The Solutions-Side to the Nonprofit Displacement Problem

Thursday, March 29, 2018

By Sarah Frankfurth, Manager, Collaborative Philanthropy, Northern California Grantmakers

The Bay Area’s real estate boom is on full display from our office windows. The dizzying new Salesforce tower gleams over the city, and smaller skyscrapers are quickly sprouting up in the blocks around it. Across the Bay, Oakland is seeing historically low office vacancy rates and, like San Francisco, skyrocketing rents. Developers in Oakland are renovating older buildings in downtown and uptown, many that have housed nonprofits, to convert into Class A office properties. All of this construction will create new market rate office space and will likely continue to attract more companies to our region.

While the real estate boom generates revenue and opportunity for the Bay Area, it places additional stress on nonprofits and the communities they serve who are struggling to remain in their neighborhoods. The kind of pressure the housing crunch is putting on individuals, is also being placed on nonprofits looking for affordable space. This has left many Bay Area nonprofits concerned about sustaining their work in the face of rising office space costs in the region.

At a recent nonprofit gathering, I learned about a volunteer run refugee legal services organization that will need to find new office space when the church they’ve been housed in is torn down. Their rent will likely triple, and a move out of the neighborhood they’ve been located in for over 30 years would make running the organization more difficult. These stresses increase the challenges for an organization providing critical services to a community facing serious threats from anti-immigrant policies and stepped up deportations. Nonprofits such as this one are key to ensuring we maintain thriving communities with equitable access to opportunities, healthy cultural institutions, and supportive services, making it imperative that we find solutions to the affordable space crunch.

Effective solutions require the public sector, philanthropy, financial institutions, and nonprofits to all be at the table. NCG’s Nonprofit Displacement Project brings together Bay Area partners from these sectors, and strives to develop solutions that are built on the expertise and resources that each has to offer. City and county governments bring their close connection with nonprofits in their communities and offer insight into how supportive policy can be shaped, they may also have funds or city property that can be directed for nonprofit use. Financial institutions can construct favorable loan products to unlock more capital for purchasing or renovating space. Philanthropy can use grants or program related investments to provide flexible funding for capital campaigns and pilot projects. Each partner brings a unique set of perspectives and resources to the conversation and the space allows for alignment of purpose and consideration of the region as a whole, as well as each city’s individual needs.

Solutions

The recent launch of the Spaces for Good platform, developed with support from members of the Nonprofit Displacement Project, is a regional solution that helps organizations find existing affordable space. This exciting new tool helps nonprofits find and list office space, meeting/event space, and co-working space for short-term, long-term, or temporary use. It was developed in response to a need voiced by nonprofits in the Nonprofit Displacement Report, and will assist nonprofits in sharing their space to mitigate the current commercial real estate market and earn revenue off of their unused space.

What's Next

In addition to supporting access to existing affordable space, the broader goals of the Nonprofit Displacement Project are to build the real estate capacity of nonprofits, develop space for multi-tenant centers, and advance policy solutions that can remove barriers or create permanent sources of capital for acquiring space. Currently, members of the project are developing a policy agenda and exploring the feasibility of establishing a real estate holding entity, similar to the CAST model, to support nonprofits to purchase and lease space.

We plan on having more solutions to share with you in the coming months as we continue to work together to strengthen our rich nonprofit sector in the Bay Area. If you’re interested in learning more about this project or would like to connect to the work, please contact Sarah Frankfurth, Manager of Collaborative Philanthropy at sfrankfurth@ncg.org

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