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Date
January 17, 2012

Benefit Corporations

Why some companies are making giving back part of their corporate mission.
Transcript

Jessica: Neil Blumenthal and Dave Gilboa see success as more than just profits. Their Manhattan-based eyewear company, Warby Parker, sells glasses online for only $95. And for every pair sold, they donate another to someone in need.

“People don’t have access to glasses, and it impedes their ability to learn, to work. You can imagine a farmer that can’t separate seeds to plant or a tailor that can’t thread a needle.

Jessica: To protect their mission, these entrepeneurs plan to register as a benefit corporation, or B Corp. Unlike traditional companies, which are required to make as big of a profit as possible for their owners, B Corps have more freedom to use their profits to benefit their community and the environment.

“We really wanted to create an organization that had a positive impact in the world and that got us excited about waking up and going to work every day.”

Jessica: Seven states now recognize benefit corporations, which are required to report annually on their social and environmental performance.

Generally, the point of a company is to make money. But B Corp’s try to make sure that people aren’t forgotten in the process of making that money. They believe this way of doing business will create a better economy and a better future for generations yet to come.

And there are nearly 500 certified benefit corporations in the U.S., with 135 joining this vision of the future just last year. And they are not all brand new, like Warby Parker. Some have been in business for years, like the outdoor clothing company Patagonia.

“I love this color.”

Jessica: Yvon Chouinard is the founder of Patagonia, based in California. After 40 years in business, this month, he registered as a benefit corporation.

“You can say that profit is not the primary reason for the corporation — that the primary reason is to do some good with the money.”

Jessica: Patagonia made $500-million in revenue last year and, as always, gave away one-percent of its sales, or $5 million, to environmental causes. Chouinard believes B Corp status will protect his vision even if someone else buys his company later on. In its second year, Warby Parker has sold 100,000 pairs of glasses and also given away one hundred thousand.

“It never gets old seeing somebody put on a pair of glasses for the first time.”

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