THE SITUATION

Small business leaders of benefit corporations should know if their state requires the production of an annual benefit report. Yet many folks are not sure what the state requirements are, as they vary from state to state. To simplify the process, refer to this handy resource from our friends at Unit of Impact that lists legal reporting requirements for your state. One common requirement is for the report to outline how that benefit corporation created social and environmental impact through their business. This paper will discuss the basics of producing an effective annual benefit report including how to structure it including key points, metrics and how to get the finished report in front of stakeholders.

“ Demonstrating social impact or “public good” is mandatory if your small business operates as a benefit corporation or benefit company. While many benefit corporation states do not enforce the production of annual benefit report, even though it’s required by law, our community insisted on such a mandate when we launched BCFG as a third-party standard. Your company cannot be recertified by BCFG if you have not produced an annual benefit report.” – Tom Hering, Co-Founder, Benefit Corporations for Good

THE CHALLENGE

“ A recent Nielsen study shows that two-thirds of consumers worldwide are willing to pay more for products and services when they know a company has good values. An annual benefit report is one of the proof points for such values,” according to Kim Allchurch Flick, leader of Mighty Epiphyte 1 and a certified Benefit Corporation for Good and certified B Corp.

A benefit report is a critical document to show authenticity and actual accomplishments and challenges from data gathered throughout the year. And it's important to share and have available not only to clients and customers, but stakeholders, potential employees, industry leaders, suppliers, current employees.

The best report is dynamic. By engaging with employees and key personnel in the writing, a valuable mission-driven feedback loop can appear. This can also help with future goal setting with everyone's inputs.

An annual benefit report is not just a document. It's a summary touch point, an inspiration, a challenge, a strong base for engaging with key people internally and externally.

THE PATH FORWARD

A simple Google search reveals several different ways to craft an annual benefit report. Here are 6 key components found through that research to consider:

• Introduction describing an organization including when it became a certified benefit company and who the third-party standard is

• Mission or Manifesto describing what the company stands for, what it believes in and what practices it follows

• Summary Review of Year describing highlights of public benefit efforts for the year

• Key Metrics providing data points meeting third-party standards in regard to people, planet and profit

• Coming Year describing areas to focus and improve upon

• Closing providing a quick summary of the efforts for the year

“ Many small businesses that are PBCs do tremendous good for their communities, employees, and the planet, but are often short on time and can overlook sharing these positives with stakeholders. Creating an annual benefit report is an efficient and compelling way to tell this story, allowing small businesses to differentiate their brand while inspiring and modeling this behavior for others.” – Russ Stoddard, Co-Founder, Unit of Impact

Writing Your Annual Benefit Report

How do you get started writing your annual benefit report? The following guidelines will be helpful to do just that: Demonstrate authentic commitment to the principles of benefit corporations. Share real efforts to make an impact on people and planet. Don't just use empty words but describe real actions. For example, you can talk about community engagement, demonstrating empathy, showing compassion and promoting social justice.

Let’s be honest, businesses face multitude of challenges every year, and it's fine to talk about some of these challenges. Lots of companies are facing tough economic conditions, or supply chain disruptions, or employee retention issues, and the list goes on. It is fine to admit to it, and describe your efforts to mitigate the problem. Just like in any communication, being transparent and direct equals authenticity.

Communicate simply by keeping your audience in mind. If you're like most small businesses, you have internal and external stakeholders. This includes employees, customers, prospects and community members.

Here are some additional tips from the Harvard Business Review 2

• Plan out what you will say to make your writing more direct and effective. Use an

outline.

• Use words sparingly and keep sentences short and to the point. Avoid industry terms.

• Write short paragraphs to make your report easy to scan. Three to four sentences per

paragraph is ideal.

• Avoid jargon and “fancy” words. Strive for clarity instead.

Take time to decide how you plan to use the report once published. If your plan is to use it mostly internally, with staff, then you will elect to include content and key stats relevant to this group. If your main intent is to use your report for marketing, business development, recruiting, then think extra carefully about which key metrics you’d like to share and which stories may be interesting to this audience.

Graphics should follow suit. Do not use complicated or complex visuals. Make sure your image or infographic is clear and easy-to-understand. Resist all other embellishment.

If you use your company branding for your report, just make sure it's used sparingly. It's another way to keep your report "simple" and clear. You probably just need your logo in a couple of well placed spots in your document or webpage.

That said, pictures inject life into any report and help tell a story. Do you have photos from a company volunteering event, or maybe a group lunch-n-learn – use them! Do you have wonderful relationships with your suppliers? Ask for a testimonial and photo to include. It’s worth the effort to collect photos taken throughout the year for inclusion in the report.

How To Evaluate Your Benefit Report

Ask a few good communicators to review your benefit report before publishing it. Consider having at least two people, one from inside your organization and one from outside, to read through the report.

Ask them to evaluate the effectiveness of your report by answering two questions:

1. Does the content clearly and easily explain your organization's triple bottom line efforts as a benefit corporation?

2. Does every element (words and graphics) move the reader along without requiring her to leave the document and call on Google Search or Wikipedia?

If they answer an affirmative "yes" to these questions, you're ready to create your PDF document for public viewing. If either one gives you a "no" or specific recommendations, consider going back and getting things right.

How To Post the Benefit Report Publicly

Most benefit corporation states (including Oregon) require that you share and post the annual benefit report in a public venue. The easiest and most logical place to post it is on your company website. You can set it up as a tab on your home page or at the bottom of your home page. Make sure the link is visible, easily accessible, and not hidden.

If you do not have a website, there are other ways to share the report. You can post it on a bulletin board at your worksite location, create a printed piece that can be distributed or mailed to shareholders and key stakeholders.

What's critical to remember is that the annual benefit report is a public document. It shows you sincerely practice what you preach! You stand out as a business that contributes toward a public benefit and greater good in addition to making a profit.

Many thanks to Polina Pinchevsky, Co-Founder of Unit of Impact, for her consultation and contributions to this document.