Fall 2015

Volume 3 | Issue 2

CORPORATE SOCIAL RESPONSIBILITY IN THIS ISSUE: 2 More Than Just Buzzwords Things You May Not Know About 5 10 Corporate Giving Professionals Keeping track of cross-sector business models

by Corinne C. Bergeron

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Social Good Power Couple

All in the family - a public benefit corporation and a social enterprise

Volume 3 | Issue 2

Welcome to this issue of NNR

EDITOR Meg Morgan Center for Nonprofit Management ADVISORY TEAM Lewis Lavine Center for Nonprofit Management Brad Gray Center for Nonprofit Management Keel Hunt The Strategy Group Rich Rhoda Tennessee Higher Education Commission Linda Peek Schacht Nelson and Sue Andrews Institute on Civic Leadership at Lipscomb University CONTRIBUTORS Corinne C. Bergeron Jackson National Life Insurance Meg Morgan Center for Nonprofit Management For content suggestions, contact Meg Morgan at meg@cnm.org.

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The line between for-profits and nonprofits is blurring. Corporate social responsibility efforts are growing across the country, and nonprofits are beginning to borrow sustainability practices from the business world. This makes it more important than ever for nonprofits to be aware of trends that transcend sector.

Locally, social enterprise continues to be a hot topic, and in 2016, the new benefit corporation model is coming to Tennessee. This issue of the Nashville Nonprofit Review is about the similarities and differences between these business models and how corporate social responsibility (CSR) affects nonprofits.

Inside, read a first-hand account of the CSR field from Corinne C. Bergeron, the CSR Manager for Jackson National Life Insurance. In “10 Things You May Not Know About Corporate Giving Professionals,” Corinne shares tips from the field that keep nonprofit professionals in mind specifically. You’ll also find an interview with local businessman Ray Guzman and his wife Nakisha Guzman about their up-and-coming entrepreneurial endeavors: a public benefit corporation and a nonprofit with a social enterprise element.

We hope that the subjects raised in this issue are inspiring in your work!

About the Center for Nonprofit Management Our mission: To create and sustain nonprofit excellence Our vision: Better communities through extraordinary nonprofit services For 30 years, the Center for Nonprofit Management has been a home to Middle Tennessee’s nonprofit leaders. Located in the historic Trolley Barns near downtown, it offers a place to relax, share triumphs and find solutions to problems. At CNM, nonprofit board members, executives and staff have the opportunity to learn how to enhance their services through our comprehensive calendar of skill-building workshops, our consulting services and our annual Bridge to Excellence conference. CNM celebrates and recognizes the enormous positive impact made by its nonprofit members through the annual Salute to Excellence awards dinner.

Fall 2015

MORE THAN JUST BUZZWORDS Keeping track of cross sector business models that share characteristics Across the country and around the world, nonprofit, for-profit and public organizations are collaborating more than ever before. Through this collaboration and the growing public interest in social responsibility, these different organizations are adopting best practices from one another – making it unclear at times how to distinguish between them. This article outlines the similarities and differences of three of these social “buzzwords”: corporate social responsibility, social enterprise and public benefit corporations.

Corporate Social Responsibility According to the online Business Dictionary, corporate social responsibility is “a company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates” and companies express this citizenship through “their waste and pollution reduction processes, by contributing educational and social programs and by earning adequate returns on the employed resources.”

Companies can demonstrate social responsibility through volunteer hours, providing grants, employee giving programs, sponsorship of philanthropic events, partnerships with nonprofits on specific projects to solve mission-aligned problems and more.

A few local examples of corporate social responsibility include the Nissan Foundation’s grants (past winners include the Oasis Center and the Tennessee Women’s Theatre Project, among others) and the work of the HCA Healthcare subsidiaries, the HCA Foundation and the HCA Hope Fund. Companies of any registration (see “Public Benefit Corporations” below) can incorporate social responsibility practices.

To learn more about the field of corporate social responsibility, read “10 Things You May Not Know About Corporate Giving Professionals” in this issue on page 5.

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Nashville Nonprofit Review

At a Glance: Corporate social responsibility Traditional corporations giving back

Social enterprise

Creating sustainable social impact by selling a product

Public benefit corporation

Registration option for mission-based businesses

NEW!

Social Enterprise Social entrepreneurship can be confusing because any business model (for-profit, nonprofit or any fusion of the two) can incorporate a social enterprise element. Dr. Bernard Turner, Director of the Center for Social Entrepreneurship and Associate Professor of Social Entrepreneurship at Belmont University, describes social enterprise using a word that nonprofits are hearing more and more frequently: sustainability.

