![]() ![]() Partnering with better-resourced and more experienced developers can help nonprofits bring benefits to their neighborhoods that they cannot bring alone. This can assist in filling the funding gaps in a project that are otherwise difficult to complete. A developer with a big balance sheet may be better able to obtain capital from conventional sources than a nonprofit neighborhood organization. In addition to know-how, partners often bring access to capital. And partnering with a more experienced developer can help smaller or newer nonprofits accomplish projects at a greater scale and build their financial strength. This allows the nonprofit to bring that capacity to their neighborhood even if they have never undertaken a commercial project before. For example, a joint venture with an experienced commercial developer could help a neighborhood-based housing developer accomplish a commercial project along a neighborhood corridor. This could mean working at greater scale or it could mean tackling different types of projects. Another developer might lend capacity that the nonprofit does not have in-house, and allow them to do more than they could otherwise take on. There are several reasons a nonprofit might want to engage in a joint venture with another entity. It is important, however, to make sure that the joint venture agreement is advantageous for the nonprofit and the community it serves. In truth, such joint venturing is not only permissible, but can be highly effective in helping nonprofits advance their missions. Nonprofit developers and their stakeholders sometimes believe they cannot or should not team with for-profit entities because they are “not allowed” to make a profit, but this is not the case. ![]() ![]() Real estate joint ventures, both with other nonprofits and for-profit developers, can help community-based organizations maintain the resources necessary to advance difficult and highly sophisticated projects, and they can help for-profit developers find ways to bring new investment to towns and neighborhoods that badly need it. More often than not, nonprofit community development organizations must accomplish this mission with limited resources-lacking adequate paid staff and funding streams. Why joint ventures?Ĭommunity development organizations are charged with orchestrating both people-centered and placed-based solutions to address complex forces at work in their neighborhoods. We spoke to both nonprofit and for-profit developers to explore some of the common advantages and risks of real estate joint ventures. But while joint venturing has benefits for both parties, it is often easier said than done. By working together, nonprofits and for-profit developers can make development projects into something more than they could be if either entity acted alone. This outcome was the result of a joint venture between Anderson’s company and Pathfinder Services. ![]() What transpired was a plan to restore the historic Odd Fellows Block into upper-level apartments with ground-floor space for Pathfinder’s Creative Abilities Arts Center, serving artists with and without disabilities, and Huntington University’s Center for Entrepreneurship, a small business incubator. So Anderson turned to a local nonprofit that was rooted in the community, Pathfinder Services, for a partnership. He wanted to create a place that had value for people in the community, a place they wanted to come and wanted to stay. As Anderson tells it, he could have leased the completed ground-floor commercial space to a market-rate business enterprise and he would have been very successful, but he wanted something more. In Huntington, Indiana, developer Jon Anderson embarked on a mixed-use redevelopment of a large historic block on the downtown courthouse square in 2017. ![]()
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