Some of the best benefits of social platforms are the ability to share ideas and make connections. My article last week on nonprofit office space resonated with many, and so we highlight some of that discussion here.
Otto Beatty, a local entrepreneur, attorney, and business advisor, elevated the conversation on tax deductibility of landlords/building owners offering space at below market rate. Amy Ciminello-Sauner, CPA at Plante & Moran, weighed in to offer clarity. The bottom line is, “for IRS purposes, free/discounted rent is nondeductible for federal income tax purposes.” There may be property tax benefits depending on the state, but the incentive isn’t in the tax code, it’s in meeting community need.
Omar Elhagmusa, Senior Leader at IFF, challenged the assumption that nonprofits have to “depend on the goodwill of landlords,” because ownership of real estate can be a powerful tool. He’s right. While owning property isn’t always the right answer, it can be a game changer.
I was reminded of MadLab, a small nonprofit theatre based in downtown Columbus and one of our former clients. Their venue was leased. It was funky but it worked, and they put a lot of sweat equity into making it their own. About 11 years ago, they lost their space because the building owner had more lucrative options. The leadership at MadLab decided to take control and buy their own theatre. I did not think it was feasible but their leadership, including Jennifer Barlup, was steadfast in their belief. To their total credit, they found a downtown location that was visible, accessible, and affordable. A decade later, they own a building, control their own destiny, and given property values, certainly must have tremendous equity that can be used to advance their mission. They continue to be an artistic haven for the creation and experience of original works, and building ownership is a big part of their story.
Two big ideas were offered:
1. Otto Beatty suggested, “Someone should match up vacant space and the 100s of qualifying non-profits who need it.”
A centralized listing would take work but could be a tremendous asset in the long term. Is this something that the Columbus Board of Realtors leads? Or maybe a funder? To all those involved in the real estate and nonprofit sectors, tell us your thoughts. What are potential solutions?
2. Christopher Norman, Development & Media Strategy Consultant at QMA/Norman Associates, proposed, “An idea would be to establish nonprofit centers within purchased buildings owned in trust. Who among my esteemed colleagues would be interested in investigating this option with me?”
My immediate thought when I read Christopher’s comment was Reeb Avenue Center, which is owned by the City of Columbus but managed by its own nonprofit board. Fourteen nonprofits are housed in the historic building dedicated to building prosperity on the South Side. The Reeb story is powerful, and certainly can serve as an inspiration to Christopher’s call to action. Who wants to join him in taking the idea further?
Amy Bodiker Baskes, a fundraising and philanthropy consultant, lifted up the Jefferson Avenue Center, which has been leading the way for decades with centralized ownership and management of properties for the benefit of the nonprofit sector. Katharine Moore, Executive Director, is furthering their mission with the development of The Good Haus and I can’t wait to see what they do next.
On any given day, I am inspired. On this Valentine’s Day, my heart is full. Thank you to all who posed questions, offered insight, and shared comments. As a company, our goal is to support the heart and hard work of nonprofits.
Together, in this smart and open city that we call home, we can create lasting change.
Article by: Kerri Laubenthal Mollard, Founder & CEO
