How to acquire and finance a building for your nonprofit

For those of you who are curious about how a nonprofit can obtain a building, please see below.

There are a couple of strategies for acquiring a building.

1. Free - A donation from a donor
2. $1 Purchase - A $1 purchase from your city, town, municipality
3. Market Rate Purchase - Buying a building at market value
4. Owner Held Mortgage - Property purchased from a private owner who holds the mortgage for your org at favorable terms
5. Wholesaling Agreement - Purchasing properties unlisted and off market
6. Tax Lien Sales - Purchase of properties for the value of taxes owned
7. Short Sale Properties - Purchasing a property under value from a bank
8. Lease or Lease to Purchase - Renting a property or renting a property with the intent to purchase

How do you finance such purchases?

1. Contracts or fee for services
2. Grants (unrestricted grants or capacity grants)
3. Donations
4. Sponsorship dollars
5. Owner held mortgage
6. Traditional mortgage
7. Partnerships
8. Line of credit

While this information is not exhaustive, this does provide some insight into how to acquire a building.

My recommendation for anyone looking to do this is to evaluate why you want to purchase a building and to have a maintenance / sustainability plan - a plan for maintaining, keeping and affording the cost of the building - after purchase.

Most nonprofit focus on the acquiring the building but forget they have to cover the cost of owning real estate. To do all of that work to buy a building to later loose it due to taxes owed, debt owed, disrepair, utility shut off, etc. is a terrible loss for your nonprofit and the community you serve.

As a real estate investor, business owner, and nonprofit operator, I recommend all of you develop a fundraising plan so you can purchase a property you can afford and sustain. If you need help developing a fundraising plan, please schedule a consult with me to talk about the development of a fundraising plan for your nonprofit. You can schedule time to speak with me by clicking the link below.

https://nonprofitfundingstrategies.teachable.com/p/consultwithdrclark

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DR. WILLIAM CLARK is a fundraising strategist and leadership development and organizational impact specialist to nonprofits and churches.

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