Many developers constantly seek ways to maximize their profits as real estate development is lucrative. One of the industry’s emerging trends is donating. A part of the profits will go towards a charitable cause. We’ll explore how donating a portion of profits from new development can help you substantially benefit nonprofits and improve communities.
How It Works
As an example, imagine you’re a Realtor in Santa Barbara who donates 10% of your commissions after closing each property sale to benefit nonprofits. This generous act will support local charities and organizations doing invaluable work to improve your local community.
As a Realtor, you could also explain this fundraising idea to your clients to encourage them to create a positive change in the community.
The Power of Joint Ventures
There are many successful partnerships between nonprofits and real estate developers, including joint venturing, which can help community-based organizations maintain the resources necessary to advance difficult and highly sophisticated projects. Incidentally, joint ventures can also help for-profit developers find ways to bring new investment to towns and neighborhoods that badly need it.
Carefully considered joint ventures often work remarkably well because nonprofit developers have considerable expertise in building and managing affordable housing and are skilled at combining various funding sources to get the possible units.
2 Real-Life Examples
Nonprofits and real estate developers have often formed successful partnerships. Here are two examples:
Habitat for Humanity and Home Depot
Home Depot has donated millions of dollars worth of construction materials to Habitat for Humanity. This has helped the organization build homes for deserving families across the US.
This partnership has supported Habitat for Humanity in fulfilling its mission and contributed to Home Depot’s brand reputation.
The Home Depot Foundation has donated $25 million to continue their partnership and support its efforts. This arrangement has also served local military and veteran families.
The Detroit Land Bank Authority and Michigan Community Capital
Detroit Land Bank Authority and nonprofit developer Michigan Community Capital worked together to create affordable housing for low-income families in Detroit.
The Detroit Land Bank repurposed vacant and abandoned properties, while Michigan Community Capital offered affordable housing to families who needed it most.
This partnership was part of Detroit’s $203 million affordable housing plan, which includes renovating vacant apartment buildings and land bank homes and providing mortgage down-payment assistance for renters.
5 Powerful Benefits of This Fundraiser
There are many potential benefits of this particular type of fundraiser.
First, it can offer nonprofits financial stability in the long run. Donations from real estate developers can offer a stable stream of income, which you can use to fund ongoing programs and cover operational expenses.
Second, it builds community. By partnering with local nonprofits, real estate developers Individuals can show their dedication to the community and help build relationships with residents.
Third, it can help create a positive brand reputation for the developer. By donating to a worthy cause, developers can improve their image in the community and attract potential buyers who value socially responsible companies. Participants can pool their resources together and gain access to larger and more profitable projects that would otherwise be inaccessible.
Fourth, real estate crowdfunding is an excellent way to access new markets and diversify one’s portfolio. Investing in multiple projects allows individuals to access deals outside their current geographic area and find opportunities in different asset classes.
Fifth, real estate crowdfunding allows investors to benefit from the expertise and experience of experienced developers. Developers have the knowledge and resources needed to source and analyze deals quickly
It’s a Win-Win Situation
Without a doubt, donating a portion of profits from new development to nonprofits is a win-win situation. Real estate developers who invest in their communities in this way contribute to the betterment of society.
In addition, they can also elevate their public image and distinguish themselves from the competition. And let’s not forget that nonprofit organizations benefit from much-needed funding to propel their missions forward and support the populations they serve.