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Money, its a crime.
Share it fairly but dont take a slice of my pie.
Money, so they say
Is the root of all evil today.
But if you ask for a raise its no surprise that they’re
Giving none away.

Pink Floyd

Today’s entry is a starting point in my response to some timely and important issues being discussed in the Sacramento urban blogosphere, which can be boiled down to money.

Central City Opinion recently decried the lack of affordable housing in the urban core. Likewise, E’s thoughtful comments on our own blog identified that the issue of “profit” represented a major reputation breakdown for developers. Sacramento Landing has had numerous entries about the slowing housing market, etc.

All this at a time when the noun “money” has become adjectified to mean “good” (e.g. that’s soooo “money”!). So, in the spirit of the heartfelt dialogue others have begun, I’ve submitted my own thoughts from the perspective of one developer (I can’t speak for others).

And rather than writing out one enormous entry trying to say everything at once, I’ll stretch this out over a few entries, starting with a few fundamentals and then getting into some of the specific issues mentioned above.

On For-Profit
For starters, at LJUrban, we tend to see money as a tool vs. an end of its own. Our mission is social change–not amassing large, personal fortunes. None of us get our sense of fulfillment from the social status of wealth (my family has one car: an 89 Camry whose paint is more overcast than its original sky blue). Truth be told, middle-income Americans live like kings and queens compared with the rest of the world’s population (and, as Micah and others have mentioned, at their expense).

That said, money is undoubtedly a powerful tool for social change if used creatively and thoughtfully. Consequently, although our social change mission is one more commonly associated with non-profit, we are purposefully a “for-profit” organization. There are several reasons for this:

Good Exercise
We enjoy the entrepreneurial exercise of making a working business model out of our ideas. The profit mandate acts as an anvil on which to sharpen the blade of creativity.

Speed and Reach
We think “business for social change” has the potential to realize faster and more far-reaching changes than is possible with entities that rely on support and funding from others. In a small business climate, making our income directly from what we do (and not from donations, sponsorships, etc.—which may or may not come with strings attached) means we have more control over what we do and how we do it and greater internal accountability. For-profit puts us in the drivers’ seat and empowers us with a “can-do” mentality we just don’t see as evident in the non-profit sector, especially in our specific industry.

Our perspective is obviously a generalization that can’t be universally applied and certainly does not downplay the importance of non-profit organizations, with whom many of us have had lengthy involvement. Actually, as Vanessa reminded me today, socially-conscious businesses like ours owe a debt of gratitude to the non-profit sector for providing a solid foundation for social change.

Lead by Action
In a free-market, capitalist society, real social change isn’t likely to occur until businesses can prove that social change has a positive financial correlation. Sad though this may be, its generally true. For example, until recently, green building practices were a fringe phenomenon, conjuring up images of hippies building houses made of hay bale and rammed earth, options that aren’t reproducable on a larger scale; now we see innovative green building practices springing up all over that can be applied and accepted universally; one big reason for this is that ‘by and large’ sustainability is hitting an economic tipping point where more and more businesses are seeing that holistic thought makes good financial sense, especially if you think long-term. There’s a lot to be said about this than I won’t go into now; but we want to prove that eco-urban communities are a good business model so that other more cautious-minded “prove it to me first” business people will begin to buy into it more and more.

So, being “for-profit,” we do intend to make money, to make a profit. Profit is one measure of success (among others). And I doubt that there’s really much concern about this—everyone needs to make a living and this is how we make ours. The real questions come up when you start asking things like “what do you intend to do with the money you make” and “how much profit is enough?” or “how do you balance the pursuit of profit with your value for people, community and living systems.”

I’ll get in to these kinds of questions more in subsequent entries. I just thought it was important to share fundamentally why we are intentionally a “for profit” company because I suspect our reasons may be different than those of many other developers.

Jason

A Later Thought
Thinking about what I’ve written here about money as a tool for social change, I think I’d have to take a minor objection to Pink Floyd’s statement that “money, so they say, is the root of all evil today”, which is apparently a common biblical misquote. If I’m not mistaken, the actual text reads, “The love of money is the root of all evil.” I personally think the difference is crucial.