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For the benefit of all stakeholders – Pushing the Needle Forward on Business as a Force for Good.

August 22, 2019 Leave a comment

Good afternoon, all. I hope you all have been enjoying the summer. I took this photo this morning as the sun was rising over downtown Grand Rapids.

Just a few days ago Business Roundtable announced the release of a new Statement on the Purpose of a Corporation signed by 181 CEOs who commit to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders.”

Thanks to Jeff Van Winkle for bringing this to my attention. You can check out the link to the Business Roundtable webiste and the announcement: https://lnkd.in/eYSTrxg

It is exciting to see the general acknowledgment and support for the idea that business exists for a purpose more than simply profit.

This is not a new thing, particularly in West Michigan.

West Michigan is truly a unique place where business and philanthropy intersect unlike any other place.  Giving of time, talents and treasure to worthy causes is embedded in the culture of this community.

We know of many businesses that have established core mission statements of social good as something beyond profit for quite some time. I look to Cascade Engineering, as one example. Check out the Blog of Fred Keller, Founder of Cascade – titled “Purpose & Profit”

Some groups are skeptical that this statement will lead to any real change – case in point Corporate America Says “Sorry” via @npquarterly

However, I am hopeful that this statement pushes the ball forward on business for good in the State of Michigan.

BCorps?

Last year the State House tantalized social entrepreneurs, once again, with the possibility of benefit corporations (“Bcorps”) becoming a viable legal option to do business in the State of Michigan.

House Bills 5867, 5868 & 5869 were introduced on April 24, 2018, that would allow BCorps to be formed under Michigan Law.

There was never any movement on those bills and they died in committee.

Back almost two years ago the legislature proposed similar legislation which also died in committee (are you recognizing a pattern?). For a review of the Former BCorp Bills, the House Fiscal Agency issued a Fiscal Analysis, check it out here. 

The Analysis provides good background on what the legislation would do. This is helpful for those who are not overly familiar with BCorps in general.

Education on the “why” for BCorps.

Interested groups and local politicians have been educating the public on why BCorp laws would be a good thing for our state.

State Rep Hank Vaupe gave a discussion to a local chamber group on B-Corps two Septembers ago:

As Rep. Vaupe indicated “benefit corporations provide an opportunity for businesses to use the markets, rather than traditional charity giving, to advance their philanthropic missions.”

Michigan is behind the ball.

Over the last several years Michigan legislators have repeatedly introduced BCorp legislation – to no avail.

Check out this handout from Rep Barnett almost 10 years ago in support of the BCorp legislation he proposed in September 2010.

I found particularly interesting the very last section – it provides some comment on why some Michigan businesses may have been averse to the introduction of BCorp legislation. Feel free to read it and reach your own conclusions.

Michigan now ranks as one of the vast minority of states that has not enacted benefit corporation legislation.

Check out the Benefit Corporation website for a state by state legislative analysis.

I hope Michigan can continue to make progress and recognize business as a force for good.

Questions? Comments?

Jeshua@dwlawpc.com

http://www.dwlawpc.com

Connect with me on Twitter: @JeshuaTLauka

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Grand Rapids Social Enterprise, L3Cs and a Call to Community Partnership.

November 21, 2018 Leave a comment

Yesterday I visited with Dr. Justin Beene – Founder of Grand Rapids Center for Community Transformation  (GRCCT) – a collective of non-profit/for-profits working to see flourishing in Grand Rapids for all.  GCCT is essentially a hub for social enterprise, for the common good of the Greater Grand Rapids Area.

Justin Beene

Dr. Justin Beene, the future expansion of GRCCT

GRCCT states on its website that Grand Rapids was ranked the number one city in the United States to raise kids by Forbes Magazine (Van Riper, 2012).

Even more, the city has been ranked as one of the most philanthropic areas in the United States (Raghaven, 2013).

GRCCT mentions the powerful presence of the institution of the Church in Grand Rapids, and over 2,800 nonprofits.

This all sounds good, but there is much work to be done. There is still great need in the Grand Rapids Community.

