When first starting an organization the first question an entrepreneur must grapple with is: non-profit or for-profit? Once they have decided they must either grapple with the for-profit tax categories or register as a 501(c)(3). Once they have made their choice they are unable to change it. The severity of this problem has increased with the recent influx of hybrid organizations: organizations with revenue stream as well as a charitable mission. The rigidity of the legal system is keeping hybrids from thriving and serves as a hurdle to their creation. Throughout this paper I will address the current legal system and the hybrids that don’t neatly fit into it by delving deeper into the different legal structures available, hybrid models, and how companies have dealt with the system.
I will focus on buy-one give-one as an exemplar for hybrid models. This model has proven successful and has a wide range of companies that adhere to it. Companies, including: Warby Parker, TOMS, CommonBond, and Baby Theresa, have made guy-one give-one a well-know model. The companies also make it easier to give real world examples for points, lessons from buy-one give-one can be applied to all hybrid models.
hybrid white paperHybrid companies are important because they stimulate the economy and benefit those in need. They are an important fixture in the business community. The legal structure should be built to cater to them, rather than make it nearly impossible for them to operate. Fluidity within the legal system would assist the cross-over created by hybrid companies.