“Social enterprise is focused on creating social impact and value through a sustainable business model. This is done by offering a quality project, thereby increasing earned income for the organization,” Turner said.

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Currently in Nashville, Turner says there are several ongoing trends surrounding social enterprise. One of these trends is funders’ recognition of the opportunities that social enterprises can create.

“Some of our grant makers recognize the importance of nonprofits diversifying their revenue base to be more sustainable and they are becoming more supportive of social enterprise,” he said.

Because social enterprise is a hot topic and becoming more well-known, Turner also says there are now more resources, training opportunities and technical assistance available to assist nonprofits, as well as other types of organizations, interested in social enterprise. To those organizations thinking about adding a social enterprise element, Turner suggests learning from others.

“We have organizations like Goodwill Industries of Middle Tennessee, Second Harvest Food Bank of Middle Tennessee and Soles4Souls that are experienced subject matter experts on social enterprise and are constantly looking at ways to grow their enterprises through new innovation and collaboration,” Turner said. “Nonprofits interested in social enterprise should take the time to learn from them and take advantage of other resources available in our community.”

Thistle Farms is another local example of a social enterprise. The organization employs women who have survived addiction and prostitution to make and sell bath and body products, and the profits from the sale of these products go back towards helping these women.

Public Benefit Corporations As of January 1, 2016, Tennessee legislation permits a new possibility for for-profit businesses: becoming a public benefit corporation. Although social benefit is what makes this type of corporation different than traditional corporations, they are not nonprofits. However, Director of the Nashville Social Enterprise Alliance Hannah Pechan describes how mission is key in this new model.

Fall 2015 “Becoming a public benefit corporation is a new registration option for your business. It protects any mission that is set forth in the charter, so shareholders do not only have to take shareholder value into consideration. Public benefit corporation status protects the founder from any liability when making a business decision that favors mission,” Pechan said.

So how are pubic benefit corporations, or PBCs, different than social enterprises? Pechan says she thinks of these models as parallel because social enterprises could choose PBC status when establishing their model.

“Using the public benefit corporation status is a good choice for some social enterprises because it helps them if they want to make sure that their mission stays core to the business,” Pechan said.

“Benefit corporation legislation has passed in 31 states now, and since Tennessee is a very businessfriendly state, this was a no-brainer here. It will attract more businesses but won’t force anyone to make a choice they don’t want to make.”

Pechan speculates that on January 1 next year, there will be a flood of new PBCs – those who have been anticipating the new registration option – but that the numbers will slowly creep in after that as more people learn about how PBCs operate. Looking ahead to the future of the Nashville and Tennessee business community, Pechan says she views the new registration option as a very positive step.

“I think that it will put more structure around all types of social enterprise,” Pechan said. “It’s very

exciting for us because it displays willingness and even excitement on the state level to encourage the growth of mission-based companies and social enterprises. Another secondary level of excitement will be watching new mergers and acquisitions.

That’s going to become much more common, I think, and people will be more willing to have the conversation about PBCs.” One example of a public benefit corporation in Delaware is Method, a brand of environmentally-friendly home and body care products such as dish soap, laundry detergent, body wash and floor cleaners.

In keeping all these terms straight, it’s important to also keep in mind that in Tennessee, public benefit corporations are not the same thing as “b-corporations” or “b-corps.” B-corp status is established when a business chooses to be certified by a nationwide company called B-Lab that specializes in this type of registration.

“In Tennessee, you aren’t required to have a thirdparty certify you as a public benefit corporation, but you are allowed to if you choose,” said Chris Sloan, Chair of Emerging Companies Team at Baker Donelson.

Sloan described B-Lab’s b-corporation certification as an independent seal of approval separate from state legislation.

See “Social Good Power Couple” on page 8 for stories about specific examples of a social enterprise and a public benefit corporation.

A dditional resources:

csrwire.com nashvillesocialenterprise.org benefitcorp.net 4

Nashville Nonprofit Review

10 THINGS YOU MAY NOT KNOW ABOUT CORPORATE GIVING PROFESSIONALS

by Corinne C. Bergeron, Corporate Social Responsibility Manager Jackson National Life Insurance I began my career in corporate philanthropy in 2011 when I joined Jackson National Life Insurance Company’s Corporate Social Responsibility team. Jackson has a long history of giving back to the community through our volunteer service program (Jackson employees volunteered more than 12,000 hours last year alone) and through our quarterly grant program that awards gifts to nonprofits serving youth and seniors. My role was available because Jackson had recently opened a regional headquarters in Franklin, Tennessee and wanted to continue to build on its legacy of giving back to the community in locations where its employees live and work.

