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Category Archives: Social Enterprise

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Final PRI Regulations Released

Posted in Grantmaking & Social Investing, Private Foundations, Social Enterprise

The Treasury Department and Internal Revenue Service yesterday released final regulations on private foundation program-related investments. These regulations put in final form nine examples of investments that qualify as PRIs, initially proposed by the IRS in 2012. The White House has been enthusiastic about impact investing as a tool to further social and charitable objectives,… Continue Reading

IRS Clarifies Position on Private Foundation Mission-Related Investments Under Section 4944

Posted in Grantmaking & Social Investing, Private Foundations, Social Enterprise

In Notice 2015-62 issued on Tuesday, the IRS explained that a private foundation and its managers will not necessarily be penalized under Internal Revenue Code Section 4944 for a mission-related investment that does not qualify as a program-related investment (PRI) and that offers a lower return than more standard alternatives, since a foundation’s charitable purposes… Continue Reading

Goodbye Flexible Purpose Corporation, Hello Social Purpose Corporation: Governor Brown Signs S.B. 1301

Posted in Social Enterprise

On September 27, Governor Brown signed into law an amendment to the Corporate Flexibility Act of 2011, which had established the flexible purpose corporation (“FPC”) as a hybrid corporate form then unique to California.  The amendment, S.B. 1301, changes existing law (found under Corporations Code Sections 2500-3503) to emphasize the social-purpose nature of the FPC,… Continue Reading

Philanthropic Facilitation Act Encourages Program-Related Investments

Posted in Grantmaking & Social Investing, Private Foundations, Social Enterprise

The Philanthropic Facilitation Act recently was introduced in the House of Representatives by co-sponsors Cory Gardner (R-CO) and Jared Polis (D-CO).  The Act would amend the Internal Revenue Code to create a voluntary review process by which the Internal Revenue Service would determine whether specific investments qualify as a private foundation program-related investment (PRI). Expedited approval… Continue Reading

California May Introduce Social Impact Bonds

Posted in Grantmaking & Social Investing, Private Foundations, Social Enterprise

Social impact bonds (“SIBs”), sometimes referred to as “pay-for-success” financing, may arrive in California.  A bill introduced in the legislature, SB9, would establish the Office of Social Innovation and Entrepreneurship Development.  The purpose of this governor’s office would be “to establish partnerships with government agencies, private investors, nonprofit organizations, and for-profit service providers to facilitate the… Continue Reading

Social Enterprise―Innovating through Impactful Partnerships

Posted in Grantmaking & Social Investing, Social Enterprise

OK.  I don’t know what the title of my post means either, but that is actually my point! Social enterprise is an emerging and developing business approach, whether accomplished through a tax-exempt organization, a traditional for-profit entity, or one of the newer hybrid forms―L3Cs, Benefit Corporations, or Flexible Purpose Corporations.  With new approaches necessarily comes new… Continue Reading

New Guidance from the IRS on Program-Related Investments

Posted in Grantmaking & Social Investing, Private Foundations, Social Enterprise

Yesterday, the Internal Revenue Service released proposed regulations providing new guidance to private foundations regarding program-related investments.  The regulations offer nine new examples illustrating a wide range of investments that can qualify as PRIs.  These nine new examples illustrate certain general principles, such as the following:   Charitable purposes that may be accomplished through a PRI are broad… Continue Reading

Social Enterprise Update: California Governor Signs Bills Creating Flexible Purpose Corporations and Benefit Corporations

Posted in Social Enterprise

Nearing the midnight hour on Sunday October 9, 2011, Governor Brown signed into law two bills that will both take effect on January 1, 2012.  Both of these bills will provide an opportunity to form for-profit corporations in California that also promote a social or charitable purpose.  Senate Bill 201 adds the Flexible Purpose Corporation… Continue Reading

Social Enterprise at Adler & Colvin

Posted in Social Enterprise

We have been working closely with clients, policy makers, and regulators to help shape the emerging world of for-profit hybrids.  For-profit hybrids include the Benefit Corporation in Vermont, Maryland, New Jersey, and Virginia, and the low-profit, limited liability company (L3C), which is now law in eight states and two Indian Nations.  We have been actively… Continue Reading