Not-For-Profit Advisory Group Newsletter - Volume 3

NOTFORPROFITADVISORY GROUP

VOLUME 3 JUNE 2015

STAY INFORMEDSTAY CONNECTED STAY INVOLVED

NOT-FOR-PROFIT ADVISORY GROUP

NEWSLETTER

Our team, led by Peter Davies and Matt Johnson, have more than 28 years experience advising non-profits with the development and implementation of comprehensive real estate strategies tailored to meet the unique needs of the non-profit occupier.

We are the only advisory group in Canada exclusively dedicated to working with non-profit organizations from coast-to-coast.

We understand that your operational issues need to be fully assessed long before real estate concerns are addressed. We appreciate the fact that non-profits have unique challenges such as funding pressures with unpredictable cycles, transparency and accountability requirements in addition to ongoing board governance concerns.

organizations, their leadership and daily challenges they face. Please provide us with feedback so we can make these newsletters and articles as helpful and interesting as possible.

We encourage you to forward this newsletter to your colleagues and contacts. Also, please follow us on Twitter @ColliersNFP and visit us at www.collierscanada.com/notforprofit

Of note, please keep an eye for the release of our Office Trends Benchmarking Survey. We will be hosting a presentation in mid-September in downtown Toronto, and in the interim, we would be pleased to present our findings in person to any organization, upon request. If you would like to be updated on the timing for the presentation, PLEASE CLICK HERE

We have numerous clients in core non-profit sectors such as health, major charities, housing, institutional, education, religious, associations and seniors housing.

Our goal with this newsletter is to further our culture of collaboration within the non-profit sector, and to provide access to best practices being implemented by non-profit leaders, and to valuable resources related to topics of importance to the sector.

We want to share as much information as possible with current clients of ours, other non-profit organizations and other specialized professionals dedicated to assisting this sector.

Upcoming issues will continue to highlight remarkable non-profit

MATTHEW JOHNSON* VICE PRESIDENT, CO-CHAIR

PETER DAVIES* VICE PRESIDENT, CO-CHAIR

COLLIERS NOT-FOR-PROFIT ADVISORY GROUP

COLLIERS NOT-FOR-PROFIT ADVISORY GROUPIN

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TABLE OF CONTENTS

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PAGE 04-05

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“5 MINUTES WITH…” Tonya Surman, CEO, Centre for Social Innovation

FEATURED PROJECTCouncil of Ontario Universities

PROFESSIONAL CORNER: RBC - Protecting Your Not-for-Profit Against Fraud

REAL ESTATE EDUCATION: Challenges Facing Not-for-Profits when Building a New Office

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“5 MINUTES WITH...”

TONYA SURMAN CEO, CENTRE FOR SOCIAL INNOVATION

How does your organization ensure that your employees are providing services that meet or exceed the expectations of your stakeholders?Our incredible staff team is focused entirely on meeting the needs of our nearly 2,000 world-changing members. We talk to, listten to and work with our members every day, striving to create a better experience. Our work is about removing barriers to our members work, so that they can stop fixing photocopiers and get on with making the world a better place.

How important is culture and collaboration within your organization?Culture and Collaboration are the heart of CSI. Fundamentally, we are about sharing - sharing space, services, ideas and coffee. And in order to ensure that collaboration really happens, we work to enable a healthy culture which reduces the friction between connections. Our culture is embodied in our values – nine core values which inform everything that we do. One of our values - Together or Die - pretty much sums up how important collaboration is to us.

Does your physical space promote collaboration?Our entire space has been crafted to create collisions and ensure transparency. The windows into the offices enable us to see each other, the coffee pot takes a full 2 minutes to brew, forcing us to wait for it and inevitably talk to each other. All of the mail is centralized and even

We want people to see our brand and think that anything is possible. That we are accessible, open, diverse, creative, provocative, scrappy and believe that anything is possible.

What do you want your employees and clients to think when they walk into your space?We want people to feel the energy and the buzz. We want them to feel welcomed and that they are home. We don’t stand on pretense, the cutlery doesn’t match and you can help yourself to a cup of coffee. It is when people feel relaxed that new ideas emerge, when the boundaries come down and people are able to connect across differences. We aim to create a space where ideas are flourishing and barriers are being dropped.

