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I want to take some of the revenue that I generate with the for-profit business I'm starting, and use it to provide start-up social enterprises that I think are interesting with some funding to help them get off of their feet.

Legally/tax-wise, what's the best way to do this? Should I write these start-ups a check directly from my business account? Should I create a trust that I keep the money in and then distribute from when I find a company I'd like to invest in?

Also, what kind of regulations would be under if I asked for equity in return? Would it be better/easier to simply provide these businesses with low interest or forgivable loans?

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What's your locality? The rules are different everywhere. – dnbrv Apr 17 '12 at 2:43
Your question is a bit confused. Few questions: (1) How certain is this cash flow from your regular business? How much money are you talking about? (2) Are these "social enterprises" for-profit or non-profit? (3) What are your goals? – Chris Fulmer Apr 17 '12 at 13:48
1)The cash-flow would be pretty reliable. I'm going to start a private network that generates revenue from recurring monthly subscriptions, and then take 50% of that revenue and put it towards funding a different start-up every three months. The ammount of $ would probably be small at first ($1k-5K) but I hope it would grow. 2) Ideally the social enterprises I'd be investing in would all be for-profit 3) I am a 1L in law school right now, and I'll be launching late this summer after I work things out. My goal is to learn more about SE and help other SEs get off their feet with a little funding – P.R. Pelrain Apr 17 '12 at 15:47
I'll be taking night classes for the rest of my time in law school, and working on this project during the day. I won't be relying on the income from this business to survive any time soon, so I'm not too concerned about taking 50% of the revenue and trying to use it to help other SEs. My main interest is in helping new social enterprises get up & running so they can start having a positive impact in the world. – P.R. Pelrain Apr 17 '12 at 15:52

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This is a bit of a long reach ... but with the crowd-funding act now passed and SEC working on guidelines, perhaps you may consider using the social web to leverage your philothranpic activities. I'll toss an idea at you ... social-goals which in essence separates targetting from funding and implementation. Despite its flaws, one of the major structures of the Anglo-saxon world was the joint stock company which separated ownership from governance and management. One of the criticisms of govt implemented social programs was the lack of follow-through and short-termism in electoral cycle. Watch Rosling in GapMinder for an objective approach in measuring social inequities. So for it to work you

  1. identify a social concern that resonates with you
  2. pool together with other social angels to offer a bounty
  3. [missing component for tracking social policy bond payout]
  4. have independent auditors measure the goal
  5. pay out when the objective is reached

I find it shameful as a member of the human race that smart people with heart are being paid millions to game the financial system (leaving taxpayers to pick up tab) when there are so many tractable social problems out there.

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