B’corps, SAGP, Capital Altruiste and committed for-profits

Many social entrepreneurship-related concepts now florish on the Web. Some time ago, the social-oriented entrepreneur could get inspiration from NGOs and from for-profit social ventures such as the Grameen Bank (well, I suppose it does not have an NGO status of some sort… I am not even sure of this ; anyway…).

Now that I am thinking of how to govern the growth of my own social venture, I am also stumbling upon a variety of other very stimulating and mind-opening concepts that may be useful to my project.

The SAGP is a French way of governing a company that seems to be inspired by De Gaulle‘s wish that employees would more and more take part in managing their company (not to say that many French companies are SAGPs, far from that !). ‘GP in SAGP stands for Gestion Partagée: shared management. SAGP is not a legal status for juristic personification (Inc., Ltd., GMBH, SARL and others). It is a kind of “label” that says something like “in our company, work and capital are of equal value and power is equally divided between both workers and shareholders“. Note that it is not necessarily a “one person one vote” system. Sounds interesting even though the 50% work /50% capital proportion sounds a bit arbitrary to me (why not 75% work and 25% finance at early stage and later evolution toward 50/50  for instance ?). And SAGP lacks a grass-root community of entrepreneurs behind it. Anyway, the idea of empowering workers is there.

B Corporations is a concept that comes from the USA. B (for Beneficial) corps are companies that include social and environmental commitments into the legal document that founds the company (the Articles of Incorporation, or “statuts” in French). It also is a kind of label but the legal dimension of the concepts can make it something superior to a plain marketing label. It somehow institutionalize the social commitments of the company.

Companies with a “Capital Altruiste” are companies which commit themselves to sharing a (fixed) part of their profit with a given (set of) NGO(s). The NGOs may become a full shareholder in the company. These companies may not “be social” (or green or whatever) by their business purpose. They even could behave unethically (preferrably not, of course). Their new social role comes from the fact that they share a given portion of their annual profits to a non-profit, either by donating profits (patronage) or by donating shares (which I think is more aligned with Thierry Klein’s idea). It is a concept that tries to keep altruism and ethics apart from usual business operations. By accepting the worst of human nature (cupidity and social blindness of traditional corporations?), this concept suggests a way for putting altruism within the reach of any corporation and entrepreneur. “You don’t have to think of yourself as a social hero to serve altruistic purposes” does it seem to say. Sounds good too… as long as it does not says “social entrepreneurs are fools” or “social ventures are doomed to failure or eternal non-growth because they unrealistically rely on the good will of some social dreamer“. Sounds like a good concepts for pessimistic and/or cynical social entrepreneurs, doesn’t it ? A stimulating dimension of the concept of Capital Altruiste is that not only social capital (or profits from capital?) can be shared but also profits from intellectual property. The legal implementation of intellectual property being currently flawed, I think one should get beyond just saying “every music album you buy will trigger a donation of 5% of its price to an NGO”. But the idea of marrying open source licensing with some form of well-designed profit-sharing may lead to something interesting.

Last but not least, Michael Pirron’s model is more for optimistic-would-be-social-heroes. His for-profit venture (also a B-Corp) contracts with a non-profit. The non-profit becomes a customer of the for-profit (for instance, it can receive consulting services from the for profit if this for-profit is a consultancy), maybe with  preferential prices. And the for-profit also shares its profits to the non-profit. It sounds to me similar to one of the founding principles of the Economy of Communion and I appreciate this similarity. I will have to dig this concept and get more familiar with it.

As a conclusion, this is all about giving with some reciprocity. You can share profits, social capital or votes. You can share them with workers or non-profit organizations which have both been designated as the less-favoured stakeholders in our  sustainable development era. You can institutionalize this sharing in your articles of incorporation or just keep it as a management principle at least until it stabilizes a bit.

I personnally feel these concepts are still very experimental and shouldn’t be institutionalized unless you have very strong legal skills and agility. I don’t have employees so I’ll keep the “share-with-the-workers” concepts aside until I get into recruiting someone. I feel some appeal to the “share-with-an-NGO” thing but I still wonder which NGO to share with especially given the fact that NGOs are my customers !

Anyway, like my friends in the Economy of Communion sometimes say : “First, focus on generating something to share !” So let’s get back to business.

I hope I did not make too many mistakes in describing the concepts above : I am just stumbling upon them and still have to recover from surprise before understanding their principles and subtleties.

Tell me what you thing and don’t hesitate to refer to any similar concept I might have been missing.

4 Responses to “B’corps, SAGP, Capital Altruiste and committed for-profits”

  1. Thierry says:

    This is a remarkable summary of what Capital Altruiste is – maybe even more easier to read than my original posts.

    Please note that I don’t think – nor wrote – that “social entrepreneurs are fools” or that “social ventures are doomed to failure or eternal non-growth because they unrealistically rely on the good will of some social dreamer“.

    You can find a more detailed comparison between “Capital Altruiste” and “Social ventures” ways of action here (in french): http://thierry-klein.speechi.net/2008/04/30/les-points-communs-et-les-differences-entre-le-capital-altruiste-et-lentreprenariat-social-de-mohammed-yunus/

  2. Sig says:

    Thierry, glad to hear that you are not as pessimistic as you wrote. Unfortunately, your last paragraphs in that article first suggested to me that, in your eyes, many entrepreneurs in movements similar to the Economy of Communion are hypocrites (tartuffes). I thought this because they don’t look like saints when you meet them ! ;)
    I admit I probably over-interpreted what you wrote there.
    I think that drawing the line between idealism (wannabe social heroes) and self-deception (or self-indulgence) is sometimes hard. It may be all about generating real income in a ethically correct way and significantly getting into the sharing/donating dance. As an optimistic person about human nature, I suspect that there are more self-decepted or self-indulgent entrepreneurs in this crowd than hypocrites tartuffes. I will let others count the saint ones. :)

  3. Thierry says:

    I mean 2 things:

    - solidarity with “traditional” methods is too weak to change the world. Solidarity has been existing since the world exists and, today, capital effects beat solidarity. “Good will” is mandatory, but a characteristic of modern world is that it is not enough anymore.

    - I am not able to decide who is a Saint or a Tartuffe – nor can anybody. As entities, private ventures, in a liberal economy, generally behave as Tartuffes (see http://thierry-klein.speechi.net/2008/05/13/supercapitalisme/). Individually, the situation is probably more complex than this as most of us, under different conditions, can act as both. In a sense, I would say that it should actually not matter so much why we do it, as long as we actually do it. The effects are more important than the moral motivations and altruistic capital gives a quantitative evaluation of the effects and of the commitment: the percentage of capital given.

  4. [...] can I let some open source businesses become more familiar (and hopefully fond of) such initiatives (this is also an open question for the economy of communion which shares so much in spirit with [...]