Tip of the Week: Consider Creating a Nonprofit Center with Other Organizations or Joining a Like-minded Co-working Space

This week’s tip comes to us from China Brotsky, Senior Vice-President at Tides.

One of the most significant costs for any organization is the price of office space and back-end services. Collaboration through shared space can help maximize your operating budget while at the same time providing unexpected benefits.

Nonprofit centers are physical facilities that intentionally house more than one nonprofit organization. These centers take shape around different themes, which can help an organization find a location where it’s surrounded with synergistic relationships and potential collaborators.

Nonprofit centers provide rents to organizations at below market lease rates starting at less than half the going rate. In a recent study by Tides’ Nonprofit Centers Network, the average annual cost savings among participating organizations from sharing space and the additional shared services is about 7 percent of annual operating costs.

Co-location also allows for better locale and higher quality facilities, enhanced staff morale and ultimately – collaboration. These aspects of centers translate to increased efficiency and effectiveness for resident groups, which is helpful to organizations at any stage, newer or more established. According to Tides’ study, 86% of participating nonprofit tenants reported moderate to significant efficiency improvements as a result of co-location.

One way to elevate visibility to funders and those you’re trying to serve while doing what you already do everyday is to join a nonprofit center. For resident organizations, being located in a highly recognizable location within the community gives them greater visibility to potential funders, accessibility to their constituents, and the ability to attract staff and volunteers.

Nonprofit centers also tend to become “hubs” around the particular issue or constituency they aim to serve, resulting in the benefits of the center spilling out into the community. For example, nonprofit centers focused on the arts contribute to vibrant cultural districts through shared experiences and fostering local artists through performance and exhibition space. When it comes to issues like the environment or the needs of seniors, these building hubs can become advocates that have the power to encourage positive policy changes and facilitate greater civic participation.

Existing nonprofit centers tend to be in high-demand and have low vacancy rates. Thus, developing extra space into such a center is an opportunity for established organizations to generate additional income and benefit from increased efficiency.
Smaller organizations that are just getting started will experience similar benefits via co-working spaces that welcome nonprofits such as The Hub in Atlanta and the San Francisco area, Makom Hadash in New York and the Centre for Social Innovation in Toronto.

Renting space to multi-tenant groups has also become more acceptable and appealing to landlords over the past several years because of the economic downturn. Rents are starting to rise and occupancy rates in office spaces are picking back up, but it will be several years before the market returns to pre-2009 conditions. Now is still an optimal time to find more affordable, well-located space for developing a nonprofit center.

To learn more about creating a nonprofit center or to find one in your area, visit the The Nonprofit Centers Network.