What’s a “low profit” company or L3C?
Low-profit limited liability companies (L3Cs) are for-profit organizations that have charitable and educational missions, by law. Unlike non-profit organizations, L3Cs pay corporate taxes. Nor are contributions to them tax deductible.
L3Cs are social enterprises that can attract hybrid sources of financing, including program related investments from private foundations, while channeling profits back into the organization’s mission.
A Federal Reserve article explains that social enterprises like L3Cs “are seen as straddling the for-profit business sector, which is generally constrained by the duty to generate profits, and the nonprofit sector, which is generally constrained by tax laws and the duty to fulfill social objectives.” From this position, “social enterprises are increasingly seen as filling a void left unaddressed by the traditional public, private, and nonprofit sectors….
“(A)n L3C’s organizing document, called articles of organization, must set forth as its primary business objective ‘one or more charitable or educational purposes,’ as defined by the Internal Revenue Code. In addition, the term ‘low profit’ is embedded in the title of the business form to put investors and philanthropic funders on notice that the entity is motivated first and foremost by its expressed social mission, but not necessarily to the exclusion of making money.”
- Alari Adams, “L3C Offers Flexibility for Social Entrepreneurs,” Venture Michigan, May 20, 2017.
- Americans for Community Development (website).
What does “open access” information mean?
SPARC (the Scholarly Publishing and Academic Resources Coalition) explains, “Open Access is the free, immediate, online availability of research articles coupled with the rights to use these articles fully in the digital environment. Open Access ensures that anyone can access and use these results—to turn ideas into industries and breakthroughs into better lives.
“Open Access is the needed modern update for the communication of research that fully utilizes the Internet for what it was originally built to do—accelerate research.
“Funders invest in research to advance human knowledge and ultimately improve lives. Open Access increases the return on that investment by ensuring the results of the research they fund can be read and built on by anyone.”