SHARING YOUR SPACE? HOW TO DETERMINE PRICING.
IF YOU ARE SHARING YOUR SACRED SPACE: PRICING WILL VARY
As a result of many elements that we will discuss - the cost to share your space will vary. It should vary even between the different spaces within your location. The following are some elements to consider.
DO A COST COMPARISON OF SPACES NEAR YOU
Any realtor should be able to give you some price points for your particular location. Those will be your standard commercial rate. You can also do some online research comparisons of other local rental spaces for events, meetings, and performances. This will give you a baseline for commercial rental rates, but you should also consider the amenities those spaces have versus the amenities in your spaces. Big items to consider that may impact rates for your spaces: A/C, ADA Accessibility, public transportation access, WiFi access, and overall quality and beauty of the space. Depending on what activity the renters are seeking will change what amenities of this non-exhaustive list are their top priority.Consider connecting with other houses of worship to see what they were charging. Comparing rates for the kinds of groups often seeking space in a sacred place will be important to know what the market is generally willing to bear in that sector.
WHAT WILL IT COST YOU TO SHARE YOUR SPACE?
Whether you are a sacred place or other nonprofit entity it is important to understand the costs of running your facilities. Sharing your space with others whose mission you may support begs the question: to what degree are your space sharing rates subsidizing the space sharers or actually covering the maintenance costs it takes to open your doors? It is worthwhile to understand your facility's full cost breakdown for this reason.
First, you should ascertain the square footage of your entire footprint, but be sure to keep the individual measurements of your individual spaces. As an example, while our entire building may be 25,000 square feet of space, the spaces you are most likely to share may only be 5000 of that 25K. In this example, while the total of your building’s costs will be for the entire footprint, the space sharer is only using a portion of that total. Knowing the percentage amount of your actual hard costs along with some costs for a portion of your staff time to assist with any space sharers will give you a better idea of what that portion of the facility costs you to operate. It is critical
to do the math first before posting a rental amount.
For the purposes of this question, the costs to put into your calculations will be the following:
- Average monthly costs for electricity, gas, oil, and water. Some months are higher and some are lower, taking the average is the best solution to figuring this out effectively. You can adjust for cost of living increases annually.
- Monthly cost for security
- Monthly cost for pest control
- Monthly cost for WiFi
- Monthly cost for janitorial services
- Monthly cost for general building maintenance & upkeep
- If applicable, monthly costs for dumpsters, snow removal, and any garden /green space maintenance
- A percentage amount of the 1 or 2 staff persons’ time that may be allocated to assisting space sharers
TYPE OF ACTIVITY
The type of activity in your space will greatly affect the wear and tear on your space. A meeting, rehearsal, or small sized class taking place within your space will have less people in attendance and far less wear and tear on your space than would a large size event or performance or conference. In addition, a large size event or performance or conference will have larger numbers of people and will add to your utility costs in addition to general wear and tear. When there are more people within
the facility and no doubt the presenters or hosts in that situation will want everything looking as best as it possibly can, you can also anticipate higher costs. Ultimately, yes, it is fine to have higher rates for larger more public events than for the smaller more private ones.
As a sacred place or a place where communities engage and interact, it is fitting that you may want to attract like minded individuals and mission-driven organizations to your space. By your space hosting these types of organizations, it promotes the idea of being mission supportive of one another. Sharing your space with commercial or for profit entities and mission driven individuals and organizations allows for a diverse financial outlook for your facility. It is quite common to create nonprofit or mission
supportive rates for those you think you would like to see in your facility because of the work that they produce, whether that work is in the creative industries, in one of the many branches of social service, or helps with food insecurity.
As the owner of your facility it is imperative that you be transparent with yourselves about your own budget. Knowing what you can and cannot afford will be key to creating a sustainable space sharing model for yourself and your facility. Sharing your space can be rewarding towards your mission fulfillment and to your overall budget line, but it should not be at the expense of your costs and overall facility health.
The Internal revenue code requires that 501(c)(3) organizations be organized and operated exclusively for exempt purposes Exemption Requirements - 501(c)(3) Organizations | Internal Revenue Service (irs.gov). While, as a rule, all income unrelated to a 501c3’s organization IRS approved purposes are subject to unrelated business income tax (UBIT), most income derived from the sharing of real property is specifically exempt from UBIT, provided that not more than 50% of the share is for the use of personal property, the property is not debt-financed income or leased to a controlled entity, and the organization is not exempt under Sections 501(c)(7), 501(c)(9) or IRC 501(c)(17), Exclusion of share from Real Property from Unrelated Business Taxable Income | Internal Revenue Service (irs.gov) Nevertheless faith based organizations should evaluate the tax implications of any space use agreement with their attorney. Such agreements may have federal, state and local tax implications on
income, real property and sales tax.
VENUELY - A CAPACITY BUILDING RESOURCE FOR HOUSES OF FAITH
Launched in 2022, Venuely.org is an easy-to-use website for sacred spaces to list spaces within their facility they would like to rent, and allow artists, community groups, and others to rent those spaces. Venuely helps congregations to not only survive through the post-pandemic world but to help them to thrive, enhancing their mission, by serving their community. This platform is designed specifically for houses of faith, and hosts (houses of faith) have complete control of how and with whom they share their space, with dozens of options for customization.