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Posted: July 22, 2009

interSector Partners brings a new business model to Colorado

L3C marries the best features of the LLC with nonprofit’s social conscience

Patricia Kaowthumrong

What does a business plan 10 years in the making – with 20 years of nonprofit experience and 30 years of for-profit work in business, marketing and development behind it -- amount to?

The answer: Longmont-based interSector Partners, L3C, a low-profit limited liability company. The company is a new form of LLC that combines the best features of the limited liability company with the social conscience of a nonprofit.

In early March, Caryn Capriccioso and Rick Zwetsch formed interSector Partners, partnering Capriccioso’s expertise in nonprofit work with Zwetsch’s business know-how. The company is the first of its kind in Colorado and operates by the philosophy coined by L3C movement leader Robert Lang: “the for-profit with a nonprofit soul.”

“Our mission is to help nonprofits become more sustainable, for-profits to become more socially responsible and to help government agencies to support both for-profits and nonprofits in the community,” Capriccioso said.

Focusing on consulting and education services, Capriccioso and Zwetsch also help nonprofits develop more effective business models.

“Part of what we do is to help nonprofits act a little more like for-profit businesses,” Zwetsch said. “A social enterprise is ultimately going to have to function like a business or it won’t be able to sustain itself. There needs to be a business plan.”

L3C’s are still relatively rare in the U.S. But the business model has caught the eye of some social entrepreneurs. L3Cs have also been suggested as one way to save struggling media companies.

Some of interSector Partner’s clients include Rally Software, Boulder County AIDS Project, Groundwork Denver, Hope Communities and Sporting Philanthropy, L3C.

Sporting Philanthropy partnered with interSector Partners six months ago. The company works with professional athletes to build effective and sustainable nonprofit partnerships, which “inform and facilitate philanthropic endeavors alongside Colorado’s many professional athletes.”

“Rick and Caryn have helped us evaluate and structure our social business. They worked closely with us to organize as an L3C and adapt our business model to most effectively balance social impact with sustainable revenues,” said Brendan McCrann, partner and account manager with Sporting Philanthropy. “Their attention to our strategic needs as a start-up company has helped us remain focused and driven.”

Six-year-old Groundwork Denver, a nonprofit with the mission to “bring about sustained improvement of the physical environment and promote health and well-being through community-based partnerships and action,” sought interSector Partners’ services seven months ago. Through support from The Denver Foundation, interSector Partners is conducting an assessment and technical assistance project for organization.

Emilie Barrata, board president of Groundwork Denver said the organization chose interSector Partners after meeting with other consultants because of Capriccioso and Zwetsch’s extensive experience in nonprofit and for-profit work.

With the current state of the economy, many people are just looking for “short-term fixes.” But the time to take action and form strategic partnerships is now, Zwetsch said.

“The rules of the game have changed, so people have to start thinking differently,” he said. “Organizations like ours help people think about the various different options and then align themselves with the resources to move forward.”

Capriccioso calls it an “all hands on deck” situation.

“The economy, the recession and the social issues we’re dealing with aren’t going to be resolved by nonprofits, for-profits or the government alone,” she said. “If people can think innovatively and creatively, pick their heads up from what they’re doing, look upon the horizon and think about what they need to do to adapt, we have the opportunity to come out the back side of this in a better place.”

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Patricia Kaowthumrong is a student at the University of Colorado School of Journalism and Mass Communication. Contact her at Patricia.Kaowthumrong@colorado.edu.

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