Not-for-Profit Architectural Firm?

[jmcarr]

Even before this economic recession, independently owned newspaper companies were struggling to stay alive. Many local newspapers have simply ceased daily operations altogether.

But, one local newspaper in Florida became a not-for-profit company, which helped save the paper, keep local jobs, and protect daily, printed media in a mid-size, American city.

I was wondering if an architecture firm could become a not-for-profit entity. The advantage would be less tax burden. Plus, Clients might be attracted to the financial transparency of NFP's, versus privately owned firms' closed books.

Granted, it might seem like a marketing ploy to create a not-for-profit architectural firm. But, another advantage is that an NFP could afford to serve clients often neglected by private architectural firms. Case in point: Mockbee's Rural Studio at Auburn University.

I'm curious what people think about this idea.

[NewSchool]

After paying your engineering consultants and professional liability insurance, you won’t have any profit to worry about.
I do not want to discourage the idea, but how will you present the "value" of services rendered without reducing the public perception that architects deserve to be compensated? There is a lot of time and effort spent while you and your fellow professionals are...

(1) dealing with complicated projects,
(2) creating efficient spaces,
(3) value engineering, and
(4) controlling construction costs by minimizing change orders?

This idea may be fought with resistance by your local competitors. I know of a medical clinic that had the same idea. They were treated with a great deal of brutality by the two local hospitals and other doctors within the community. The medical clinic finally conceded to raise their fees to the fair market rate established by the hospitals. But then the "non-profit" clinic would choose not to pursue the collection of fees for a family who could not afford to pay their bills. The doctors lived in shacks and drove rusty clunkers to work.

But I do not want to discourage the idea. I think it all hinges on how you determine who is worthy of pro-bono and reduced fees (third world countries) and who should pay more (attorney's office and real estate office).

Am I understanding your proposed idea correctly?

[sixofnine]

I believe K-Marx will like it!

[brudgers]

Even before this economic recession, independently owned newspaper companies were struggling to stay alive. Many local newspapers have simply ceased daily operations altogether.

But, one local newspaper in Florida became a not-for-profit company, which helped save the paper, keep local jobs, and protect daily, printed media in a mid-size, American city.

I was wondering if an architecture firm could become a not-for-profit entity. The advantage would be less tax burden. Plus, Clients might be attracted to the financial transparency of NFP's, versus privately owned firms' closed books.

Granted, it might seem like a marketing ploy to create a not-for-profit architectural firm. But, another advantage is that an NFP could afford to serve clients often neglected by private architectural firms. Case in point: Mockbee's Rural Studio at Auburn University.

I'm curious what people think about this idea.

I suspect the newspaper to which you refer is the St. Petersburg Times whose publisher is owned by the Poynter Institute. The ownership structure adresses issues that are non-existent in architecture - namely the demands of C-corporation share holders.

There's nothing that prohibits a regular architecture firm from pursuing projects in the public interest. Probably with much greater flexibility due to issues surrounding leadership compensation in a not for profit.

Consider also that the directorship structure of a not-for-profit may not be a legal way of organizing a practice in your state.

You should talk to your attorney about the operating requirements for a not for profit.

[brudgers]

After paying your engineering consultants and professional liability insurance, you won’t have any profit to worry about.
I do not want to discourage the idea, but how will you present the "value" of services rendered without reducing the public perception that architects deserve to be compensated?

That's not the concern of a business. That's the concern of an industry. While there are certain organizations that place a higher value on the perception of their industry than on service to the public, such organizations do not refelect many people's values.

Some people won't leave their good works at the studio door for the "sake of the profession."

There is a lot of time and effort spent while you and your fellow professionals are...

(1) dealing with complicated projects,
(2) creating efficient spaces,
(3) value engineering, and
(4) controlling construction costs by minimizing change orders?

The fact that something requires hard work only increases the need for someone to provide such services in way which places the public interest a little higher than their need for a boat.

This idea may be fought with resistance by your local competitors. I know of a medical clinic that had the same idea. They were treated with a great deal of brutality by the two local hospitals and other doctors within the community. The medical clinic finally conceded to raise their fees to the fair market rate established by the hospitals. But then the "non-profit" clinic would choose not to pursue the collection of fees for a family who could not afford to pay their bills.

Sounds like a violation of anti-trust statutes. Something that certain professional organizations in architecture are under court order not to do. Which raises questions about what is really damaging to the public perception of the profession.

There's nothing like ongoing price fixing to make clients not want to hire architects.

The doctors lived in shacks and drove rusty clunkers to work..

And we all know that we should judge a person by their appearance not their works.

But I do not want to discourage the idea. I think it all hinges on how you determine who is worthy of pro-bono and reduced fees (third world countries) and who should pay more (attorney's office and real estate office).

How an architect decides to set their fees is no concern of anyone else. That's the great thing about living in a free country.

[NewSchool]

Sounds like a violation of anti-trust statutes. Something that certain professional organizations in architecture are under court order not to do. Which raises questions about what is really damaging to the public perception of the profession.

Although unlawful, it still happens. Recognizing that the clinic could not function without the support of the hospitals (delivering babies and intensive care services), they could not see any other way to deal with it.

There's nothing like ongoing price fixing to make clients not want to hire architects.

How an architect decides to set their fees is no concern of anyone else. That's the great thing about living in a free country.

I agree.

[King]

There are Habitat for Humanity & Architecture for Humanity already.

[King]

That's the great thing about living in a free country.

good to live in Capitalism too.

[brudgers]

Although unlawful, it still happens. Recognizing that the clinic could not function without the support of the hospitals (delivering babies and intensive care services), they could not see any other way to deal with it.

That's an interesting story.

I'd like to read more.

Can you post some links?

[jmcarr]

All interesting responses. Thanks.

I was thinking about an independent, not for profit firm, not connected to a university or other institution.

Peoples' points are well-taken that competitors' complaints about fees would arise, like the medical clinic.

Taking this idea in another direction, my city's professional lawyer's association has a referral service offering sliding scale fees for those needing an attorney. This service benefits the community and provides local lawyers with "bread and butter" work, in addition to good marketing.

It's possible that local AIA chapters could offer the same type of discounted rates in a referral-type way. However, given the AIA's corporate bias, it's doubtful the idea would get much traction.