Prior to joining Jackson, I served as the Director of Development and Communications for the Center for Nonprofit Management and as the Finance Director for former Mayor Karl Dean’s campaign. Both of

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these positions prepared me for my current role by giving me a complete understanding of the nonprofit sector and how to appropriately represent a public official or organization in the community. The skill sets I developed that have served me well include: public speaking, event planning, organizational and time management, media relations and writing skills.

One of the most surprising aspects of this role has been the sheer number of meeting requests I receive every week from people who are interested in learning about how I became a corporate giving professional. Given the frequency of these requests and realizing that my colleagues with similar positions field identical requests, I thought it would be useful to share some facts, misconceptions and general information on the profession. Whether you are interested in working in this field, or are seeking tips on how to approach corporate funders, I hope this information will be valuable for you.

Fall 2015

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We realize how lucky we are.

I read recently that you have about as much of a chance of becoming a corporate giving professional as you do a famous ballet dancer. It’s an extremely difficult position to break into because companies typically keep the headcount for these jobs low. We spend the money after all, not make it! In many cases, only one person has the full time job of managing a corporation’s charitable giving.

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We are often overwhelmed.

With limited staffing, it is not unusual for someone in my field to receive 20 meeting requests per week to go over our funding guidelines or to learn about a nonprofit. We feel guilty about not meeting in person with everyone who makes these requests, but our time is often a scarce resource.

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We attend A LOT of events.

Events supporting our community are often wonderful occasions, but if you have an interest in working in this field, keep in mind they will dominate your calendar, often requiring evening activities up to three to five nights per week.

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Did I mention the schedule?

In this type of role, no day or time is off limits; 7 a.m. breakfasts, luncheons, evening receptions and other events will creep into your weekends. We have to be experts at time management and create clear boundaries in order to get our work done.

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There wasn’t a clear path to this career for us, and there probably isn’t for you.

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The hardest part of our jobs is that we have to say “no” every day.

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Friends may begin to have agendas.

Unfortunately, we don’t have any secrets about the best way to pursue a career in corporate social responsibility! The best advice I can give is short and a little obvious – seek out professional opportunities that allow you to be the community representative for an industry.

Before my job, I worked in politics, nonprofit and public relations, all in community-facing roles which helped me to develop my expertise on community engagement. Also, if you are fortunate enough to interview for a position, stay away from describing your interest in the position as the glamourized version of this role. Because we have limited headcount, we are often the people doing all of the administrative work behind grant check presentations and events.

Sponsorship requests come through various channels and not always through our company’s standard grant process. Emails and phone calls abound, often forcing us to say “no” to requests in a way that is as kind, but direct, as possible. We try to make every effort not to waste your time if your mission is outside of our funding focus.

Have great friends? Chances are they are involved with a nonprofit organization.

Once they figure out that we have a hand in the charitable giving for our company, regular happy hours can quickly turn into an opportunity for a sponsorship pitch. They are doing their jobs advocating for their organization, but we need to make sure we are always following a set process in order to prevent preferential treatment.

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Nashville Nonprofit Review

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There isn’t a secret pot of money or special way to ask.

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Don’t make an "ask” in your first meeting or conversation.

Most companies have an established process in place for their charitable program and you must submit a grant request through a formal system. That being said, there is no substitute for building relationships with the key decision makers who receive those requests.

Instead, utilize this time as an informational session to find out if your organization fits with the nonprofit’s focus area.

Ask a lot of questions about the funding process and focus. Demonstrate that you have already read public materials including the website, to indicate you have done your homework.

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We love the nonprofit community with our whole hearts, and spend every day advocating for it internally.

When we aren’t at events, we spend our days navigating our corporate structures to increase our budgets and encouraging our employees to volunteer or tell their stories to people inside our businesses. We believe that nonprofits don’t receive nearly enough credit for their unwavering commitment to making Nashville better for all of us. We love what nonprofits do for this community and are so thankful for their partnership!

For more information about the corporate giving profession, visit the Association of Corporate Contributions Professionals (ACCP) website: accprof.org.

