When a guy called Lightning says something has a terrible name, you have to give him the benefit of the doubt.
Lightning Atkinson is a professional coach and speaker in the Chicago area who specializes in working with entrepreneurs, business owners and work groups.
And he’s a big proponent of the new (since 2008) L3C designation for small businesses focused on social impact. L3Cs are for-profit businesses that qualify for program related investments—mandatory contributions from large foundations—which previously could only go to not-for-profit organizations.
But Lightning’s not a big fan of what “L3C” stands for.
“’Low-Profit Limited Liability Corporation’ is a terrible name,” he says. “The focus shouldn’t be on the profits, because that’s not the point. The difference between an L3C and an ordinary LLC is in their priorities. Businesses set up as L3Cs aren’t looking to make money first and foremost. They’re all about social change.”
The first L3C Lightning encountered was Urban Worm Girl, a Chicago-based supplier of—wait for it—worms, along with books and educational materials promoting community vermicomposting. He also points to Overflow Coffee and Vitamend as local businesses that put social impact over profits. Among his own clients, he describes The Wilderness Brotherhood as an L3C that barely considers profits at all.
“It’s basically a couple of guys who like to organize camping and hiking expeditions for their friends. One day they ask me, ‘What if someone falls off a cliff and their family sues us?’ To protect themselves, they needed to become a legitimate business entity, and L3C was a great fit.”
He doesn’t see program related investments as a big draw for new businesses considering the L3C designation. “Again, it’s more about priorities. There’s always been this dichotomy between improving society and making money, but it’s a false dichotomy. Non-profits can’t devote all their energies to their missions, because they’re always fund-raising, but a revenue-generating business can make social impact sustainable. They can stand on their own two feet.”
There are 116 L3Cs registered in Illinois. Check out this list to support your local businesses that make social impact their mission.