Abstract: State statutes authorizing firms to pursue mixtures of profitable and socially beneficial goals have proliferated in the past five years. In this invited response essay, I argue that for one large class of charitable goals, the so-called “social enterprise” firm is often privately wasteful. Although the hybrid form is a bit more sensible for firms that combine profit with simple, easily monitored social benefits, existing laws fail to protect stakeholders against opportunistic conversion of the firm to pure profit-seeking. Given these failings, I suggest that social enterprise’s legislative popularity can best be traced to a race to the bottom among states competing to siphon away federal tax dollars for local businesses. Not all hybrid forms inevitably are failures, however. For example, the convertible debt instruments proposed by Dana Brakman Reiser and Steven Dean— the inspiration for this response—offer a promising route forward for “cold glow” firms wishing to clean up some easily-measured but harmful business practices.
BCLR Releases Vol. LV No. 3
The Boston College Law Review is pleased to publish the May 2014 issue. Here are summaries of this issue’s Articles and Notes: […]
Volume LVI Board of Editors Announced
We are pleased to announce the Board of Editors for the 2014-2015 academic year: Volume 56 Board of Editors […]
BCLR Releases Vol. LV No. 2
The Boston College Law Review is pleased to publish the March 2014 issue. Here are summaries of this issue’s Articles and […]