Bill Gates’ new move is a game changer for not-only-for-profits
Looks like Bill Gates is about to boost a new type of not-only-for-profit into the limelight.
Here’s the story: The Bill and Melinda Gates Foundation recently announced it’s going to use a philanthropic vehicle called program-related investments (PRI) through the creation of a $400 million fund. PRIs, new and largely unused, are investments that also allow a philanthropy to achieve its charitable mission.
The other part of the story is about L3Cs. This is a type of “low-profit” LLC that has a charitable mission. It also qualifies as a PRI for foundations. (The IRS hasn’t yet officially provided an opinion on the tax consequences, although it may do so soon). I recently wrote about an ambitious new news site in Chicago that’s becoming an L3C.
What’s it all mean? If Bill Gates is giving his blessing to PRIs, he is also, by extension, doing the same for L3Cs. And that could mean that 2010 will become the year when L3Cs really start humming
For the world of L3Cs it is a game changer.
I like the way a story in Trusts & Estate sums it up:
Although the $400 million program-related investments fund is dwarfed by the $3.5 billion in grants made annually by the Gates Foundation, the fact that the world’s largest foundation is dipping its big toe into the world of venture philanthropy may accelerate a nascent trend in philanthropy the way the Beach Boys “Pet Sounds” and the Beatles “Sgt. Pepper’s Lonely Hearts Club Band” revolutionized popular music forever.