Case Study: B Lab

October 15, 2018

B Lab, profiled in last year’s report, is in its twelfth year. An expanding number of companies is engaging with its mission to redefine success in business: becoming Certified B Corporations, adopting legal structures like the benefit corporation statute, and using the B Impact Assessment (BlA) to assess, compare and improve their impact. Some funders understand the value in B Lab’s systemic approach, as evidenced by new funding for B Lab to help businesses deliver on the Sustainable Development Goals, building on the nonprofit’s existing impact management platform. In aligning the BIA and the SDGs, B Lab can create convergence and increase coordination of efforts and reporting, eventually across tens of thousands of businesses of all sizes across the world, including influencer companies that are in the process of getting certified.

Co-Founder Andrew Kassoy notes that to grow their funder pool, “we needed to learn how philanthropy could fill the gap. We have grown in the last 18 months with new foundation donors, and want to work more with family foundations and high net worth individuals. We have a list of 720 potential funder relationships, but only a small subset are active supporters. Each of these funders has different reporting requirement.” B Lab hasn’t yet found support from funder collaboratives, despite trying for some of the well-known ones like MacArthur Foundation and the Audacious Project.

B Lab has found that funders generally prefer narrow requests rather than broader, system-wide approaches that the B Lab team believes is the only route to truly transforming capitalism to serve society, not just shareholders. “We want to attract collaborative funding platforms. If we can’t determine how to address this systems approach, as opposed to project funding, with funders, we will have problems with scaling in the way that a systems approach requires.” B Lab faces the same challenges that most grantees do: funding only for projects, not the overall strategy. They hope their own funders who see the importance of this, including the Skoll Foundation, Ford Foundation and Propel Capital, can get other funders to understand the value.

Kassoy notes, “There’s nothing more important than talent on a team for delivering on objectives, but the philanthropic world often doesn’t see the need for an organization to actually have an organization. Business investors never fund specific projects or one specific result, they fund the whole business to succeed. And a business then uses that investment capital to build its talent and execute on its strategy so that it can attract more funding to scale. But it’s been almost impossible to get people to understand the need for talent development, professional development, back office systems for M&E, or helping with reporting to foundations. This has been a huge constraint – the ability to create a sustainable organization so that our talent stays.”

B Lab is measuring the impact they’re having by tracking the impact improvement of B Corps and other companies using its impact management platform, as well as the adoption of legal structures enabling companies to be more accountable to their stakeholders. “We have business objectives, impact objectives, and organizational objectives against which we measure our results. We don’t yet have the sophisticated technological platform to track these objectives and to really use the data as a feedback loop for improvement.”

General operating support from a few foundations is enabling B Lab to grow, but they don’t yet have an M&E team, and they can’t support it if funders don’t fund M&E or provide more core support.  Better collaboration between organizations, funders, and the whole community, is essential according to Kassoy. “There is a lot of overlap between organizations. There are a lot of mapping exercises that get funded to define that overlap – we don’t need another map. Harmonization of data platforms and interoperability of data platforms will lead to a lot more impact. But it is hard to fund that.  That’s a big opportunity for someone who wants to own it!” Given the important role of business in society, and the potential that B Lab has, this will be an important network to learn from and support in the years ahead.

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