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Indiana To Bridge Gap Between For-Profit, Non-Profit Groups

By Brandon Smith

Posted December 21, 2015

Indiana will begin registering businesses as "benefit corporations," which gives companies the flexibility to be socially conscious while still making money. The new designation is meant to bridge the gap between for-profit and non-profit companies.

Secretary of State Connie Lawson says the benefit corporation designation protects companies against shareholder lawsuits when profits aren't maximized at the expense of a social mission. She notes it's a popular concept with millennials, a group she says will make up 75 percent of the workforce in the next decade.

"And 77 percent of millennials say that their company's purpose was part of the reason they chose to work there," Lawson says. "Benefit corporations give prospective employees confidence that a company is legally committed to their mission."

Heidi Schmidt runs College Students Care, which provides college and grad students a fundraising platform to support their volunteering and charity work. She says benefit corporation status gives her options she would only otherwise have had as a non-profit.

"To actually generate profit, get investors and grow a for-profit company with a mission that is really all about benefiting charities and the greater good," Schmidt says.

By allowing companies to make money while doing the work normally reserved only for non-profits, benefit corporations can often engage in greater charitable efforts.

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