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Formally known as a Low Profit Limited Liability Company, L3Cs are legal forms of business corporations that blend non-profit and for-profit investment efforts with a socially beneficial structure. With reduced regulations granted from the IRS, an L3C is classified organization that sets to attain social goals first, with profit second. Similar to the structure of a typical LLC, as to obtain membership flexibility and organization, the L3C modifies itself by amending and simplifying legislative processes.
Program Related Investments (PRI) are very common with L3Cs. PRI capital comes in the form of equity, depoists, or debt and is given from an organization to a L3C that does social work in the same philanthropic realm as theirs. They are similar to grants in the sense that they are ways of creating inexpensive capital toward social issues – however they are still investments that are to be repaid, although at a much more modest rate than regular enterprise investments.
PRIs range in size from as little as $1,000 to several million dollars. Generally, the amount of the PRI depends on the need and capacity of the recipient as well as the scope and size of the foundation, and its tolerance for risk.