ELLEN MARTIN

Lead, strategy & operations, SoJo

The decision that Sarah Drew has described is one that I hear so frequently from young social entrepreneurs. They begin to pursue their ideas, start building support and get early traction when they suddenly hit a cliff. They must choose between two paths: to register as a non-profit or a for-profit.

The No. 1 recommendation I make to entrepreneurs facing the same fork in the road as Drew is to think — however challenging it may be — towards their three-to-five-year vision rather than focusing on any immediate challenges they may be facing. An organization’s corporate form is not a decision that only lasts six months or one year, so the considerations that are taken into account should reflect that.

Funding, for example, is something that Drew mentioned as an immediate challenge. Although there may be more funds available for early stage non-profit organizations than early stage for-profit businesses, there are challenges that come with these funds.

Drew points out that funds from non-profit sources come with specific terms, defined outcomes and are very often tied to specific activities. At the early stage that Every1Games is at, this would mean setting and sticking to a vision, strategy and tactics for the next year or two depending on the terms of the funding. That is a major commitment for an early stage venture. On the other hand, Drew believes that a forprofit structure would give her full control over the organization’s curriculum and workshop design — two of the organization’s core offerings.

I would recommend that Drew register Every1Games as a for-profit corporation. This corporate form will provide her with the ownership and flexibility that Every1Games requires today and five years down the road. I would, however, suggest that she explore a certification like “B Corporation,” which would measure and transparently report on her business’s commitment to social impacts in every aspect of their operations. This would allow investors, partners and clients to understand her company’s commitment to social impact, thus building trust and allowing her to develop the right relationships for Every1Games.