logo
    • Magazine
    • Membership
    • Donate
  • Racial Justice
  • Economic Justice
    • Collections
  • Climate Justice
  • Health Justice
  • Leadership
  • CONTENT TYPES
  • Subscribe
  • Webinars
    • Upcoming Webinars
    • Complimentary Webinars
    • Premium On-Demand Webinars
  • Membership
  • Submissions

The $1 Rent Trap: Another Nonprofit Finds Its Lease at Risk

Ruth McCambridge
January 8, 2018
Share
Tweet
Share
Email
Print

January 7, 2018; Times Free Press (Chattanooga, TN)

Over the years, NPQ has covered any number of stories about buildings owned by local government and leased to a nonprofit for a minimal amount each year. These agreements come in a great variety of forms. In some cases, the lessee is responsible for upkeep; in some, there are other financial supports provided, including grant money. In one case we covered, the payroll of the nonprofit was run through the city. What many of these arrangements have in common, however, is their vulnerability to changes in administrations and their commitments in local government. This story very much conforms to this pattern.

Primary Healthcare Centers had enjoyed a $1-a-year rent agreement with Walker County in Georgia for 10 years before a new county commissioner decided the deal was a bad one. Commissioner Shannon Whitfield concluded the property was worth $8,800 a month, and that the money would be better spent on relieving the county’s $70 million deficit than toward the mission of this well-run, well-used health clinic.

“The county’s not going to be continuing to prop up an entrepreneur that has a thriving million-dollar operation,” says Whitfield. But, who is propping up whom exactly? The building’s use attracted a $465,000 grant last year from the Georgia Department of Community Affairs to renovate the facility based on a promise that the building would continue to act as a clinic for low-income residents for the next 20 years. Ending the lease, in fact, may spark a demand for return of the grant from the county, and it may also mean a block on other grants to the county. Whitfield, however, says he would try to push the state into adjusting its commitment so the county could rent it to another nonprofit.

Sign up for our free newsletters

Subscribe to NPQ's newsletters to have our top stories delivered directly to your inbox.

By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.

Trying to make a case for the clinic’s lack of need, he pointed to Primary Healthcare Centers’ $1.1 million in net assets, the fact that it recently bought Hutcheson Medical Center’s old hospice building for $280,000, and that it has a number of salaries that hover above $100,000, hardly an unusual situation for a healthcare facility with six facilities and 125 staff.

“They tell me they can’t afford it,” Whitfield says. “Well, we can’t afford for them to continue to be there for free.”

No one is arguing there’s no need for the clinic, by the way; Rossville, where the clinic is located, has a median household income of $32,000 a year.

We would suggest that nonprofits manage against this particular kind of risk, but that would likely entail building up reserves over addressing community need, and the mere existence of such reserves might spark a grab. What’s a nonprofit to do?—Ruth McCambridge

Share
Tweet
Share
Email
Print
ABOUT THE AUTHOR
Ruth McCambridge

Ruth is Editor Emerita of the Nonprofit Quarterly. Her background includes forty-five years of experience in nonprofits, primarily in organizations that mix grassroots community work with policy change. Beginning in the mid-1980s, Ruth spent a decade at the Boston Foundation, developing and implementing capacity building programs and advocating for grantmaking attention to constituent involvement.

More about: nonprofit real estateManagement and LeadershipNonprofit Newsnonprofit-municipal relations

Become a member

Support independent journalism and knowledge creation for civil society. Become a member of Nonprofit Quarterly.

Members receive unlimited access to our archived and upcoming digital content. NPQ is the leading journal in the nonprofit sector written by social change experts. Gain access to our exclusive library of online courses led by thought leaders and educators providing contextualized information to help nonprofit practitioners make sense of changing conditions and improve infra-structure in their organizations.

Join Today
logo logo logo logo logo
See comments

NPQ_Winter_2022Subscribe Today
You might also like
Hierarchy and Justice
Cyndi Suarez
Salvadoran Foreign Agent Law Threatens Human Rights Movements
Devon Kearney
Charitable Tax Reform: Why Half Measures Won’t Curb Plutocracy
Alan Davis
Healing-Centered Leadership: A Path to Transformation
Shawn A. Ginwright
Into the Fire: Lessons from Movement Conflicts
Ingrid Benedict, Weyam Ghadbian and Jovida Ross
How Nonprofits Can Truly Advance Change
Hildy Gottlieb

Upcoming Webinars

Remaking the Economy

Black Food Sovereignty, Community Stories

Register Now
You might also like
Hierarchy and Justice
Cyndi Suarez
Salvadoran Foreign Agent Law Threatens Human Rights...
Devon Kearney
Charitable Tax Reform: Why Half Measures Won’t Curb...
Alan Davis

Like what you see?

Subscribe to the NPQ newsletter to have our top stories delivered directly to your inbox.

See our newsletters

By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.

Independent & in your mailbox.

Subscribe today and get a full year of NPQ for just $59.

subscribe
  • About
  • Contact
  • Advertise
  • Copyright
  • Careers

We are using cookies to give you the best experience on our website.

 

Non Profit News | Nonprofit Quarterly
Powered by  GDPR Cookie Compliance
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.