Benefit Corporation In California Meets Chill In San Francisco

Despite some changes to the original measure, the California Association of Nonprofits (CAN) still opposes the bill.

The bid preferences would give Benefit Corporations additional points in a graded system the city uses for bidding contracts. Some groups already have managed to get the legislation changed, so that if a locally-owned small business or a local nonprofit is bumped, the discount would not apply, according to Jan Masaoka, CAN’s chief executive officer. Still, the organization opposes the bill because, she said, nonprofit privileges should not go to for-profit corporations with no meaningful oversight or reporting requirements.

“There’s no basis -- of either historical disadvantage or evidence of benefit -- to give these kinds of nonprofit-like privileges to for-profit companies that have virtually no regulation or restrictions,” said Masaoka. She testified on the legislation during a recent hearing by the city’s Budget and Finance Sub-Committee. “They have to promise to do good but they don’t have to do good,” she said, adding that that there’s no need for legislation to attract these organizations to San Francisco because it’s already a hotbed of social innovators of all kinds.