Top Three Corporate Giving Causes

29%

of total giving went to education

25%

went to health and social service

15%

went to community and economic development

Data from the Giving in Numbers Brief 2015 from the Committee Encouraging Corporate Philanthropy (CECP), available at cecp.co

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Fall 2015

SOCIAL GOOD POWER COUPLE Ray and Nakisha Guzman are working towards establishing a benefit corporation and a nonprofit with a social enterprise element.

What do you get when passionate people take action to solve problems? In the case of Ray and Nakisha Guzman, the answer is two different social responsibility models – a public benefit corporation and a nonprofit with a social enterprise element.

Ray and Nakisha have been married for 20 years and have five daughters. And although Ray is the CEO of WPC Healthcare, an IT company that provides healthcare data solutions, and Nakisha homeschools their five children, they have also found the time to channel their passions into developing big ideas.

Neither of these ideas is brand-new; the seeds for both of the Guzmans’ projects were planted years ago. Ray became inspired on a trip to Ethiopia (the Entoto mountain range outside the capital city of Addis Ababa) with the group Ordinary Hero. Ray says that while Ethiopia is one of the more developed countries in Africa, a huge percentage of the citizens live in poverty and the unemployment rate was 17.4 percent last year.

“On Entoto Mountain you’ll see women carrying huge loads and bundles of eucalyptus. Eucalyptus is used for multiple purposes in Ethiopia, but in effect, these women are doing this job for 60 cents a day,” Ray said. “And the load is significant, sometimes upwards of 120 pounds, and these women might weigh 100-120 pounds themselves.”

“...the load is significant...”

Ray says that while he has seen this type of situation before in other countries, it never occurred to him to do anything about it until this particular trip. He recalls an interaction with one 61-year-old woman who managed to exude tremendous joy, even after years of back-breaking work for very little pay. After this experience, Ray started to wonder what he could do to support them.

“It probably didn’t help that I was on that trip with

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Nashville Nonprofit Review my soon-to-be-19-year-old daughter so I think I was particularly vulnerable emotionally about it all. So after that, we started to brainstorm. The more we started thinking and looking into it, and me recalling things I’ve seen before, the truth is that it wasn’t just about the women on this one mountain, it’s tens of millions, potentially hundreds of millions, of women around the world,” Ray said.

After doing a lot of research and strategizing with others, Ray landed on the idea of developing weight displacement backpacks. In working through this concept, Ray has partnered with engineers, inventors, designers, patent attorneys, marketers, photographers and others, and now has a basic prototype developed. The backpacks look similar to the large ones you might see travelers carry on a trip through Europe, or the ones often used in long camping trips.

“The next step is a crowdfund of some sort to take the project to the next phase: working with a local company to take it from concept and design in physical products,” Ray said.

Ray hopes to bring prototypes of the backpacks into the field during the next trip to Ethiopia in December. After bringing so many different people together to work on the project, Ray says that if the design is successful, he will feel a great responsibility to bring it to as many people as possible.

But how would this project remain sustainable?

That’s where the public benefit corporation model comes in. Ray says that, assuming the pack works as expected, he intends to create a commercialized backpack.

“Think of a regular backpack that would then enable us to sell the product in the marketplace in order to subsidize giving these away in places like Entoto Mountain. We’re calling it Entoto Gear,” he said.

Ray believes that Entoto Gear can best achieve its mission by establishing with the public benefit corporation model, even though Tennessee just passed the legislation.

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“I don’t foresee it being a pure not-for-profit primarily because if we are successful, I could see other avenues that we could pursue to expand upon this type of concept – other types of bags and other things we could monetize to subsidize giving products away,” Ray said. “I also want to have room for flexibility. For the governance structure, the agility and the autonomy that I think will be needed to really execute this at speed, a benefit corporation will give me more than a 501(c)3. But at the same time, a benefit corporation feels different than a pure traditional corporation because there’s a stated mission and requirement that you are living out the mission that you’re telling people you’re going to uphold.”

For anyone thinking about starting a benefit corporation, or any business model with a social impact, Ray recommends looking to your circle of friends.

“I’ve never done anything like this. But for me, it was surprising to learn how many people that are in your network who are willing to do something. I’ve had so many people say things like, ‘I know a guy who knows a guy who would be really interested in helping with this part of the project,’ and before you know it, they’re introducing you and you’re having lunch. It seems intimidating and overwhelming, but you probably already have all the resources you need from a talent perspective,” Ray said.

“I’ve never done anything like this.”

