B Corps, Co-ops, & Nonprofits

Ownership matters. At the end of the day, it is ownership that drives who benefits from any organization’s success and determines its priorities, principles, and practices.

DATA AT A GLANCE

* as of Dec 31, 2019

  • $188

    million

    in loans to nonprofit organizations

  • 25

    percent

    of total loan dollars are to nonprofit organizations

  • $42

    million

    in loans to B Corps & Benefit Corporations

  • $15

    million

    in loans to co-ops, co-op developers and ESOPs

WHY IS THIS IMPORTANT

Entities that build mission into their ownership and governance structures prioritize people and planet as much or more than profit, and is more likely to stay mission-driven in the long run. Nonprofits or those with worker-ownership help democratize power and wealth, provide critical resources, and contribute to economic stability.

According to the National Center for Charitable Statistics, there are approximately 1.56 million nonprofits and they contributed an estimated $985.4 billion in the US economy in 2015. This comprises 5.4 percent of the country’s gross domestic product (GDP) and accounts for 8-12% of employment in our three states of California, Washington, and Oregon. 

Cooperatives can play a critical role in building community wealth by reducing inequality, creating quality jobs, empowering individuals, and anchoring wealth to local communities. In 2015, there were over 64,000 cooperatives in the US, providing over 850,000 jobs across different types of cooperatives and different industry sectors.¹ And this does not even include housing cooperatives! 

Yet, despite all the social and economic impact they bring, nonprofits and cooperatives have a very difficult time getting the funding they need to operate. Most banks and small lenders don’t provide loans or provide higher-cost loans, to nonprofits and cooperatives because they don’t understand their business models.

OUR APPROACH AND IMPACT

We celebrate a variety of beneficial ownership models and some of the biggest impact we can have is to support the nonprofits, worker cooperatives, and other mission-driven ownership models in our communities. From arts to workforce development, education to waste reduction, our clients that put people and planet before profit are a critical force for change and giving back to the community. At Beneficial State, we are proud to support these entities by providing loans that are reasonable for both the borrower and for us. As of December 31, 2019, we have over $188 million outstanding loan commitments to nonprofits, accounting for over 25% of our commercial loan commitments. And we have over $57 million in outstanding loan commitments to other mission business structures including B Corps, cooperatives, and businesses with employee stock ownership plans (ESOPs). These loans — almost exclusively in California, Oregon, and Washington — have supported human rights, education and youth development, environmental sustainability, workforce development, affordable housing, and more.

 

Our approach:

  • Utilize our expertise and services to understand the true nature of all our clients. Rather than only letting numbers speak for themselves, we build relationships with organizations to work with the unique capital and cash management needs of nonprofits that consider fund sources, programming and services, and growth goals, and we take the time to understand the needs and structures of cooperatives and employee stock ownership plans.
  • Offer our Small Business and Nonprofit Builder Programs as a way for small businesses and/or nonprofits to access capital with quick turnaround time, flexible repayment terms, and lower costs. Our team is constantly working towards improving these programs including the efficiency and variety of products for small dollar lending to further support small organizations.
  • Serve as active leaders in the B Local communities, including B Local Bay Area, B Local LA, and B Local Portland. We provide a tailored checking account that rewards certified B Corps and established a Procurement Policy that prioritizes B Corp vendors, when possible. Through collaborations with B Corp leaders, we foster and deepen connections among organizations in our region who share our purpose and passion for using business as a force for good. Together we collaborate to improve the social and environmental impact business has on all stakeholders within our community and beyond.

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