Anyone have experience starting/running a Social Purpose Corporation?

[lhamo]

I am thinking about starting a small business and looking into the relatively new/uncommon structure of a Social Purpose Corporation. 

https://www.501commons.org/resources/tools-and-best-practices/starting-a-nonprofit/social-purpose-corporation

https://en.wikipedia.org/wiki/Social_purpose_corporation

Anybody have experience with these?  I am wary of going the official non-profit route for a variety of reasons (including having witnessed friends have control of the non-profits they founded and sacrificed for be stripped away in some pretty brutal ways).  I also like think this new model that takes both social good and profits into account.  Plus you can define and pursue public good more broadly than with a social benefit corportaion.

Just created an account and searched the Washington state Sec of State database -- looks like there are currently 383 of these entities active in Washington state.  Even more have been administratively dissolved (472)...

[Smokystache]

I hadn't heard of these (I don't live anywhere close to Washington).

What is the primary benefit of a SPC over a traditional company/business that simply has a strong socially-oriented mission or side-goal. For example, let's say you want to start a donkey rescue, but you also breed some donkeys for profit.

I guess you could have an
a) SPC
OR
b) an LLC with a strong mission statement and an advertised goal of sharing 5% of your profits to help aging donkeys

If part of the goal is presenting yourself to the world as a committed, socially-oriented company, then I think your marketing (including social media presence) is more important than a niche corporate status that a relatively small percentage of people would recognize. Or put another way, your ability to put cute donkey stories on social media will have a larger impact than some different letters behind your company name.

But perhaps there is some other benefit that I'm missing that cannot be accomplished by traditional business structures (e.g., LLC, etc.). Would you be eligible for certain grants? Would it have an impact on state tax filing? Or is it just window-dressing?

[lhamo]

I guess part of what I like about it is that it states/commits to the social benefit goals up front, but has more flexibility than a 501c3 non-profit structure.  And potentially allows for tighter control by the founder than a traditional non-profit.  I'm curious about the model and think it is something interesting to support/experiment with.  So why not?

I had a look at the database and discovered that a popular business in my area registered under this designation earlier this year.  I've been meaning to see if they want to consign some of my stuff, so I'll go in and chat a bit with the owner about it.

I also discovered another org in a different part of the state that has a name and purpose that shares a lot of the aspects of what I want to do.  A bit worried there might be too much overlap there -- don't want to poach customers/market from them and can see ways that what I want to do could support/feed what they are already doing, but need to figure out how to approach.  I am probably only 1-2 degrees of connection removed from them socially/professionally, given where they are and what they focus on, so shouldn't be too hard to find a way to get introduced to them.

[Smokystache]

I can definitely see the advantages compared to 501c nonprofit; I share your concern about losing control as a founder.

A couple of other questions:
- Do you plan to seek/take outside funding?
- It is my understanding that an SPC will either need to elect to be a C Corp or an S-Corp (I could certainly be wrong). Which do you plan to choose?
- Is this something you could start as a sole-proprietorship and then later determine if you want to go the SPC route?

I like the idea of chatting with the folks at the nearby business.

[lhamo]

A couple of other questions:
- Do you plan to seek/take outside funding?
- It is my understanding that an SPC will either need to elect to be a C Corp or an S-Corp (I could certainly be wrong). Which do you plan to choose?
- Is this something you could start as a sole-proprietorship and then later determine if you want to go the SPC route?

Not initially, though I might in the future for specific project/project areas. 

I'm kind of seeing the whole enterprise as a bit of a business concept/idea incubator.  I've got a few things I'd like to try to start up small scale myself, prove concept, and then seek a larger partner to license or spin the idea off to. 

At the initial stages these include:

Specialty food/personal care products production, starting with a specific native plant that was once a staple food source but has not been commercially adopted in significant ways.  I need to look into more of the reasons why that is -- I know the plant itself is a bit challenging to propagate and time-consuming to harvest from.  But if I'm doing small batch production I can forage enough to start out myself. I am hopeful that local tribes (who I would like to partner with) also have existing stands of the plant that could be put into semi-cultivated status for a more reliable source.

I found one large agricultural grower that has significant acreage of the plant for a very specialized market.  Not sure what they do with the fruit, which is my main interest.  Will try to find a way to approach them to see why they haven't tapped it and if there is some way to partner up.

Propogation and promotion of the plant for use in landscaping and environmental remediation.  I need to look into why exactly the state DOT does not use this plant heavily in its landscaping, because I think it would be perfect for a lot of situations.  It can outcompete invasives like scotch broom in a lot of settings, requires no irrigation once esstablished, and can be foraged by both humans and local fauna.  If it is not maintained it can get quite rangey and develop dense thickets.  But if you harvest the fruit and leaves regularly that should keep it manageable.

I also do a lot of seed saving and plant starting, and could sell some of those as an income stream for the business.  Also landscape design and installation services using both the focal plant (once I get good at propagating it) and other native/permaculture oriented species.

I've wanted to do a permaculture design course or two or five for a long time -- this could pay for that.

Having things structured as a business makes it easier to control my income for health insurance and other purposes -- I can keep most profits in the business.

I don't know enough about the distinction between S and C corps yet to say which route I would go.

This may all fizzle out as I come down from my latest ride up my mental health rollercoaster, but at least I am having fun and being more productive than the many weeks I spent this fall pretty much catatonic on my couch watching youtube.....