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At our popular recent program, Understanding Social Enterprise: Models, Funding and Legal Structures, the consultant and nonprofit attendees had lots of questions—many of them being: What the heck do all those acronyms stand for?
Our expert moderator and panelists Suzanne Griffith (Vega Partners), Belinda Li (Citta Partnership), Erica Spangler Raz (Chicago Lawyers' Committee for Civil Rights), and Bradley Summers (Wells Fargo) used their varied background in legal, fiscal and management to make sense of the social enterprise ABCs.
B Corp: B Corporation (or B Lab)
B Corporation certification is a private certification issued to for-profit companies by B Lab, a global nonprofit organization with offices in the United States, Europe, Canada, Australia, New Zealand and a partnership in Latin America with Sistema B. To be granted and to preserve certification, companies must receive a minimum score on an online assessment for "social and environmental performance," satisfy the requirement that the company integrate B Lab commitments to stakeholders into company governing documents, and pay an annual fee ranging from $500 to $50,000, depending on annual sales. (Wikipedia)
CFA: Chartered Financial Analyst
A chartered financial analyst (CFA) is a globally-recognized professional designation given by the CFA Institute, (formerly the AIMR (Association for Investment Management and Research)), that measures and certifies the competence and integrity of financial analysts. Candidates are required to pass three levels of exams covering areas, such as accounting, economics, ethics, money management, and security analysis. (Investopedia)
CPWA: Chartered Private Wealth Advisor
Certified Private Wealth Advisor® (CPWA®) is an advanced professional certification for advisors who serve high-net-worth clients. It's designed for seasoned professionals who seek the latest, most advanced knowledge and techniques to address the sophisticated needs of clients with a minimum net worth of $5 million. (Investments and Wealth Institute - CPWA)
CRPC: Certified Retirement Plan Counselor
Chartered Retirement Planning Counselor (CRPC) is a professional financial planning designation awarded by the College for Financial Planning. Individuals may earn the CRPC designation by completing a study program and passing a final multiple-choice examination. Successful applicants earn the right to use the CRPC designation with their names for two years, which can improve job opportunities, professional reputation and pay. Every two years, CRPC professionals must complete 16 hours of continuing education and pay a small fee to continue using the designation. (Investopedia)
L3C: Low-Profit Limited Liability Company
A low-profit limited liability company (L3C) is a legal form of business entity in the United States that was created to bridge the gap between non-profit and for-profit investing by providing a structure that facilitates investments in socially beneficial, for-profit ventures by simplifying compliance with Internal Revenue Service rules for program-related investments, a type of investment that private foundations are allowed to make. (Wikipedia)
PRI: Program Related Investment
Program-related investments are those in which:
1. The primary purpose is to accomplish one or more of the foundation's exempt purposes,
2. Production of income or appreciation of property is not a significant purpose, and
3. Influencing legislation or taking part in political campaigns on behalf of candidates is not a purpose. (IRS.gov)
UBIT: Unrelated Business Income Tax
Even though an organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income. For most organizations, unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis of the organization's exemption. An exempt organization that has $1,000 or more of gross income from an unrelated business must file Form 990-T. An organization must pay estimated tax if it expects its tax for the year to be $500 or more. (IRS.gov)
Did we miss anything? Let us know and we’ll update our list.
Want to learn more about implementing a social enterprise in your organization? Find an expert in our member directory or reach out to our Executive Director to connect with one of our social enterprise member experts: firstname.lastname@example.org.
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