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About this Product
HOW CAN LOW-PROFIT LIMITED LIABILITY COMPANIES FACILITATE PROGRAM RELATED INVESTMENTS? WHAT DO YOU NEED TO KNOW BEFORE ADVISING YOUR PRIVATE FOUNDATION CLIENT? WHO HAS ADOPTED L3CS AND WHO MIGHT BE NEXT?
A low-profit, limited liability company (L3C) is a for profit venture that pursuant to its state organizational documents must have a primary goal of performing a socially beneficial purpose, not maximizing income. State legislation authorizing L3Cs has been specifically written to comply with the federal IRS regulations relevant to Program Related Investments (PRIs) by private foundations. The L3C facilitates tranched investing with the PRI taking first the risk position thereby making the investment in the lower tranches more attractive to commercial investors. Because the private foundations take the highest risk at little or no return, it essentially turns the venture capital model on its head and gives many social enterprises enough low cost capital to be self sustainable. Additionally, by providing the possibility of a small return on investment it has the potential to increase the charitable dollars available for distribution by private foundation. During this program our panel will discuss:
Structuring an L3C
Maintaining compliance with the PRI rules
Proposed and pending state and federal legislation effecting L3Cs and PRIs
