CATEGORY

February 2010

Nonprofit Lobbying
Governance

Nonprofit Lobbying – Yes You Can!

A common misconception among nonprofits is that they can’t lobby. In reality, this restriction applies only to private foundations, not public charities. Public charities are explicitly permitted to lobby so long as they adhere to limits.

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L3C
Starting a nonprofit

L3C What’s All the Excitement About?

The L3C, or Low Profit Limited Liability Company, is a new legal entity that can be legally formed in six jurisdictions. The concept started in Vermont and is quickly catching on in other states across the U.S. including Illinois.

How is it different from an LLC?

The L3C’s primary purpose is to conduct activities that further a charitable or educational purpose. Earning a profit is its secondary purpose. Traditional corporate law requires that the owners’ interests are exclusively economic. This has been interpreted to mean that corporate directors have a duty to maximize profits for the company’s owners to the exclusion of virtually any other consideration. The statutory framework of the L3C turns the traditional view of the fiduciary duty to maximize the economic return for a company’s owners on its head. Instead, the L3C statutes require the managers to pursue the accomplishment of a charitable or educational purpose. They can earn a profit while pursuing their mission, but earning a profit can’t be a significant purpose of the company.

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Small is Beautiful
International Operations and Grants

Small is Beautiful – Economics as if People Mattered

Fritz Schumacher published Small is Beautiful – Economics as if People Mattered in 1973. According to The Times Literary Supplement, it is among the 100 most influential books published since World War II and rightfully so.

For the last 60 years or so our way of life has been based on the premise that so long as there is demand there will always be supply. Schumacher wisely challenges these assumptions when he writes that sustainability is an impossibility when we are, “assuming all the time that a man who consumes more is ‘better off’ than a man who consumes less”, in an environment with finite resources.

E. F. Schumacher is clear about what economics can do and what it can’t do. Mainstream economists divide humans into producers and consumers. As consumers, consuming more will always be in our self-interest. As producers, efficiency is to be desired above all else. This breaks down, Schumacher says, as soon as we realize that producers and consumers are the same people with the same desires.

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