Sustainability can help YOU!

Choosing Your Social Purpose

Creating a mission that matters



Are you a mission-driven business wanting to make your values a legal part of what you do every day? Are you about to launch a new business and want to ensure your values are deep into every part of what you say and do?


Social purpose corporations allow you to create a legal governance structure for your business that do just that. Being an SPC allows a company to be flexible in identifying its social purpose and helps tell the impact of those values through annual reporting. SPCs merge our state’s entrepreneurial drive with its humanitarian mindset.


Who Should SPC?


SPCs are best for providing a maximum amount of flexibility for socially/environmentally conscious companies that want to do good on their own terms. Some examples are:


• owner-managed enterprise or startup

• venture-funded startup

• late stage privately-held company

• wholly owned subsidiary of a public company

• publicly-traded enterprise


Primary value may come at the time of the sale or breakup of a business, directors may consider factors other than maximizing shareholder value.


Startup Law Blog outlines some of the business that might want to add SPC to the end of their names and publicly declare their triple-bottom line benefits to our community. These include companies that want to:


• Promote environmental stewardship and sustainability.

• Use renewable or low-impact sources of energy whose marginal cost may be higher to the corporation than other options.

• Provide certain “quality of life” benefits to employees that it considers central to the corporate identity.

• Select international suppliers whose practices are consistent with the company’s values for worker conditions.

• Create a taxable affiliate of an existing nonprofit corporation whose social purposes are consistent with the nonprofit’s mission.

• Commit to donating a certain percentage of the corporation’s profits to charity


How do SPCs help Washington?


Part of what makes SPCs good for Washington State is that it provides flexibility for business to determine what beneficial behavior is applicable to it. Ultimately, this gives much more freedom to the directors of the corporation to make decisions beyond simply providing shareholder economic value.  They will be able to make decisions that provide benefit and value that most impact their community by serving one of the stated social purposes.


However, the more transparent the SPC, the better. Genuine impact does not happen simply by declaring it so. While it is required to state the social purpose(s) of your corporation, you will also be able to add in requirements to meet third-party standards  and to require impact on all decision making by your own choice. What makes SPCs different than other benefit corporation laws is the flexibility to choose, rather than be required to do so. Increasing transparency and continually reaching for high standards helps you avoid “greenwashing” and builds trust with the public.