Startup consults nonprofits, for-profits
LONGMONT - A new consulting firm in Longmont wants to help nonprofit organizations become more profitable and for-profits become more socially responsible.
interSector Partners L3C, headed by Rick Zwetsch and Caryn Capriccioso, will in part help organizations and companies form a new type of business entity called an L3C to tap benefits from both sectors.
An L3C is a low-profit, limited liability company that has a primary charitable, community or social responsible mission. The hybrid business model allows charitable foundations to receive some profit returns for their investments, and allows for-profit businesses to receive foundation investments for their charitable missions.
interSector is an L3C. The Longmont-based company originally formed in Vermont, the first state to allow the organization of LC3s. Michigan, Wyoming and Utah have since joined Vermont, and all 50 states at least recognize the company structure.
"The L3C allows us to formally put our social mission before any profit motives," Zwetsch said. "This hybrid business model is a perfect fit because our core beliefs focus on bringing the sectors together and blurring - if not eliminating - the lines that separate us."
Zwetsch said interSector is looking to tap foundation money to move the company forward. With the L3C designation, foundations can fund a company like interSector through program related investments and then receive a return on those investments. Without an L3C designation, then a foundation could only issue a grant, and receive no return.
It's not a full-proof win for foundations, however. Like any investment with a possibility of profits, there also could be a possibility of losses.
Beyond helping nonprofits and for-profits, interSector will offer consulting services to governments to better support both sectors in their communities.
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