Why you should care
Because putting down roots can help nonprofits grow.
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When writer Jane Hodges first laid eyes on an abandoned elementary school in Mineral, Washington — a rural, former logging town 20 miles from Mount Rainier — she didn’t see the shadow of something past. She saw the bright future of a home for her dream nonprofit.
With inheritance income, Hodges purchased the building in 2013 for a reasonable $171,000. And since nonprofits don’t technically have owners, she had to do some legal craftwork to lease the building to the arts organization she was founding, now called Mineral School.
For many nonprofits, the first concern is bringing their mission to life and the second is figuring out a physical space to house the organization. However, Hodges’ research led her to believe that owning a space for her nonprofit would be key to its success. “I knew I would start with the building and then find the people who would want to do this with me,” she says.
And Hodges’ instincts were spot on. According to a 2013 study by Nonprofit and Voluntary Sector Quarterly:
Nonprofits that own property are more likely to accumulate equity and maintain a stable presence in the community than those that rent space.
But the Mineral School’s path is not a common one. Pete Mattingly, Head of Branch Administration and Operations for JPMorgan Chase, explains: “Nonprofits often don’t pursue the property route, either because long-term funding sources are uncertain or because they operate out of historically disinvested neighborhoods, which makes it difficult to secure mortgage loans from mainstream banks.”
Another common challenge associated with nonprofits owning their own space, says Hodges, is that “not a ton of institutional funders want to give you money to purchase a building.”
But luckily, there are quite a few institutions out there willing to do just that. According to a 2014 survey from Grantmakers for Effective Organizations, 77 percent of staffed foundations in the U.S. provide a form of funds — commonly referred to as capacity-building funds — that are earmarked to help nonprofits improve their effectiveness, including purchasing their own properties.
We’re making a place for art where there wasn’t one before.
Jane Hodges, Mineral School Co-Founder
And improving effectiveness is exactly what JPMorgan Chase’s Partnership for Raising Opportunity in Neighborhoods (PRO Neighborhoods) does.
PRO Neighborhoods has been helping nonprofits put down roots on a significant scale. In 2016, JPMorgan Chase launched PRO Neighborhoods as part of a $125 million, five year commitment that seeks to support and encourage locally driven solutions for reviving distressed neighborhoods across the U.S. This includes an annual competition calling on community development financial institutions (CDFIs) to submit proposals that tackle the biggest barriers to opportunity in their communities.
For instance, this competition helped the Midwest Nonprofit Lenders Alliance — a collaboration of three CDFIs — provide long-term financial support to nonprofits in Minnesota and Ohio metropolitan areas, enabling the organizations to purchase and improve their physical places of operation.
“It’s of great benefit for these organizations to own the spaces they operate out of, just as it is for individuals and families, making it easier for them to focus on their mission of serving their communities,” Mattingly says.
It’s clear that when a nonprofit owns a physical space, the organization’s ability to fulfill its mission becomes much more extensive. For instance, Mineral School now has a secure foothold in its community, thanks to the building that Hodges purchased. In fact, because of its physical space, Mineral School has been able to offer a total of sixteen, two-week residencies per year to a variety of artists and writers. Hodges says, “We’re making a place for art where there wasn’t one before.”