Investing in L3C Organizations: Indicators of Legitimacy

Gregory G. De Blasio and Emma K. Woeste
Additional contact information
Emma K. Woeste: Northern Kentucky University, USA

Journal of Applied Management and Investments, 2013, vol. 2, issue 2, 83-86

Abstract: Organizations are cautioned to avoid favoring one stakeholder group over others when establishing policy and engaging in public discourse. Corporations are often crit-icized for privileging investors or shareholders. Non-profits, however, typically main-tain strong connections to community stakeholders and operate with visible educa-tional, heath care, or other institutional affiliation. With the recent and ongoing crea-tion of a new legal entity, the low-profit, limited liability L3C company, organization-stakeholder relations will need to be reconceptualized. The L3C is charged with a pri-mary purpose of practicing charity and social good, and yet is permitted to generate low profit and to court investors. The L3C investors expect a financial return much in the same way an investment in a large for-profit organization would be expected to grow. How, then, does the L3C organization fulfill its obligation to do charitable work and meet the institutional demands of social transformation while pursuing profit and answering to investors? In other words, how does L3C remain legitimate? The L3C places a new form of strain on stakeholder relations. An examination of a social circus organization in its formative stages helps to answer how stakeholder relations are re-considered for the hybrid L3C low-profit entity. The concepts of civic engagement and institutional affiliation were found to be factors in the legitimation process.

Keywords: legitimacy; L3C; social circus; stakeholder theory; community; institutionalization (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.jami.org.ua/Papers/JAMI_2_2_83-86.pdf (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ods:journl:v:2:y:2013:i:2:p:83-86

Access Statistics for this article

Journal of Applied Management and Investments is currently edited by Anatoliy G. Goncharuk

More articles in Journal of Applied Management and Investments from Department of Business Administration and Corporate Security, International Humanitarian University Contact information at EDIRC.
Bibliographic data for series maintained by Anatoliy G. Goncharuk ().