President Barack Obama spent part of his hour-long State of the Union address Tuesday discussing a partnership between business and academia aimed at closing a skill gap. Siemens USA, a major player in the energy and health care sectors, helped the Central Piedmont Community College design courses necessary for potential employees at its recently opened gas turbine factory in Charlotte.
Such partnerships are at the heart of the quiet push that started last decade for states to permit a corporate structure called a low-profit limited liability corporation, or “L3C.”
The idea of an L3C is to allow for a venture to yield some profit, as long as its primary reason for existence is to do social good. Such a structure, proponents say, can allow social entrepreneurs to use low-interest “program-related investments” from foundations and donors to leverage other capital investments.
Click here to read “A Push for Investments Instead of Grants,” a 2008 Youth Today feature story that examined the early stages of the L3C movement. [If you are not a subscriber, click here to subscribe or here for a 10-day free trial.
When we published that story, Vermont had only five months before become the first state to allow the incorporation of L3Cs. Since then, eight other states have enacted L3C legislation: Illinois, Lousiana, Maine, Michigan, North Carolina, Rhode Island, Utah and Wyoming.
According to L3C advocate interSector Partners, 546 L3Cs have been organized in those nine states since 2008. A cursory look at the list of companies on its website includes some youth-related ventures, including: Newbury Children’s Center in Vermont and Family Support Centers in Utah.
In November, Reps. Aaron Schock (R-Ill.) and Jared Polis (D-Colo.) introduced the Philanthropic Facilitation Act, a bill that would streamline the IRS approval process for L3Cs and other organizations receiving program-related investments.