SBNR.org Becomes Fifth Company in Michigan to Organize Under the New L3C Status

SBNR.org, the organizing body for the Spiritual But Not Religious movement, touts its L3C status as the solution to the paradox of doing good versus doing well.

(Vocus/PRWEB ) May 28, 2009 -- This year Michigan became the second state, following Vermont, to recognize a new type of business organization known as a low profit, limited liability company, or L3C. On April 9th, 2009 SBNR.org, the organizing body of the Spiritual But Not Religious movement, became the fifth company to be granted L3C status in Michigan.

The non-profit model is outdated

What is also outdated is the concept that a for-profit business should solely create wealth for its shareholders. The L3C vehicle is a major step forward in recognizing that businesses can and should create value for all interdependent stakeholders - including customers, employees, investors and the broader community.

As an L3C we must put purpose before profit

but we still desire to attract top talent and growth capital through investment - and that can't happen as a non-profit organization.

In the past, talented business professionals had to choose between doing good and doing well. The L3C vehicle lets both happen in the same organization and that enables us to attract top performers to do this important work

It’s serendipitous that Michigan approved the L3C only months before we launched SBNR.org

Some things are just meant to be.

We know there is a foundation out there that not only understands the power of PRI but is also fully aligned with our mission

Our business model has been affirmed by the community and we are ready to grow. The challenge now is to find a foundation that is aligned with our cause. That’s when the fun will really begin.

“The non-profit model is outdated”, says SBNR.org CEO, and Co-Founder, Steve Frazee. “What is also outdated is the concept that a for-profit business should solely create wealth for its shareholders. The L3C vehicle is a major step forward in recognizing that businesses can and should create value for all interdependent stakeholders - including customers, employees, investors and the broader community.”

SBNR.org is a social media company that produces and distributes entertainment and education to the Spiritual But Not Religious (SBNR) community. The company estimates that over fifty million people in the United States alone identify themselves as Spiritual But Not Religious.

“As an L3C we must put purpose before profit”, confirms Founder and independent spiritual teacher Ian Lawton, “but we still desire to attract top talent and growth capital through investment - and that can't happen as a non-profit organization.” The distinction between doing well and doing good is a much discussed topic among social entrepreneurs. “In the past, talented business professionals had to choose between doing good and doing well. The L3C vehicle lets both happen in the same organization and that enables us to attract top performers to do this important work,” says Lawton.

The primary advantage of the L3C is its qualification as a Program Related Investment (PRI), an investment with a socially beneficial purpose. Foundations can only directly invest in for-profit ventures qualified as PRIs by the IRS. Many foundations shy away from investing in for-profit ventures due to the uncertainty of whether they would qualify as a PRI. Validating that an investment qualifies as PRI can be accomplished by a Private Letter Ruling from the IRS, but getting such a letter can be expensive and time consuming. An L3C’s operating agreement minimizes this problem by specifically outlining its PRI-qualified purpose at the time it is legally formed, making it easier for foundations to identify social-purpose businesses. By regulation, a foundation must distribute 5% of its holdings each year. PRI funds count toward the 5% annual distribution benchmark. Foundations are feeling the pinch of these tough economic times. PRI distributions enable foundations to meet the 5% rule while gaining the potential for that money to be repaid with interest or capital gains. That doesn't happen with grants.

“It’s serendipitous that Michigan approved the L3C only months before we launched SBNR.org,” says Lawton, an Australian who currently calls Grand Haven, Michigan home. “Some things are just meant to be.” SBNR.org is seeking foundations and private investors to invest in its growth. “We know there is a foundation out there that not only understands the power of PRI but is also fully aligned with our mission,” says CEO Frazee. “Our business model has been affirmed by the community and we are ready to grow. The challenge now is to find a foundation that is aligned with our cause. That’s when the fun will really begin.”

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spirituality versus religion steve frazee ian lawton sbnr spiritual but not religious doing good vs doing well michigan l3c l3c pri

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