Partnerships
Better World Books to Offer Equity to Non-Profit Partners
Published May 26, 2009 @ 12:19PM PT
Studying in Gorée, near Dakar, Senegal (via Ferdinand Reus)
When people new to the field ask me what organization most embodies "social enterprise" or "social entrepreneurship," more often than not I find myself describing Better World Books.
Better World Books takes donated books that would otherwise end up in landfills, resells them through it's online marketplace, turns a great profit and pours money back into literacy programs around the world. They're already one of the most socially-integrated companies around; the first thing you see when you arrive on their website is the convenience of their product, the amount they've donated to literacy, and the number of books they've saved from landfills.
Today, they've made an announcement that suggests a bold new future of non-profit/for-profit partnerships. They've begun to offer an actually ownership stake in their company to their non-profit partners.
From the press release:
"Today Better World Books announced the creation of an Incentive Stock Option program for its non-profit literacy partners, an unprecedented financial innovation in social entrepreneurship. The program puts aside approximately 5% of the company for use in stock option grants to an initial group of five literacy partners with potential to add others in the future: Books for Africa, Room to Read, Worldfund, the Robinson Community Learning Center and the National Center for Family Literacy.
In keeping with the company's core values, Better World Books is implementing this program to ensure its literacy partners can share in its financial success. Working alongside its primary equity investor, Good Capital, the company carved out a 5% ownership stake for its key literacy partners.
"We worked closely with Good Capital to come up with a way to more closely link our social mission to our business model, ensuring the future success of Better World Books results in benefits to our non-profit literacy partners," said Better World Books CEO, David Murphy.
"We created Better World Books to show that it is possible to do good while at the same time run a successful company. Our literacy partners are essential to our mission, and we want them to flourish," said Better World Books co-founder Xavier Helgesen. "Today's announcement ensures that as our company grows, our partners will too."
Better World Books plans to supplement the initial round of stock options with subsequent rounds of performance based options, which reward its literacy partners for their successes in promoting and supporting literacy; for the synergies they create with Better World Books; and for their innovativeness in addressing literacy and education challenges in the United States and around the world. These stock option grants will be based upon the partners' ability to achieve their own internal metrics for delivering on specified goals and objectives as well as how effectively they promote the collection and sales of books collected in book drives that provide Better World Books with its inventory.
"One key to our approach in social entrepreneurship is establishing clear, quantifiable benchmarks for success for our partners-and rewarding them when they meet or exceed those goals," said Murphy.
Hopefully I'll have a chance to get more about this up in the coming weeks, but I think this is a huge milestone. Kudos to the BWB team and to their partners at Good Capital as well for pushing this field.
