;The B’s are B Corpora- tions, companies that have been certified by B Lab, a nonprofit dedi- cated to the concept that business must be a force for good, rather than profit alone, and allies working toward that goal. That concept had clearly become mainstream when, in August, the Business Roundtable, which
represents the nation’s leading corporations, rejected
“shareholder primacy” as the sole purpose of business
in favor of stakeholder considerations. By doing so, the
business titans at the very least acknowledged that business must have a purpose beyond making money—that
companies must serve their customers, their employees,
and their communities as well as their investors.
That is B Lab’s mission. The B stands for “benefit,” as
in the social purpose businesses serve—or should. “Good
is the new cool,” explains Afdhel Aziz, a serial social
entrepreneur and inspirational speaker. He’s so sure of
it, in fact, that he’s adopted that phrase as his brand. It’s
even embroidered on his hat. That helped distinguish
him from the many B Corps attendees who are wearing
the “B” brand literally stitched onto their sleeves.
Denise Taschereau found her purpose in selling
socially responsible promotional items when she realized
that many great brands were giving away “terrible
products,” she says. Fairware, the company she
co-founded, sells “ethically sourced, sustainable
Hers is a Certified B Corporation, or B Corp, a very
much for-profit company, but one legally committed to
generating positive social as well as financial results. She
and her co-founder, Sarah White, are building on their
insight that companies are changing, says Taschereau, from
“marketing to drive sales to marketing to drive change.”
Another attendee, Dan Bodner, envisioned his future
as a B Corp while on his drive to work from Oakland,
California, to San Francisco. He watched homeless people
gathered in pop-up communities spilling onto the streets.
As a CEO of an IT outsourcing company, he found
success. But as CEO of his startup, Habitat Transitional
Shelters, he has found a deeper purpose: building low-
cost, moveable, temporary housing for homeless people.
“This is what I’m excited about,” he says. “This is where
my passion is right now.”
Habitat Transitional Shelters plans to produce basic
housing with metal framing, locking doors, operable
windows, and standard insulation for less than $8,000
per unit. That figures to be an inviting price for munici-
palities struggling to find shelter for the people that the
economy has left behind.
These entrepreneurs are in some sense rebelling
against the traditional business model. And no one
explained or defended this model better than the brilliant
economist Milton Friedman. Author of the 1962 classic,
Capitalism and Freedom, Friedman called the very idea
of corporate social responsibility (CSR) a “fundamentally
subversive doctrine,” likening it to a form of taxation.
Friedman was partially right but wrong in the end,
as experience and history have shown. It is possible to
operate in a for-profit structure, with the advantages
Friedman identifies, and also work as a public-purpose
company. That underlines the fast-growing movement
of businesses built on that dual-purpose premise known
as a benefit corporation.
Since Friedman’s writing, for-profit corporations
ranging from Starbucks to Koch Industries to Goldman
Sachs have used CSR strategies to increase shareholder
value while producing public-purpose goods. As far back
as 2013, more than 90 percent of consumers polled by
Carol Cone, the nation’s leading purpose-driven brand-
marketing expert, rejected the Friedman model in favor
of a broad CSR approach. Her research found that “the
clear majority expects companies to do more than play
a limited role in communities or simply donate time
In the harsh light of 2019, Friedman’s argument is not
merely outdated; it misses the point even in retrospect.
Investors are demanding that corporations take on social
responsibilities involving everything from guns to climate
change to education to the environment and more. The
Friedman doctrine is simplistic at best, and the corner-
stone of market fundamentalism at worst.
Most of the most successful companies—from micro-enterprises to multinational corporations—thrive because
they aspire to a greater purpose than profit alone. Best-selling business writer and adviser Jim Collins learned
through research on the performance of more than
14,000 companies that the most profitable ones over the
long haul succeeded because they focused on maximizing
Adapted from Organized Money: How Progressives Can Leverage the Financial System to Work for Them, Not Against
Them, by Keith Mestrich and Mark A. Pinsky (The New Press). Mestrich is CEO of Amalgamated Bank in New York City;
Pinsky is the founder of Five/Four Advisors, which consults small businesses, CDFIs, nonprofits, and corporations.