A STRONG FOUNDATION

     

    During visits to Chicago in a former job, I was struck by an unusually designed building across the Chicago River. This two-acre lot had previously sat undeveloped for decades while stakeholders sought a way to utilize the space for maximum efficiency and impact. 

    The lot was constrained by the river on one side, train tracks on another and by rules which called for a minimum amount of green space in any new development. In 2017, the 54-story office tower known as 150 North Riverside opened, complete with a base that is shockingly more narrow than the floors above. This design, born out of necessity, allows for 1.2 million square feet of leasable office space because of an extra-thick concrete core, tied to a steel frame, in turn linked to a deep foundation reaching bedrock 110 feet below ground.

    At their best, non-profits seek to provide for unmet needs, to lift marginalized groups and expand into underserved areas of the community. Often these needs are obvious for years while stakeholders seek ways to create maximum efficiency and impact. Then suddenly, the organization expands, and new programs and physical spaces come into play. People are served, needs are met, revenues grow, and expenses follow rapidly behind. But like that Chicago building, is the foundation of the organization strong enough to support all the growth above?

    Proper planning and honest appraisal are critical to the long-term success of any expansion. Leaders need to consider whether sufficient data is being gathered and if systems and staff exist to turn that information into impact and stories that drive philanthropy. Is the finance team not merely large enough but also skilled enough? Are staff assigned tasks that line up with their abilities and interests? Does the organization fill openings with the future in mind or based merely what’s worked in the past? Is the technological infrastructure robust enough to carry the weight of new demands on server space and bandwidth?

    It’s safe to say that the developers of 150 North Riverside didn’t just start digging without modeling and testing financial assumptions along the way. Neither should organizations seeking to grow. A thorough assessment of the current financial state can yield a treasure trove of information. Current programs and physical locations should be evaluated for their financial and mission returns. Capacity for debt and the effect of expansion efforts on current bank covenants should be known up front. Existing long-term obligations to provide services should be made known to current decision makers and donated assets should be evaluated for restrictions or reversionary rights that exist far into the future.

    The answers to these questions and the information gathered are the key components to the core, the framework and the deep foundation required to support the important and rapid growth of an organization. Those we serve deserve our continued and sustained assistance until our mission is fully accomplished.Take a deep and honest look at your organization and build the strong foundation you need to make that happen!

     

     

     

    Photo Credit: Steven Vance from Chicago, United States [CC BY 2.0 (https://creativecommons.org/licenses/by/2.0)]

    Posted by Brian Keel on Mar. 12, 2019
    Brian Keel

    Written by Brian Keel

    As Senior Consultant with Donor By Design Group, Brian brings nearly 25 years of leadership experience gained both in for-profit and non-profit organizations. This background gives him a keen understanding of the challenges and opportunities inherent in non-profit financial management.

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