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Mixing Mission and Business: Does Social Enterprise Need a New Legal Approach?

April 24, 2009

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In late September, the Nonprofit Sector and Philanthropy Program gathered more than 40 attorneys, investors, finance and tax consultants, field leaders, and social entrepreneurs to consider whether a new corporate form or tax changes are needed to accommodate the emergence of hybrid organizations that operate like both nonprofits and for-profits.

Although some expressed doubt about the feasibility and/or need for a new corporate form or change in the tax code to accommodate “hybrid” activity, most of the group embraced the idea and insisted that what currently exists is not sufficient for fostering social entrepreneurship. Most attendees also agreed that information on existing hybrid organizations should be compiled and made publicly available, with the hope that a centralized source would lead to the development and testing of new organizational and financial models.

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