Choosing the Legal Structure for a Social Enterprise, Jim Fruchterman Offers Guidance in New CSRwire Op-Ed

By Benetech, posted on

As global changes are transforming the ways in which society organizes itself to create public goods, aspiring social entrepreneurs often grapple with the question of what type of legal structure they should create—a nonprofit, for-profit, or hybrid. This is one of the topics that CEO Jim Fruchterman will be discussing at the upcoming Social Enterprise Alliance Summit 14. In his newly authored CSRwire op-ed ahead of the Summit, Jim offers guidance to social entrepreneurs through the issues they need to consider before they determine the legal form of their new venture.

“Call me structure agnostic,” says Jim. “I believe that for-profit and nonprofit structures can both be good vehicles for improving society.” He therefore argues that before deciding on the legal structure of a new venture, it is necessary to thoroughly explore the social enterprise idea. “Once you understand your venture and your motivation, the question about structure should have a straightforward answer.”

Jim highlights four foundational issues social entrepreneurs ought to consider: their motivation for starting a new social venture, the market they will be serving, the capital required to launch their venture and to keep it growing, and how much control they need to have over it.

You can read the complete op-ed on CSRwire Talkback. Jim’s op-ed is based on his 2011 Stanford Social Innovation Review essay titled For Love or Lucre.

Follow the conversation at @JRandomF @SEAlliance #SEASummit14.