Here’s some corporate development news we wanted to share: Giv.to is halfway through the process of being certified as a B Corporation.

B Corps are “new type of corporation which uses the power of business to solve social and environmental problems.” The premise is this: Unlike non-profits, B Corps value market-based principles to grow their business – instead of relying on grants and charity they build their business to scale and achieve liquidity in a competitive marketplace. But unlike traditional corporations, B Corps’s social mission is designed to come first.

B Corps believe that a legitimate social agenda does not have to suffer under the interests of a company’s shareholders. Is this belief realistic?

From our conversations with the B Corp team, it seems like a very tricky balancing act. Even if a team builds a company with a social agenda in mind, there are two big problems that often arise:

1. Under New Management – if a company is especially successful, its founders sometimes exit under a sale, merger or IPO. Whoever the new management is, they might have a completely different attitude to running the business. This problem makes it dangerous to help socially progressive companies because you believe in their cause. The more successful the business becomes, the more likely the company is to change its agenda once its founders secede.

1. Shareholder Primacy – if a company starts to take on investment and divest equity, all of a sudden these stakeholders will have input into the core business model, and their interest will be to maximize their return on investment, whether or not it comes at the cost of parts of the company’s social agenda. This problem is especially tricky because our country’s legal regime is designed to protect shareholder interests above anything else, making social goals secondary to profit-maximizing ones.

The B Corp solution is to include in the corporate governance documents a legal framework for balancing a social agenda with a purely economic one. That way the agenda survives new management and can be judiciously balanced against shareholder primacy.  The proof of whether this works is in the pudding, so check out the legal vision section of their website to see how it works.

As a business dedicated to changing the way non-profits and campaigns raise money, we believe Giv.to is a great example of what makes B Corps work. In our case, we’re lucky to both have a solid business case to make to our clients (causes who want to multiply their fundraising power) and also an agenda of building communities of activists around the world. More important, we think we have a strategy where the more business we do, the better the world will be. It’s a great feeling to be part of such a business.

If you think your business fits into such a mold, check these guys out and download the B Corp Intro Package.