Dedicated Rentals

Many of our communities of faith are blessed with amazing space. There is an emergence of understanding that this is our 'ministry of space' within the neighbourhood.

What is a dedicated rental?  This is when an organization has exclusive access to their own space.  This could be a daycare that needs this for specific regulation, a non-profit that is using office space, or a number of other organizations that prefer to have a space that is their own for storage or other reasons.

Top Tips

1. Flexible Vs Dedicated

What we have seen is that typically a community space is sustainable with 4 to 7 dedicated renters, depending on the square footage that each is taking. There are implications with either approach.

Dedicated space: The community of faith may not have access to this space anymore, especially in the case of a daycare. The positive is that there could be leasehold improvements to the property that are part of the negotiation. There can be ongoing conversations that make this relationship very amenable with new ways to work together emerging. And this allows for some stability and forecasting in terms of ongoing income. Finally,  this allows for a more sophisticated cost sharing of other building expenses including potential property taxes, utilities, and caretaking.

Flexible space: This is still an important part of a community space, especially with many of the relationships with community groups including AA, Girl Guides, Boy Scouts, and many others.  Many of these groups and event rentals bring in new people to the church building, which is a great thing! The challenge in most flexible space rentals, is that they are scattered throughout the building, require room booking management, and more variability in caretaking/set up costs. 

A best practice is to try to see if a handful of rooms can be used for these types of rentals in order to make room for dedicated space and longer term relationships as well.

2. Being Easy to Work With

Starting to consider dedicated space is a mindset change for the community of faith. You are actively moving in with another organization, and that does take accommodation just like when you get a new roommate.  The biggest thing in welcoming someone new to your space is to be hospitable and have an open conversation of what works for you and what doesn't, just recognizing that they might have a different perspective.

One part of being easy to work with is have a policy in place with the Board that the person(s) in charge of property are able to agree to new dedicated tenants without coming back to the board.  If the process is too cumbersome, you might lose a potential tenant.  Example: A community of faith wasn't sure if they wanted to do dedicated space.  It took the Board 6 months to decide 'yes', and by then the organization had found a new home. 

3. Set Expectations

With growing rentals and partnerships being formed, it is going to be natural that room allocations for nonprofits and your own committees or choir are going to change.  This is part of the 'ministry of space' and setting this expectation upfront is helpful. 

A great example is that a community of faith's Board was speaking about room allocations for a theatre group that needed dedicated space. The best location for this was the choir practice room that is used for 90 minutes once a week and has been used in this way for 35 years.  When someone mentioned that due to this legacy, it would be impossible for this to be the dedicated space.  Since the understanding of 'ministry of space' had been set, this was not considered to be an objection by the Board.

4. Are They Renters or Are They Partners?

This is a great question to be asking yourself.  

- are their values aligned with yours?

- is their work helping  you with your mission?

- do you have a positive relationship with them?

- do they actively engaged and communicate about their relationship with you?

Which of your renters are partners?  Or could be partners?

When you decide, the general understanding of a partner is one where you should be doing the following:

- Planning: Annual planning where you talk about each of your plans for the next year & discuss what happened this year.  When you do your annual report with the community of faith, should you be sharing this with your renters as well?

- Communication: Are they on your weekly newsletter?  Are you on theirs?  Do you have a wine and cheese or other events, and do they attend? 

- Shared Operations: Obviously sharing the same space makes this easier. But information on utilities or upgrades, do you share a booking system, or do they have access to the building?

- Shared Risk / Reward: Again, sharing the building automatically ties the organizations together.  But is there a general understanding of this?  How could there be a sharing?

5. Negotiation

When you have found potential partners to be working with you, the conversation of what the rental agreement and all of the components with this begins.  A few best practices are;

- don't come from a place of desperation.  It is difficult if you are just starting with rentals, but think about if the mission is a fit prior to moving forward.  It is harder to go backwards.

- think like a partner and relationship from the beginning

- understand their cash flow as a non-profit. There are creative ways to structure the relationship with sharing of tickets or even following the ebbs and flow of their funding.

- consider sharing in their success. What could that look like?

Great Resources

Halo Project: This demonstrates the economic value of a community of faith in its neighbourhood.

Sample MOU for NonProfit Dedicated Rental Relationship with cash flow considerations