We help nonprofit, for-profit and hybrid entities identify and implement market-based strategies to advance their social missions. We represent many non-profits, social-purpose businesses, social enterprises, social entrepreneurs, philanthropists, lenders and investors. We assist them in:
Sometimes all government needs to do is get out of the way and let businesses and nonprofits partner up. Increasingly, nonprofits are seizing the power of market-based strategies to pursue sustainable social innovation and promote positive social change. Their best opportunity to do this is hidden in plain view in the Internal Revenue Code.
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.
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.
An L3C can have different classes of investors - - individuals, nonprofits, for-profits, and even government agencies. But foundations, primarily seeking social payoffs, take the lion's share of economic risk yet content themselves with below-market financial returns. No wonder for-profit investors, seeing the risk-reward tradeoff shifted dramatically in their favor, eagerly commit their capital and expertise to investments they would otherwise reject out of hand.
We are recognized as a national leader in the development of L3Cs and provide assistance in: