A Local Example Of Social Business: Ryan Hurley

I am a huge proponent of using business to go good in the community. This has been my passion since first reading Yunus’ work on Social Business. Yunus has stated that Social Business will be the salvation of capitalism and I think he is right!

A Social Business has emerged to help address the social problems of the world. In the most general sense all business is meeting some social need, but Yunus’ concept involves a for-profit model, financially self-sustainable, where the profits are either reinvested into itself, with the result of increasing social impact, investing in community needs, or improving products and services in ways that will better support its social mission.

Yunus believes that this model will replace the unsustainable model that we call non-profits. Social Business’ do not rely on donations; they are businesses that are run efficiently and effectively with any profit made going back into the cause, not into the owner’s pockets. As Yunus stated, “A charity’s dollar has only one life; a Social Business dollar can be invested over and over again.” I am sold on this model, and its sister, Social Entrepreneurship.

This brings me to our local example Ryan Hurley. In Sunday’s paper Ryan was profiled as a critical business leader in the development of downtown Vancouver. The title of the article was “Building community is key for developer.” The article described how Hurley’s company is “repurposing” downtown Vancouver. His goal is to “help the city grow and flourish.”

Hurley is a businessman who commits each project to prayer. He was quoted as saying “I’m committed to moral and ethical development. The larger endeavor of good projects is that they benefit the community.”

Hurley is an entrepreneur. Lee Rafferty, executive director of Vancouver’s Downtown Association, recognizes Hurley has to ability to see “potential in buildings that others may write off as outdated infrastructure.” The fact that he can “take something old and solid and give it new purpose,” is what it means to be an entrepreneur. He is a risk taker, determined, and pays attention to the business. These are all characteristics of an entrepreneur, all of which were implied in this wonderful article in the paper.

But, is Hurley a person who believes in Social Business? I have not talked to him in years, so I can only draw conclusions by what I have read in the paper. I see all of the signs of a businessperson who recognizes that business is much more than just profit. He uses terms like win-win, or relational examples like business partners are akin to a marriage, and his belief in the importance of ethical business practices. And to top it off Hurley is quoted in the paper as saying, “Money and profits really come second to people, the whole point of a thriving economic community is the benefit of people.”

As I read this article, I believe that Hurley embodies the essence of Social Business, but even more so I think he is an exemplar of a principled entrepreneur. He is a man of God, who wants to follow Christ as he does what he is called to do. I have had some recent interaction with folks at Boomerang which gives its profits to charities, and I think Hurley is operating within the theoretical framework of a Social Business, at least in its broadest definition.

I truly believe that this is the future of business. Greed, excessive profits and exploitation of people are processes from the past. I read a comment recently by a very rich man who stated, “every time I see that the stock market has edged higher, I can more clearly hear the blades of the guillotine.” Many people see business leaders as the greedy exploiters described by Marx, but businessmen like Hurley prove that that is not the case.

My hat is off to Ryan Hurley, and Praise God for his willingness to serve in this capacity and make a difference in our community.

And that is my thought for the day!

To Blog Or Not To Blog?

This week in on of my classes we were discussing motivation. The discussion revolved around a particular model that dealt with several factors associated with a particular job. Does the job require a lot of variety, can you tell if you have finished the job, and how significant is the job viewed by those around you and how important is the job to you. Two other factors that play a role are how much autonomy do you have in your job, and how quickly do you know if you are doing well or not.

I have to tell you that I love my job, but it can be a bit overwhelming at times. One of my biggest complaints is the lack of down time. And one thing that is very important to one’s level of motivation is the ability to have down time; to feel rested. For me that has been a bit of a problem lately resulting in my lack of blogging and now needing to see a chiropractor to deal with some neck and back issues. The stress has moved right into my neck.

I only tell you this to emphasize how much I like blogging. I really like taking a few moments to reflect on the issues of life. The process has changed me and helped me to have broader perspectives on things. I am happy about that, and due to the lack of time to write have missed the process immensely.

So the question to blog or not blog has been answered. I intend to make time to blog. I need that creative time to reflect and hammer out my opinions on different aspects around us. I am passionate about inequality and how to deal with it. I am passionate about the power of business to create positive social change. I am passionate about the power of the gospel to change lives which in turn will change the world we live in. I am passionate about my wife and family. There are many things that I care about and think about which I can write about. So I will blog.

