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Group forms to grow Encinitas’ ‘fourth sector’

ENCINITAS — Words like “historic” “electricity” and “great opportunity,” were bantered about among the 40 or so people at the Leichtag Foundation’s barn on a steamy Thursday afternoon to describe the gathering.

And the people in the room all felt the words were apropos to describe what was happening.

The group of entrepreneurs, nonprofit leaders and city officials just finished hearing a speech about for-benefit corporations, a so-called “fourth sector” of America’s economy that blends economic viability and social conscience.

Those in attendance left emboldened to pursue an ambitious expansion of the for-benefit sector in Encinitas, an expansion that has the potential support of the White House and several other major entities.

“We have an opportunity to do something that isn’t being done anywhere,” said Anthony Zolezzi, a well-known “eco-entrepreneur” who attended the gathering. “There is an electricity here. This can happen. It already is happening, we just need to bridge the gap.”

For-benefit corporations are for-profit entities that include positive impacts on society and the environment, in addition to profit, as their legally defined goals.

The traditional economy has three sectors: for-profit companies, nonprofit organizations and government. For-benefit companies are seen as the meeting of two of those sectors, melding for-profit structure and organization with the social conscience and stewardship of nonprofit organizations.

Call it “conscious entrepreneurship,” stakeholders said.

Among the traits of for-benefit corporations include stakeholder governance, fair compensation, reasonable returns, social and environmental responsibility, transparency and inclusive ownership, a stark contrast to traditional for-profit companies and corporations.

The July 2 meeting was organized by Andrew Hewitt, the CEO of GameChangers500, an Encinitas-based organization that ranks the world’s top for-benefit organizations, and featured Heerad Sabeti, who organized a recent summit at which organizations made it a priority to identify pilot communities for fourth-sector development.

Sabeti agreed to visit Encinitas on July 1, and Hewitt quickly put together the presentation and invited potential leaders in the emerging sector. Among those who attended included Jim Farley of the Leichtag Foundation, Jessica Toth of the Solana Center, former City Council member Teresa Barth and current Councilman Tony Kranz.

Sabeti’s presentation included an introduction into for-benefit corporations and what is needed for them to grow and thrive.

Following the presentation, Hewitt asked for each of the people present to introduce themselves, their organization and what they could do to help foster the for-benefit movement in Encinitas.

They each pledged various assistance, including venue space, a commitment to adopting for-benefit tenets and even starting the legal process to become benefit corporations. California is one of 28 states that have adopted legislation that allows the creation of such corporations.

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1 comment

Frank Scarpaci November 2, 2015 at 4:03 pm

NYC launched a very successful campaign last March with B Lab called “Best For NYC” business campaign. This campaign challenges NYC businesses to compete to be the best for NYC and the world. By introducing businesses to the same free tool that is used to certify B Corps around the globe, the hope is many will commit to build a more socially and environmentally conscious business.

Here’s an excerpt from their announcement:

New York City Economic Development Corporation (NYCEDC) and B Lab today announced the launch of Best for NYC, a campaign and set of business tools and services designed to inspire and equip New York City businesses to measure and improve business practices that help create well-paying jobs and improve the quality of life in all five boroughs, while also strengthening their bottom-line. Using B Lab’s Impact Assessment, the leading global tool for measuring, benchmarking and improving economic and social impact, businesses can assess their practices on issues such as diversity and inclusion, compensation, benefits and governance, and compare their businesses to more than 20,000 others to establish best practices. Businesses will be able to identify opportunities to improve their competitive position by investing in better practices, and in doing so, improve their workplace and communities. The Best for NYC goals stem from recommendations made in the Career Pathways report created by New York City’s Jobs For New Yorkers task force, and the campaign leverages the global campaign led by B Lab to support businesses in measuring social and environmental impacts.

Portland, OR just announced that are launching a similar campaign with B Lab in 2016.

Encinitas is small compared to NYC and Portland, however the business climate and culture makes this kind of city-wide campaign work. Rather than recreate the wheel, look to what B Lab has already done and is doing with these campaigns. Very exciting stuff!!

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