A bill that makes it easier for companies to get investments from private foundations passed the N.C. House on Friday and is expected to be signed by the governor.
It allows private foundations to give low-interest loans to L3Cs, or low-profit companies. The bill, S308, passed the N.C. Senate last year.
The new law has been envisioned by some as a way to boost domestic manufacturing like furniture making, and some see it as a way to save journalism or bolster news organizations.
It allows for-profit businesses to be organized to serve primarily charitable purposes. In the United Kingdom, they’ve been called profit-for-purpose businesses. One UK business, People-Centered Economic Development, was conceptualized in Chapel Hill in 1997.
Fast Company has quoted a foundation executive as describing the companies as for-profits with a nonprofit soul.
The Point Reyes Light weekly newspaper in California has been incorporated as an L3C under Vermont’s law.
The business model has been tossed around for symphonies, museums, yoga studios, family farm cooperatives and much more than just news organizations. Wikipedia explains better than I can.
Lots of background:
Davidson County Dispatch news story on the bill passage.
Sally Duros in The Huffington Post on L3Cs and how to save newspapers.
Save The News on L3Cs for news organizations.
Amy Gahran on L3Cs for news organizations.
Lydia Dishman in Fast Company describes L3Cs.
Big hat tip to @saduros on Twitter.