The Redpoll Centre is social profit hub in Fort McMurray, Alberta, Canada. Home to 16 different agencies, including anchor tenant – The United Way of Fort McMurray, it offers three different meeting spaces, a spacious lunchroom, and reflection room/ resource library. The shared office space is located in Shell Place, part of the largest recreational facility in Canada.
I’ve seen a lot of nonprofit real estate projects destabilize the organizations they are meant to bolster. That’s why I’m passionate about nonprofits undertaking careful feasibility planning when contemplating a space project. Whether your organization chooses to rent or buy, whether the project is for your organization alone or with a cohort of other nonprofits for a shared space – the key objective is to do no harm and make sure that your new space enhances your mission and doesn’t undermine it. Occupancy costs are second only to personnel in terms of nonprofit expenses, but even the most sophisticated nonprofits often get tripped up by poorly planned real estate projects.
I first heard of Joanne Posner-Mayer when I was a consultant working with a fledgling shared space in Denver focused on international development in 2013. The project was in trouble. They had secured a lease for a building through the Denver Housing Authority, but it was a historic structure and the group needed to raise the funds for renovations and start-up costs. There was a gap between the projected costs and the actual costs and it wasn’t clear how the project could move forward. I remember thinking, another one bites the dust.
But I was wrong. The project succeeded because of Ms. Posner-Mayer and it is now one of the best examples of mission-driven shared space. Posner-Mayer is a Denver physical-therapist-turned-entrepreneur who invented the FitBall™, which is now ubiquitous in gyms and therapy rooms. She had deep roots with the Curtis Park neighborhood where the international development shared space center was being developed. Her father, a Polish immigrant, had a successful hardware store in that neighborhood. Ms. Posner-Mayer felt she could give back to the neighborhood that enabled her to achieve so much. I remember being so surprised at how it all came together – her contribution was truly pivotal to the center, the difference between life and death. Now in Denver we are lucky to have the Posner Center for International Development, named in honor of her family.
If that wasn’t tribute enough, a recent blog by the Rose Community Foundation reported that Ms. Posner-Mayer has been instrumental in another shared space project, the Rose Andom Center. The Andom Center is a one-stop shop for survivors of domestic violence and houses over 20 agencies in a central location. Previously, those affected by domestic violence had to travel to up to a dozen different locations to access services. Taking a client-centered approach will help stop the cycle of violence by improving rates of reporting abuse. Ms. Posner-Mayer contributed to the Rose Andom Center and is helping it establish an endowment so it can be financially sustainable for a long time to come.
I’m anxious to learn of other philanthropists who have embraced the shared service model as much as Ms. Posner-Mayer. In working with her at an NCN training event in 2015, we discussed the notion of mission-driven shared space centers as a kin to a mutual fund investment vehicle – invest in one shared space center and you’ve touched all the organizations who locate there. It’s a great way to address a pressing community issue in a holistic way. I’ve not heard of many who have invested in multiple centers, but I’d love to see it catch on.
At this time of year, it’s inspiring to think about the many ways our generosity can make a huge difference in people’s lives. The Posner Center addresses global poverty and creates opportunity for men, women and children around the world. The Andom Center is helping local Denver families find safety and peace. I can’t imagine a better example of what we all hope for in this holiday season.
If a picture is worth a thousand words, then what is a video worth? Here are a few of our favorite videos to showcase the model of sharing. Take a moment to check out three different models of shared space!
Theme Center: Posner Center for International Development Denver, CO
Service Center: Together Center Redmond, WA
Multi-Sector Center: Carroll Nonprofit Center Westminster, MD
My consulting work takes me to all parts of the county, but so often I hear the same comments from community to community. “I can’t spend money on office space, because that takes away from my mission.” “How am I going to justify the overhead to my donors?” “If I spend $1,000 a month on office space that’s X number of people I can’t feed.” While every group I meet with has a unique flavor, the concerns are still the same. It’s an extension of the poverty mindset that most nonprofits live in. We need to move away from the idea that overhead is a necessary to evil towards thinking about all the ways that we can leverage our infrastructure to make a greater impact. Minimizing your overhead leads to other costs that can make a big impact on your work, particularly when it comes to office space.
“Making Do” takes time, and time is money. I recently discussed finding meeting venues with a group of nonprofit leaders. Many said they were fine “making do” with free spaces in town. Those free spaces take time to find and book, not to mention set up. Sometimes you event have to buy and set up your own AV. Is spending hours setting up chairs and projectors the highest and best use of your staff time?
The cost of decreased productivity. Free office space sometimes translates to “office space in need of major capital investment.” I recently heard the story of a nonprofit that has cheap rent, but in the summer one of the staff members must choose between running a computer or the air conditioner, due to the faulty wiring. I’ve also seen many nonprofit staff members shivering when the HVAC goes out and they can’t afford to fix it. You can’t be efficient and effective in these conditions.
Lack of visibility. Many nonprofits operate out of church basements or off kitchen tables with a webpage, an e-mail address, or a phone number. Without a physical presence, you could be missing out on a chance to connect with your stakeholders, especially those that don’t have access to the world wide web. Having an office raises your profile with funder too. For the vast majority of nonprofit organizations, you need to be easily found.
As you’re struggling to justify the membership fee for a coworking space or a month’s rent in a nonprofit center, I encourage you to think about all the ways that being in a high quality office space helps you meet your mission. It’s worth the investment.
In the wake of the election, no matter who you voted for or if you were watching from the North, the results have shown the true polarities of opinions, emotions, classes, and struggles that American’s face. There was a large sum of individual voices mainstream media did not even pick up on in the polls. Whatever you believe or hoped, I am recognizing the need to acknowledge these unheard voices.
During the 2015 State of the Shared Space Sector survey, NCN found that a large proportion of mission driven shared spaces are operating as successful social enterprises. At the same time, the majority of these spaces are offering their tenants below market rate rent. How is this possible? A new publication, Balancing Act: Sustainable Finances for Shared Spaces, out this week, gives us some insight. Here are three key findings to help you balance your shared space business model.
Maximize your rentable square footage. We all love to have access to vibrant common areas, big meeting spaces, and funky cafes, but when it comes to profitability, rentable office space is key. For every 10,000 square feet of common area, profitable centers have four times as much rentable space. Centers running in the red only had 25,000 square feet of rentable space for every 10,000 square feet of common space.
Make sure your offices are full. Rental revenue is perishable income – if someone isn’t in that space for a month, you will never have the opportunity to regain that revenue.
Manage your expenses per square foot. Profitable centers in our studies had total expenses in the range of $22 (including staff, utilities, maintenance, internet, and more) per rentable square foot. Centers running a loss were paying over $90 per rentable square foot on average! Paying close attention to your expenses goes a long way.
Ninety percent of maintaining good health is determined by factors other than direct health care. The Melinda Hoag Smith Center for Healthy Living will create a synergistic model of service delivery, by aligning a major hospital with like-minded non-profit organizations that share in the vision of making the vulnerable community healthier.