B-Corp vs. Non-Profit

B Corps aren't required to be for-profit -- you can be a nonprofit B Corp. It depends on the goals of the organization and the state laws where they are operating.

The idea behind a B Corp is to have a third type of legal structure for the organization. In most states there are only legal frameworks for nonprofits and for-profits, and nothing that allows for a hybrid of the two. For example, if you wanted to have a nonprofit structure, but also have financial investors. In this case, you would have to choose a C-corp incorporation and then structure the bylaws to run as a nonprofit. The only thing is, if you were successful and had enough investors to buy you out then there is nothing legally preventing them from completely abandoning the nonprofit philosophy.

The goal of the B Corp movement is to lobby state governments to enact legislation to grant legal protections for such hybrids. Depending on which state you live in you may already have such legislation. In which case, you would look at what being a "for-benefit" corporation means in your state.

Otherwise, you need to decide what your goals are for the organization. If you plan on making most of your income from for-profit activities, there might be no need to become a nonprofit and obtain 501c3 status. It may make more sense to be a for-profit with clearly structured bylaws showing your for-benefit intent. This route would also give you a lot more operating freedom. Conversely, if you feel having 501c3 status would significantly increase your operating capacity or be a strong selling point for your clients, then it may make more sense to be a registered nonprofit with a clear focus on more market-driven approach. However, you would then have additional legal and documenting requirements to adhere to.

Either route you go, you can still register as a B Corporation, or one of the other for-benefit movements, so long as you meet their requirements.

/r/nonprofit Thread