Will I have readers? I hope so, because I think I have something to say. But the question is why read my blog rather than watching the conclusion of Two and A Half Men? I think my perspective is more practical than some. In fact I thought about that yesterday after a meeting. You see, I tend to walk a road that is in between the extremes. Many of the people I interact with have strong negative feelings about the right side of the spectrum, the spectrum being made up of politics, economics, and religion. And others that I interact with have strong feelings about the left side of the spectrum. I tend to walk in the area of what works.

Someone tells me that Capitalism does not work; then tell me what the replacement would be? If you are telling me that Communism is the way to go, then I have to point to history. The fact is we make many comments that are based on emotion and what our passion tells us instead of being practical and finding solutions to the myriad of problems we face.

Solutions come from dialogue, not shooting out thoughtless prejudices based on feeling rather than dialogue. You have a problem with the politics of Focus on the Family, then sit down with someone who is involved with that and find out why they feel the way they do. You have a problem with Sojourners, then sit down with them and find out why. Talk!

We tend to demonize the opposition so we can better justify our own positions. We are the right ones, we are the moral ones, we are the voice of God. And the other side is bad, evil. There were two articles I read this morning that got me thinking about this. The first had to do with faith in the classroom. Michael Roth wrote a great article about students being uncomfortable talking about religious experience. This discomfort is on both sides of the spectrum. No one wants to be thought of as stupid or wrong. So we clam up.

Another opinion pieced discussed how Justice Clarence Thomas is becoming the most influential thinker on race in America. I can just hear people I know screaming at the top of their lungs – no way. But having read some of his comments, I have to say I see how both sides could be right.

Thomas is arguing for strong individual rights. His argument is based in the “premise that the 14th Amendment – guaranteeing equal rights for all – cannot mean different things for different people.” Thomas is opposed to “perpetual racial tinkering” in an attempt to fix racial imbalance and inequality at schools and the workplace.

In a dissenting comment in Gutter v. Bollinger, “a case that preserved the affirmative action policies of the University of Michigan Law School” Thomas quoted an 1865 speech by Frederick Douglass, “What I ask for the Negro is not benevolence, not pity, not sympathy, but simply justice.” Justice Thomas is arguing that blacks should be treated as “independent, competent, self-sufficient citizens” and not as victims. These are interesting thoughts that intrigue me.

As I am pondering Thomas’ comments I think about an HBR article I use when discussing diversity in organizations. The article is a part of several that make up an HBR collection titled “What Every White Boss Needs To Know.” I cringe every time I read this, but I find all of the articles are relevant to current race issues within organizations. The key word is miasma. Miasma is a word that means “bad air.” The author of the article is using the word to describe a process that was illustrated on Blackish a while back. The main character played by Anthony Anderson is given a promotion but the question is whether he earned it or he got it because he was black.

I do think this is what Thomas is getting at. Everybody I know, (black, white, Asian) want to receive a promotion as a recognition of a job well done. Everyone wants to get a job because they meet the requirements. Miasma occurs when we hire someone because they are a certain color, but then give them insignificant assignments because we don’t really think they can do it anyway, thus the bad air. Others would call these micro-aggressions. Thomas is arguing that our systems should recognize all individuals as unique capable individuals regardless of color or ethnicity.

I think this is great for those who have access to the appropriate systems, but what do we do with those who do not? Those born in relative poverty? Are a product of gang saturated neighborhoods? Who grew up with horrible role models? Who don’t have the work skills, study skills, needed to get ahead? Do we just leave them to their own individuality to pull themselves up by their own bootstraps?

See, there are two sides to the story. We can agree with Justice Thomas’ premise, but there seem to be two tiers to the story. Tiers represented by Martin Luther King and Malcolm X. I think those tiers are relevant today. King tended to represent middle-class blacks, while Malcolm X represented the inner city rage of the time. I think this is a very important distinction.

So lets talk! Lets talk about religion, taxes, and race. Instead of calling each other pejorative terms, I don’t know how many times I have heard someone say Evangelical as a cuss word (I’ve lost count), lets talk. Let’s find common ground. Then maybe we can get something done.

And that is my thought for the day!

Two Americas

Under the title “America Less Exceptional,” George Will argues how a “mushrooming welfare state has done major damage to [our] nation.” His argument involves a changing ethos within our country moving from a strong protestant work ethic to one of deepening dependency. The data he provides is interesting.

