Optimizing Operations: Children's Home + Aid

Children's Home + Aid delivers more than 70 programs from nearly 30 sites to 40,000 children and families in Illinois. Its steady growth has CH+A wanting to better understand its portfolio of owned and leased space, especially in an economic climate that demands operational optimization.

IFF devised a three-tiered planning process targeting 20 program sites. A program and budget review for all 20 sites will quantify operating profit or loss. For top tier facilities owned by CH+A, IFF will:

- Examine facilities for code and ADA compliance,
- Identify opportunities to increase environmental sustainability,
- Develop a deferred and future facility maintenance schedule, and
- Determine appropriate facility reserves for CH+A to begin funding.

IFF's cost benefit analysis on a middle tier of leased and owned sites will determine whether they are optimally located in context of CH+A's service area and proximity to other sites, and whether CH+A should lease or own each. A minimal review of a final tier of sites will focus on recently built or renovated facilities.

The completed plan—with data, recommendations and proposed development budgets as appropriate—will inform CH+A's program, staffing and fundraising decisions, and provide a long-term framework for facility management.

Guiding Real Estate Investment Decisions: Marillac

Marillac Social Center on Chicago's West Side serves over 9,000 individuals annually through the provision of early childhood education, teen mentoring, family support services and assistance to the elderly. Marillac operates two facilities, and sub-leases part of this space to a charter school and health services provider.

Marillac wanted to optimize future investment in space to meet program growth goals. IFF analyzed Marillac's financial health, current programming and long-term goals. It performed a physical assessment of both facilities and reviewed Marillac's rental arrangements. Finally, IFF undertook an analysis of Marillac's current service area and programs to identify future service gaps.

The resulting plan—complete with options including development costs, debt capacity and fundraising gaps—range from reconfiguring and maximizing existing programming space, to developing unused space that would add more than 10,000 square feet of programming area.

Marillac's CEO Bart Winters interprets the plan as such, "Not only will it help us make better real estate decisions and enrich our fundraising conversations, it has already helped us better understand our clients, which translates to a better focus on our programs."

Launching RES in St. Louis and Milwaukee

In 2009, thanks to a grant from the Walton Family Foundation and its commitment to K-12 education reform, IFF added staff in its Missouri and Wisconsin offices.

Michelle Gleason transferred from IFF's Chicago office to her hometown of St. Louis. In her capacity as Manager of School Services and as a member of the Mayor's Charter Advisory Panel, Michelle works closely with the Missouri Charter Public Schools Association as well as the Mayor's Office of the City of St. Louis. In preparation for charter sponsorship and state authorization, she consults with and provides technical assistance to proposed and existing charter schools as it relates to new school development including business and facility planning.

Heather Heaviland, a six-year IFF veteran, leads IFF's real estate program in Milwaukee, providing consulting to charter schools, choice schools and other nonprofits. In its first year, the Milwaukee office has:

- Contracted with 12 agencies, helping them to plan for and/or execute facility plans,
- Negotiated on behalf of four agencies to secure a facility purchase contract or lease,
- Provided analysis and prepared short- and long-term facility strategies for 11 agencies, and
- Evaluated the physical condition of over 15 buildings and prepared renovation plans and cost estimates for each.

Policy: From Crisis to Solutions

The Neighborhood Stabilization Program (NSP) is an unprecedented federal public policy response to the foreclosure crisis. NSP funds were allocated to all 50 states, selected local governments, and nonprofits to stabilize communities suffering from foreclosures and abandonment.

With its national track record of public policy leadership on community development finance, charter schools and child care facilities, IFF has been allocated more than $12 million from NSP, split across four initiatives in Cook County and northeastern Illinois. Efforts focus on developing a range of facilities to stabilize communities: special-needs housing managed by social services providers, affordable homeownership and rental units, and community facilities to provide needed social services.

One of these initiatives is a collaborative of six western Chicago suburbs where IFF is consulting in an NSP capacity and toward the broader community- and economic-development goals. Here, NSP funds will be used to redevelop a 26-unit building for affordable rental, and to redevelop one or two single family homes for affordable homeownership.

Reducing Costs: New Energy Efficiency Program

Until now, savings from full-scale energy efficiency upgrades have been unavailable to nonprofits. This is because nonprofits are often too small to participate in programs offered by qualified energy efficiency contractors. IFF's new Energy Performance Program was created recently to enable nonprofits to benefit from these costs savings. The program has entered its first phase with a group of IFF customers as participants.

IFF's Energy Performance Program is far more than an energy audit that only identifies opportunities for greater energy savings. The Program prioritizes and implements energy efficiency upgrades, with IFF overseeing the work as project manager. A below-market rate IFF loan will fund the upgrades, using cost savings as loan repayment. Savings will flow directly to the program participant after the payback period.

Savings will vary based on each facility's age and use, and the scope of the energy efficiency opportunities. IFF will target energy efficiency opportunities that reduce energy use by 25 percent and have a loan payback period of less than 10 years.

Stayed tuned to future issues of IFFFYI for the program's initial results and future plans.

More Information on RES

Operating in the Chicago metropolitan area, St. Louis and Milwaukee, IFF's Real Estate Services are priced—on average—at 60 percent of market rates. Click here for more information on services provided by RES, and to view case studies of IFF's work with nonprofits.