Why ‘Clean Money’ is the Way Forward

 Photo Credit: Zack Embree

Photo Credit: Zack Embree

B Corps, embracing imperfection and other insights from changemaker Joel Solomon

Ready to reinvent capitalism? Joel Solomon is.

And he explains why in his compelling book, The Clean Money Revolution: Reinventing Power, Purpose and Capitalism, with Tyee Bridge. “Part memoir, part insider’s guide, and part manifesto,” it’s about Joel’s own journey and observations on why the free market needs a restart and the importance of aligning our money with our values. Why? To create a sustainable future that benefits all—rather than a powerful few. It’s not socialism, though, but “clean money;” in other words, “money aligned with a purpose beyond self-interest.”

If you don’t already know him, Joel is a founding partner and chairman of the Vancouver-based venture capital firm Renewal Funds, overseeing a $98 million fund focused on supporting mission-aligned companies and impact investors.

I had the distinct pleasure of interviewing Joel about the burgeoning movement of “people using business as a force for good™” prior to his book launch. Here are the highlights.

Why ‘Clean Money,’ why now?

There are two driving factors impacting the business and the investing world today: Millennials and inheritance. In North America, Millennials make up the largest workforce demographic and they are looking for purpose—to have a positive impact and make a marked difference in the world. Additionally, the greatest transfer of wealth with more than “$50 trillion will change hands in North America alone by 2050.”

As a social venture capitalist, Joel says, “I’m part of a field that’s emerging, in particular where businesses are taking more responsibility for values, meaning, and purpose, and how those are connected.”

A new model emerging: Marrying good citizenship with profits

The wave of the future is a triple bottom line, asserts Joel. But, “it takes a long time for these kinds of changes to happen,” he says. “The economy and business sector might be very nimble when it comes to product innovation or new technologies, but this was a tough nut to crack: the idea that you could question that making money is values-neutral. And then if you made a lot of money, that you should then give back to your community.”

Joel has walked this walk from the beginning. His first investment from an inheritance was in 1983: $50,00 into a small, but growing organic yogurt company called Stonyfield Yogurt. The move demonstrates that investing based on individual values, and an organization focused on sustainable practices, can make for an impactful and profitable business. The model may just be about to gain big momentum.

“We are in an invention period and actually quite a robust, even explosive, growth of the idea that business needs to be aligned with values; money needs to be aligned with values,” Joel says. “I compare it often to the organic food movement that took decades first to be seeded, coming from people who probably for hundreds of years have wanted to align good citizenship with transactional activities, like business or the exchange of goods and services."

The current business model, he says, is quickly becoming out of sync with New Millennium values and feels hypocritical to tomorrow’s socially aware leaders: “(The current model leaves) out some very important things and a lot of damage is happening through rationalizing—go make money all week long, do whatever it takes and then, so to speak, go to church on Sunday, get forgiven and give away a little bit of money; then go back out Monday and just do whatever it takes.”

Inventing new models—like B Corps

Challenging? Sure. Especially when it comes to inventing new models, such as B Corporations or B Corps. “Sometimes it can be daunting and difficult,” Joel says. “It’s hard to make the perfect fit all the time. My attitude is: when you invent new things, it’s pretty rare that they’re perfect right away. Only babies are like that, I guess. B Corps, for example, are “not perfect and it’s important to have a little bit of a relaxed attitude about that—or just accept you’re not going to get an A+ on everything.”

What are B Corps, anyway?

B Lab is a U.S.-based non-profit that is building a global community of certified B Corps. B Lab’s assessment tool “measures what matters” and promotes corporate legal structures such as Benefit Corporations. This global movement is gaining speed: to-date there are 2,319 certified B Corps worldwide; 199 certified in Canada. The value is it’s a third-party certification verifying that a for-profit business has not only made a commitment beyond profit to making a social or environmental impact, but also to achieve the highest standards and operate with transparency by sharing their assessment outcome online in the form of an impact score (see below).

 From website: https://www.bcorporation.net/community/renewal-funds

From website: https://www.bcorporation.net/community/renewal-funds

Why do we need B Corps? Because technology is making the world more transparent and connected

In an earlier article, I discussed the disruptive impact technology advancements are having on industries and companies; how businesses are rethinking their purpose, business models, connection to customers and strategies.

It’s different today because “everyone is a technology company,” as Peter Sondergaard noted at the Gartner Symposium in 2013. “Convergence and mutual reinforcement of four interdependent trends—social, mobile, cloud and information” has created this new reality. The technological change spurring rethinking, reinvention, and inception of business has given organizations and their people the opportunity to reflect on whether their money is aligned with their values—or not. Increasingly, this type of alignment is as important to start-ups as existing organization’s and their employees, potential employees, partners, and customers.

And “B Corps are important because consumers, employees, purchasers, citizens in this era have access to information,” Joel explains. “Things are not as opaque as they once were, and that’s driven by technology... people are making more conscious choices about what to buy, where to work, whom to do business with because they’re coming to grips with understanding that you actually need to have values aligned with money or the world can go down a very strange direction. Things like the B Lab ratings effectively give you a more quantified way to look at different businesses.”

Don’t wait—Get onboard early

The time to sit back is past, Joel believes: “When I see infrastructure organizations, things such as B Corp, I love to get in early and put my name and some energy behind those efforts as a contribution to the larger field.”

 Image from:  New Society  website

Image from: New Society website

This is nothing new for Joel. In his book, he shares many stories of involvement with a number of infrastructure organizations, including experiences as a founding member of Tides Canada, Business for Social Responsibility, The Social Venture Network (SVN) and work as Board Chair of Hollyhock. Through his involvement with SVN, he met Jay Coen Gilbert, B Lab co-founder.

In fact, with encouragement and backing from Joel’s Renewal Funds team, two-thirds of the ventures in the Renewal fund to-date have certified as B Corps. “It also serves me and my interests because I’m aligned with what B Corp is about,” he says.

Socially responsible companies = the way forward

Do you make decisions today thinking seven generations ahead? Founded in First Nations wisdom, that’s Joel’s guiding principle: “There’s no other business type I would want to run. I need to have my sense of values as a human being and the work that I do in the world be congruent. I need that for my own wellbeing and sanity, and for who I want to be and what I want to convey. I believe that one of the hardest things to figure out, especially in this day and age of so many choices is, who am I? What’s my meaning and purpose? What’s the role? Where do I fit in? The purpose of being alive is to think about future generations and to make the best contribution that you can to that.”

The mantra: Mailman, Money and Manure

“I have a friend named, Josh Mailman, who was a co-founder at SVN. Josh had a saying he used to share from his father, which was: “Money is like manure. If you pile it up, it really stinks. If you spread it, it grows all kinds of things.”

And so to individuals, investors and entrepreneurs alike, Joel poses the question: “Does your money align with your values?”

 

Katherine Sharp, founder of K. Sharp & Associates, enables companies to make meaningful social impact because they run businesses that are strategic, profitable and highly efficient, not to mention great places for the people who work there. If you want to get perspective on your organization’s strategic needs, please contact Katherine directly.