The first part of this essay considers how entrepreneurship activity can connect to social justice. Part two presents various strategies and tactics by which foundations and philanthropy can pursue entrepreneurship agendas as programmatic priorities, both as an end unto itself and as a means to other mission ends — all consistent with regulatory mandates (at least in the United States) that require charitability and avoidance of impermissible private benefit. These activities generally fall into three categories: • understanding the entrepreneurship phenomenon and environment; • directly engaging entrepreneurs and their ecosystem; and/or • supporting the work of others who so engage. By highlighting the powerful effects that entrepreneurship can have on marginalised and poor communities and those who inhabit them, and because philanthropy so frequently neglects entrepreneurship, this essay presents a new model of philanthropy for social change that contributes to significant transformation for those lives and communities. This essay also shares lessons from the experience of philanthropy in other countries, in my case the Ewing Marion Kauffman Foundation in the United States. Ewing Kauffman dedicated his Foundation in part to entrepreneurship as a core mission area well before his death in 1993. Mr Kauffman was an early — and perhaps the first — person to overtly connect his wealth creation to his entrepreneurial roots and then to dedicate his foundation to advancing that experience for others. He saw in entrepreneurship his own economic mobility and rise. More importantly, he saw its power to raise others, including as a means to financial stability or even wealth, meaningful jobs, advances in human welfare, improved standards of living, more unified communities and emboldened personal dignity. In other words, in dedicating a substantial part of his philanthropic vision and resources to entrepreneurship, Mr Kauffman saw the means for helping meet basic needs and for advancing opportunity, hope, and achievement for individuals and communities — that is, social justice.

This paper focuses on presenting a spectrum of relevant approaches for charities, foundations, and others seeking to become more intentional about incorporating race into their programmatic (as opposed to employment, investment, or other operational) decision-making. Having a common nomenclature and understanding of how to characterize the types of racial equity and justice approaches and outcomes can facilitate those discussions and decisions internally and with others. This paper does not seek to provide answers; but rather; presents a suggested framework, including approaches, terminology, definitions, and practices to help advance those discussions. The approaches are as follows: race-neutral, race-aware, race-conscious, and race-based. In addition to discussing definitions and practices within each approach, this paper also presents considerations about their risk of potential exposure (e.g., § 1981 and/or Title VI), potential mitigation strategies, and degrees of perceived intentionality about pursuing racial equity and justice. Those considerations are highly imperfect, are not to any scale, and are for illustrative purposes only. Moreover, they do not consider the many other factors that affect exposure, nor do they purport to be translatable for analyzing reputational risks/benefits, which also are unique to an organization and its circumstances.

This article identifies ten ways to think different and differently about detailed terms by which investment capital is provided and put to use in furtherance of targeted social/charitable purposes, outcomes, and results. The article has particular, but not exclusive, application for entrepreneurs and investors who provide and facilitate the flow of capital to under-represented, under-served entrepreneurs whether through a fund vehicle or direct investment. Among the topics are those that might be considered mission critical (i.e., structures, scope and priorities, reporting, and remedies), inherently important (i.e., key person provisions, how to deal with debt, and the flow of capital reinvestment and return), and deceptively mundane (i.e., thresholds for approvals, clawbacks and guarantees, and fees). Each has relatively typical approaches and applications in profit-oriented and -prioritized contexts, but they present different challenges for contexts that target social/charitable outcomes. Thus, they also often require different approaches, solutions and thinking. This article asserts that thinking about capitalizing such efforts – their mechanisms and details – should also be different just as thinking about the objects of investment is different. There are at least four tangible benefits for this approach. First, thinking different can help ensure fealty to priority of purpose when focused on other than financial interests. Second, it can help inform internal approaches to decision making about risk taking, allocation of resources, assessment, and other topics. Third and fourth, it can help demonstrated priority of purpose to others while also ascertaining their priorities and alignment (or lack thereof) – in practice as opposed to mere intentions or tolerations – based on how they respond to the proposed approaches to the identified terms and topics.

