Page 114 - Social Enterprise A New Business Paradigm for Thailand

The company’s mission is to manufacture the highest-quality products while minimizing
unnecessary environmental harm. Patagonia actively campaigns for environmental causes
through its social media platforms, documentaries, articles, and its official website to raise
public awareness about environmental issues and ways to participate in solutions. Consumers
can connect and interact with environmental activists, groups, or organizations through the
“Patagonia Action Works” section of the company’s website.
Patagonia is frequently cited as a model Benefit Corporation that exemplifies corporate
responsibility toward society and the environment. It is also widely recognized as a high-quality
business that meets the Certified B Corp standards.

Source: Patagonia, Our Environmental Responsibility Programs,
https://www.patagonia.com/our-responsibility-programs.html, 2024.

3) Low-profit Limited Liability Company (L3C)

L3Cs are hybrid entities that combine the characteristics of for-profit companies with a
commitment to social objectives. They were developed from an initiative led by Robert M. Lang,
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Jr., the president of a family-founded foundation in New York , in collaboration with several other
key figures in the social enterprise sector, including Marcus Owens and Arthur Wood. The aim
was to create an organizational form capable of pursuing social missions while simultaneously
generating profit and attracting investment from philanthropic foundations. L3Cs thus resemble
social enterprises that allow for profit-sharing, but with a key distinction: while traditional limited

liability companies (LLCs) prioritize profit generation, L3Cs are required to place social benefit as
their primary goal, with profit-making as a secondary objective.

L3Cs were specifically designed to meet the operational and legal needs of private foundations
seeking to maintain their tax-exempt status under the regulations of the United States Internal
Revenue Service (IRS). According to IRS rules, tax-exempt foundations must disburse at least 5%
of their investment assets each year through donations or investments in qualified charitable or
business organizations. L3Cs provide a viable option for foundations wishing to uphold their tax
benefits while not necessarily expecting high financial returns. These investments can take the

form of loans, loan guarantees, equity purchases, or other financial instruments, but they must
serve a recognized charitable purpose.

Program-Related Investments (PRIs) and L3Cs
Investments of this nature are known as Program-related investments (PRIs), which must meet
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the following conditions set forth by U.S. tax law:

74 Mary Elizabeth & Gordon B. Mannweiler Foundation.
75 Code of Federal Regulations (CFR), Title 26 – Internal Revenue, Sec. 53.4994-3 (a).
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