Nonprofits nationwide are increasingly considering shared workspace arrangements to lower rising facility costs. These arrangements are particularly appealing for nonprofits looking to cut operating costs and for those just getting started. Space sharing can net financial savings and also establish an environment that cultivates collaboration.
“Shared space” refers to workspaces shared by nonprofits, small businesses, consultants and start-ups. Depending on their needs, tenants can pay for access to private offices, conference rooms and common areas. Office equipment and other office services are shared amongst the tenants.
The shared space trend in recent years has led to the development of several options. For example, space could be rented in a dedicated, shared workspace facility that also might provide “back-office” support services. Many of these arrangements welcome a variety of businesses, but some cater primarily to nonprofits. For example, a nonprofit in Lexington, Kentucky provides coworking space specifically targeted to nonprofits, entrepreneurs and creative professionals.
Facilities that accommodate a range of tenants often offer networking opportunities and events such as happy hours, yoga classes, service projects and community lunches. Facilities that mainly or solely host nonprofits might provide workshops on topics relevant to tenants’ needs, such as proposal writing, advocacy and volunteerism.
Similarly, some private foundations, with more space than they require, lease out the excess to nonprofits, and some for-profit businesses are willing to donate unused space.
Another option would be for nonprofits to join forces with other nonprofit organizations that serve the same population. The two organizations would rent a shared facility and slice the cost in half. They might also rent out unused space to other organizations, generating revenue to offset rent.
The most obvious benefit of sharing space is in the cost savings. Why, for example, pay annual rent on space that includes a conference room you only use for board meetings? Organizations of all sizes benefit by efficient use of supplies and equipment, utilities and maintenance expenses.
Flexibility is another benefit and is especially valuable for nonprofits in the early stages of development. Young organizations usually don’t want to commit to long-term leases before they have a handle on how much space they’ll ultimately need. Sharing space is a more appealing option than operating out of a founder or board member’s home.
As nonprofit budgets get tighter and come under more scrutiny, cutting space-related costs may provide some peace of mind and pave the way to sustainability. Your MCM professional can help you determine whether moving your operations to shared space is a solid financial decision.
For more information, contact your MCM professional or Assurance Manager Ben Dennison, CPA via e-mail or phone (859.514.7779).