Co-Habitation Leads to Savings, Collaboration

May 11, 2011       Samuel Fanburg      

Some 45 percent of nonprofit location in nonprofit centers saw an improvement in their organizations’ revenue. Similarly, 55 percent of nonprofits reported their co-location resulted in a significant improvement in quality of services to clients. About 59 percent of resident organizations found that nonprofit centers enhanced their visibility to potential funders.  

These are among the results from a report prepared by The Nonprofit Centers Networks, Tides and Mt. Auburn Associates called “Measuring Collaboration: The Benefits and Impacts of Nonprofit Centers,” examining the effectiveness and community impact of nonprofits relying on nonprofit centers.

Research was conducted surveying 146 directors of nonprofit centers  (63 percent response rate), a survey of tenants of 16 nonprofit centers (57 percent response rate), interviews with 15 center directors, four focus groups of center directors and five case studies.

As 23 percent of nonprofit centers have been around for more than 20 years, centers have established a norm of collaboration, imperative to the efficiency of this setting. More than half of center directors said that at least one-third of resident organizations collaborate on programs and services.

Of responding tenants, 46 percent reported they had collaborated on at least a monthly basis around programs and services and 34 percent joined forces regarding client referrals.

Nonprofit centers have also grown to include mechanisms for tenant involvement. Input from tenants has become important when dealing with shared space and facilities leading 62 percent of nonprofit centers to use tenant surveys, 79 percent conduct town hall meetings, 78 percent utilize tenant committees and 61 percent have regular meetings with the center’s director.

Benefits associated with nonprofit centers range from fiscal advantages to managerial options, increasing the effectiveness of an organization. Tenants responding to the survey projected the annual cost savings of co-location of about 7 percent of annual operating costs leading 75 percent of nonprofit centers able to meet expenses.

In addition, according to the study, 72 percent of organizations believed that with co-location they had increased the awareness and credibility of the organization within in the community, whereas 65 percent reported enhanced staff morale with two-thirds of resident organizations positing that collaboration with other center residents contributed to this effectiveness.

With 68 percent of lease rates of nonprofits centers ranging from 50 to 100 percent of the market price, organizations aren’t only getting a discounted space, but are receiving a higher quality space as well. Some 84 percent of resident organizations reported that the quality of their space improved when they moved into the center.

Separating the types of nonprofit centers into service centers, theme centers and multi-sector centers, respondents indentified certain strengths and advantages unique to each.

Service centers, places where individuals can receive services and work directly with tenants, found the “one-stop” location the most beneficial to mission goals, whereas theme centers that house organizations with a shared mission believed that accessibility and visibility of the center was the greatest benefit of the center. Multi-sector centers, home to an array of disconnected nonprofits saw low costs as the greatest advantage to a shared space.

Many of these nonprofit centers, about 40 percent, are built in economically distressed neighborhoods. About one-third of tenants reported a significant impact related to new property development and property renovation in the surrounding neighborhood. Business development is also improved in the surrounding area of these nonprofit centers. Almost 40 percent of centers located in distressed areas report moderate to strong impacts on public infrastructure investments.

Based on case studies, nonprofit centers are also seen as “cultural hubs” for people looking to expose themselves to an array of different experiences. Specifically, art centers have become vastly important in allowing for a creative economy and connecting members of the community.