Rather than relying the sale of goods or services and on donations from foundations and other charitable givers that meet program-related investment rules for giving to for-profit operations, an L3C would be a vehicle for such charitable givers to more easily invest in appealing ideas that have the potential to make a profit. This funding wouldn't be tax deductible, as charitable gifts are, but having an L3C option would help foundations to spend the 5% of endowment that they are required by law to pay out each year. The key idea is that this incentive, and structure, would attract more financial support for such ventures.
In this story, I learned that Vermont, Wyoming, Utah and North Dakota already have L3C laws. Legislation is pending in several other states. In Vermont, more than 60 companies are registered.