On November 16, I moderated a panel discussion in New York on the Low-Profit Limited Liability Company (L3C), and its potential for the arts. The panelists included two of the leading national experts on the business entity (Marc J. Lane and Rick Zwetch), alongside two masters from the theater world (Gregory Moser, Victoria Bailey), and one change agent from the arts business infrastructure (Adam Huttler). The video from that panel is now online, and worth a watch.
There’s been such bubbling of enthusiasm for the L3C form in the arts community (or at least in pockets of it), it was fantastic to gather such smart people and explore its purpose and potential. I came away with a deeper understanding and a greater appreciation of the full spectrum of ways we connect our businesses in the arts.
In short, the L3C is a business entity on the books in the legislation of nine states and one tribal nation. It is an entity intentionally designed to be a ‘social purpose’ enterprise…primarily focused on delivering a social outcome, even as it may or may not generate a profit along the way. The L3C was designed to receive a special type of investment from foundations, Program Related Investments (PRIs), but also seeks to gather resources from a full range of socially conscious investors.
In a world where wealth is continually seeking opportunity — to make more wealth, to make things happen, to shape the community, to solve challenging social problems — the L3C offers one more channel for wealth-holders who want both social impact and return on investment, likely at below market returns.
After the panel, I’m convinced that the L3C offers another useful tool for creative enterprise. But I think it will be used and useful in a fairly narrow range of circumstances, in which it can make a big difference. It’s a new power tool to make things happen. And we need as many tools as we can get.
Many thanks to Michael DiFonzo, the producer of the event, and to the brilliant and generous panelists who shared their time and insights with us all. Michael promises updates and next steps on the official event website, so stay tuned for more.