Why do non-profits need a lease agreement?

A lease agreement for a non-profit organization allows for more flexibility in case the organization grows, relocates or dissolves.

Where do nonprofits put leases on their balance sheet?

The Financial Accounting Services Board now requires nonprofits to include operating leases on their balance sheets instead of in the footnotes of their financial statements, as previously required. This creates more transparency on leasing transactions by nonprofit organizations.

How to answer the questions of a nonprofit?

Write your answer to each question on a document in collaboration with your team. The activity will produce a valuable resource, which your whole team can use in marketing and fundraising. Reference it when you draft donation appeals, annual reports, newsletters, event invitations, and more. Let’s get started!

How does a modified gross lease work for a non profit?

Modified Gross: ​ A modified gross lease requires the renter to pay a base rent, just like a triple net lease. However, instead of paying for other expenses based on square footage, the renter pays only for what is used by the organization, including utilities, phone, internet and janitorial costs.

Can you lease a property to a non-profit?

Simply leasing a property to a non-profit will not, on its own, exempt a private individual from having to pay property taxes. Since property taxes are state taxes, the exemption will depend on the laws in your individual state.

How long should a non-profit lease agreement last?

Lease agreements for non-profit organizations are typically long-term leases that can be renewed. When entering into a non-profit lease agreement that may last 10 years, you want to be sure to negotiate terms that are favorable to you.

The Financial Accounting Services Board now requires nonprofits to include operating leases on their balance sheets instead of in the footnotes of their financial statements, as previously required. This creates more transparency on leasing transactions by nonprofit organizations.

How to get the best leasing deal for a nonprofit?

Ask your broker to research and analyze all of the properties you are interested in. Your broker can easily look up pricing, leasing term, amount of space available, debt on the property, and other information that can help you negotiate the best deal. It is important to identify all key decision makers at the outset.