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  1. Impact Philanthropy
July 15, 2014updated 11 Jan 2016 1:58pm

Philanthropists need to think about bricks and mortar before supporting charities

By Spear's

So how are your bricks and mortar? Hardly the question of a generous philanthropist when preparing make a donation to their favourite charity, and yet take it from me, this is the very first question you should ask before signing the cheque.

Whether one is passionate about saving the whale or finding a cure for cancer, property is not high on the agenda, and yet property costs form the second biggest item on any charity balance sheet after staff. As the Charity Commission will tell you, property is one of the biggest areas of concern case for charities ringing up for help.

In the 2013 Charity Property Matters Survey, 40 per cent of charities saw their building as the biggest risk to their organisation’s survival. ‘We’re seeing amazing projects fail, through just not thinking about the small, necessary property issues in time,’ says Ruth Thompson, property advice service manager at the Ethical Property Foundation, the leading UK property advice charity. ‘Our advice makes the difference between all that work, investment, love and care building a fantastic asset to society or falling by the wayside.’

The Ethical Property Foundation was set up in 2004 to provide affordable quality property advice to charities and to date has helped 2,500 organisations. Charity folk are rarely property-minded – after all, sorting out leases and bills for dilapidations are not why they went into a life of good works.

Yet for this reason charities represent a big risk for donors and funders if they do not undertake due diligence. In the last six months alone, the Ethical Property Foundation has saved three charities from bankruptcy caused by property mismanagement – protecting vital services provided to over 23,000 vulnerable people and incidentally saving both the money and the blushes of some of the UK’s best-known funders and philanthropists (one or two of whom undoubtedly have the good taste to be Spear’s readers).

Increasingly, therefore, the foundation is asked to act on behalf of donors and funders before money is handed over. And so if you are inspired to whip out your chequebook for a favourite cause, here are the top ten property tips for the savvy donor:

1. Ask to look at the charity business plan. Has the charity fully factored in the costs of running their office premises: maintenance, utilities, security, service charges etc? Are the calculations based on figures from a reliable source – the owner or landlord or a survey – or are they guesswork?

2. Check what repairs and maintenance obligations your charity has with regard to their building. Have they planned how to meet these costs?

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3. Is your favourite cause leasing dangerously? Check your charity has taken professional advice on the terms of a lease or sale offered to ensure they are getting the best possible deal.

4. If your charity is taking on a building, ensure it has commissioned a condition survey to highlight potential problems and advise on the correct planned maintenance.

5. Does your charity have a planned maintenance schedule? When was the last condition survey?

6. Has your charity set aside money aside in their budget as a ‘sinking fund’, a pot of money for unplanned expenditure on the premises should an emergency arise? Ask how they would meet any unplanned costs.

7. How does the organisation plan to raise income from the building? Is the asset being used effectively? Are there other potential uses that are being missed?

8. Read your charity’s business plan. Are their premises’ needs included? Have they considered how these needs may change over time?

9. Ask your charity who is responsible for looking after their premises. Do they have a facilities manager? Do they have the proper training, knowledge and support to do their job correctly?

10. If your charity plans to rent space to other charities, do they have proper agreements in place with their tenants? How is this managed? Is there space? Who are the tenants?

Bricks and mortar are rarely the stuff of fundraising campaigns. And yet the bottom line is that charities must be well-run businesses because they are using other people’s money, including yours. The other bottom line is that no-one can save the world with bailiffs at the door and a leaky roof.

Antonia Swinson is the director of the Ethical Property Foundation

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