To Profit or Not to Profit?

Sometimes it's easy to see the world of American enterprise as two mutually exclusive camps: the do-gooders and the corporate greed-mongers. Or, depending how you look at it, the rational pillars of society and the caterwauling bleeding-hearts. Rarely the twain have met, though in the instances when they have, in the form of socially responsible companies such as Stoneyfield Farm and Patagonia, the results have been fantastic.

So it's about time that we're entering a brave new world of hybrid institutions that allow organizations to snag corporate investment dollars while remaining true to their ideals. No longer does a nonprofit have to remain tethered to hard-won donations. And a company can now escape from the tyranny of shareholders who demand a profit at the expense of the institution's values.

This field is still a new frontier. Only 31 states have "corporate constituency statutes," which allow CEOs to make decisions by taking into account the interests of alternate stakeholders, like the company's employees or the larger community. One new structure, only in existence since last year and now only on the books in four states, is known as the Low-profit Limited Liability Company (or L3C). This status allows companies to prioritize their missions above their profits and apply for "program-related investments," in which foundations invest in projects that align with their charitable goals but also may produce profits.

All I can say is that it's about time.