Skip to main content

To Profit- Or not to Profit? What the Heck- Why not Both!?!

It has come to my attention, through that grapevine known as "the internet", that under discussion in the Maine state legislature is the creation  of a legal business entity that is a hybrid between the non-profit and "low profit" organizations. I have not yet been able to locate any specifics about the bill as it would stand in Maine. In North Carolina, it includes small manufacturers, but the usual definition of an LC3 is just a manipulation of the non-profit category so that investors can make a profit.

Here is a defintion from The Non-Profit Law Blog

"The low-profit, limited liability company, or L3C, is a hybrid of a nonprofit and for-profit organization. More specifically, it is a new type of limited liability company (LLC) designed to attract private investments and philanthropic capital in ventures designed to provide a social benefit. Unlike a standard LLC, the L3C has an explicit primary charitable mission and only a secondary profit concern. But unlike a charity, the L3C is free to distribute the profits, after taxes, to owners or investors. "

I do not know if  the investor retains a tax benefit for "donating" money to a non-profit organization, and if so, if that would be before or after paying taxes on his profit. The language used in defining the hybrid is "low profit" organizations- with "low profit" as yet undefined. I will be interested to see if "low profit" is defined in the legislation, should it come to pass.

Burton A Weisbrod is an economist who has written in length about the non-profit sector and it's relationship to the government sector and the private economy sector. The problems of the nonprofits already hybrid capitalization will not go away if the legislature creates a new legal hybrid.

This is the blurb from "To Profit or Not to Profit " Edited by  Burton A Weisbrod
Nonprofit organizations are changing dramatically in the ways they are financed. They are becoming increasingly commercial, operating more like private firms. Far more is involved than the generation of revenue. As donations decline in importance and user fees and money-raising ancillary activities come to dominate, they bring side-effects on the social missions that justify public support. This book examines these little-recognized relationships for the overall nonprofit charitable sector and then focuses on each of six industries; important differences are found among hospitals, universities, social service providers, zoos, museums, and public broadcasting."


"

Comments

Popular posts from this blog

Why are social impact investors trying so hard to defeat smaller shelters for the homeless?

  "Social Impact” developers in Portland, Maine seek to squelch a referendum for smaller shelters called for by qualified practitioners with concrete experience in the field. A large sign says Vote C to support the Homeless, small handmade sign next to it says Untrue! That sign is paid for by developers who want / Photo by Jess Falero In   the 1970s under Governor Longley , Maine became a centrally managed economy that expanded Maine’s wealth gap and merged, almost seamlessly, the public and private and the non-profit and for-profit economic sectors into one mutually beneficial wealth-concentration & distribution system. Currently, mutually benefitting factions are coming together once again in hopes of building a mega-shelter for the homeless in a Portland, Maine industrial development district. In addition to beds for the homeless, the project will include, dining, and locker facilities, as well as offices and an attached health clinic. The promotion  describes the facility

Communism and State Ownership of Intellectual Property

Tweet This: http://goo.gl/BcA6ru Government As a Secret Society The response to my informal suggestion that public accessibility to government could be improved by making information available in a searchable data base ( see previous post) subjectively confirmed that the  functioning power elite of Maine's economic development programs and policies are both intentional in instituting a political ideology that supersedes the will of the people, as expressed in the Maine State Constitution, and deceptive towards the general public. 1.Information made available on an agency website but not in a searchable database format may not provide the research and investigative tool needed by the public. The Freedom of Access Act does not require that public information be posted online in any particular format, just that public records be made available. While there is a strong argument for increasing the accessibility and usefulness of information, there is no current requ

Hand Making Ceramics in the USA, The Medium is still the Message

I was raised in a ceramic business in the home, which was different from its surroundings, making myself and my siblings, outsiders inside the classroom environment. When school closed and summer commenced, an alternate reality emerged, a world in which my family's art was sought after by a wide range of humanity. I felt welcomed by the foreigners and an outsider among local peers. Later when I left home for  NYC, circa 1966, I found myself surrounded by welcoming peers, a difference between night and day. It was New York City at the pinnacle of the flower power era when Greenwich Village was wall-to wall youth culture As you can imagine this formulated a peculiar psychology, so strange, that even I didn't recognize it! From Levittown To Maine in 1952 Page from Jim Harnedy's book on the Boothbay Region. The 200 year old barn which was the first home of Andersen Design was torn down after we moved to East Boothbay A while ago a high school acquaintance told me