How important is the use of your website to promoting your vision? How about social media?CSI uses our social media constantly. Our web presence is our communications foundation. Our recent Community Bond campaign, where we raised $4.3M in bonds to help pay for 192 Spadina, was driven through our online work. There really is no difference between the online and offline campaigns anymore. These things are fully integrated into all we do.

the bathrooms are non-gendered, ensuring that you never know who you might meet.

How do you ideally go about creating or forcing change?Change is so constant at CSI that we have essentially had a management re-org every year for the last 4 years. Our challenge is slowing down the pace of change so that people can get their bearings straight. We have begun to work in more modular teams - creating stable areas of the organization and then identifying those teams or projects that experience great change. By calling out what is and what isn’t changing, it creates a greater sense of stability and enables us to go through the change more intentionally.

From a funding perspective, how does your organization position itself in a crowded non-profit market?CSI is a non-profit social enterprise. We have grown from nothing to now 50 staff and a $7M/annual budget. We work with funders and partners around key strategic projects. We are careful not to take on things that pull us away from our core purpose and we really seek opportunities where we can leverage the partner investments and bring about even greater outcomes through the power of collaboration.

How important is your brand to you? What do you want people to think of when they hear your organization’s name or see the logo?

COUNCIL OF ONTARIO UNIVERSITIES

FEAT

URED

PRO

JECT

PROJECT OVERVIEWIn July 2014, the Council of Ontario Universities (“COU”) engaged Colliers Not-for-Profit Advisory Group to assist them with the strategic planning of their office space in Toronto.

COLLIERS NOT-FOR-PROFIT ADVISORY GROUPPAGE 03

CHALLENGECOU had numerous challenges including inadequate meeting space, budget restraints, and a need to improve design efficiencies with flexibility to allow for future changes, and had to respond to members and stakeholders with

a space that meets key location, operational and cost objectives.

SUCCESSTo help build the foundation, our team assisted COU with all of the items noted below and they successfully decided to relocate

within their current building with a reduction in total square footage by almost 14%, a reduction in total cost per square foot, and their lease included numerous landlord upgrades including direct payment of over half of the total relocation costs.

ONLINE SURVEYS EMPLOYEE MAPPINGPROPERTY TOURS

NEEDS ANALYSISFINANCIAL ANALYSIS LEASE SUMMARYLEASE DOCUMENTS

DETAILED TIMELINE

SPACE PLANNING

SAMPLE ONLY

SAMPLE ONLY

SAMPLE ONLY

SAMPLE ONLY

SAMPLE ONLY

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THE IMPORTANCE OF INTERNAL CONTROLS

• Forensic accountants say when fraudulent incidents occur, they’re typically not discovered internally — they’re found through outside tips or by accident.

• The Association of Certified Fraud Examiners findings indicate frauds can occur for up to 18 months before being detected.• A recent PriceWaterhouseCoopers survey indicates that insufficient internal controls are one of the top three reasons

for committing fraud.• Fraud can erode up to roughly 6% of an organization’s revenues. It’s essential that organizations know the warning

signs and establish clearly defined fraud prevention precautions and procedures.

PROTECTING YOUR NOT-FOR-PROFIT AGAINST FRAUDTILDA ZANETTE

There are few things more despicable than someone taking advantage of an organization that devotes its time and resources to advancing worthy causes.

Unfortunately, it does happen fraud – whether external or internal – can damage your organization’s reputation and credibility, affect your ability to fulfill your financial mandate, and lead to longer term funding shortfalls and associated challenges. Working with Not-For-Profits on a daily basis, my colleagues at RBC and I are constantly advising our clients on ways to minimize the potential for fraud. Understanding different types of fraudulent activity and educating yourself and your

associates about how it occurs and how to identify it is a great place to start. From there, you can incorporate a system of checks and balances to help prevent fraudulent activity from occurring in the first place. Not only do some of these solutions mitigate the risk of fraud, they can help improve financial reporting and save costs associated with cheque stock, postage/couriers and employee time. Fraudsters are always busy at work. I frequently see clients’ cheques being altered or counterfeited, the most frequent instances involving their cheques being intercepted and the ‘payee’ altered. This occurs when a legitimate cheque is intercepted by a fraudster, and the payee name is changed. Often, this

goes undetected until the supplier notifies the sender of the missing payment, at which point the sender realizes that the cheque has cleared their account for the correct amount but payable to a different payee. In other cases, we actually see a client’s entire cheque stock being counterfeited and duplicated.

