Business for Good: What It Means and How to Do It

By: Michael Jonas, Owner & Attorney of Narwhal Law and Business Strategy

We hear a lot of buzzwords these days—social enterprise, benefit companies, fiscal sponsorship, nonprofit vs. for-profit. But what do they actually mean? And more importantly, how do you decide which model is right for you?

These are the kinds of questions I’ve spent years thinking about. When I founded Rational Unicorn Legal Services in 2017, my goal was to help small businesses, nonprofits, and social entrepreneurs navigate legal and strategic challenges. After running it for several years, I sold it in 2024 to run for Congress—but my work in business law, nonprofits, and impact-driven strategy didn’t stop there.

Now, I run Narwhal Law and Strategy, where I work with nonprofits, mutual aid organizations, wellness businesses, environmental initiatives, and impact-driven companies. My job is to help these organizations with not just traditional legal services, but also with law and business strategy. And through my work at both companies, I’ve seen firsthand how different business models can either help—or hinder—your ability to create change.

So, let’s break it down. Whether you’re an entrepreneur, a nonprofit leader, or someone who just wants to support ethical businesses, here’s what you need to know about building a business for good.

What Does It Mean to Be a Business for Good?

A business for good is any business that balances making money with making a positive impact.

There are many ways to do this:

• Some businesses donate a portion of their profits.

• Some commit to sustainability and fair wages.

• Some form legal structures that require them to consider more than just shareholders.

But not every approach fits every mission, so let’s look at some of the main ways businesses can create impact.

What Is a Social Enterprise?

A social enterprise is a for-profit business that prioritizes social or environmental impact while making money. These companies embed their mission into their business model rather than treating it as an afterthought.

Examples:  TOMS Shoes – For every pair sold, they donate a pair.  Bombas – They donate socks to homeless shelters. Ben & Jerry’s – They advocate for social justice while selling ice cream.

The key takeaway? Social enterprises still need to be profitable, but they also build impact directly into how they operate.

What Is a Benefit Company and the Triple Bottom Line?

If you want to legally commit to being a business for good, you might consider becoming a benefit company. A benefit company is a for-profit organization required to balance profit with social and environmental impact. Unlike traditional businesses that focus solely on maximizing shareholder profit, benefit companies aim for a triple bottom line: People, Planet, and Profit. In 37 states and Washington, D.C., this legal designation is recognized. 

In certain states—Oregon being one example—even LLCs (not just corporations) can get certified as “benefit companies.”

Some companies obtain certification through certifying companies such as Benefit Corporations for Good. Although certified companies are recognized as benefit companies or corporations, they cannot call themselves "B Corp" unless they complete the specific certification process with B Lab, an international organization that holds “B Corp” as a trademark.

What Is a Fiscal Sponsorship?

Want to do nonprofit work without starting a nonprofit? Fiscal sponsorship might be the answer.

A fiscal sponsor is an existing nonprofit that takes your project under its wing, allowing you to:  Fundraise and receive grants without forming a separate nonprofit.  Get legal, tax, and administrative support so you can focus on your mission. Fiscal sponsorship is quite the spectrum. Some fiscal sponsors allow the use of their EIN and administer funds all the way to some fiscal sponsors providing shared marketing and operational resources. 

Three Common Types of Fiscal Sponsorship: 1️⃣ Comprehensive Sponsorship (Model A): The project is fully integrated under the sponsor. The sponsor manages all funds, and project staff are employees of the sponsor. 2️⃣ Independent Contractor Model (Model B): The project operates as a separate legal entity and acts as an independent contractor to the sponsor. The sponsor manages funds and pays the project team as contractors. 3️⃣ Pre-Approved Grant Relationship (Model C): The project stays independent, but the sponsor receives and manages donations on its behalf.

Why does this matter? Fiscal sponsorship is a great way to test a community impact program or event before committing to forming a full nonprofit.

How Are Nonprofits, Not-for-Profits, and For-Profits Different?

People often confuse nonprofits and not-for-profits, but they’re not the same.

Key Differences:  Nonprofits exist to serve a public mission and can get 501(c)(3) tax-exempt status—meaning donations to them are tax-deductible. Not-for-profits serve a private group (like a trade association or private club) and don’t always have the same tax benefits. Nonprofits operate like businesses, with structured financial planning and often paid employees. Not-for-profits are typically recreational organizations, often run by volunteers and do not focus on earning revenue as a business would.

Another big difference? Nonprofits must reinvest all surplus funds back into their mission. Not-for-profits can use extra funds to benefit their members (like improving services).

If your goal is broad public service, go nonprofit. If you’re serving a specific group, a not-for-profit might be a better fit.

Should You Have a For-Profit, Nonprofit, or Both?

Ask yourself:  Do you want to sell products/services and keep profits? Start a for-profit social enterprise or benefit company. Do you want to raise funds through donations/grants? Start a nonprofit. Do you want to make money AND fund a mission? Consider having both.

Many companies do this! Examples: A law firm that donates part of its revenue to fund a nonprofit legal aid clinic. A coffee shop that runs a nonprofit job-training program.

The key is choosing the right model for your mission. Also know though that there’s more to the above questions. You have to also ask yourself things like: If I found a non-profit, do I have the capacity to build out and manage a board? If I have a for-profit and open a sister nonprofit, do I have the capacity to run two businesses-one of which will have nonprofit compliance formalities? 

Final Thoughts: Every Business Has the Potential to Do Good

At the end of the day, every business has the potential to be a force for good. The real question is—how do you want to create change? We offer no-cost 30 minute service consults. Let’s keep the conversation going.