Ambitious Chicago news site to become an L3C
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One solution for saving journalism from the precipice is for news organizations to become nonprofits. But a soon- to- be- launched web site is taking a slightly different approach by assuming an L3C structure.
Called The Chicago News Cooperative, the site’s founder is Jim O’Shea, a former Los Angeles Times editor and Chicago Tribune managing editor. His plan is to launch Nov. 20 as a nonprofit. But, in January, the site will become an L3C, or low-profit, limited liability company, a hybrid model mixing elements of for- profit and nonprofit in one structure. That is, it creates a new classification for for-profit businesses with a charitable purpose and the intention to be “low profit”. The site can’t take that form until January, because that’s when a new law in Illinois goes into effect making this type of structure legal.
L3Cs, which I’ve written about before, can accept private investments and charitable donations. They also are able to distribute their profits to investors. A handful of states have L3C laws; Vermont, which passed its law in spring, 2008, was the first.
O’Shea plans for the site to produce what he calls public-service journalism about Chicago. He’s also going to provide some Chicago news to a new edition of the New York Times. As a nonprofit, he was able to accept funding from the John D. and Catherine T. MacArthur Foundation. But the plan is to become self-sustaining in five years with a mix of membership fees, ads and service fees.
The site also seems to have attracted a roster of reputable former Tribune journalists, including James Warren, a former managing editor, Bill Parker, and Ann Marie Lipinski.
It’s a worthy experiment and an interesting use of this new structure.
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