“America’s welfare state transfers more than 14% of GDP to recipients, which equates to about $2.3 trillion dollars. This is indicative of what Will calls a “needy” nation. Another piece of data is that “transfer benefits to individuals through social welfare programs have increased from less than one federal dollar in four (24%) in 1963 to almost three out of five (59%) in 2013.”

We all know that Baby-Boomers are beginning to retire, and some would assume that the major source of growth in social welfare payments would be a result of the Baby-Boomers. However, Will states “more than twice as many households receive anti-poverty benefits than receive Social Security of Medicare.” Will goes on to give other details about the issue, but as I read this I said to myself, “why is this happening?”

One reason he argues is the change of what is meant by poverty. I do think he has an interesting point. “Poverty programs have become untethered from the official designation of poverty: In 2012, more than half the recipients were not classified as poor but accepted being treated as needy.” This, writes Will, has created “character challenges which promotes certain habits.” We are fast becoming a nation of people standing on street corners with a sign that say “will work for food,” but have no intention of actually working. In fact, many of us have forgotten how to work. A dependency culture is emerging, thus eliminating the American distinctive of “self-reliance, personal responsibility, and self-advancement.”

The question, is this true? I can read the numbers, and I can draw certain conclusions, and I have to say I am concerned. But do we need to blame just the government, business for not paying a living wage and outsourcing work, the conservative blowhards, or even the growing liberal ethos in this country? I think I want to blame all of the above.

Our government continues to expect different results by doing the same things. I know what that is a definition of. We also know the wages are stagnant, and I for one will not talk anymore about the supply and demand theory of micro-economics associated with wages. I know what it says. I also have my concerns about the move of our country away from its Christian foundations because of, well for many reasons. Much of it seen as a result of the colonization excesses of the past that so-called enlightened folks point to while crying out that everything is the Evangelical’s fault.

So what is the solution to the two Americas? The rich are just fine, or so they think. The poor continue to struggle. The secular humanist cries out there is no God. The Social Gospel Sojourner moves slowly towards a universal gospel that says only the poor are saved. The political conservative tells us what they are against. Those that associate their salvation with their political beliefs, thereby ensuring the gays and immigrants are all condemned to hell, scream the loudest. All of this demonstrates to me just how far we have moved away from what is really important.

I remember when I first got saved. And yes, I am going to call it that. I was lost and He found me. I was saved. I remember the simplicity of that time. It was all about Jesus. This Guy who I knew loved me enough to die on the cross for me. He has given me a new life. That life is not about riches, and it is not about politics. But it is definitely about a chosen life. One that involves following. It is a life rich with love, compassion, and service.

If we are going to deal with the two Americas the way it should be dealt with, then I think we need a fresh wind. A fresh recognition of who this guy Jesus is. May the Spirit of God breath a fresh wind in our hearts and lives, and may the living water of Jesus Christ fill us so we never thirst again! May we fall in love with Jesus.

And that is my thought for the day!

Capitalism and Relgion: Principled Entrepreneurship

I am pleased that I teach in a Christ-Centered school that is of the Liberal Arts tradition. The reason I say that is because I love to teach and I love the topic of business. I want to know how the economy works, I want to teach my students how it works, and I want my students to know how to run organizations in efficient and effective ways to ensure society receives value. My understanding of value is broader than some, but I see it both as monetary and social value.

There isn’t a day that goes by where I don’t read or see something negative about Capitalism. I think it is because the folks that say these things are just looking at the extreme perversions of capitalism. They don’t see private property being used to produce goods demanded by the market. They see the excesses of the system, which are real and problematic. However, I don’t think we should throw the baby out with the bath water and become Socialists.

What got me thinking about this was an article I read yesterday “Teaching Capitalism to Catholics.” The title intrigued me, and after reading the editorial I have been exposed to another great phrase “principled entrepreneurship.” I have to say I like that phrase.

I am sure all of you are familiar with Pope Francis’ recent comments about economics. As a Priest aging in South America he saw many of the excesses of Capitalism, and was very concerned about caring for the poor and marginalized. Pope John Paul II also “explicitly condemned” economies that exploited the poor, however in a 1991 encyclical noted the working man would be the first to suffer, which “was borne out by the collectivist societies of the 20th century.” He recognized that exploitation happens regardless of the economic system employed by the state. But in the encyclical Pope John Paul II he also commended an “economic system which recognizes the fundamental and positive role of business, the market, and private property.”

