Social Work, Inc.: How Benefit Corporations Grow Your Business With Social Responsibility
by Kristin Battista-Frazee, MSW, Rachel L. West, LMSW, and Karen Zgoda, MSW, LCSW
#MacroSW Twitter chats are held every Thursday night at 9 p.m. Eastern. For more information, check out https://macrosw.com. The New Social Worker is a #MacroSW media partner.
Social work entrepreneurs who want to incorporate have three main incorporating structures to choose from: a typical business in which all decisions must lead to profit; a nonprofit that has a well-developed social mission but involves spending much time fundraising and writing grants; or the lesser-known benefit corporation, which essentially combines the best of both of these worlds. Each of these entities has benefits and tradeoffs, including tax implications, fees, shareholders or constituents, and even how they hold meetings and file meeting notes (seriously). This article will explore how one group of social workers decided to become a benefit corporation and provide advice for others based on our experiences thus far.
In 2014, a group of individual social workers, schools, and associations came together to form a collaboration with the goal of holding bi-monthly Twitter chats using the hashtag #MacroSW. Our main goal was to reinvigorate macro social work practice, research, and conversation by forming a community of professionals and students committed to social action and social justice. Through our mission of conversation and content focused on macro social work practice, we have created an online community where social workers—both clinicians and macro practitioners—can focus on policy, advocacy, and social justice issues.
Fast forward five years, and the chat collaborative is still made up of individual social workers, schools of social work, and professional associations. We now hold Twitter chats every Thursday. We also launched a Lunch and Learn chat series that focuses on macro social work careers, held on the last Tuesday of each month. All of this keeps us busy.
In 2017, we began having discussions about #MacroSW becoming a legal entity. It was beginning to take a significant amount of time to run the chats. Additionally, we were considering offering workshops, doing research, starting a podcast, and pursuing more policy and advocacy work. All of this led many of the chat collaborative members to the conclusion that we needed to incorporate, so we could raise funds to support our work.
In the summer of 2017, we held our first retreat. By the end of the weekend, we were leaning toward incorporating as a benefit corporation. To say we had numerous conversations and discussions about which incorporating structure made the most sense is an understatement. We carefully deliberated our options, and once we made the decision to become a benefit corporation, we took our time carefully writing the bylaws.
So, what exactly is a benefit corporation?
According to benefitcorp.net:
A benefit corporation is a traditional corporation with modified obligations committing it to higher standards of purpose, accountability and transparency:
Purpose: Benefit corporations commit to creating public benefit and sustainable value in addition to generating profit. This sustainability is an integral part of their value proposition.
Accountability: Benefit corporations are committed to considering the company’s impact on society and the environment in order to create long-term sustainable value for all stakeholders.
Transparency: Benefit corporations are required to report, in most states annually and using a third party standard, showing their progress towards achieving social and environmental impact to their shareholders and in most cases the wider public.
(2019, https://benefitcorp.net/what-is-a-benefit-corporation)
There were a number of reasons why we opted to incorporate as a benefit corporation. Benefit corporations must be committed to creating a public benefit in addition to generating a profit. This was something that was really attractive to us, given our commitment to social work values. We considered forming a nonprofit but felt there were too many drawbacks, such as being limited in how we could raise and spend money. There was also a sense that the types of activities #MacroSW carries out and the activities we plan to roll out in the future did not fit into a nonprofit model.
In November 2018, #MacroSW legally became MacroSW, INC, a benefit corporation in New York. To learn more details about benefit corporations, watch this Ben & Jerry’s video on how they determined this was the best choice for their business model:
We did the incorporation filing ourselves. This was aided by resources from organizations like B Labs (https://bcorporation.net/about-b-lab) but took considerable time. We were able to download samples of bylaws and articles of incorporation. We also carefully researched what was required in the state we chose to incorporate in (New York). Our partners all live in different states, and this was another obscurity to be worked out. Again, this took time.
The benefit corporation structure will help us move forward with bigger projects and to apply for grants, remain transparent and accountable to our audience, and establish a structure long after the founding partners are gone.
What We Learned—3 Tips
Gain Clarity
Take the time to think about why you want to incorporate and what your organization has to offer. At our retreat, #MacroSW collaborators worked on a logic model and had in-depth discussions about where we wanted to go over the next five years. The logic model was also helpful in saying “no” to projects outside our mission and goals. These discussions helped us not only to decide what type of corporation to form but were also instrumental in writing our bylaws, as well as making other decisions.
Do Your Research
As mentioned previously, we were able to do the filing ourselves, which saved a lot of money. This required spending a lot of time researching the process. It should be noted that New York State makes information about incorporating pretty accessible online. This may not be the case where you reside. (Note: Currently, 33 U.S. states allow incorporation as a benefit corporation.)
Plan Accordingly, Be Kind, and Have Patience
We had strong cohesion and shared vision among group members about what we wanted to accomplish. However, the process still took nearly two years (years!) from inception to MacroSW, INC. Much of this delay resulted from getting all chat partners up to speed about our incorporation options and sorting out how our individual organizational, professional, and academic affiliations would intersect with incorporation.
To help move the process forward, we communicated regularly, held annual retreats (both in-person and virtually using Zoom), and committed to a transparent process in which we would share feedback openly. Remember that if you have a shared vision with someone or a group you want to incorporate with, it really is just a matter of hashing out the details. Infusing a healthy dose of humor and patience may be the communication lubricants needed to have more fun in the process!
This is a grand adventure that we are embarking on, and we are happy to share our experience as we venture forth. The type of business entity you form depends on your goals, services, tax advantages, and whether you are going into this venture alone or with partners.
We think a benefit corporation is well worth considering, especially if nonprofit incorporation is not an option. Its focus on transparency and social responsibility enables social workers to form a for-profit company without compromising our profession’s values and ethics.
Kristin Battista-Frazee, MSW, is a social worker, marketing consultant, and author. She works at Columbia University School of Social Work in the field education department, supporting the online campus.
Rachel L. West, LMSW, is an advocacy and community outreach consultant in New York.
Karen Zgoda, MSW, LCSW, is a social worker at the Department of Children and Families in Massachusetts. For more than 10 years, she has taught social work courses at Simmons University, Bridgewater State University, Boston College, and Salem State University.
Kristin, Rachel, and Karen are MacroSW, INC, partners.