Vistas: Geri Stengel’s Blog: Social entrepreneurs

by Lauren Abele

For entrepreneurs looking to positively impact people, planet, and profit by launching a triple bottom line enterprise, financing opportunities are scarce.  Why? Traditional investors—like banks, angels, and VCs—tend to look exclusively at financial return on investment and ignore social impact when making an investment decision. On the other hand, most foundations and other nonprofit funders, which traditionally have funded projects with high social and environmental impact, are either unable to or not interested in funding for-profit companies. With this funding dichotomy, where is there room to do well and do good?

Some people know what matters. And, I’m happy to say, there are a lot of them. The Unreasonable Institute just announced the top social enterprises competing for funding by the Institute and noted that there were so many good applicants that the process of whittling them down had been arduous.

Some make change by using old tools – growing mushrooms or training bakers – other redesign the standard business model in order to change the world. 

Last week, I described the innovations of two of the Utne Social Ventures Network 2010 Innovation Award winners who are using the basics to change lives. Now let's look at tweaking the business model.

By David Rudofsky

The Low-Profit Limited Liability Company, or L3C for short, represents an attractive hybrid business form available to organizations located in Vermont, Michigan, Utah, Wyoming, and Illinois. Specifically, adoption of the L3C form – a hybrid between LLC’s and 501(c.)(3) nonprofit organizations – has the potential to simplify life for nonprofit organizations that may generate some income, even though their primary purpose is charitable or educational, and not income generation. The L3C form may also be of great appeal to for-profit organizations that want to have the leeway to prioritize social gain over profits, without risking shareholder lawsuits.