The Lifeline Project was a well-regarded charity. Failure to carry out the targets within the contracts led the charity into insolvency and resulted in a personal, 7-year disqualification order.
Aside from the obvious limitations of asking only 1,000 people and the phrasing of the questions, are they right? Or is there a broader learning point about office costs wherever a charity is based?
The Guardian then took this one step further querying in an article if in fact charities should be based in London at all. They asked if for national charities this was the best place to be?
Hidden within this article was a very interesting question which some charities are turning their attention to. What is the place of property assets in a charity’s plans?
Some people and organisations would have us believe that offices for many charities are a waste of money full-stop regardless of the location. Employees should work from home, coffee shops, or in fact anywhere the charity doesn’t have to pay full rent, business rates, utilities etc.
The movement away from office based work may not suit all charities as once the move is made, it would not be simple to go back to a standard office.
Others are aghast at the suggestion that employees would not head into “the office” to go to work. What about the team? Interaction? Accountability? Identifiable location? Proximity to government ministers?
And in the corner of many charity offices (or coffee houses/spare bedrooms if they are already working remotely) there are finance directors quietly crunching the numbers and trying desperately to balance the books. The balance sheet doesn’t lie after all.
The finance directors’ eyes may be tiring but through the slits they see funding diminishing. Rents increasing. George Osborne casting his eye in the sectors direction; this time with charity business rates in his sights. Utility costs rivalling the price of gold. Service charges sky high. It’s a lot of costs to balance.
Looking out of the window of an Islington office or a headquarter building in the centre of whichever city or town it is, the financial director may consider that maybe the building is part the problem.
This is not an uncommon situation as our experience shows that assets or long term centrally located premises are being put under the microscope by some charities. They are looking at the asset on the balance sheet and querying if in fact they need to realise this now (if they can). Or at least look to enter an arrangement such as a sale and interim leaseback whilst locating to cheaper premises. The location whilst prestigious or relevant to the history or just easier to get to for employees is starting to be seen as an opportunity to re-balance the books.
We are seeing a trend for some charities to sell up in central locations and move out and our property team have worked on several of these matters.
Of course there are a great deal of associated costs and upheaval but in these cash strapped times, can charities afford not to view their properties as an opportunity?
For more information
Please contact Dominic Curran.
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