Benefit Corporations

Earlier this year, New York became the seventh state to recognize an interesting new category of business: the “benefit corporation.”

Unlike the typical for-profit corporation, which must be run to maximize shareholder profits, the benefit corporation is explicitly enabled to balance its profit-maximization objective with some other “public benefit” of its choosing.  The statute sets forth a list of qualifying “public benefits,” which includes a variety of worthwhile causes.  Conspiciously absent from this list is anything having to do with religion.

The full list is as follows:

” (1)  providing  low-income  or  underserved individuals or communities   with beneficial products or services;     (2) promoting economic  opportunity  for  individuals  or  communities   beyond the creation of jobs in the normal course of business;     (3) preserving the environment;     (4) improving human health;     (5) promoting the arts, sciences or advancement of knowledge;     (6)  increasing  the flow of capital to entities with a public benefit   purpose; and     (7) the accomplishment of any other particular benefit for society  or   the environment. “

One could attempt to form a benefit corporation with a religious orientation by arguing that such a focus fits within category 7, “any other particular benefit for society.”  Whether that would pass muster and qualify is an open question.

Two things make the absence of an explicitly religion-oriented category  of benefit corporations from the statutory list particularly ironic.

First: historically (especially prior to the 18th century), a business could only be chartered as a corporation if it served some public purpose / the common good.  Thus, it could fairly be said that, regarding the first corporations, they were all “benefit corporations.”  Interesting, however, among the most commonly recognized public purposes for which a corporation could be formed back then were purposes having to do with religion (such as the construction of a church).

Second: in recent times, some of the most vocal advocates for greater corporate social responsibility have come from religiously inspired voices.

It is difficult to believe that the absence of religion from the list of qualifying “public benefits” was a mere oversight.  Rather, it seems to reflect the prevailing notion that religion is a wholly private matter, with little connection to the common good.

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2 responses to “Benefit Corporations

  1. I’m not sure I see the same thing you are. It may be that religion is not one of the end recipients on the list (except maybe in the residual category #7), but any one of the first 6 items can be accomplished by a religious institution or in a religious manner (moreover, #6 could involve moving money to religious non-profits). Further, none of these aims excludes religion. If that’s a fair reading, then the subtext would be that religion is instrumentally beneficial to the common good, but perhaps not an intrinsic part of it. (Left unsaid: perhaps religion is an intrinsic good for those who practice–but this structure seems agnostic on that issue.)

  2. Fair point, Jeremy. But what I was getting at is that promoting religion per se is not considered a “public benefit” (although promoting the arts, science, environmental preservation, etc., are considered pubilc benefits). This omission, I suggest, reflects a particular view of religion (a view that does not see religion as something that contributes to the common good).

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