January 16, 2018; Rochester Post-Bulletin (Rochester, Minnesota)

It’s not uncommon to see “nonprofit buildings” where groups share space and certain services. At NPQ, we have covered many of these, including a social enterprise co-working space in New York City and, more recently, churches in Austin, Texas, and elsewhere that provide working space for artists. But a recent twist on the model is emerging in the city of Rochester, Minnesota, where area nonprofits are seeking to create a jointly governed cooperative that would provide both space and services to nonprofits throughout the city.

A project led by the local community foundation in Mankato, 90 minutes to the west, helped spur Rochester’s effort. In Mankato, the Mankato Area Foundation opened Shared Spaces, a common office designed to help participating nonprofits lower their administrative costs. As the Mankato Free Press wrote in December 2015, participating nonprofits “aren’t tenants in the traditional sense of the word…and [don’t] pay rent. Instead the organizations will split the expense of keeping the nonprofit center open, jointly bearing the costs for electricity, heat and other utilities.”

They’ll also share conference rooms, and in some instances, staff, further reducing costs. A commercial copier/printer, which few of the nonprofits could afford on their own, will be available for common use. There is also a shared kitchen and breakroom as well as ample storage space.

Building on Mankato’s example, Rochester nonprofits have sought to develop their own model, as Ken Klotzbach, writing in the Rochester Post-Bulletin, reports:

About 30 to 70 area nonprofit entities, mostly in the health and human services sector, have shown an interest in being part of a co-op, in which they’d share human resource managers and information technology services and personnel. They could create pooled health care coverage for their employees and do more joint purchasing. And while it might not save money in all instances, it would improve organizational competency and effectiveness, nonprofit leaders say.

Klotzbach adds that representatives from five nonprofits—the Diversity Council, Family Service Rochester, the southeast Minnesota chapter of the National Alliance for Mental Illness, Legal Assistance of Olmsted County, and Families First—are taking the lead in the design process, and that 70 executive directors have participated in at least some discussions on the topic.

A follow-on editorial from the Post-Bulletin notes that, “Among the advantages of a cooperative, according to those executives: the potential for shared HR [human resources] and IT [information technology] services and health care coverage, all of which are vital and expensive functions that are especially tough for smaller organizations to afford. There would be savings and efficiencies in purchasing and other areas as well.”

The vision being developed is a concierge model, where nonprofits can opt into different aspects, according to Dee Sabol of the Diversity Council. Sabol explains, “The way that nonprofit co-ops work is that people can buy into the parts that interest them. If a nonprofit has a need for (shared) benefits but doesn’t have a need for joint purchasing or vice versa, people can buy into the parts that interest them.” Another part of the vision, Sabol adds, is a common “co-op building with a ‘community front door’…where all the services are available.”

Funders in Rochester have expressed support for the co-op, as has the editorial board of the Post-Bulletin. The editors begin by noting that, “There are dozens of nonprofit organizations in Rochester, large and small, and just about all have needs for office space, human resources and IT services, health coverage for employees and more. What if those organizations joined forces to share some of those costs?”

The Editorial Board goes on to add that the Rochester nonprofit community is looking for a building of up to 100,000 square feet to co-locate some of the organizations and that “a potential location, a vacant commercial building that could be remodeled for flexible office space,” has been identified.

“We encourage the nonprofit leaders to keep going, and get other community leaders involved to help shape the idea and advocate for it,” the Post-Bulletin’s editorial board concludes.—Steve Dubb