Nonprofits in Chicago are staffing up at a much faster rate than national counterparts, more than doubling the national average. In Chicago, 35 percent of area nonprofits reported that they planned to expand staff and/or office space in 2015, up from 24 percent in 2011.
“This growth shows that the nonprofit and association sector in Chicago has recovered well in the past several years and nonprofit leaders are very confident and optimistic about the sector’s future in this market,” said Gregg Witt, senior vice president and Chicago Nonprofit Practice Leader at CBRE. “Nationally, that is not the case, as most markets are still somewhat flat and not projecting the same confidence as leaders in the Chicago market.”
In 2011, only 12 percent of nonprofits nationally reported plans to expand staff or real estate space. That number has grown to just 14 percent in 2015, mirroring findings in 2014 and demonstrating little growth over the four-year-period.
Optimism from Chicago-area nonprofits is not limited only to staffing, but expands to spending practices as well. In 2010, 22 percent of nonprofits reported attempts to raise their profile via public relations efforts, while 44 percent reported the same goal in 2015, a 100 percent increase. Nonprofits are also looking to add to advocacy and marketing budgets in the Chicago area, with 20.6 reporting intentions to do so in 2015, up from 8.5 percent in 2010. Nationally, this is not the case as spending on public relations efforts has decreased from 22 percent in 2010 to 19 percent in 2015, and increased spending on advocacy has remained flat at 10 percent in the same time period.
“These statistics point to the optimism in Chicago-area organizations. Besides increasing programs and staff, we see nonprofits investing in PR and advocacy,” said Witt. “After the recession, nonprofits and associations in Chicago had been much more reluctant to do so.”
Nationally, nonprofits shrink square footage
According to the national survey, which focuses on 501(c) (3), 501 (c)(6), and 501 (c)(4) organizations in 26 states, nonprofit organizations are experiencing a dramatic decrease in square-footage per employee as a result of more efficient workplace practices and the gradual shift from private offices to open office layouts.
In 2009, the average square footage per employee was 403 square feet for firms with 20 employees or more. In 2015, that figure is down to 314 square feet, a 22 percent reduction. For firms with 19 or fewer employees, the number dropped from 561 square feet to 479 in that time period, a 15 percent drop.
“The strength of the economy has helped nonprofits initiate a wave of new hiring, which has led to some of this tightening of office space, but, organizations are also more cognizant of developing smarter space configurations that allow them to better utilize their existing offices in a more efficient manner,” said Witt.
Chicago associations and nonprofits have maintained efficiency in space use throughout the study’s history, going form 316 square feet per person in 2009 to 319 in 2015. For smaller organizations, space has dropped from 531 square feet in 2009 to 481 in 2015, keeping more in line with national trends.
“Chicago has always been more efficient with space historically, but the nationally other organizations are catching up,” said Witt. “Metrics are still higher than what we see in corporate space users as nonprofits and associations are somewhat new to current workplace strategies.
The survey also found that different types of nonprofits displayed more or less efficiency with their space. 501(c)(3) organizations with 20 or more employees tended to be more efficient, averaging 250 square feet per person, while 501(c)(6) organizations of the same size average 358 square feet per person.
“It makes sense that 501 (c)(3) nonprofits, which rely on donations and grants, are more efficient with their resources,” said Witt. “The findings show that the structure of an organization’s financial resources have a direct impact on its space efficiency.”
For some nonprofits, greater space efficiency has meant switching from traditional office layouts to more open spaces, Witt added.
According to the survey, 37 percent said that they could operate more efficiently in an open floor plan versus private offices, up from 31 percent who agreed with this approach in 2013.
In 2015, 33 percent responded that their headquarters were mostly private office configuration, while 36 percent responded this way in 2010. Further illustrating the trend, 17 percent of respondents in 2010 said that their headquarters were mostly open space, while 20 percent responded this way in 2015.
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