Where your nonprofit is located and how you use the space you have can mean the difference between striding or just limping along. That fact was highlighted for many nonprofit leaders during the COVID-19 pandemic, when lease or mortgage payments became a financial strain, and dust accumulated on the desks of employees working remotely.
Even with the economy bouncing back, having your nonprofit’s employees and volunteers return to previous uses of office space could be a mistake. For example, you might be overpaying for the property you’re leasing. Or you might be able to afford better space in other areas of the country. In addition, the way your space is configured might no longer be appropriate if hybrid work arrangements prompted by the pandemic become permanent. Now is the time to consider flexible/coworking office space, moving into a smaller space or opting for a shorter lease term.
Some organizations, including nonprofits, have converted staff to full-time remote positions. It became clear over months of stay-at-home orders that, equipped with reliable Wi-Fi, quality devices and the necessary software, employees can perform their jobs without being onsite.
If many of your employees will be working at least part-time from home after the pandemic is over, a smaller office space might be necessary. But will that affect your workforce productivity during the times when all or most of your employees and volunteers are present in the office? Regardless, it’s a good idea to reconsider the layout of shared spaces. Using space design and furniture, you can create a sense of calm and comfort in your nonprofit’s workspace.
Making the move
If you’re not interested in a complete office space redesign, you can make other improvements. Many companies are looking to relocate, often from downtown areas to the suburbs.
That might not make sense for your nonprofit. But a move to a more desirable location could be in the cards — whether that desirability is based on easing employee commutes, being closer to your donors, or just relocating to a more attractive building. With high vacancy rates driving down rents, and the possibility that you may choose to downsize, locations that were previously unaffordable might now be within reach.
Striking a deal
Finally, your best opportunity in today’s environment may be to strike a better deal with your landlord. Several approaches might work. After you read your lease carefully, find out whether any of your landlord’s other tenants have successfully negotiated better lease terms. And check out the occupancy rate for similar properties in your area to get a feel for how eager your landlord might be to keep you as a tenant.
You might want to:
- Ask for an amended lease with a reduced rent and no strings attached,
- Agree to extend your lease, but with reduced rent,
- Agree to pay the contracted rent if the landlord foots some or all of the bill for improvements you want to make in your leased space, or
- Ask to be able to sub-lease some of your space (if not already an option).
Generally, the more you can share with your landlord about why you need to make a change, and why the new arrangement you’re seeking will be financially sustainable for you, the better.
Your CPA is a good source of information and may be able to assist with negotiating ideas to help you reach the best possible outcome. Now is the time to make the best choice for your nonprofit’s office space needs and long-term financial sustainability.