There is a heightened lack of clarity and understanding about the new U.S. business forms both in terms of theory and practice, especially with regard to relative priorities of social good (or the absence thereof), decision-making, and meaningful accountability thereto (or the lack thereof). As a likely result, investors, entrepreneurs, and their respective advisors are not using the forms, or they too often are using the forms for the wrong purposes. Moreover, policymakers risk incentivizing something other than what they intend while punishing those they do not intend to punish. In addition, capital is not flowing to businesses that pursue and prioritize social good as had been hoped. Contributing to the complexity and consequences are efforts to re-characterize businesses as “social” and investing as “impact” any or all businesses or investments that have even a smidge of social good. As a result, too often, too many people feel good about what they believe they are doing without realizing that they are not doing what they believe. An intentional framework for decision-making and evaluation can help inhibit these results. This article presents a framework grounded in understanding commitment to social good, desired connections between efforts/resources and social results, and approaches to social good that are distinct from those of traditional approaches – i.e., “differentiated social good.” It also juxtaposes the proposed “social primacy company” as an example of what a form that actually does what too many mistakenly believe traditional and the still new hybrid forms purportedly do. Investors, entrepreneurs, their legal and other advisors, policymakers, journalists, academics, researchers, and others would benefit from such clear understandings, framework, and considerations of differentiated social good.

This Viewpoint essay outlines key considerations for research on entrepreneurship, and for social business entrepreneurship specifically, considering the wide range of forms and essentially heterogeneous nature of this broad set of businesses. Themes related to practical research and key questions are outlined, along with considerations for researchers as the social business entrepreneurship space continues to evolve.

For more than ten years, Prof. Rob Reich has lamented that foundations have been allowed to be “subsidized,” unaccountable, opaque, and powerful – as he and others conceive of foundations and their environment. This lament is presented in his recent book, which positions its purposes on five pillars: (1) philanthropy is repugnant to democracy as described; (2) philanthropy is an “artifact” of the State; (3) foundations are opaque and unaccountable; (4) donor intent and perpetuity are subversive; and (5) the charitable deduction is a “subsidy” with no redeeming value except possibly as a tool to justify reining in foundations and philanthropy. However, each pillar leaves out critical elements and analysis, and the vacillation between theory and practice without noting the switches or fully presenting either creates confusion. Those pillars are intended to support two possible roles – and only two roles – as acceptable for foundations in democracy: discovery and advancing pluralism. However, their positioning neglects important chronologies and histories and suffers from other missing substantive analysis that also does not sufficiently support restricting foundations to these and only these functions. Finally, there seems to be a disconnect between overt objectives, actual presentation, and implicit purposes, which contribute to substantial concerns about critical gaps and missing information and perspective about foundations, philanthropy, and democracy. Ultimately, the theory and its presentation are too confusing, incomplete, and nuanced in part because they neglect substantive ways in which foundations and philanthropy are not only not repugnant to and not failing American representative democracy but are actually consistent with it and even exemplars of it, which is a topic for another day.

Demand and opportunities for combining pursuit of profit and social, green impact are increasing. The public sector and both aspects of the private sector – for-profit business and tax exempt, charitable enterprises – are interested in doing more and better. That includes both sectors seeking to leverage the benefits of what each can bring to an endeavor through cross-sector collaborations and ventures. While originating with interests that complement each other and even overlap, these hybrid pursuits – financial and social impact, public and private operations – involve interests or depth of intentionality that inevitably will collide and ricochet. There are bound to be disagreements, even under the best of circumstances when those involved act with the best of intentions. Until recently, there were no frameworks within which policy makers might use policy levers to reconcile, encourage, or discourage approaches to resolving such conflicts. Nor were there frameworks by which practitioners – legal, investors, entrepreneurs, and others – could understand their own expectations or those of others in order to identify and exploit areas of convergence and to prepare for areas of divergence. This article expands on four recently introduced frameworks for identifying and managing complementary, competing, and conflicting interests and objectives and the depth of commitment to them as follows: • Degree and depths of commitment to social purposes or the lack thereof; • Importance of connections between the effort being put forth and the social impact or results to be achieved; • Whether and how to address direct, indirect, knowable and unintended harms; and • Relevance of accountability and whether to rely on business owners, social/public engagement, and/or legal causes of action and remedies. These frameworks (or something like them) usefully function independently, but they also inter-relate and operate together. The essence of this article is posit how the above frameworks can intersect to identify the areas in which policy makers should and should not make policy concessions for given efforts (e.g., compromise fiduciary duties, provide tax incentives or bid procurement preferences, exempt from securities laws, etc.). This article aids practitioners by helping them identify their own (or their clients’) substantive expectations, those of others, and where overlap can be advantageous and where disparities are likely to become costly diversions.

