Running a nonprofit organization means everything from figuring out how to best serve your community to fundraising and getting other donations, so you have what you need to keep the organization going—including how to get a building donated to your nonprofit. That might sound like you’re reaching for the sky but getting a building donated to a nonprofit happens more than you think. Many building owners like to give back to the community by donating their property to a 501c3 because it fulfills their company’s philanthropic mission and gives the property owner a nice tax incentive. Here’s what to know about real estate donations and how you can approach building owners about donating property to your nonprofit. But, first, here are the terms you need to know.
Summary
Terms Associated With Property/Building Donation
Outright Donations
In an outright donation, the property deed is transferred directly to the nonprofit. The building donation may come from an individual or company. The donor doesn’t have to pay any capital gains tax, and they receive a tax deduction for donating to a nonprofit.
Bequest
A bequest is a donation occurring at the time of the donor’s death. The nonprofit is named as the beneficiary of the building upon the donor’s passing.
Bargain Sale
The donor agrees to sell the building to the nonprofit for less than fair market value in a bargain sale. In this scenario, the donor only pays capital gains on the “uncharged portion.” In other words, that’s the difference between the value of the property and how much it was sold to the nonprofit. Again, this lessens the donor’s tax liability.
Charitable Gift Annuities
The building is donated to your nonprofit with a charitable gift annuity, and then the organization pays the donor in smaller fixed payments (annuity income). Some of the annuity income is tax-free for the donor. The nonprofit may decide to sell the property; however, the annuity payments stay the same.
Charitable Remainder Trusts (CRT)
Similarly, a Charitable Remainder Trust (CRT) allows the donor and nonprofit to share in the property’s value. Although the property owner sells the property, the proceeds are placed in a trust for the named beneficiaries. Typically, the beneficiary is the donor who receives a percentage of the income for the rest of their life or a set term—such as 20 years. Then the remainder of the trust goes to the nonprofit named in the trust.
Retained Life Estate
Building donations can also be gifts of primary or secondary homes. In a retained life estate, the donor gives the property to the nonprofit and then either continues to live in it for the rest of the donor’s life or a set number of years. When the term is over, or the donor passes away, the home goes to the nonprofit to use or sell. Because the nonprofit owns the deed, the donor (or their estate) gets a tax deduction.
Can Nonprofits Rent Out Space?
You can also look for building owners willing to rent out space in their building for no cost to a nonprofit. Many building owners with extra room to rent prefer to rent to nonprofits to give back to their communities. And they get a tax deduction, as well.
Building Grants for Nonprofit Organizations
As a nonprofit, you are probably familiar with many of the grants available for all types and sizes of businesses. Check Grants.gov for nonprofit real estate grants to build a new property for your organization or to make improvements to your already existing building.
Local Building Donations
One way to find potential property donations for your nonprofit organization is to drive around your local area and search for buildings available for sale, lease, or rent. First, look at buildings only in commercially zoned areas to ensure your charity can legally operate out of the space. Then, inquire about each facility by contacting the real estate agent or broker listed for the property or searching through available real estate ownership filings made available through state and county-level government agencies. You can also check with local commercial realtors to see if they know of any buildings or space in an available building.
How Do You Get a Building Donated to Your Nonprofit?
Before you start your “campaign” to get a property donated to your nonprofit, it’s crucial to prepare. Make sure you’re ready to answer any questions or provide any backup documents a property owner may ask you. Here are some steps you can follow:
Start With a Clear Vision
Before you even think about asking, you need to know exactly what you’re asking for—and why. Be specific, realistic, and bold.
Why do you need a building? Is it for administrative offices, a community center, a shelter, or something else entirely? Paint a picture of what this building will mean for your nonprofit’s work and the people you serve.
What does the ideal space look like? Think about size, layout, accessibility, and amenities. Do you need classrooms, open floors, a kitchen, or private meeting spaces?
Where should it be? Is there a particular neighborhood or city that would help you better reach your audience or fulfill your mission?
