Yesterday brought some exciting news for California – Governor Brown signed into law what was Assembly Bill 361, putting into place a new form of corporate entity: the Benefit Corporation.

Traditional corporations are legally bound to put profit maximization ahead of other goals. If they don’t, shareholders may sue. Benefit corporations operate under a broader definition of success – one that includes material positive impact on society and the environment. Specifically, benefit corporations must: 1) have a corporate purpose to create a material positive impact on society and the environment; 2) redefine fiduciary duty to require consideration of the interests of employees, community and the environment when making decision; and 3) publicly report annually on its overall social and environmental performance using a comprehensive, credible, independent, and transparent third party standard.

Vermont and Maryland were the first states to enact benefit corporation legislation, in 2010. New Jersey, Virginia and Hawaii followed earlier this year. New York is poised to become the seventh state to join the movement, and similar legislation has been introduced in Colorado, Michigan, Pennsylvania, and North Carolina.

Entrepreneurs with a desire to advance a social or environmental mission while generating value for shareholders now have another concrete tool for doing so. It isn’t the only tool – B Corp status is another way for a for-profit corporation to signal its intention to prioritize social and environmental benefit along with the creation of shareholder value. B Lab, the nonprofit organization that certifies B Corporations, was one of the sponsors of the California’s benefit corporation legislation.

Like many, we’re still following the evolution of the L3C (low-profit limited liability company), a corporate form just a little over three years old. Over the course of those three years nine states and two federal jurisdictions have enacted L3C laws, and according to a recent tally by interSector Partners, there are now 488 L3Cs organized across the country. The L3c movement has not progressed without controversy, but much of that has focused on the usefulness (or not) of the L3C in paving the way for foundations to fund for-profit entities via program-related investments (PRIs). A 2010 research study indicated that the ability to pursue PRI’s wasn’t, in fact, the primary motivator for most early L3C founders – that the appeal lay more in the ability to create “a for profit with a nonprofit soul.”

Time will tell which corporate form – or forms – will truly take off. For now, I’m just excited that there are an increasing number of options. May the momentum continue.

Occasionally we have a chance to see just how much things have changed in a short period. Two years ago we were working with the Lodestar Foundation to launch the 2009 Collaboration Prize. A few days ago, we announced the 2011 Collaboration Prize. What has changed in that two year period?  It’s hard to know where to start.

We looked back to the way in which our team announced the Prize in 2008 in order to plan the 2011 Prize announcement.  We found that some of the print sources we used in 2008 are long gone and while others are still around, their print readership is now far surpassed by their online readership. Some blogs have also come and gone. Twitter wasn’t even on our radar in early 2008. In two short years, the Prize team has had to rethink and revamp our communications strategy. Luckily, we have great partners in the Williams Group who are helping us navigate those decisions.

More importantly – knowledge and interest in the sector regarding the use of collaboration has changed dramatically.  Lois Savage and Jerry Hirsch at Lodestar were true pioneers in understanding and promoting collaboration as a strategy that could yield bigger, better outcomes. Today, they are at the forefront of a movement.

As we worked with the Foundation Center who has built an amazing new resource on collaboration, we began to surface a  dozen foundations around the country who are fostering collaboration in their own communities. For example, there are nineteen funders in Cleveland who have launched a Human Services Strategic Restructuring Pilot, while in New Jersey, The Geraldine R. Dodge Foundation is nurturing collaboration among their grantees. Plus, Whitney Johnson at the Anschutz Family Foundation in Denver is playing a pivotal role in creating a Colorado Collaboration Prize, and the Foundation For The Carolinas has built the Community Catalyst Fund to support innovative partnerships, collaboration and strategic mergers.

How exciting is that?

We’ll be working with the Lodestar Foundation and AIM Alliance in reviewing and evaluating the applications for the 2011 Prize that will be accepted between June 1 and July 16.  I can’t wait to see what has been happening out in the sector since the last Prize process.

Like we found while conducting La Piana Consulting’s NonprofitNext research initiative and described in our Convergence report, today’s nonprofit sector leaders are finding innovative ways to achieve their missions through collaboration.  These futurists aren’t just looking at how to combine Organization A plus Organization B.  They are saying, “Why do we need to take on one model or the other or a blend of the two?  Let’s start with the question: how should we organize our programs and operations to have the greatest impact on our mission?”  They are essentially throwing out the old and looking – with great creativity and fearlessness – at entirely new ways to work.

As we approach the 2011 Prize, we have to ask what new ideas have great nonprofits come up with that will help inform the sector and drive the next round of innovation around collaboration?   I can’t wait to see the answer.