In addition, plenty of information about creative business models is available for those who take the time to conduct research, Ray says. And of course, passion is necessary.

“The only thing that has carried it through for me is the passion I have for the problem I’m trying to solve.

That passion comes out when you sit down and talk to people,” Ray said.

Fall 2015 Nakisha Guzman certainly isn’t short on passion either. Nakisha began thinking about ways to better serve the disabled community and their families after she and Ray had a child with special needs.

“For me, it started when we were having trouble connecting our daughter with a larger community.

We were involved in some programs – Full Circle with the YMCA has been great – but even churches in the area sometimes have a hard time meeting the need.

There are a lot of families who might not even have the opportunity to go to church because of the challenges of bringing a child with special needs,” Nakisha said. “I had a vision for a therapeutic recreation center and at the time I had no idea what that meant.

Years went by, and what I had envisioned seemed like such a big project that I wasn’t sure how to get started. But then more time went on and we had another child with special needs – she has autism – and at that point I thought it must finally be time to answer the call.”

lives, and to also help their family members on that journey,” Nakisha said. “We want to take whatever business we start, and right now we are looking at starting a restaurant, and pour those revenues back into the mission of FLOH Nation. We’d be able to create programs that offset the cost of therapy for the family and open up doors of opportunity for recreation and employment.”

With five children, two of whom have special needs, the Guzmans say that creating opportunities for all of them can be challenging. If one child has a speech therapy session, do the other children just tag along and sit in the lobby? What if some take dance or karate classes and the special needs children are unable to participate?

With an inclusive recreation and therapy center, opportunities for growth and development would be available for all children in a family – and not to mention it would make parents’ lives easier.

The vision became FLOH Nation, a planned inclusive community that serves people with disabilities and their families alongside typically developing children and families. FLOH stands for freedom, love, opportunity and hope – tenets that Nakisha wants to create for families.

FLOH Nation is a 501(c)3 that includes plans for several different programs, including a recreation center, therapy opportunities and a restaurant.

“Imagine a community where all of these things are in the same place!” Nakisha said.

“Our goal is to find employment opportunities for the disabled so they can find meaning and purpose for their

But, as with Entoto Gear, how can this big vision of the FLOH Nation community become sustainable?

FLOH Nation is also looking into developing a housing model.

“Think of grandparents raising a special needs child.

They’re aging, so what will happen to the child? In this model, imagine a condo where the older couple could have a place of their own while they are aging and their needs could be met, but also where their grandchild could either live with them, next door, or completely separate, depending on needs. The child would already be integrated into a community,” Nakisha said.

“When I looked at the model, and through being involved in different organizations, I realized that I didn’t want to become an organization that only relied on donations and fundraising,” Nakisha said.

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Nashville Nonprofit Review This is where the social enterprise aspect of the nonprofit comes in. Nakisha hopes to open a restaurant that would both bring in revenue to sustain the FLOH Nation model and serve the mission of the nonprofit by opening employment opportunities.

“I really want to open up avenues of employment.

That’s kind of my thing. There are many individuals whose disabilities aren’t that significant whose skills and abilities are high. For a lot of these people, they might be intimidated to apply at certain places even if they felt they were capable,” Nakisha said. “I think it would be amazing for Nashville to be a leader as a place that changes lives for the disabled. Every parent’s hope is that your child can reach his or her potential and be a part of society.”

“I really want to open up avenues of employment.”

With 501(c)3 status in hand and plans in place, Naki-

sha says the next step for FLOH Nation is geographic in nature.

“Right now I’m looking at locations, both for the recreation center and the restaurant. And I’m looking to build the team and find the right people who see the vision and who are as passionate about this mission as I am,” Nakisha said.

Plans are developing and moving forward for both Entoto Gear and FLOH Nation. Since the time of this interview, Entoto Gear has developed a logo and a website, secured a provisional patent and hired a crowdsource funding firm. Ray reports that content development is underway. A location has been found for FLOH Nation and the organization is now looking to secure funding to purchase it by launching a campaign soon. Nakisha is also working towards launching an apparel line on her own to bring in funds for FLOH. Visit entotogear.com and flohnation.com for more information, or email info@entotogear.com or info@flohnation.com to learn how to get involved.

Opportunities at the Center for Nonprofit Management Interested in enhancing your nonprofit career?

In celebration of its 30th anniversary, CNM has redesigned its Certificate Programs to include new classes, new class descriptions, and updated strategic tracks of classes. Visit cnm.org for more.

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