Organizations and people from within the charitable sector are increasingly engaging in historically non-traditional activities and with other than 501(c)(3) organizations in their efforts to generate revenue and investment/donations and to more aggressively pursue their charitable mission objectives. Examples include ventures with or from other than charitable-oriented businesses and investors, combined public-private fund arrangements, pay-for-success, impact investing, opportunity zones, micro-lending for business, and other finance-oriented relationships. These efforts are changing the ways in which 501(c)(3) organizations must identify and manage against impermissible private benefit. One aspect of many of these activities is intentional awareness that the brand and reputation of many 501(c)(3) organizations can have independent value on which others might want to trade, with or without providing commensurate value. Another area in which private benefit problems arise is within more garden-variety, day-to-day operations. Consider operation-oriented pursuits such as contracting for delivery of goods and services, which might require increased attention to the financial and non-monetary values of data collected and the tools used to collect, store, secure, and analyze that data. Finally, “new” philanthropists and social change actors are engaging in historically non-traditional activities by structuring these activities without regard to (or at least with much less regard for) the incentives of tax deductions and exemptions. All of these implicate and require thoughtful consideration of and management to protect against impermissible private benefit while still allowing for enthusiastic pursuit of mission objectives.

There are numerous opportunities for policy interventions to clarify, enable, or perhaps even inhibit social entrepreneurship. As one example, consider the emergence and expansive growth of available social business forms, particularly of the benefit corporation, which substantially modified traditional conceptions of fiduciary duties perhaps to the point of elimination. Other policy efforts or possibilities include financing mechanisms involving public money, tax favored treatment, exemptions from securities requirements, and affording bid procurement preferences on government contracts. As an essential precursor to material policy concessions to social entrepreneurship, especially to the extent it or its enterprises compete with or seek to distinguish themselves from other market participants, several determinations must be made. These determinations have two key roles: (a) shaping whether to provide the relevant incentives or make the applicable concessions and, if so, (b) how far to go to ensure a reasonably commensurate relationship between benefits and burdens for enterprises, movements, and society. Four essential sets of questions should shape, or in some cases even dictate, how those roles are defined. Beyond policy, these sets of questions have practical implications for those who invest in, operate, and interact with social ventures. Lack of mutual clarity about any or all of these risks longer term problems for the enterprises and those involved with them but more importantly for the social benefits being sought. • What should the underlying commitment be to pursuing social results: devotion or does mere tolerance suffice? • What should the relationship be between the effort dedicated to social returns and the actually realized result? • What attention should be given to or require about social harms that might be associated with, connected to, or caused by actions taken in the pursuit of social good? • What form(s) should accountability take and what consequences, if any, should be expected for failure – not just non-compliance but less than optimal outcomes? Clarity on these matters can also help regulators and enforcement personnel as they evaluate whether/how to proceed with guidance or actions. Resolving ambiguities that exist could facilitate more and faster adoption of social business forms and other efforts to achieve worthy objectives of the social entrepreneurship movement. In some ways, this analysis also involves bringing clarity and discipline to whether “impact” and “intent to have impact” are the same or even similar.

In Policy Patrons: Philanthropy, Education Reform, and the Politics of Influence, Prof. Megan Tompkins-Stange purports to delve into the inner sanctum of four large U.S. foundations – Gates, Broad, Ford, and Kellogg – and then compare her perspectives of the first two with the latter two in how they engage or fail to engage democracy in their respective missions to improve our nation’s education systems and outcomes. Although presenting interesting insights, the book has too many flaws to give in to the natural temptation to equate its timely topical focus with meaningful critique, much less to extrapolate to policy debates more broadly. The book’s portrayals, conclusions, and even its structure unduly disparage the democratic participation that actually occurred in so-called “top down” approaches while simultaneously overstating the democratic sensibilities of “grassroots” approaches. Even so, the book presents entertaining and even useful insights into the workings of these foundations in one particular program area over a particular course of time. Reading more into the book overstates its significance for foundation engagement in education policy or more broadly, regardless of who would have won the election.

This chapter demonstrates that social business models do not meaningfully prioritize or impose accountability to “social good” over other purposes in ways that (a) best protect against owners changing their minds or entry of new owners with different priorities and (b) enable reliable accountability over time and across circumstances. This chapter further suggests a model – a “social primacy company” – that actually prioritizes “social good” and meaningful accountability to it. This chapter thus clarifies circumstances under which existing models might be most useful and are not particularly useful, especially as investors, entrepreneurs, employees, regulators, and others pursue shared, common understandings about purposes, priorities, and accountability.

