The Fall issue of the Nonprofit Quarterly contains a timely article (in print edition only) detailing the pros and cons of purchasing real estate. Now that the real estate market has finally crashed, there may be a tendency among nonprofits (as among other bargain-hunters) to finally purchase that home they’ve always dreamed of.
Authors Gabriella DiFilippo and Tanya Vartivarian of the Illinois Facilities Fund provide the following straightforward bit of advice:
With few exceptions, new nonprofit organizations should not focus on real estate ownership. Instead they should establish the organization and its value to the community.
The Nonprofiteer hopes that even established nonprofit organizations will heed this discouraging word. Especially among the social service agencies, the process of “establish[ing] the organization and its value to the community” is nearly never-ending, and the business of making sure the roof doesn’t leak is often nothing more than a gigantic distraction from making sure that value continues to be provided.
And, as anyone who’s ever bought a home knows, even if it’s not an out-and-out money pit, it always costs more than you think it will. And that’s money you could instead be using to serve your clients.