In honor of National Celebrate Pro Bono Week, Pro Bono Net has lined up a variety of guest bloggers from law firms, legal aid organizations and elsewhere to share their pro bono ideas and experiences. Check back each day between Oct. 22-26 for new posts, and visit the Celebrate Pro Bono site to learn how you can get involved in events near you.
Below, we are pleased to present a guest post from Sarah Chiles and Nick Glicher of TrustLaw, a program of the Thomson Reuters Foundation that acts as a global hub for pro bono legal work.
Not too long ago, Ed Dowding created Sustaination, a new social enterprise in the UK with an ambitious goal: to “create a sustainable and resilient food system which produces enough good food, for everyone, forever.” A social entrepreneur by any measure, Ed created on online platform that helps small food businesses find, buy, sell, and promote locally produced food and drink.
Nicknamed “a LinkedIn for Local Food and Farmers,” it helps producers, distributors and retailers work together to shorten the supply chain, and save time and money in the process. As it grows, the company wants to create a sustainable alternative to the supermarket-led food system.
Like many social enterprises, Sustaination gets revenue both from philanthropic donations as well as from earned income, but Ed needs advice on how best to structure his organisation to attract the investment capital he needs to scale his revolutionary model.
Ed, like so many others, faces a classic bind that many social enterprises find themselves in as they come up against limitations with tax and regulatory codes that view a venture either as a profit business or a charity.
What legal structure social entrepreneurs choose for their venture is crucially important in attracting funding in the future.
Social entrepreneurs need legal structures that are flexible to cope with the rapidly increasing sophistication and innovation in the sector but also rigid enough to ensure that the commercial world understands and trusts them.
Through TrustLaw, we have worked with hundreds of new and existing social enterprises from around the world that are faced with similar challenges.
TrustLaw has matched them with pro bono legal advice to help them make the best decision for their social ventures, because for non-lawyers, choosing among these legal structures – community interest company in the UK or L3C in the U.S., charity, sole trader – is difficult.
Many of the more innovative governments across the globe are beginning to consider how they themselves can support the social enterprise sector in their own countries.
For example, the South African Treasury is working with the British High Commission to develop a white paper on policy frameworks for social businesses there.
Governments look to countries like the UK and the U.S., both of whom like to position themselves as market-leaders in the sector, for models that can be used and adapted to suit the contexts of their own countries. Given that neither the UK nor the U.S. provide a perfect template, it becomes all the more difficult for other countries to negotiate this landscape as well.
Without a perfect corporate form for social entrepreneurs to use, helping them understand how to get the best out of what is currently available by introducing them to enthusiastic and creative lawyers seems to us to be a very effective tool to help their ventures, and the sector at large, to develop.
With invaluable assistance from Morrison & Foerster, we have also created a detailed guide to explain the options in England, and are in the process of doing the same for the US and India, with guides for further jurisdictions in the pipeline.
Our hope is that by providing help in this way, more entrepreneurs will be able to see what works for them and what is lacking in current legislation. They will then be the best placed of all the players in the industry to apply the pressure and drive the changes necessary to ensure that future legal developments and policies are designed to fit the entrepreneurs, rather than the other way round.
Sarah Chiles is Vice President of Thomson Reuters Foundation and former Adjunct Professor in Social Entrepreneurship at NYU Stern School of Business. She manages relationships with members of TrustLaw Connect and oversees high impact programs in the areas of social entrepreneurship and impact investing.
Nicholas Glicher is a Senior Manager at the Thomson Reuters Foundation, having spent a number of years practising law at an international law firm.