2017-11-29 00:00:00 Nonprofit Organizations English Learn about key considerations when deciding whether your nonprofit should relocate to a larger office space. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/12/Non-profit-business-owner-discusses-office-space-with-colleague.jpg https://quickbooks.intuit.com/ca/resources/nonprofit-organizations/non-profit-business-office-space/ How to Decide When to Move Your Nonprofit Into a Larger Office Space

How to Decide When to Move Your Nonprofit Into a Larger Office Space

2 min read

If you run a nonprofit organization, one day you may reach a point when the office space you operate from becomes too crammed. Before immediately upgrading to a larger office, conduct an analysis to see whether the move makes sense.

Important Items to Consider

Upgrading to a larger office space typically has immediate negative cash flow effects for the organization. In extreme cases, the increase in monthly rent can even jeopardize the existence of the organization itself. Thus, it is very important for members of top management to discuss a handful of key items and arrive at a decision to move together.

First, you want to identify whether a geographical move affects your organization’s mission statement. Every situation is unique, but avoiding mission drift should remain a priority. A very local move likely won’t have any impact, but if the new office space is located hours away from the current location, it may result in the goals and operations of the organization changing. Next, you want to identify whether a move would result in the loss of key employees, volunteers or board members. A move to a larger, fancier office space may be nice but will likely be offset if people critical to the organization decide to leave due to traveling inconveniences or other reasons.

You should also consider whether a move would damage your organization’s reputation in any way. Depending on the specifics of the move, clients, donors, local officials or other key stakeholders may feel the move doesn’t align with the organization’s mission. These people could feel less important to the organization after a large move and may cease to participate in the future.

Clearly Define What You Want and Need

If you arrive at the conclusion that a move would not negatively affect the organization, it is then time to decide if it actually makes sense to move to a larger office space. It may make more sense to reorganize your current space to be more efficient rather than move to a larger office. Or, it may make sense to keep the current office space and then rent a smaller second office to accommodate growth.

You want to determine how much extra square footage is necessary, why it is needed and what the organization would specifically do with the space. You should conduct an analysis to review storage space and extra office space, and whether the organization needs other amenities, such as an improved lobby space, larger kitchen and dining space or even more meeting areas for clients and donors.

After deciding on these items, you want to put together a financial projection to determine what your organization can actually afford. Once that is done, it is best to get professional help. Professional real estate brokers can certainly assist with the search for new space, and a lawyer may be necessary to review your current and future leases, as well as any legal documents pertaining to the nonprofit itself, to ensure a move to a new office space is technically allowed.

Moving to a larger office space might be just what your business needs to expand its reach and grow its customer base, but you want to recognize the effect it may have on your cash flow, mission statement and volunteers and clients. Plan ahead with a financial projection and office layout analysis, and seek professional help if you feel the process may be a bit more complicated or want to ensure your nonprofit business is protected against risk.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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