 

 

despite the affluence, giving, and nonprofit services in West Michigan, the outlook in education, employment, and long-term quality of life for many urban citizens looks bleak. 

Forbes Magazine just recently released a study of 52 metropolitan cities in the United States and found Grand Rapids to be the second worst city in the country for African-Americans to live based on business ownership/entrepreneurship, median income, and home ownership (Kotkin, 2014)…

Youth living in the urban center of Grand Rapids are among the most impoverished young people in the country.”

 

In response to the great need in our city, particularly for youths struggling with poverty,  GRCCT supports several social enterprises (Rising Grinds Cafe and Building Bridges) that not only provide skills/job training but also provides revenue for the long-term sustainability of these programs.

 

Low-Profit Limited Liability Companies.

Both Rising Grinds Cafe and Building Bridges are Michigan Low-profit Limited Liability Companies (L3Cs)

Back in 2009 the Michigan legislature authorized the formation of these “hybrid” business entities.

L3Cs are formed fundamentally for a charitable/socially beneficial purpose, but unlike non-profit corporations, members can own equity in these L3Cs.
L3Cs – Viable Tools for Social Entrepreneurs…

I’ve said this before- L3Cs are a viable tool for social entrepreneurs – they tell the whole world that your company exists, fundamentally to do good.

Certainly, that is the purpose of both Rising Grinds Cafe and Building Bridges –  they exist for the common good.

 

Doing our Part – Being a Good Community Partner.

Grand Rapids is taking deliberate steps to help those most in need, particularly in the area of affordable housing

Recent national headlines demonstrate that there is a lot of mixed feelings about the proper solutions to the affordable housing crisis facing many cities across the U.S.

 

One key take point that GRCCT inherently understands:

 

Creating real change requires an entire community’s involvement.

 

GRCCT is looking for individuals, businesses, organizations

MTM

who will partner for the common good of the Greater Grand Rapids Area.

I love this quote that is often spoken of at Mel Trotter Ministries – “People don’t become homeless when they run out of money. They become homeless when they run out of relationships.”

That is our job. Being those relationships for the most vulnerable.

Not just “one-way relationships” but truly reaching out in community in a sustainable way.

Keep up the good work Justin and all at GRCCT.

 

 

 

 

 

 

 

 

 

 

 

 

Legal Update on Michigan Bcorps and Purpose Driven Business.

October 9, 2018 Leave a comment

Happy Tuesday, all.

I recently took this photo of the Grand River that flows through downtown Grand Rapids.

Today I read an article in the Grand Rapids Business Journal by Local First President

2018-09-30 13.46.51Elissa Sangalli Hillary on how to build a “Purpose Driven Business“.

Elissa starts off the article by advising entrepreneurs to “start with your values”

“As an entrepreneur, you have an opportunity to start a business that’s founded on your values, morals and principles. Before you dive into your business plan, reflect on your core values and prioritize those you want as the foundation of your business.”

 

According to Elissa’s article, you can join her and other entrepreneurs at  Start Garden on Oct. 10 for a “Measure What Matters Workshop on The Social Justice Entrepreneur. This workshop is an opportunity to hear from entrepreneurs and their best practices for developing a meaningful business plan and leading a business with purpose.

 

Benefit Corporations – purpose driven business.

The option of forming a business entity using a “benefit corporation” legal structure is one way to formally memorialize at a fundamental level your company’s values morals and principals.

 

Why BCorps?

BenefitCorp.net describes the benefit of BCorps as:

“Benefit corporations expand the obligations of boards, requiring them to consider environmental and social factors, as well as the financial interests of shareholders. This gives directors and officers the legal protection to pursue a mission and consider the impact their business has on society and the environment. The enacting state’s benefit corporation statutes are placed within existing state corporation codes so that it applies to benefit corporations in every respect except those explicit provisions unique in the benefit corporation form.”

 

BCorps have gained Popularity since 2006.

Currently 34 States have enacted BCorp Laws.

Michigan is not one of those States.

Almost six months ago the State of Michigan House tantalized social entrepreneurs, once again, with the possibility of Bcorps becoming a viable legal option to do business in the State of Michigan.

