Too Good to Be True? The Opportunity and Cost of the $1 Building

Too Good to Be True? The Opportunity and Cost of the $1 Building

While opportunities to acquire free and low-cost facilities have long appealed to nonprofit arts organizations, the short- and long-term costs of leasing a facility for $1 a year, buying it for $1 (or an under-market price), or being given a building are significant, a study commissioned by the Kresge Foundation finds. The report, Too Good to Be True? The Opportunity and Cost of the $1 Building (22 pages, PDF), found that, in many cases, building owners, public and private funders, and community stakeholders were motivated by the potential positive impact of the arts on the community, while the arts groups themselves often were more focused on securing cheap space to pursue their missions. What's more, many organizations that acquired a building for $1 without a clear understanding of their financial needs or without funding in place to cover those needs over the long term have struggled financially. Conducted by TDC, the study also found that the acquisition of facilities often led to changes in the nonprofits' operating model and culture. The report highlights the need for upfront financial evaluation and planning when acquiring a building for $1; anticipating and adapting to change during the acquisition process; and maintaining lasting relationships with key partners and supporters.