To the Panel of the Chicago Journalism Townhall:
A low-profit limited liability company (L3C) is not a non-profit (NPO). An L3C is a for-profit business that gets a kick-start from foundation funding and then welcomes investors to follow in, or vice versa. It has rules around making a profit and those rules include the fact that if you are getting foundation money to meet your social mission, you cannot neglect your social mission to make a bigger profit. That would mean in the case of a newsroom, that you could not lay off the staff because they cost too much, not as long as the staff is meeting their social mission.
The panel of expert journalists at the Townhall Sunday â€” sage and talented as they all are â€” would benefit from expanding their thinking. The non-profit model works well when it has achieved scale and is able to tap into the passion of the news consumers â€“ good example WBEZ.
But in an L3C, passion is built into the model. It is initially monetized by the presence of foundations and investors who expect a return in money and mission. Unlike the NPO mode, profits are welcomed and encouraged. But mission trumps profits.
I will be writing about this more in the Huffington Post tomorrow.
Meanwhile read through these excellent materials American for Community Development.
And as I said a few weeks ago in my article on L3CsHuffPo article, the Peoria papers are looking at it.