Streetsmart Financial Basics for Nonprofit Managers

Chapter 20Owning a Building: What's in It for You?

Built in the 1920s for a fraternal organization, the senior center was gloriously endowed. Within its four floors, it offered a swimming pool, a bowling alley, two gymnasiums, dozens of activity rooms, and some very nice office space. There was just one problem. The senior center corporation couldn't afford the building. Paint was peeling everywhere, the roof leaked, minor repairs were growing into large ones by the hour, and every time the antique boiler wheezed to life, the senior center managers held their breath.

Be Careful What You Wish For…

When the fraternal organization donated the building, it had seemed like a dream come true to the center's board of directors. But just a few years later, the life jacket they put on was feeling like a cement overcoat. The building was not compliant with the Americans with Disabilities Act (ADA), and it needed too much capital investment just to get it back in working order. Oh, and because of population shifts, there wasn't a single elderly person living within a half-mile of the building. The closest subway stop was a mile away.

While perhaps a bit extreme, the senior center illustrates a common dilemma for many nonprofit organizations: Do you buy a building and take on the fixed costs and the risks that ownership brings, or do you try to rent something suitable and give up the control that ownership offers?

The answer to that question used to be simple: You bought it if you had ...