• Mark Bertler

    On aspect of this this change from nonprofit to for profit ownership/management of services to vulnerable populations is the ability of for profit entities to participate in the political process.
    While 501 (c) 3 organizations are banned from participating in political activity, for profit entities including LC’3s, benefit corporations and similar corporate structures are not.
    This might be an area that deserve some additional investigation and research.

  • Mat Despard

    Thanks Ruth for a critical perspective on hybrids. I thought the points about profit motive relative to issues of service quality and the characteristics of people served were especially important. I suspect though that some hybrid proponents might argue that the companies like Vitas share little in common with B-Corps and L3Cs with respect to a genuine desire to generate social value. There’s nothing intrinsically valuable about hybrids with respect to solving community problems; this is a matter of effective and well evaluated interventions, which can be implemented by any organization, regardless of corporate form.

  • Arthur Wood

    Mark – just for the record the L3C is based on a marriage of an LLC / LLP – with the congressionally passed (1969) Program Related Investment Code which defines how a Foundation can make a for profit investment – but which counts towards its 5% – to your point this specifically excludes political organisations. One may want to think about using the flexibility of the LLC / LLP code to also write in a golden voting share for teh charitable players which would also further hardwire the social mission further. Indeed we are working with Brookings and Accenture to create such a structure

  • Arthur Wood

    Mat – as a former Ashoka staffer I cannot tell you how much I agree with your poit about the crticality of the social entreprenurial interventions – but many of the issues we deal with our systems issues that may require a series of different players to take different economic / social risk return – exactly as happens in the for profit world. Indeed cross subsidisation between economic and social mission lies at the heart of much of Impact Investing. Having a mechanism that defines that process ina standardised way to the benefit of the social sector is key – if not you risk giving the margin of financial innovation, collaboration, scale and indeed future cash flow to the for profit players