House Bills 5867, 5868 & 5869 were introduced on April 24, 2018, that would allow BCorps to be formed under Michigan Law.

As of today, there is still no movement on these bills.

 

Back almost two years ago the legislature proposed similar legislation which died in committee. For a review of the Former BCorp Bills, the House Fiscal Agency issued a Fiscal Analysis, check it out here. 

The Analysis provides good background on what the legislation would do. This is helpful for those who are not overly familiar with BCorps in general.

 

I continue to wonder why year after year Michigan fails to catch up with the rest of the country concerning these social enterprise businesses for good.

As of March 2018 there have been 14 West Michigan businesses certified B Corporations – a third party sustainable good certification process, but not having the corporate BCorp Structure. That number is growing.

People want to do business with companies that exist for something besides making a profit. Certainly you don’t need the Bcorp legal structure in order to accomplish that.

However, there seems to be a demand for such a social enterprise entity in Michigan.

What is the legislature waiting for?

Questions? Comments?

Jeshua@dwlawpc.com

http://www.dwlawpc.com

Connect with me on Twitter: @JeshuaTLauka

 

 

 

Today OCC Begins Accepting National Bank Charter Applications From FinTech Companies

It’s Tuesday in Grand Rapids. Beautiful mid-70s, a bit overcast and if you look carefully you can see the reflection of my shirt as I took the photo from my office window…

Today, the Office of the Comptroller of the Currency (OCC) announced it will begin accepting applications for national bank charters from fintech companies.

7.31

 

Joseph M. Ottin, Comptroller of the Currency gave the following remarks concerning Fintech Companies:

“The federal banking system must continue to evolve and embrace innovation to meet the changing customer needs and serve as a source of strength for the nation’s economy,” 

Mr. Ottin also commented that accepting applications from Fintech Companies:

helps provide more choices to consumers and businesses, and creates greater opportunity for companies that want to provide banking services in America.”

 

You can read the full press release here.

Fintech recap…

The prior OCC, Thomas Curry announced last year that OCC would move forward with considering applications from financial technology (fintech) companies to become special purpose national banks.

 

“The OCC published a paper discussing the issues and conditions that the agency will consider in granting special purpose national bank charters.” You can check that paper out here

What’s made clear from the press release is that “[e]very application will be evaluated on its unique facts and circumstances.

 

Fintech Charter: Praise, Debate, Criticism and a Lawsuit.

The propriety of a Fintech charter has been supported by the Fintech community in general.

 

As previously reported by Crowdfund InsiderBrian Peters, Executive Director of Financial Innovation Now  “a public policy coalition comprised of Amazon, Apple, Google, Intuit and PayPal” stated;

“FIN believes that payments and lending regulation needs streamlining for the modern era. We commend the

OCC’s leadership and vision in driving this regulatory discussion. The OCC has rightly concluded that its approach must evolve to ensure that all American consumers and small businesses are empowered with better access to the benefits of financial technology.”

According to Crowdfund Insider  “Fintech Charter could benefit innovative financial firms that can provide superior services at a lower cost for both consumers and businesses.”

That being said, the propriety of such action by the OCC has been questioned by others, and officially sued by the Conference of State Bank Supervisors as an “unprecedented, unlawful expansion of the chartering authority”- check out the Press Release from the CSBS back in April of last year.

 

 

Why Fintech Intrigues me – Purpose Driven.

 

I’ve previously talked about why fintech is so intriguing.

I’ve highlighted some fintech companies doing unique things in the past, like Lemonade.

a. taking a risk doing something different (being an innovator);

b. disrupting business as usual;

c. for the good of others (being mission driven).

 

That’s social entrepreneurship at its finest.

 

Questions? Comments?

e-mail: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauka

Michigan Behind the Ball with Benefit Corporation Laws.

Good afternoon, all. It has been a while since my last post – I hope you all have been enjoying the summer.

I usually include in these posts a recent photo of downtown Grand Rapids where my office overlooks Rosa Parks Circle.

