'Social benefit' business efforts sought by state
Hartford - Connecticut is trying again to rework state law allowing business owners to organize companies using alternative business models that seek social change rather than focusing solely on boosting profit.
The legislature's Commerce Committee has scheduled an informational hearing on Tuesday, three weeks before the start of the 2014 session, to consider legislation that would allow business owners to establish so-called "benefit corporations." Similar legislation failed last year and in 2012, and lawmakers and advocates believe they have a good chance to pass a measure before the legislature adjourns in May.
"We got a lot of people on board earlier than last year," said Rep. Chris Perone, the House chairman of the Commerce Committee.
Benefit corporations, or B-corps, are intended to allow a portion of a company's profit to be used for social purposes such as promoting the arts, protecting the environment or reducing poverty without the threat of shareholder lawsuits.
Sen. Gary LeBeau, the Senate chairman of the Commerce Committee, said if it ultimately becomes law, business owners will be "doing good while doing well."
"You can do both," he said. "You can make money and do good."
James Woulfe, public policy and impact investing specialist at reSET, a Hartford nonprofit group that promotes social enterprise, said changing state law could quickly draw in more than 20 companies establishing a business model to create change.
Changing state law would be "empowering" to capitalists who have a different business model, he said.
Christopher Brechlin, a community organizer who uses data to help local nonprofits, government and business find solutions to housing and other problems, said his business, Blueprint for a Dream, would benefit with a change in state law.
"It allows me to lock my mission in and protect me if I choose to favor the social mission of my business," he said.
LeBeau said many business leaders looking to establish a new business model are in their 20s and 30s or even younger.
"They're entrepreneurial and creative. They're exactly the kind of people we want to keep in Connecticut," he said.
David Cadden, a business professor at Quinnipiac University, compared the business model to investments that appeal to investors who want their money to support causes even if they forfeit higher profit. Opposition to benefit corporations is nearly non-existent, he said.
"Outside some ideological obsession I can't see where anyone would be adverse to them," he said.
MOST VIEWED MEDIA
MOST DISCUSSED STORIES