REGULATING CHARITIES: THE INSIDE STORY is a fascinating amalgam that is part history, part chronology, and part storytelling about recent changes in how five historically connected common law countries approach regulating their charitable sectors. These countries are England and Wales, the United States, Canada, New Zealand and Australia, with each country’s evolutions being covered distinctively in at least two chapters. Chapter authors include those who have served as principle executives of their country’s primary regulatory body, members and chairs of government oversight commissions, a legislator, and leaders and practitioners from within the respective charitable sectors, including one with a decidedly state-level orientation. Many authors cross several categories, and some cut across multiple jurisdictions having served as advisors to others or substantive participants in international gatherings of charitable sector regulators. The book decidedly eschews a coordinated effort or commanded approach and successfully avoids merely comparing and contrasting among jurisdictions. Instead, the editors allow the chapter authors to communicate their perspectives on and experiences with the recent changes in the manner they believe will be most useful. In the process, the reader can draw their own comparisons, especially across the several key themes that organically emerge: the influence of political power, challenges balancing regulator independence vis a vis government and the sector, views of permissible proactive engagement by charitable sector entities in policy activity, and the effects in some countries of increasingly blurring lines with other sectors -- government and business. With this combination and approach, REGULATING CHARITIES satisfies certain curiosities, stokes others, and ignites new ones, perhaps especially in allowing the reader to decipher for him or herself just how much of the approaches taken by any given jurisdiction may or may not be readily transferrable to others. The book succeeds in demonstrating that appropriately regulating the charitable sector is challenging and that adapting from another jurisdiction(s) is not as easy nor as obvious as it might appear on the surface.

The article contends that entrepreneurship and philanthropy have much more in common than money. Entrepreneurship and certain approaches to philanthropy share perspectives on opportunity recognition and risk taking. More importantly, however, America's entrepreneurial and philanthropic experiences are both made possible by and exemplars or demonstrations of core principles of "pursuit of happiness" and "blessings of liberty" from America's Declaration of Independence and Constitution. The article also explores how considering charitable assets as "public money" is inconsistent with those principles and undermines both entrepreneurship and philanthropy, not just the latter. The author contends that, by adhering to and advancing these core American principles, we can expand on centuries-old traditions of hard work, innovation, and creativity that have contributed so greatly to economic growth, individual opportunity, quality of life, and human welfare.

The chapter focuses on how core principles in America’s Declaration of Independence and the Constitution have shaped opportunity recognition and risk taking characteristics shared by entrepreneurs and certain approaches to philanthropy. Of particular focus are principles that relate to the “pursuit of happiness” and “blessings of liberty.” The chapter asserts that America’s extensive entrepreneurship and philanthropy experiences both are made possible by these principles and are exemplars or manifestations of these principles in action. By advancing these core American principles this paper contends that we can expand on centuries-old traditions of hard work, innovation, and creativity that has contributed so much to economic growth, individual opportunity, improved quality of life, and advances in human welfare.

One of the principle motivating forces driving the creation, expansion, and use of new formal hybrid business structures is a desire among entrepreneurs, investors/funders, and policymakers to dedicate financial capital and other resources to areas of society that might not be as clearly or easily pursued under traditional forms. People are seeing opportunities to address social problems in new and different ways with financial resources, business models, and compensation structures and incentives not normally targeted to such problems with the same vigor, if at all. They have wanted clearer and simpler legal contexts within which to pursue their purposes and help others do likewise.As a result, new business forms have emerged such as benefit corporations, flexible purpose corporations, and low profit limited liability companies. As with most things new, there are accompanying questions and ambiguities. Among the most notable and troubling for these forms and their use is how to regulate them and what impact such regulation may have on operations. One approach seeks to subject them to charitable trust laws, but that approach is likely to have substantial negative (and avoidable) consequences for these forms and those who engage with them, including the following: • restraints on how or even whether charitable hybrids distribute profits and allocate appreciated property.• restrained flexibility to change either their purposes or operations in light of models or tactics that seem to be succeeding or failing;• fewer avenues for merging, terminating, or disposing of assets, which could restrict or even extinguish certain exit strategies for funders; and• restricted capacity to compensate managers and other insiders, especially if they are also investors.Fortunately, it is not required that charitable hybrids be uniformly treated as charitable trusts, and there are sound arguments against doing so, not the least of which is that such a construction could effectively nullify the statutes, which could not have been the legislative or gubernatorial intent. More importantly, strong alternatives exist for addressing legitimate regulatory concerns, including the prevention of fundraising scams and protecting the credibility of the charitable sector and the integrity of when and how charitable trust law applies. These alternatives could actually broaden the available oversight, causes of action, remedies, and consequences for failure to abide by charitability requirements of the new forms.