This is the focus of principled entrepreneurship. You see the Catholic University of America’s School of Business and Economics has received a grant to study and teach how capitalism and Catholicism are compatible. As one who sees the need to frame business within a moral structure, I am encouraged and excited to see where the CUA takes this. It is a fact that economic development has done more to alleviate extreme poverty than anything else in the history of humankind.

Catholics, like students at Warner Pacific, are concerned about social justice. Therefore, this university will be developing systems of pedagogy which understands the importance of recognizing how “free markets only work within a moral culture. When business is unmoored from a concern for the common good, capitalism can slide into cronyism and corruption.”

I for one believe that the principles of the free market can alleviate poverty only if we recognize and fight against the excesses. The free market has raised 1 billion people out of extreme poverty and created a “2 billion person middle class throughout the world over the past 300 years.

To do this I believe that business must be taught within a framework of morality. If we only teach the technical aspects of business leading to profit maximization for the 1% and not for the common good, then our motivation is wrong and immoral. Milton Friedman had it wrong. The process of making money is not amoral, it must be done with the prescription to effectively and efficiently use resources, but in a just way. I for one believe it can be done like this. I for one think that we cannot only do well, but we can do good too.ß

And that is my thought for the day!

A Plethora Of Topics

I like the word plethora; it means “a large or excessive amount of something.” When I say there are a plethora of topics to discuss, I really mean it. The apostles of do nothing are back in session. All of our public servants have been sworn in. I could write about that.

I could write about the interesting people I have met over the last couple of days. Michal Tehteh from the Community Cycling Center in Portland, or Lisa Detchman from Boomerang. Both are active with businesses that are doing good in their community, one is Portland and the other Vancouver. One person I want to talk to is Ryan Hurley of Detour Ministries who seems to have a vision for West Vancouver that intrigues me. I am going to try and meet with him.

I could write about Boeing. It had an incredible year both delivering airplanes, as well as getting new orders. There are still labor issues, but the company will be producing aircraft in the Pacific Northwest for many years to come. Of course, tragic events could change that, but hopefully these do not occur.

One thing that did catch my eye yesterday was a new book. The title “Labors Love Lost,” got me to take another look because of my love for reading and watching Shakespeare. The article in the WSJ that discussed this book started with “The American working class seems destined for the dustbin of history.” That seems rather negative. The author of the book, Andrew Cherlin, is a Sociologist and expert on the contemporary family.

Cherlin argues that the world of business in the United States has changed causing an angst for the modern American worker. The benefits of work in the US took over 100 years to develop as our economy moved from an agrarian base to an industrial one. “Only after the greatest generation returned home from a war that had disabled the competition from abroad did productivity increase, the family wage became commonplace and the lunch-pail worker emerged as a star in America’s story of progress.”

But now, the American worker is faced with a “global diaspora” of living wage jobs, being replaced with low-wage service jobs. Cherlin also argues the American male has become frustrated with the lack of wage advancement and subsequently has gone AWOL from the labor market. This in turn is leading to the implosion of “churchgoing American families,” who are experiencing divorce and non-marital births as routine. The reason given for this, at least from a political perspective, is dependent about one’s philosophy. Liberals believe it is because of the affects of economic inequality, and the conservative it is related to the loss of traditional “bourgeois values.”

Ok, we know we have a problem, but I am more concerned with how we fix it. Where do we go from here? The fact is the way we work has changed. Technology has done more to change the way work is done than the diaspora. However, I think the American consumer needs to change too. If we want to see better paying jobs for all, then we need to support small local businesses that hire a lot of people. However, if we can only afford to shop at Walmart, then we need to continue the pressure them to raise wages. This will need be a combined effort by consumers and government. I am not sure what that looks like, but I know if Walmart adds a few pennies on the cost of its product to raise the wages of its employees by a few bucks, everyone wins, even the investor.

I also think the investor, owner of capital, can change this too. They can put pressure on management teams to raise wages by instructing the board of directors that this is a priority. It may not be maximizing the return to shareholders, but it will optimize.

