The challenge of building enterprises that combine the best elements of for-profit and nonprofit organizational models lies at the very heart of social innovation today. The emergence over the past decade of novel forms of legal incorporation—the benefit corporation, the L3C organization, and so forth—testifies to the demand for creative adaptation in this area. But as legal scholars Dana Brakman Reiser and Steven A. Dean argue in “Creative Financing for Social Enterprise,” a feature article published in the Summer 2014 issue of SSIR, the push to enable hybrid forms of legal organization might be less effective than efforts to develop hybrid financial instruments. The key to allowing social enterprises to flourish, Brakman Reiser and Dean suggest, lies in providing entrepreneurs with reliable access to capital, and properly designed financing arrangements can help to meet that goal.

To supplement the article, we present two scholarly articles that the authors have written for peer-reviewed law journals. In “Theorizing Forms for Social Enterprise,” Brakman Reiser offers a broad theoretical examination of the legal and practical dynamics that pertain to using standard and hybrid forms to house social enterprises. In “Hunting Stag With FLY Paper,” Brakman Reiser and Dean explore what they take to be a crucial impediment to building social enterprises—the trust gap that can exist between social entrepreneurs and impact investors—and discuss the kind of financial instrument that might address that problem.

SSIR shares this content with gratitude to the authors.

Theorizing Forms for Social Enterprise

One of the most basic things social entrepreneurs seek in a specialized legal form is safe space to declare that their entities are committed to a new and different goal—pursuing both profit and social good. The simple expression of this commitment is transgressive in traditional nonprofit legal entities.—from the scholarly article (published in Emory Law Journal)

Download the complete article here.

Hunting Stag With FLY Paper

FLY Paper creates a window of time during which social entrepreneurs can pursue their social missions without turning to the permanent legacy protection of a charitable organization. Rather than representing a threat to its social mission, the investment makes the mission “sticky” during the FLY Paper’s term. When social enterprises issue FLY Paper to investors, neither entrepreneurs nor investors need to worry that the other will “defect” by unilaterally pursuing their own self-interest.—from the scholarly article (published in Boston College Law Journal)

Download the complete article here.

Tracker Pixel for Entry