7.10 On one of my walks downtown last week I decided to take a different photo – the memorial of Rosa Parks – the courageous woman who  this part of downtown Grand Rapids is named after.

It is wonderful to see Rosa Parks, and all that she stood for, honored – prominently at the intersection of Monroe Center and Monroe Avenue.

People, particularly vulnerable people, who stand up for what is right, even in the face of fierce opposition, should be honored.

 

 

 

West Michigan is truly a unique place where business and philanthropy intersect unlike any other place.  Giving of time, talents and treasure to worthy causes is embedded in the culture of this community.

 

Because business as a force for good is part of the fabric of Grand Rapids, it only makes sense to me that social enterprises such as benefit corporations should be able to thrive in West Michigan.

BCorp Certification is Trending in Michigan…

Over the last several years more and more local businesses have becoming Certified B Corps through BLabs. West Michigan has the most concentration of BCorp businesses in the State.

Check out a March article from Rapid Growth Media on the strong presence of Bcorps in West Michigan.

Headlines in Grand Rapids have brought attention to the need for businesses to ask the question: Am I working to build a better community?

 

B-Corp certification is one way (certainly not the only way) for businesses to hold themselves accountable to being a good community partner.

 

Unfortunately, Michigan has no legal framework for BCorps – yet.

 

BCorps?

A few months back the State House tantalized social entrepreneurs, once again, with the possibility of benefit corporations (“Bcorps”) becoming a viable legal option to do business in the State of Michigan.

House Bills 5867, 5868 & 5869 were introduced on April 24, 2018, that would allow BCorps to be formed under Michigan Law.

 

There has been no movement on this bill.

 

Back almost two years ago the legislature proposed similar legislation which died in committee. For a review of the Former BCorp Bills, the House Fiscal Agency issued a Fiscal Analysis, check it out here. 

 

The Analysis provides good background on what the legislation would do. This is helpful for those who are not overly familiar with BCorps in general.

 

 

The latest proposed Bcorp Legislation

The current Bcorp legislation has some different language than the 2016 proposed language. I am assuming it conforms with the model BCorp Legislation. One difference is the definition of “general public benefit” to “specific public benefit” which would be defined under the new Bcorp law as:

 

“SPECIFIC PUBLIC BENEFIT” INCLUDES, BUT IS NOT LIMITED TO,
ANY OF THE FOLLOWING:
(i) PROVIDING LOW-INCOME OR UNDERSERVED INDIVIDUALS OR
COMMUNITIES WITH BENEFICIAL PRODUCTS OR SERVICES.
(ii) PROMOTING ECONOMIC OPPORTUNITY FOR INDIVIDUALS OR
COMMUNITIES BEYOND THE CREATION OF JOBS IN THE NORMAL COURSE OF
BUSINESS.

(iii) PRESERVING THE ENVIRONMENT.
(iv) IMPROVING HUMAN HEALTH.
(v) PROMOTING THE ARTS, SCIENCES, OR ADVANCEMENT OF KNOWLEDGE.
(vi) INCREASING THE FLOW OF CAPITAL TO ENTITIES THAT HAVE A
PUBLIC BENEFIT PURPOSE

 

Education on the “why” for BCorps.

Interested groups and local politicians have been educating the public on why BCorp laws would be a good thing for our state.

State Rep Hank Vaupe gave a discussion to a local chamber group on B-Corps two Septembers ago:

As Rep. Vaupe indicated “benefit corporations provide an opportunity for businesses to use the markets, rather than traditional charity giving, to advance their philanthropic missions.”

 

 

Michigan is behind the ball.

 

Over the last several years Michigan legislators have repeatedly introduced BCorp legislation – to no avail.

Check out this handout from Rep Barnett almost 8 years ago in support of the BCorp legislation he proposed in September 2010.

I found particularly interesting the very last section – it provides some comment on why some Michigan businesses may have been averse to the introduction of BCorp legislation. Feel free to read it and reach your own conclusions.

 

Michigan now ranks as one of the vast minority of states that has not enacted benefit corporation legislation.

 

Check out the Benefit Corporation website for a state by state legislative analysis.

