Financial Forecast for Nonprofit Centers: A Foundation’s Perspective

by Michelle Sedaca, Program Associate
South Africa Partners

A staff member of a NonProfit Center tenant organization, Michelle writes this monthly column on life at the center, and the unique culture of a multi-tenant center created specifically for nonprofits.

Photo:Michelle (left) meeting with Jackie Cefola, program coordinator at the NonProfit Center

This March, the Innovative Strategies for Nonprofit Workspace conference, held at the NonProfit Center, brought together stakeholders from around the country and Canada interested in the process of creating nonprofit centers.

Of particular concern to stakeholders lies the seemingly daunting task of funding for such centers, which can typically cost an extra 50-75% over the already steep price of the property itself. However, good news exists for nonprofits: some foundations are keen on investing in such endeavors.

This may come as a surprise to many, as usually foundations provide grants specifically for mission-based work rather than facilitating the purchasing of buildings. Greg Cantori, executive director of The Marion I. & Henry J. Knott Foundation based in Baltimore, MD, strongly advocates for a mind-switch towards the typically perceived role of foundations as primarily grant makers.  

Greg Cantori, executive director of the Knott Foundation

Supporting Multi-Tenant Centers Provides Benefits to Foundations

According to Cantori, funding nonprofit centers fulfills two needs for foundations. “[Nonprofit centers] create a double bottom-line [for foundations] because we are investing in a locally-owned area of interest and we derive a tax benefit.”

Despite these incentives, information for foundations about this new and exciting funding area is scarce. Cantori described the challenge of spreading the word in the foundation world that funding nonprofit centers is both a feasible and smart choice. In contrast to the lack of information available to foundations about this frontier of funding, he commented that foundations are inundated with investment companies who seek to sell their financial services.

Willing to confront risks and experiment with innovation, Cantori’s foundation has already proven to step outside of the box. By providing cash-flow loans, the foundation offers needy nonprofits emergency loans – atypical for most foundations. Thus, the next step of funding nonprofit centers is possible on the horizon.

“Not only does [the nonproft] own a piece of real estate, they also happen to be [one of the foundation’s] grantees,” he reasoned. “It’s equivalent to giving an annual grant.”

Cantori advises nonprofits interested in establishing a nonprofit center to first start with contacting foundations. “Start breaking through that barrier through word-of-mouth and asking foundations if they would like to invest,” he urged.

Pitching the Idea to Your Foundation

China Brotsky of the NonprofitCenters Network suggests four main propositions to encourage foundations to invest in multi-tenant centers:

• Benefit multiple organizations with one investment
• Leverage additional commercial dollars
• Enhance grantee effectiveness through quality workspace
• Facilitate place-based collaborations

If you can reduce a nonprofit’s overhead, you’re improving their ability to focus on mission. And mission speaks to funders.

Keep up-to-date with Michelle’s latest columns - sign up for the TSNe-Bulletin, a monthly e-newsletter providing tips and ideas to help you strengthen your nonprofit’s impact with and for the communities you serve.