What are the ongoing costs? Even a donated building isn’t free. Be prepared to discuss your plan for maintenance, utilities, and upkeep.
So, think of this vision as your North Star. It will help you identify the right opportunities and also make it much easier for donors to say “yes” when they understand your clarity and focus.
Tell a Powerful Story
The heart of your ask isn’t the property itself, it’s the story behind why you need it and what it will accomplish. You’re not just asking for a property donation; you’re inviting someone to be part of something bigger.
Highlight Your Mission: Share why your nonprofit exists, what you’ve already achieved, and how this building will help you do even more.
Showcase the Impact: Connect the dots between the building and the lives it will transform. Will it house homeless families, give teens a safe space, or become a hub for community education? Make it tangible.
Inspire Emotion: People give to causes that move them. Use real stories, photos, and videos to show the human side of your work.
Connect the Donor’s Contribution: Remind potential donors that their gift will leave a lasting legacy in the community.
When you share a story that tugs at someone’s heart and aligns with their values, you turn an idea into an opportunity for them to make a difference.
Find the Right People
A donated property (building) isn’t going to come from just anyone. You’ll need to think creatively and strategically about who might have a property to give and why they’d consider donating it.
Look to Local Property Owners: Reach out to businesses, developers, and landlords with unused buildings or properties they no longer need.
Target Corporations: Many large companies hold real estate assets they could donate for a tax deduction and goodwill.
Tap Into Foundations and Philanthropists: Some organizations and individuals specialize in making large-scale donations that leave a legacy.
Engage with Local Government: City or county governments sometimes have surplus properties or vacant buildings they can donate to nonprofits.
Ask yourself: Who in your network might already know someone with property? Lean on your board, staff, volunteers, and community allies to help you make introductions. Your network is more powerful than you realize.
Build Genuine Relationships
Cold requests rarely work when it comes to such a big ask. Donors need to feel like they know and trust you—and that you’re the right organization to steward their gift.
Start With Conversations: Attend local business and community events to connect with people who might be able to help. Don’t jump straight into asking; focus on learning about them and their goals.
Lean on Your Board: Your board members can be incredible ambassadors. Ask them to reach out to their contacts and start the conversation.
Invite People In: Host tours, coffee chats, or small events to show people the work you’re doing now and how a building could take it to the next level.
At its core, this is about human connection. Relationships, not transactions, will move someone to donate such a significant asset.
Make a Thoughtful Ask
When the time comes, you want to approach potential donors with confidence, sincerity, and a plan.
Be Prepared: Bring a clear proposal outlining your vision, the building’s role in achieving it, and how you’ll handle ongoing maintenance and costs.
Customize Your Pitch: Tailor your ask to the person or organization. Why would they care about your cause? How does this align with their values, legacy, or business goals?
Make It Easy to Say Yes: Explain the benefits, including tax deductions, public recognition, and the lasting impact they’ll have on the community.
Listen and Address Concerns: Be ready to answer questions about your nonprofit’s sustainability, ability to maintain the property, and long-term plans.
Most importantly, ask with heart. People are more likely to give when they feel connected to both the cause and the people asking.
Finding the Right Fit
Getting a building donated to your nonprofit is not an easy task, so do not expect to get results overnight. However, the organization’s building is the heart of the operation and consequently one of the most significant expenses in running a nonprofit. So, while you’re looking for building and/or property donations, be sure and have a backup plan to make sure you can cover the many daily operating expenses your organization faces. A nonprofit line of credit can help.
A nonprofit line of credit is like a loan for nonprofits; however, it is revolving credit, which means you don’t pay anything when you’re not using it, and when you pay it back, the total amount is available to use again.
At Financing Solutions, a leading provider of business loans for nonprofits in the form of a 501c3/not-for-profit line of credit, many of our nonprofit clients apply for and get their line of credit lined up before there is a need. A nonprofit credit line from Financing Solutions means your organization is always prepared. Contact us today to learn more!