 

Of particular note, just a few months back in February our neighboring State of Wisconsin has enacted Bcorp legislation.

 

I am hopeful for a more meaningful update on these Bills in the months to come…

 

Questions? Comments?

Jeshua@dwlawpc.com

http://www.dwlawpc.com

Connect with me on Twitter: @JeshuaTLauka

 

 

Detroit Startup Week Kicks Off – Schedule Now Available, Includes Legal Workshops

Today starts art festival in Grand Rapids – I took this photo just minutes ago.

Summer is coming fast and so is Detroit Startup Week. Scheduled from June 18-22.

6.1

According to its website, Startup week is:

“A week long celebration of Detroit’s entrepreneurs. Volunteer-led and completely free for attendees, we are aiming to create a community driven event that builds a stronger startup ecosystem. Startup Week is held in dozens 

of cities around the world.”

Crain’s Detroit reported  that the venue will be moved to outdoors where a crowd of 8,000 – 10,000 is expected, up from last year’s 6,500.

Crain’s reports that Startup week will consist of similar “weeklong collection of panel discussions, speeches, activities, networking and competitions is bringing back its women-tailored entrepreneur events.”

 

The Schedule is Now Available

Check out the great workshops and events for entrepreneurs which will take place in Detroit in the coming weeks.

Last year the week kicked off with Detroit’s Small Business Legal Academy.

 

This year there are several types of legal workshops including:

  • Social Enterprise/non-profit.

Social Enterprise is definitely a trending area in Michigan.

 

I think it is no secret – that startup businesses would do well to get some basic legal  during their business startup

 

I had a client send me this e-mail, below (unprompted) which I was given permission to share – it is extremely on point:

 

“I don’t think you understand how valuable your assistance is. A small guy like me, without you, would sign whatever they put in front of me and get into big trouble because of that someday.  The problem is that most small businesses don’t understand how critical legal review is either.” – client

 

The reality is that there are a host of legal areas that can turn into pitfalls for startup businesses – over the years I have written on quite a few of those areas, including:

Terms and Conditions in Contracts

Non-Competition Agreements

Entity Formation and Personal Liability

Personal Guarantees

 

 

Cash flow is a barrier for startups. This doesn’t mean you should avoid educating yourself on the legal issues affecting your business.

Take advantage of the resources available.

Consult with an attorney – Particularly law firms friendly to startup businesses.

 

e-mail: Jeshua@dwlawpc.com

www.dwlawpc.com

twitter: @JeshuaTLauka

My Thoughts on Social Enterprise: Am I Living Each Day with Conviction and Purpose?

Last week I mowed the lawn for the first time this year.

I didn’t have any gas to fill up the mower, so I just relied on the unknown amount of gas that had been in the mower over the winter.

As I was mowing the back yard, the largest portion of my lawn, I kept wondering – is this gas going to last the entire lawn? I really had no idea.

5.24

I like mowing the lawn because it gets me thinking outside of myself.

My thoughts shifted to a friend who had unexpectedly passed away in February. My friend was the same age as me, 37, he was in excellent health, married with young children. He died suddenly of a heart attack while vacationing with his family.

 

 

 

 

I am sure my friend had no idea that morning he woke up on vacation, that it would be his last on earth.

 

Mowing the lawn without knowing how much gas was in the tank reminded me of how none of us are promised tomorrow.

I had no idea when my mower was out of gas.

None of us knows when we will breathe our last breath.

It gave me pause to ask myself:

am I living each day with conviction and purpose?

am I living each day for what really matters?

 

I think we all could benefit from this “eternal” or “purposeful” mindset.

 

This “purposeful mindset”  is one reason why I love social entrepreneurs:

Those in business who are purposeful in using their business as a force for good.

 

And it is why I am excited about the proposed Benefit Corporation laws that have once again been introduced in the State Legislature.

 

My call to you:
Be purposeful.

Be eternally minded.

 

Questions? Comments?

Jeshua@dwlawpc.com

http://www.dwlawpc.com

Connect with me on Twitter: @JeshuaTLauka