The issue that is repeatedly reported as being the primary concern for charity boards and chief executives is the sourcing of funds. Research has determined that it is the issue that charity CEO’s think about most often. Property is a proven path to addressing the funding challenge and can generate additional short and long term revenue from new sources safely and responsibly.
While many charitable organisations have a portfolio of valuable property assets, most do not know how to take advantage of them. Commercial property expertise isn’t common within boards and management of charitable organisations, and external advice is often conflicted or self-serving. There is a need for expert property and development advice that is truly independent and focused on maximising the outcome and minimising any risks for the charitable land owner.
Charitable organisations often acquire multiple properties over time for various operational reasons connected to the services they provide and the people they serve. These properties are rarely considered from a portfolio perspective, where all the properties and all of their opportunities and limitations are assessed against all the property related requirements of the organisation and where opportunities to release value for the organisations purposes can be identified. Charities are known to simply not recognise opportunities for better and more efficient management of property.
Charities are often the targets of direct approaches from developers. These approaches appear to offer benefits to the charity but are in reality a mechanism for the developer to secure a development opportunity at the best possible price and terms, that is, at the charity’s expense. They do this by directly negotiating with the charity and seeking to avoid competition from other developers.
Another reason why some charities fail to properly benefit from their property assets is by passively managing their properties and relying on valuations undertaken every three years, or sometimes less frequently. This valuation information is often out of date, isn’t aimed at identifying opportunities, does not consider the properties as part of a portfolio and does not provide strategic advice about how the property can best support the organisation’s objectives.
Independent expert advice will improve the ability of a charity to manage its property assets more effectively and can significantly reduce funding pressure, open up new revenue streams and fund new premises. Good management of property assets can generate revenue directly and will also have a positive effect on the organisations reputation with other funding sources such as donors and government.
A property strategy prepared by an independent expert will set out the best path to capture revenue generation opportunities and deliver a solution to the charity’s physical property needs while minimising risk. It will also be a demonstration of the probity of the organisation’s processes and contribute to improved communication to the stakeholders, thereby improving the prospects for stakeholder support for the Board’s adopted strategy.
To learn more about how we can help your charity achieve its funding and premises objectives please contact us on 02 9966 8898.