The social side, implosion of families, I think is a result of the culture shift in our country. Civility is in decline, connection is now done electronically and not F2F, and relativity has become the philosophical foundation of our country. I think that is a problem. This is where I think religious organizations can step in and begin to work with the people to develop a more healthy outlook on life. How can a guy, just cut off by a 72 year old man in traffic, feel like he has the right to follow the old man home into his garage to express his road rage? No wonder the 72 year old man shot him. I think our culture is in trouble.

To conclude my thoughts this morning, which are a bit random, I want to quote Phillip Yancey. “In the waning days of the empire [Roman], the watching world sat up and paid attention. People flocked to the churches, which stood out as caring communities. A fourth-century Roman emperor known as Julian the Apostate complained bitterly about Christians of his time” The impious Galileans not only feed their own poor, but ours also…Whilst the pagan priests neglect the poor, the hated Galileans devote themselves to works of charity.”

There is a plethora of things to think about and take action on. My question to you is do you care enough to make a difference? Stockholders, and other owners of capital, do you care enough about the living standards of the people who work for you? Are you the Scrooge before or after the visions? Are you a man who has checked out of the process of life because you feel you are a victim? Or are you a church member who sits on Sunday and listens to a message that is meant to spur you on to service, but only reinforces your idea of exceptionalism? I think I have been, but now I want to change.

This is a new year and the key term is plethora. No one person can do it all. But the time is now to turn the page and make a difference Spiritually, Economically, Socially, and Environmentally.

And that is my thought for the day!

The New Year!

Over the last week I have thought about what a new year means. I have thought about my family, church, career, and philosophy. Change is all around therefore, what, if anything, do I change in 2015? In November of this year I will be 65, enrolling in Medicare. I probably have ¾ of my life done, at least according to the Social Security website. However, I did read this morning that people with asthma have a higher chance of heart disease. Oh my, I just can’t win. But, the question is relevant, what does the new year bring?

First, careerwise I don’t see any changes. I love being a professor and working with students. So I don’t foresee anything changing there. In my family, probably not a whole lot changing there, but hopefully there will be some opportunities for my kids for better jobs, and for more opportunities to see grandchildren. Mainly I am going to care for my wife who had surgery and needs love and support.

There may be a change when it comes to church though. My pastor of the last five years is retiring, and I am thinking it is time to try something else. It is not that I like church hopping, but I think I want the fresh wind of the Spirit filling me a new. I know that is not related to where I attend church, it is my responsibility to keep myself in a place of openness to God, but it just may be good for me to attend another church. I have recently attended one close to my home, where there are a lot of old friends, and it feels very comfortable, and at my age comfortable is good.

My philosophy probably will not change much either. Although, I may be a bit more liberal than I used to be. However, my belief that business is a force for positive social change has been fortified over the last year, and I think it will become even more prominent in my thinking this year.

I plan on introducing myself to Lisa Detchman and Detour Ministries. She has started a thrift and consignment shop in downtown Vancouver. The store is located at 808 Mainstreet. I also plan on sitting down with Ryan Hurley who started Detour Ministries, “a nonprofit Christian organization that aims to create sustainable support for nonprofits and churches.” This is very similar to Erik Bahmes concept Mission-Based-Entrepreneurship. Also, the principles are the same as Social Business or Social Entrepreneurship. This to me is the salvation of Capitalism.

What Detchman is doing is running a business, and then giving the proceeds to various ministries and nonprofits, such as the food bank. In December she was able to give a $900 check to the Clark County Food Bank. Detchman operates her firm using effective and efficient business practices. This in turn helps to provide more of a return to charities. Detchman is using the triple bottom line as her business model. She is looking at the economics of the business, the social return, and ways of being environmentally aware (her philosophy involves reuse). I really need to touch bases with this group.

So there you have it, a short description of what I have been thinking. And oh, by the way, I plan on improving my blog site. That is the next thing on my list.

And that is my thought for the day!

Eliminate The Corporate Tax Rate?

I just looked at my statistics for my blog. I had 4,400 folks look at my blog over the last year, which I am pleased with. However, the one statistic that really amazed me was the number of countries my readers represent. I have had people from 88 countries throughout the world read my blog. I am humbled and thankful that so many people have read my blog. I have two goals for next year in relation to my blog. I want to increase my readership, and I want to increase my number of countries. I plan on reading Paul Sohn’s ebook on how to increase your blog readership. I will also read other recommendations to increase the reach of “It’s Business and Personal.”

