With all this “B Corp” buzz in the air, it’s time to get one thing straight: the Benefit Corporation and the “B Corp” are not created equal. The terms are often used interchangeably, and it’s not necessarily wrong to say “B Corporation” or “B Corp” to informally describe a Benefit Corporation either. People understandably confuse the two, since both similarly aspire to cement a social or environmental purpose in a company’s mission and corporate governance structure.
But there is still a key difference between the pair: the benefit corporation is a legal entity recognized under a state’s corporate laws, while the “B Corporation” (or B Corp) is a certification conferred upon a company by a certifying organization. A company can be a B Corp without being a Benefit Corporation – and vice versa – but it’s important to know that while these two sound similar enough at first glance, they actually function fairly differently from one another.
Guest post today courtesy of Kent E. Seton, founder and president of the Center for Nonprofit Creation.
If you are passionate about your nonprofit charity or business, branding your charity is an invaluable tool that can yield significant economic benefits. Some of the most well known nonprofits in the world, like United Way and the American Red Cross, are charitable entities that are just as well known as brands that do make a profit, like Coca Cola and Nike. How does a nonprofit translate into dollars and cents? Several companies, such as the American Red Cross, have brands so reputable that they license out their trademark to “for profit” enterprises. An example of this licensing in action is a seal of approval – if you go into a grocery store and see a Red Cross logo on a cosmetic item, it has been officially “certified” by the American Red Cross. Each time that product is sold, the American Red Cross earns a royalty. The American Red Cross generates a significant amount of revenue via this model.