Your best protection against fraudulent cheque activity is daily reconciliation, which should include payee name as part of the cross check. Both of the scenarios I mentioned can be further mitigated by replacing cheques with electronic payments. You even get the added benefit of saving postage, stationary costs and time spent on lost or stale-dated cheques.

PROF

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COR

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HOW PROTECTED IS YOUR ORGANIZATION FROM FRAUD?

Take a few minutes to test your organization’s fraud protection:Does you organization...

segregate duties to ensure no single individual is responsible for handling cash, issuing cheques or reconciling bank statements

require a minimum of two signing authorities for issuing cheques or electronic payments require an executive or Board Member to authorize payments over a certain dollar threshold issue individual payments for all expenses, so they can be matched to a specific invoice keep cheque stock, cash under lock and key pay regular suppliers including staff reimbursements electronically

COLLIERS NOT-FOR-PROFIT ADVISORY GROUPPAGE 05

CHALLENGES FACING NOT-FOR-PROFITS WHEN BUILDING A NEW OFFICEARLENE DEDIER

REAL

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use credit cards or electronic payments to replace cheques when making payments receive electronic statements to ensure only authorized individuals have access to banking details reconcile all payments with a vendor invoice or other paper document do basic background checks on all associates — paid or unpaid require bonding of associates who handle funds enforce vacation leaves for all staff-for example 5 consecutive days avoid using windowed envelopes to mail out cheques perform daily reconciliation on the full details of cheques that have cleared your accounts, or utilize an automated

notification solution to identify any discrepancies between your paid cheque and your issued cheque file leave outgoing and incoming mail in a secure area issue unique passwords for each individual employee, and ensure no employees are sharing passwords, even within a department have a security policy specifically for IT governing the use of all data, servers and networks, as well as hardware communicate to employees not to respond to emails soliciting passwords (A.K.A.“phishing” or “spoofing”) have a formal code of conduct have an appropriate expense policy have password protected computer access, changing passwords frequently restrict access to data based on relevance to employee’s position use an online banking platform that authorities are assigned, and audit logs are available conduct random audits on business accounts

As a Not-for-Profit, your organization’s reputation and credibility are your bread and butter. While the tips and advice presented here are by no means exhaustive, there is a great deal of information available to help you establish fraud detection and prevention protocols. By looking after your own interests when it comes to fraud prevention, you can do so much more to help the interests of others.

Tilda Zanette, Senior Account Manager with RBC focusing on the Not-for-Profit sector’s banking needs.

She can be reached at [email protected]

Like a corporate company, not-for-profits can be faced with the task of relocating or building a new office space. As a result, a great opportunity is presented. A new work environment allows for a company to align their organizational vision and goals, and have them be reflected in their work environment. This consequently presents the not-for-

2. Physical internal resources to manage a project full time

3. Design or construction expertise

A first reaction to this situation may be to hire an architect, interior designer, general contractor or a construction manager to lead the overall process. The problem that then presents itself is that although

profit with the ability to have a more collaborative, efficient and thought provoking work environment for both the employment team and their constituents and members. Unlike a corporation however, a not-for-profit organization faces some challenges within the scope of such a project:

1. Financial resources to fund the project

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those resources are valuable, their agenda and priorities often do not align with the not-for-profit. What is most important? Design versus cost? Cost versus constructability? Both? Neither? The list can be endless.

“Planning is the process of choosing among those many options. If we do not choose to plan that we choose to have others plan for us.” - Richard I. Winwood

THE FIRST STEP IN THE PROCESS IS TO ASK THE FOLLOWING QUESTIONS TO ASSIST IN ESTABLISHING A “STRATEGIC VISION”:

• What do we need to build?• What do we want to build?• What would a successful space

look like?• How much would this cost?• How much can we afford?• How long will this take?

