non profit, for-profit, or pro bono?
Aside from altruism, those are good reasons to found a 501(c)(3). On the other hand, why bother with the administrative complexities when you can do pro bono projects under a for-profit umbrella? For that matter, why not simply create a “good citizenship” niche that accrues economic value?
The last question, in particular, could apply to GreenBlue, a Charlottesville, Va., nonprofit thought up by William McDonough, FAIA, and German chemist Michael Braungart, Ph.D., of Cradle to Cradle fame. Led by executive director Jason Pearson, who joined the startup in 2003, the group works with industries to develop sustainable materials, products, and packaging. According to Pearson, who trained as an architect, nonprofits are a neutral ground on which would-be competitors can put their heads together to solve a problem. “Nonprofits are in a unique position to act as a safe place for industrywide partnership,” he explains. “Our nonprofit status allows us to sidestep the limitations of both the for-profit and government sectors in order to create really dynamic space for collaboration and innovation.” Still, he expects to eventually create for-profit spin-offs within GreenBlue, selling minority ownership to investors as a way to raise capital.
Nonprofit status also provides a platform for attracting seed money—an issue that Pugh + Scarpa principals Angela Brooks, AIA, and Lawrence Scarpa, AIA, considered when they established Livable Places, a development entity, six years ago. “We could have formed a for-profit, but we started out with no money and felt that [by] being a nonprofit, we'd be able to [raise funds] more easily,” says Brooks, who serves as board president. That structure also improved their prospects with the Los Angeles city council. The perception is that “you're more likely to be a good partner if you're a nonprofit,” she says. “Other developers come with a whole other set of baggage.”
The idea for Livable Places had been brewing for a long time. Brooks' SCI-Arc master's thesis involved rewriting Los Angeles zoning codes to encourage higher density and mixed-use development. But after graduating in 1991 and finding no such niche for architects, she and Scarpa began talking to like-minded professionals. That led to monthly meetings with architects, developers, artists, bankers, and city officials, all of which ultimately led to the development agency that today is staffed by an executive director, a project manager, and two policy experts. “On the policy side we've been making baby steps,” Brooks says. “We have four ordinances on the books that we've helped the city planning department write.” (Among other things, they include concessions for higher allowable densities for affordable housing and townhomes.)
Since so many developers are already doing low-income housing, the nonprofit focuses on residential and mixed-use development that's within reach of middle-income folks, such as teachers, architects, and firefighters. They're targeting underused land parcels in depressed or industrial neighborhoods, like the old W.P. Fuller Building in L.A.'s Lincoln Heights neighborhood that's being adapted for residential use. Although Pugh + Scarpa is designing the lofts, one of the nonprofit's goals is to help other talented firms break into affordable housing by hiring them for projects—in short, expanding the field so that others will follow suit.
For Brooks, Livable Places represents a chance for architects to position themselves higher on the decision-making chain. “The education of an architect is such that we should be impacting planning issues instead of doing work after it trickles down from planners, which often amounts to doing a pretty building on the site,” she says. “That's the main thing I'm proud of regarding Livable Places: We're starting to be looked at as creative problem-solvers.”
The pursuit of design influence that goes beyond the rather narrow province of the wealthy—or, at least, the well-off—is the motivator for most architects who start nonprofits. And what is commonly viewed as philanthropy may also turn out to be a sound career strategy. Bryan Bell makes his living through the Raleigh, N.C.-based nonprofit Design Corps, wearing the hats of both architect and developer of low-income housing. Much of it is for migrant workers around the country. While his niche falls squarely into the category of good deeds, it's also an unlimited market opportunity for architects with development skills.
As a profession, “We're competing harder and harder for jobs from the 2 percent of the population who hire residential architects,” he reasons. “I'm going over to where there are 98 percent of the jobs and no other architects are competing. All those jobs we never had and all those clients who never thought of us—that's what I'm talking about.”
Bell incorporated as a nonprofit because, like Peterson, he saw design needs that no agencies were addressing. He also believes there's a widespread misconception about 501(c)(3)s. “Being a nonprofit means that federal programs available to help people are available directly to you, as opposed to your client,” he says. “Our work is fee-based—we do a project, [we] get a design fee and a developer's fee. We're in a situation where we could conceivably enjoy a 30 percent fee. We never have, though, because we put 20 percent to 25 percent back in to pay for whatever nice features we want to include. It doesn't mean I don't have to get paid much. I could easily draw a salary comparable to my former classmates at Yale.”
Bell, who edited Good Deeds, Good Design: Community Service Through Architecture (Princeton Architectural Press, 2003), quotes a statistic from “Building Community: A New Future for Architecture Education and Practice” (a Carnegie Foundation study commonly known as “the Boyer Report”). It states that 22 percent of architecture students—the second-highest response—said they wanted to become designers in order to help their communities. “I think this will be a growth segment until that 22 percent has been able to find the population they were looking for,” he says of the finding. “I hope the designers who are so motivated can find the opportunity to fulfill their original hopes.”