Using the law to do good: Kyle Westaway on Benefit Corporations and capitalism with a purpose

Business law assumes profit as a company’s singular motivation, making it hard, and sometimes illegal, for social enterprises to keep a social mission at the core of their operations. Kyle Westaway has dedicated his legal practice to counseling social entrepreneurs on the risks and complications involved in their business models. Westaway Law advises clients like Frontline SMS, Wello Water, All Day Buffet, Praxis Labs, and the Adventure Project. Westaway is also a founder of Biographe, a fashion startup that seeks to create sustainable jobs for survivors of sex trafficking in Thailand. Here he gives Dowser some thoughts on the emergence of Benefit Corporation legislation and the power of social enterprise. Check out more of Westaway’s advice on the SocEntLaw blog.

RS: What led you to become an advocate for social enterprise?
Westaway: I think that title, advocate, is the best description of what I do for this new form of capitalism with a purpose. I grew up with a great family that always knew it was very important to give back, to lift others up, that getting ahead didn’t mean you had to put others down. Also, when I was getting my master’s degree in public policy by thesis was around economic development in sub-Saharan Africa. So I got really interested in economics, in how can you leverage the market to alleviate poverty. Read more

Sites I like: Simpl puts ideas on the (crowdsourced) market

Fresh on the crowdsourced funding scene is Simpl, a site that aims to help ideas grow by bringing them into contact with people who have access to and want to share resources. 

But what’s unique about Simpl, unlike most crowdfunding sites, is that its function is not limited to giving money. Instead, individuals and organization who like an idea on the site can offer support in a range of forms, including a conversation over coffee, office space, staff, or anything they feel will help. Read more

Starting from scratch: Rubina Design’s founder on building a social enterprise

Notes: I’ll be profiling this organization as it moves through the stages of product development, marketing, and expansion, over the next few months.

photo courtesy of Rubina DesignBringing an idea to life is a little like launching a rocket: the moment is fueled by many patient hours spent studying, researching, planning, searching for resources, building a team, and refining key details. But in entrepreneurship, unlike rocket science, you don’t need to know specific formulas in order for your idea to take off. It takes inspiration, careful consideration, and a willingness to learn on the job.

Kari Litzmann founded Rubina Design after studying a women’s sewing workshop in Pakistan where she saw the limits of the nonprofit charity model but also observed the potential benefits of supporting women entrepreneurs. While supporting herself through freelance design work, Litzmann is working on developing her first line of products, attractive print materials targeted at “working women who care about the world,” to be made by rural artisans in India. Read more

New ways of thinking: From critique to optimism (but still in beta)

I don’t know if there’s something inherent to the discipline of
anthropology that moves us toward critique: the tendency to pick-apart any kind of human effort to do anything in the world. Modernization: homogeneous and violent. International development: bureaucratic and self-interested. Food aid: corrupt and exploitative. Humanitarianism: ineffective and paternalistic. It seems that our gaze upon the world is colored by darkly-tinted lenses; we see problems as if they were highlighted in neon; we even historicize them so as to find their roots, the concepts behind these global systems.

But critique itself can be a violent thing. It destroys everything in its path with a smug wave of its hand, and leaves nothing in place of what was there. Read more

Social Impact Bonds: a revolution in government funding

In his recently proposed budget, President Obama has asked for up to $100 million to implement programs funded by Social Impact Bonds (SIBs). These bonds are the cornerstones of a new way to pay for public services, one that its proponents hope will address social problems with greater efficiency and higher success rates than current government approaches. In the UK SIBs were piloted to tackle the problem of prisoner recidivism by funding intensive counseling, employment, housing, and other support services for recently released prisoners. Something known as supportive housing is a potential area where SIBs may make their debut in the U.S. This program would deal with homelessness from a preemptive approach, by paying people who are at-risk of having to go live on the streets to stay in their homes.

The model of Social Impact Bonds consists of governments agreeing to reward private, for-profit entities, called “social impact bond-issuing organizations” (SIBIOs), for their work. But the government only pays if the services deliver as promised, and only out of government cost savings. No taxpayer money will be wasted on failed programs in this plan. The idea behind these bonds is that investment is like prevention, and social problems can be more effectively addressed before they urgently need a cure. Governments, unlike private financiers who are motivated by potential profits, are likely to wait until a problem needs mitigation, rather than foreseeing it. Read more

Sites I like: funds citizen journalism

One of the most exciting sites I’ve come across recently is, a crowdfunding platform for independent, citizen journalism. Users can submit story tips, and journalists pitch their story ideas for funding. The site hosts some excellent stories done by hardworking, independent investigative reporters. Reporters keep 90 percent of the revenue, and the rest goes to site editors. If you’re low on cash but want to participate, you can support a story of your choice at no cost through earning points by taking a survey with a sponsor. Read more