What I want to address today is the topic of a Corporate Tax rate. I just read an article that discussed ten reasons for eliminating taxes on corporate taxes. When I first saw the title I immediately thought, or great another greedy person who is looking for the government to give them more advantage with the promise of better economic growth for all, but never seeing the promise emerge, but when I actually read the article I now find myself agreeing, but with a qualifier which I will discuss shortly.

John Steele Gordon, an author, wrote a commentary today in the WSJ giving the top ten reasons to abolish the corporate income tax. He argues that with a tax rate of 35%, the highest in the world, the United States is actually hurting missing an opportunity that could be gained if the tax was eliminated. I was skeptical until I read his argument.

I think any of us that pay attention to tax revenues and deficits recognizes the complexity of our current system. Within our system there is a huge need for tax preparers and consultants that help people, an corporations find the loopholes. Gordon argues that if we eliminate the corporate tax, the consultants, lobbyists, go away, and I can see the benefit of that and the opportunity to have an incredible amount of money that could be used for other things.

The second reason given by Gordon is connected to the first. Management is focused on profit. If they are good managers they will be looking at a multilayered income statement that will help them focus their efforts on controlling costs. Gordon states that managers focus on after tax profits, and rely heavily on consultants to minimize taxes and increase after tax profits. I would hope that these managers would not just focus there, but earnings after tax is important. With the elimination of the corporate tax that effort is replaced with a focus on the actual creation of wealth, which is not a bad idea.

Currently, taxpayers are hit by two different tax rates. One is related to wages and the other capital gains. Long-term capital gains, stocks held longer than 61 days, are taxed at a 15% rate, whereas short-term capital gains are considered income that is taxed at a higher rate depending on how much money you make. By eliminating the corporate tax rate “there is no reason to tax dividends at the lower level.” Which means more revenue for the government.

Another by-product of this elimination would be increased profits that could be shared with investors and other stakeholders. With increased income more investment could occur thus increasing capital budgeting for most companies. More investment means greater growth in the GDP. Greater growth in GDP means great income for people that means a greater tax foundation which means more state revenue. More state revenue means stronger social programs. Hmm, seems like everyone wins.

Another outcome, according to Gordon, is increased stock prices. This in turn leads to larger 401(k)s, meaning better retire accounts, thus creating the wealth effect leading to more consumption. This means a stronger economy, which means higher tax revenue, which means more cash for social programs.

Gordon’s sixth reason is very interesting to me, especially in light of my thoughts about social entrepreneurship being the new model for meeting social need. Gordon states, “the distinction between for-profit and nonprofit corporations would disappear. So nonprofit corporations would not have to jump through hoops to qualify for that status.” Anyone who has been through that process knows how difficult it can be. This reason does intrigue me.

Gordon’s seventh reason also seems compelling. This reason involves the $2 Trillion that is sitting offshore to escape taxes. With the tax requirement eliminated this cash could be moved to the United States increasing our liquid capital. Hmm, money in our checking account.

One of the reasons for US company inversion is to escape the tax rate. If the rate is eliminated there is no reason to go elsewhere. In fact, with the reduced cost of business, and our trained workforce, many foreign companies may choose to relocate here. This is another really good point. A related point involves competition. Foreign countries would be forced to reduce their rates also, which would help the world economy. Hmm, very interesting.

Gordon’s tenth reason involves the elimination of crony capitalism. If the corporate tax rate is eliminated then there is no reason for politicians to dole out favors for money. The favors are usually tax breaks for corporations. This could also include subsidies, etc. All of this would go away, at least in the mind of Gordon.

The argument Gordon presents is, at least to me compelling and interesting, but it is a long way from implementation. I can think of several problems that could occur because the new system would be too simple. Lobbyists, and other consultants, maybe even tax preparers may see it as a threat. Therefore they will fight this type of change. Or, maybe corporations would view this as a loss of power. Thus seeing power as a competitive advantage. They might feel threatened by a level playing field. However, I also believe in the fallen nature of man and our ability to mess things up. I also think this would work better if we went to a flat tax rate. I do think the elimination of tax loopholes and the implementation of a flat rate would be a win win for all.

And that is my thought for the day!