Behind our B: B Corps, Benefit Corporations and what it means to be both
March 10, 2022;
4 min read
Starting early in my career journey I faced a challenge to choose between business and impact, intrigued by for-profit work but fulfilled by the non-profit space. In an effort to settle this internal tug-of-war I started researching corporate responsibility, what I thought at the time was my best bet of a mesh. In weaving my way through a series of books and articles I found a reference to the B Corp Handbook. Two hundred pages later, I was hooked. It felt like I had stumbled upon a mythical amalgam that proved profit and impact don’t need to be mutually exclusive.
Not long after this I left my corporate role and enrolled in a Social Impact MBA program. I arrived buzzing about B Corps and graduated two years later even more sure of my belief in this movement. Here’s why.
There are a lot of business descriptors used to signal a company considers stakeholders beyond profit – “sustainable business”, “social enterprise”, or “purpose-driven” to name a few. Yet without further explanation or information it is difficult to understand what this really means. Take a cigarette company for example, a business we can pretty confidently say operates for profit only. Now imagine this company has stated its purpose is to sell the most cigarettes. By doing so, are they purpose-driven?
Yes, this example is extreme, but hopefully also sheds some light on how cloudy these labels can be. The B Corp certification provides clarity and transparency on an organization’s impact on all stakeholders. Once certified, the company’s assessment score is public information. It also provides credibility. Earning the B logo confirms the company has been independently verified to be using business as a force for good.
Dimagi is both a certified B Corp and a Benefit corporation, which are often, and understandably, confused as the “B” in B Corp stands for benefit. Now for the good stuff, what does this all mean?
What is a B Corp and how can an organization get certified?
A business becomes a certified B Corporation when they pass the B Impact Assessment (BIA). The BIA has 5 sections – Governance, Customers, Workers, Environment, and Community – each containing questions with an assigned point value. Of the total 200 points available across the sections companies need 80 points to become certified. Don’t let the 40% requirement fool you, 80 is hard to get. The average score for an ordinary business is about 50 points.
The B Corp framework is naturally a part of Dimagi’s DNA.
We’ve been a certified B Corp since 2008 with an initial score of 87.2, which we’ve now raised to over 120. This huge jump in our score was mostly driven by Dimagi’s focus on increasing accessibility to our product and further targeting our impact towards low income populations. In the past six years, Dimagi has been honored with the Best in the World title from B Lab for our impact on customers, or partners, four times.
Here are some of the ways Dimagi aligns with the B Corporation impact areas:
Mission Locked Dimagi has an Impact Business Model, it is intentionally designed to create a specific positive outcome for one of its stakeholders.
Ethics & Transparency Financial, social, and environmental performance is made available at minimum to all employees.
Diversity, Equity, & Inclusion Dimagi has a designated group explicitly responsible for diversity, equity, and inclusion.
Civic Engagement & Giving Dimagi participates in partnerships with charitable organizations and actively advocates for adopting improved social or environmental policies.
Air & Climate Dimagi measures our global carbon emissions and purchases verified carbon credits to 100% offset our carbon footprint.
Financial Security 100% of Dimagi employees are paid at least the equivalent of a living wage. Additionally, cost of living adjustments are made to employee salaries.
Career Development Dimagi has a regular performance feedback process and offers written guidance for career development.
Health & Wellness Improvement Dimagi uses randomized and non-randomized control groups to measure outcomes from our product (Evidence Base).
Serving Underserved Populations Dimagi provides specific training and support to organizations on how to best serve underserved populations.
Table: Dimagi aligns with B Corporation impact areas
The B Corp certification process is multi-faceted. It is first and foremost a tool, the BIA is a comprehensive way to measure a company’s impact and provide a framework for decision making. Secondary to that, it is a stamp of approval which builds trust among all stakeholders. But to me, it is most importantly a movement. In being certified we show we don’t only care about the positive impact Dimagi is creating, but we want to amplify awareness of this business model and influence our peers so B becomes the norm.
What is a Benefit Corporation?
Traditional companies today are legally set up to make decisions based on profit maximization. B Lab introduced the Benefit corporation structure to provide a legal alternative for a business to operate considering a larger scope of stakeholders. While the B Corp certification process provides a tool for impact measurement and builds credibility for a business, there are no legally binding aspects.
As a Benefit corporation, Dimagi is legally required to have a purpose that goes beyond maximizing monetary value and includes a stated and specific public benefit. In the same vein as an organization we must make business decisions looking through the lenses of all impacted stakeholders. Each year, we submit a mandatory impact report, separate from the BIA, to the state of Massachusetts that outlines our social and environmental impact.
The nature of electing into this status focuses a lot on what we have to doto comply, but I think the true essence is in what we get to do in return. As a Benefit corporation Dimagi gets to choose the partners and projects we work on based on their alignment with our mission, not solely on the revenue they bring in. We get to take an environmental stand and become Climate Neutral certified even though there is a cost to offsetting our carbon footprint.
The Benefit corporation status is a protective forcefield for companies breaking out of a more traditional business model. It not only sets a baseline for defining purpose, but preserves it from shareholder pressure, leadership transitions, and changes in the business environment that could otherwise redirect focus back on profit.
What does it mean to be both a B Corp and Benefit corporation?
At Dimagi we describe ourselves as a social enterprise, and we have an overwhelming amount of evidence to support that statement. But in a world where time can feel limited, or our field of work complex, our choice to be a certified B Corp and Benefit corporation stands on its own. Our B Corp logo sends a clear signal to our partners, our Dimagi team members, and our communities that we are using business as a force for good. And, as a Benefit corporation, we legally lock in our purpose and responsibility to consider all stakeholders as Dimagi continues to grow and develop. Being a B Corp and a Benefit Corporation combines our passion and commitment as a company to work towards a brighter future for all.