The world of social impact organizations is booming, and as it grows, so does the number of classifications and certifications that can be awarded to these organizations. Even if you work in the sector, it can all get pretty confusing, so here’s a short guide to some of the basic terms and exactly what they mean.

B Corps

B Corp is a certification that is the business equivalent of Fairtrade or Organic. B Corps have gone through a rigorous screening process to assure they meet a strict set of B Corp criteria, including social and environmental performance, accountability, and transparency.

Examples: Exygy (that’s us!), Comet Skateboards, Dansko, Culinary Collective

Benefit Corporations

Not to be confused with B Corps, a benefit corporation is a legal status given by the state, and is legally recognized by 26 states and the District of Columbia. While many of its characteristics overlap with those of certified B Corps, benefit corporations do not need to be certified, and are not recognized outside of the United States.

Benefit corporation is a legal status given by the state

Examples: Active Neutrals, Fresh Truck, Get that You Matter

Nonprofits (NPO)

The objective of a nonprofit organization is to take any surplus revenue to achieve a social goal, and to use any kept revenue only for maintenance and expansion of the organization. It does not mean that the organization does not aim to make a profit, but simply that the profits will not be used for the benefit of the owners.

Examples: NPR, The Metropolitan Museum of Art, Habitat for Humanity, ASPCA

Public-Benefit Corporations

A public-benefit corporation is a specific type of company that is chartered by a state government. Public-benefit corporations can be for-profit or nonprofit, and focus primarily on social, educational, recreational or charitable goals.

Example: Empire State Development

Social Enterprises

A Social Enterprise is a company that has both commercial and social goals, but values the social goals over any shareholder profits. In contrast to a commercial enterprise with some social objectives, social enterprises do not offer any benefit to their investors, and often address social needs directly through their products and services.

A Social Enterprise is a company that has both commercial and social goals

Examples: LifeStraw, TerraCycle, Tom’s Shoes

For-Profit/Nonprofit Hybrids

Hybrids occur when a nonprofit and a commercial venture are linked, either through one being a subsidiary of the other, or through a long-term contract that binds the two. Usually there is a symbiotic relationship between the two organizations, with each half providing some kind of benefit for the other.

Examples: Parent Earth, Story Pirates

Low-Profit Limited Liability Company (L3C)

An increasingly popular choice for entrepreneurs who want to put social benefits before profits, the L3C legal status allows for profits to be distributed to owners, with the legal and tax protections of traditional LLCs, but with a defined social mission as the chief aim of the business.

L3C legal status allows for profits to be distributed to owners

Examples: Hope Sings, Fresh Food Fairy, Weaving Hope Designs

Community Interest Companies (CIC)

CIC is a legal status in the UK for limited companies with a social goal, similar in scope to the L3C status in the United States.

Examples: Community Catalysts, The Healing Clinic, One and Other

Gamechangers 500

The Gamechangers 500 is a merit-based qualification aiming to help for-benefit organizations get more customers and social attention. Gamechangers prioritize social missions over profit, giving stakeholders positive impacts in the social as well as financial arena.

Examples: OneMama, Just Giving, The Chopra Center

Purpose-Driven Businesses

“Purpose-driven” is a blanket term used to describe any business that uses its existence as a force for good. Nonprofits, social enterprises, L3Cs, and many other classifications fall under the purpose-driven category.

Values-Based Businesses

Similar to purpose-driven businesses, value-based businesses are steered by the social values of the company’s founders and stakeholders, rather than profit being the primary objective. Like purpose-driven businesses, value-based businesses can fall into a range of social categories, certifications, and legal statuses.

Value-based businesses are steered by the social values of the company’s founders and stakeholders

B-Lab GIIRS

GIIRS (pronounced “gears”) is B-Lab’s Global Impact Investing Rating System, a system for assessing the social and environmental impact of companies. The ratings help investors make informed impact investing decisions, while giving organizations full transparency and an objective, standardized rating.

SF Green Businesses

The San Francisco Green Business certification recognizes SF businesses that focus on sustainable environmental practices. The program is run by SF Environment, and is supported by the San Francisco Department of Public Health and San Francisco Public Utilities Commission.

Examples: Nature Trip, Bi-Rite Creamery, Alter Eco Foods

Bay Area Green Businesses

This is a similar certification as the SF Green Businesses, but covering the entire Bay Area.

Examples: Blue Light Cinemas, The Green Yogi

Green America Certified Businesses

Green America has worked since 1982 to certify businesses committed to social and environmental responsibility. There are two levels of certification, standard and gold, each for companies that can demonstrated continual adherence to a strict set of green initiative standards.

Green America has worked since 1982 to certify businesses committed to social and environmental responsibility

Examples: Sunbeam Candles, Brilliant Earth, Portfolio 21

Great Place to Work and Best Companies

These are two international recognition programs, available in 45 countries, based on employees’ surveys of the places where they work. The data gathered from the surveys forms the basis of a ranking system through which the world’s best companies to work for are recognized as such.

Examples: Granite Properties, Return Path, Wegmans