Originally published in the Monadnock Shopper News
Looking back on Monadnock Buy Local’s accomplishments (like nurturing Plaid Friday in our region), while looking forward to what is happening in the local economy movement has me thinking -- is it time to move away from traditional nonprofits and towards different types of business models to support this work? Enter the Fourth Sector Economy.
What is the Fourth Sector?
There are three widely recognized sectors in our economy: for-profit businesses, nonprofit organizations and government agencies. Over time, these sectors have become blurred -- as for-profit businesses look to maximize social benefits over financial profits, and nonprofits sell products and services to diversify their revenue streams. The lines have become so blurred that many believe another sector has emerged, the Fourth Sector.
The Fourth Sector represents a merger of movements that intentionally integrate social purpose with traditional business methods. Unlike regular for-profit companies, for-benefit businesses put their mission over maximizing profits for their shareholders. The products and services that these businesses offer help them serve their purpose, not just bring in financial profits.
Benefit Corporations/B Corporations
One well-known example of a Fourth Sector business in our region is W.S. Badger Company in Gilsum, a locally owned company that makes healing balms, lip balms, sunscreens and other personal care products. In 2014, a New Hampshire law created the option for a company to incorporate as a Benefit Corporation rather than as a traditional corporation. This designation allows Badger to balance its triple-bottom line (social, environmental and financial) interests -- instead of being legally obligated to maximize financial profits for its stakeholders.
Badger is also a B Corp, a certification process that helps the company “measure what matters” and better balance its purpose and profits. Other B Corps in our region include Green Energy Options and Mascoma Bank.
Fourth Sector Needs
Just like Badger, as the Fourth Sector develops, it requires a supportive ecosystem of legal structures, technical assistance and other support to meet its unique needs -- some of which is not yet developed.
“To succeed at delivering on both their commercial and impact objectives, for-benefits need strong support systems just like the other sectors but tailored to their unique requirements,” said Heerad Sabeti from The Fourth Sector Group. “They need access to financial markets that seek positive social and environmental impacts, enabling policy and regulatory environments, integrated assessment and reporting standards and tools, specialized technical and legal assistance and training offerings, and more. In short, the mechanisms that make a market function.”
The Local Crowd and The Fourth Sector
I’m thrilled to share that, first, The Local Crowd Monadnock (TLC Monadnock), a locally based crowdfunding platform, will expand to serve all towns in our region and, second, TLC Monadnock will begin working more formally to support some of the needs of the Fourth Sector Economy. Please stay tuned for more details on that work in January.
TLC Monadnock is currently hosted by Monadnock Food Co-op and supported by the Greater Keene Chamber of Commerce, Greater Peterborough Chamber of Commerce, New Hampshire Small Business Development Center and Monadnock Economic Development Corporation. Discover more at monadnocklocal.org/tlc or contact me at firstname.lastname@example.org or 603-283-5401.