For-Benefit Organizations

The defining characteristic of all Fourth Sector organizations is that they integrate social and environmental aims with business approaches. Some Fourth Sector organizations go further by embodying features like inclusive governance, transparent reporting, fair compensation, environmental responsibility, community service, and contribution of profits to the common good. Of course, there are varying degrees of commitment to these features, and some organizations focus in certain areas of expression more than others.

As the Fourth Sector expands and becomes more formalized, there is a need to better clarify its boundaries. To that end, a range of efforts are underway to define the criteria for the archetypal Fourth Sector organization, sometimes referred to as the “For-Benefit” organization. As broad consensus builds around the definition of an archetype, it will become easier for those involved in developing various elements of the support ecosystem for the Fourth Sector – financial markets, legal forms, technical assistance, assessment and reporting standards, etc. – to focus and join their efforts. This will in turn create a more conducive environment for the growth and maturation of Fourth Sector organizations.

For-Benefits are a new class of organization. They are driven by a social purpose, they are economically self-sustaining, and they seek to be socially, ethically, and environmentally responsible.

Like non-profits, For-Benefits can organize in pursuit of a wide range of social missions. Like for-profits, For-Benefits can generate a broad range of beneficial products and services that improve quality of life for consumers, create jobs, and contribute to the economy. For-Benefits seek to maximize benefit to all stakeholders, and 100% of the economic “profits” they generate are invested to advance social purposes. Because of their architecture, For-Benefits can embody some of the best attributes of other organizational forms. They strive to be transparent, accountable, effective, efficient, democratic, inclusive, open, and cooperative.

For-Benefits represent a new paradigm in organizational design. At all levels, they aim to link two concepts which are held as a false dichotomy in other models: private interest and public benefit.