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L3C
(Low-Profit Limited Liability Company)

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Low-Profit Limited Liability Company

The Illinois Limited Liability Company Act provides for the creation of low-profit limited liability companies (L3C).

The L3C is essentially a subtype of a for-profit LLC that is (1) specifically organized to further charitable purposes and (2) does not have the production of income for its members as a significant corporate purpose.

Just like an LLC, an L3C can be organized as a disregarded entity or a taxable business and there is no requirement that its members be tax-exempt organizations; the statute requires only that its members seek to conduct a business activity through the L3C that furthers a charitable purpose. Since the statute anticipates that an L3C will hold charitable assets, the Act requires all L3Cs, unlike traditional LLCs, to register and file annual reports with the Illinois Attorney General’s Office under the Illinois Charitable Trust Act, unless otherwise exempt. 

 

Corporation
501(c)3 and Benefit

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501(c)3 Non-Profit Corporation

These terms explain different aspects of the same organizations. A non-profit organization refers to a wide range of legal entities that are organized without shareholders or other private owners. Most nonprofits serve a public purpose, but many address private interests as might be seen in social clubs, trade associations, etc. 
The expression “not-for-profit corporation” refers to a specific legal entity formed under the Illinois General Not For Profit Corporation Act of 1986.

Benefit Corporation

The Illinois legislature recently enacted the Illinois Benefit Corporation Act, creating a new business entity designed to encourage social and environmental goals in addition to maximizing its profits for the benefit of its shareholders. The public benefit corporation is a taxable business entity with private shareholders that adopts a corporate purpose that creates “a material positive impact on society and the environment." 

Whole Foods and Patagonia are two well-known examples of businesses that have reorganized under similarly structured statutes in other states. No special tax benefits are currently afforded to benefit corporations. However, akin to the low-profit limited liability companies, organizers may find that the good will and public image created by the use of a benefit corporation, and the changes to the fiduciary duties, warrants the additional reporting obligations. 

 

Resources for Non-Profits

Aspen Institute - Program on Philanthropy & Social Innovation

This program seeks to inform and maximize the impact of grantmaking foundations, nonprofit organizations, social enterprises, and public-private partnerships through leadership development initiatives, convenings, and communications so that each can contribute to the good society at home and abroad.

Center on Philanthropy at Indiana University

The Center on Philanthropy is moving philanthropy forward in the 21st century. Its cutting-edge programs and initiatives provide nonprofits, donors and scholars with the resources they need to make a difference.

Chronicle of Philanthropy

The Chronicle of Philanthropy is the top news source for nonprofit leaders, fund raisers, grant makers, and other people involved in the philanthropic enterprise. For more than 20 years, The Chronicle has been connecting the nonprofit world with news, jobs, and ideas.

Donors Forum

Donors Forum is a nonprofit membership association that promotes philanthropy and a strong nonprofit sector in Illinois.

Foundation Center

Established in 1956, the Foundation Center is a national nonprofit service organization recognized as the nation’s leading authority on organized philanthropy, connecting nonprofits and the grantmakers supporting them to tools they can use and information they can trust.

Giving Institute

Since 1935, the Giving Institute and its 34 member firms have embraced and embodied the core values of ethics, excellence, and leadership in advancing philanthropy.

GuideStar

A searchable database of more than 620,000 nonprofit organizations in the United States. You will have to register to verify a nonprofit's legitimacy, learn whether a contribution will be tax deductible, or view a nonprofit's recent Forms 990.

Idealist.org

A project of Action Without Borders, Idealist is an interactive site where people and organizations can exchange resources and ideas, locate opportunities and supporters, and take steps toward building a world where all people can lead free and dignified lives.

Independent Sector

Founded in 1980, Independent Sector is the leadership forum for charities, foundations, and corporate giving programs committed to advancing the common good in America and around the world.

National Council of Nonprofits

The National Council of Nonprofits is the nation's largest nonprofit network with more than 22,000 member organizations across the country. The National Council works through its network of state and regional nonprofit associations to amplify the collective voice of America's nonprofit organizations.

Pew Charitable Trusts

The Pew Charitable Trusts is driven by the power of knowledge to solve today’s most challenging problems. Pew applies a rigorous, analytical approach to improve public policy, inform the public and stimulate civic life.

Social Enterprise at Kellogg (SEEK)

The SEEK program reflects the converging challenges that managers face today as they strive to be socially responsible global leaders in their chosen fields.

The NonProfit Times

The leading business publication for nonprofit management.

Urban Institute

In 1968, the Urban Institute was established as a center for independent nonpartisan analysis of the problems facing America's cities and their residents. Urban Institute researchers analyze policies, evaluate programs, and inform community development to improve social, civic, and economic well-being.

USA.gov for Nonprofits

U.S. government portal specifically designed for nonprofit organizations, with links to sevices and information from various Federal, state and local agencies.

 
 

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