Thanks for writing and clarifying. Yes, I correct that a donation to an L3C would be classified as a “gift” and not a “donation.” I picked up a quote from Slate.com relating to newspaper L3C’s that speak to that: “But whereas benefactors of nonprofits can claim charitable deductions on their taxes, supporters of for-profit ventures like the Times cannot. Indeed, the IRS would qualify such contributions as gifts rather than donations. It follows that there’s a financial incentive to donate cash to even prosperous charities, but not to the ailing paper.”

Ted

Thanks for a nice post on the L3C. There’s a small cohort of us out here on the L3C prairie that have been discussing applications of the L3C in the world of film, documentary or otherwise. There are a few challenges,as there will be in most industries, but we believe the L3C brings incredible potential if thought through using all of our collective creative genes to clear the current actual and perceived hurdles!

Not sure if I’m reading one point you made correctly but those making donations directly into an L3C will not receive a tax deduction as they would by making a donation to a traditional 501(c)(3) tax exempt organization.

Please let us know if you’d like to have further conversation bout the L3C!

Best,

Rick Zwetsch
Principal Partner
interSector Partners, L3C