In an October survey about office space, 102 nonprofits told us what they were paying for space and what is important to them when it comes to keeping a roof over their heads. Note that the responses were heavily weighted to King County on this survey. No surprise that in King County the #1 amenity nonprofits want is access to free parking!
Key takeaways from the survey: Most nonprofits (89%) pay for space through mortgage, lease, or sublease. The remainder operate from a private home or free space from another organization. Size impacts an organization’s decisions about space: Subleases are mostly held by organizations of fewer than 4 staff and a budget of less than $500,000. Leases are held primarily by organizations with 4-20 staff and budgets of less than $2 million. Nonprofits who own space represent a range of sizes, but most are larger with greater than 50 staff and budgets larger than $2 million.
Of the 60% of respondents who lease, half have been informed of a rent increase in the next two years. 61% say their office space is too small, and 56% think they may relocate in the next two years. If we apply this to the 16,000 nonprofits in King County, that means as many as 5400 may be looking to relocate in the near future. About half of nonprofit leases are 5 years or more. 73% of nonprofits pay less than $21 per square foot. We inquired what organizations would consider paying for space, even if it had amenities the organization doesn’t currently have. The average maximum was $21 per square foot, including triple net. Nonprofit leaders feel the pressure to keep costs low without compromising their getting their space needs met: “We will outgrow our space but know we need to raise more money to move to a larger space.” “There is no reason for us to move if we have to pay more than we are now.” “We just got a 5 year renewal and were able to reduce our lease amount.”
Office space is about so much more than economics. Nonprofits want amenities that allow for an efficient and comfortable working environment. Beyond space for day-to-day operations, shared meeting spaces often come at a premium. Do you maintain your own meeting and event space (carrying costs year-round) or pay to use other facilities (incurring higher rental and staff costs). We asked about just this issue to gauge how often organizations need meeting space. How nonprofits are making it work One way nonprofits attract talent and minimize costs is by allowing staff to work remotely. Only 16% of respondents don’t allow remote work, which typically means that the staff split time between the office and home or coffices (that’s the new portmanteau for when you make a coffee shop your office). Only 16% of nonprofits have staff who work remotely more than 75% of the time. Many nonprofits noted other concerns about their space. Location is highly important, whether that’s just a central location or you’re tied to a specific neighborhood because of the services you provide. One nonprofit even noted that office space “is the biggest factor negatively affecting our organization at the current moment. But all office space nearby on Capitol Hill is currently beyond our budget.”
To counter some of these concerns, nonprofits are increasingly forming partnerships and sharing facilities to save on costs. The survey showed that nonprofits value amenities and are ambitious about getting what we need at an affordable price. We’re also realistic, remaining acutely aware of the trade-offs with any office space arrangement. Even the 11% of organizations who get free space know that there are compromises involved. We recognize that we have to consider more than dollars and cents. Most notably, staff satisfaction can be impacted by location, and most of the valued amenities are just as important for staff well-being as they are for any public benefit. In the end, we’re willing to make trade-offs, as long as we an arrangement that will meet most of our needs for the long-term.