LOW-PROFIT LIMITED LIABILITY COMPANY (L3C)
an effective impact accelerator
The "low-profit limited liability company" (L3C) is a new, hybrid business form which can leverage foundations' program-related investments to access trillions of dollars of market-driven capital for ventures with modest financial prospects, but the possibility of major social impact.
Social, Economic, & Ecological impact
Increasingly, nonprofits are seizing the power of market-based strategies
to pursue sustainable social innovation and
promote positive social and ecological change.
Their best opportunity to do this is hidden in plain view
in the Internal Revenue Code. The L3C.
a world class tool available for our venture
Foundations earn their tax benefits when they serve the public
by distributing at least five percent of their assets
to social programs every year -
or by making socially beneficial "program-related investments"
of five percent or more of their assets every year.
Program-related investments are those that further
a foundation's tax-exempt activities
and wouldn't have been made if profit were the sole reason to invest.
And therein lies the opportunity.
