While the focus of nonprofit organizations is often on their programs, ensuring a secure location is equally important. The reality is that nonprofit organizations are vulnerable to displacement and can be impacted by real estate market conditions. This impact is particularly felt in metropolitan areas and in high cost of living areas.
I recently partnered with a team from the Northern California Community Loan Fund to host a workshop designed for nonprofit organizations thinking about rent increases, lease expirations, or getting new office or program space. While the workshop was hosted in San Jose, California, the tools, strategies and lessons apply to all of us struggling with these issues across the country.
This workshop offered a systematic approach to assessment and readiness for a move to a new space, answering questions like: “how do you assess what you need and what you can afford?” and “what does the entire process look like?”
The assessment process starts with a candid look at organizational capacity.
- Is your mission clear?
- What stage is your organization in?
- What are programmatic goals?
- Do you have metrics to evaluate success?
- Staff and Board Capacity∙
- Is your leadership team stable & experienced with facility issues?
- Do you have a Board Facility Committee?
- Do you have a defined decision-making process?
- Financial Capacity:
- Is one of your goals to increase net income?
- Do you have healthy financial ratios?
- What is your current fundraising capacity?
- What are your financial reserves?
Create A Facility Plan
We recommend that an organization stressed with facility issues create a Facility Plan that is complementary to but separate from the strategic plan.
The facility plan asks:
- Where in the facility planning cycle are you?
- Where would you prefer to be?
- What are your current space uses?
The Facility Plan considers location, space planning, program uses (current, ideal, and minimum), and lease vs. buy analysis. In our workshop we use a matrix tool to help an organization map out CURRENT, MINIMUM & IDEAL SPACE NEEDS considering how many square feet does your organization occupy? How many people in what kind of configuration do you have? for each of your administrative and program spaces.
Facility Planning is more difficult if outside factors are driving the need to make a decision, and it’s important to be clear as an organization what is driving the decision and what needs to be done to move the process forward. It might be, for example, that you are driven by specific real estate opportunities; or perhaps your organization is facing a financial crisis; you may be in imminent danger of losing space, or maybe the Board and Executive staff do not agree about the need to move.
Once you know what you need and what you can afford, then you can begin to explore and research potential options. Shared nonprofit facilities are a growing trend nationally and have many advantages. Due to the increasing urgency of displacement and facility needs in the nonprofit sector, there are a growing number of resources for further information. The following are just some of the resources you may find useful:
The work of nonprofit organizations is critical to the health and strength of our communities. It is our job, as nonprofit leaders, to ensure our organizations can navigate a volatile economy and a wildly stressed real estate market. With smart and strategic planning, we can explore our options and find good solutions.