Most non-profits lack the ability to run a for-profit business, having depended so long on hand-outs. Rather than run a business, the non-profit can use its donor base to solicit investments in a revolving fund which is, in turn, used to fund start-up worker cooperatives. No free lunch. The worker cooperative must pay interest on loans and split some of the profits with the equity investors. Hence, each new co-op adds to the income stream in favor of the charity.

The new “kid on the block” is the L3C limited liability, social benefit entrepreneurial enterprise. This type of enterprise needs low cost financing from the start-up stage to the point of profitability. Please visit my blog to read all about how this type of financing can go a long way to solving the funding of 501.c.3 charities: MUTUAL AID SOCIETY OF AMERICA, INC.
103 Methodist St., Cecilia, KY 42724
Ph. 270-307-4857; fax. 270-862-4379
email: jimmiller5417@gmail.com

Here’s my earlier post in case you missed it;

March 27, 2010

Re: Offer of collaboration

Dear Folks,

On behalf of Mutual Aid Society of America, Inc., I would like to engage your organization in a cooperative project well suited to both our missions. The general goal is to improve the quality of life in rural America for its least economically able people. This goal can be met by attaining these objectives:
Form a new corporation or empower an existing one to offer organizational and funding support to worker cooperatives. This corporation has or would obtain 501.c.3 status and also qualify as a U.S Treasury certified community development financial institution. It will establish several “bridges” in aid of its mission.
Form one or more limited liability companies as social benefit entrepreneurial enterprises which become qualified L3C entities with the IRS.
Create a campaign for the issuance of notes by the L3C corporation, 100% of the proceeds of which are used to fund start-up worker cooperatives.
Assist the L3C in applying for funding from private foundations and government entities.
Provide professional services to each start-up, including legal, accounting, tax, marketing, securities, banking, and dispute resolution for as long as needed.
Liquidate the notes by using the revenue from interest on loans and/or dividends on equity investments in the worker cooperatives.
Form and fund a Community Development Credit Union.

The model for this form of non-profit funding has been implemented by Cooperative Fund of New England which formed a subsidiary, The Creative Capital Fund of New England, http://coopcapital.coop/coopcapital which will invest 100% of the proceeds in start-up worker cooperatives. The Prospectus is at: http://coopcapital.coop/coopcapital/prospectus .

The funding is exempt from securities regulations and is not backed by insurance against loss. The use of First Loss Notes, earnings and reserves against loss, protect, to some extent, the Second Notes. The proceeds represent a “blind pool” from which the Board of CCF can draw for loans or equity type investments in worker cooperatives.

Much of the historical background and articles on worker cooperative and rural economic status is on the MASA website at: http://masallp.wetpaint.com/ I’ve started a new blog to which I have copied many of the relevant articles: http://mutualaidsocietyofamericainc.blogspot.com/. My comprehensive resume may be viewed at: http://algaloildiesel.wetpaint.com/page/JAMES+E.+MILLER+–+COMPREHENSIVE

Please acknowledge receipt of this email and, if your organization is interested, please respond by email so I can pass it along to my associates. Thanks,

Sincerely yours,

James E. Miller, BA, BS, JD