Putting together a wish list is a natural response – but is it realistic? Affordable? Achievable? Will it meet your needs? It is at this stage where an independent third party project management company like MHPM Project Managers Inc. would come in. They would lead the entire process from the conception of your vision, the implementation and construction of your design, through to the installation of the furniture.

The reality is that as many as 90% of projects fail. Poorly managed projects are often late and over budget and they do not fulfil the organizations “strategic vision.”

PROJECT PITFALLS TO AVOID:

• Unclear vision or goals• Priorities are undefined• Poor initial planning• Design not challenged by peer

review or constructability review• Lack of construction expertise• Breakdown in communication

A professional project management company can empower a not-for-profit by providing them with a seasoned team led by a dedicated project manager who will act as the single point of responsibility on a project. MHPM’s project managers lead their team based on the clear project success criteria established by the not-for-profit. The criteria are memorialized in the project charter and the project manager plans for the use of the entire project team.

“If you don’t know where you are going, you’re going to wind up somewhere else.” - Yogi Berra

BENEFITS OF HIRING A PROJECT MANAGER:

1. Having a dedicated resource, their organizational strength and their lessons learned focused on the project goals.

2. Having a project management company with experience in the not-for-profit sector and its accounting requirements.

3. Having a committed resource to mitigate risk, maximize opportunity and provide the not-for-profit with the best value for their dollar.

4. Having a clear project plan, communication plan and protocols and setting a standard to validate decision making.

HELPFUL HINT – RISK MANAGEMENT

Project leaders know that you must act when problems are small and opportunities are great; otherwise you lose your ability to influence and control outcomes. This is the role of risk management. Many risks can be anticipated by an experienced project manager. If a project is to be successful, regular communication between all parties will help ensure that expectations are realized, understood and managed. Understanding and managing the three key elements of scope, cost and time will result in a quality project that meets the client’s criteria for success.

Having an experienced project management firm leading your project provides your organization with the certainty that you have done your due diligence and captured the best market value, utilized the best practices in accounting and adhered to the project schedule. The end result is the transparency required by all of your stakeholders to be fiscally responsible and to deliver the best space for your talent, services to your constituents and members and accountability to all of your stakeholders. The challenge becomes an opportunity for success.

Arlene Dedier, Principal of MHPM Project Managers Inc.

She can be reached at [email protected]

CHALLENGES FACING NOT-FOR-PROFITSRequirement for fiscal transparency to all stakeholders including board members and constituents and/or membership and donors

Requirements for defensible decisions and clear business cases and due diligence for large capital expenditures

NOTFORPROFITADVISORY GROUP

MATTHEW JOHNSON* Vice President, Co-ChairNot-for-Profit Advisory GroupPhone: +1 416 643 [email protected]

PETER DAVIES*Vice President, Co-ChairNot-for-Profit Advisory GroupPHONE: +1 416 643 [email protected]

PARKER PAYETTE* AssociateNot-for-Profit Advisory GroupPhone: +1 416 643 [email protected]

MATT JOHNSONVice President, Sales RepresentativeCo-Chair, Not-for-Profit Advisory GroupDirect Phone: +1 416 643 [email protected]

PETER DAVIESVice President, Sales RepresentativeCo-Chair, Not-for-Profit Advisory GroupDirect Phone: +1 416 643 [email protected]

WATCH YOUR INBOX FOR YOUR LINK TO THE SURVEY. www.collierscanada.com/notforprofit

SOURCE: COLLIERS TENANT SURVEY

Q: HOW IMPORTANT IS IT FOR EMPLOYEEES TO BE CLOSE TO THE FOLLOWING?

6 5

The 10-minute barrier

The accessibility to public transportation is overwhelmingly a critical factor for many office tenants today since a whopping 71% of survey respondents said they wouldn’t consider options more than a 10-minute walk from transit. With the harsh Canadian winters, who can blame them?

This trend is not new – in the Colliers 2007 Tenant Survey, respondents rated “Location Close to Public Transport” at 8.7/10 in importance when attracting and/or retaining staff. We expect this to become even more critical as the battle for talent ramps up again in this business cycle.

Tenant action item: If you are concerned with talent attraction and retention, consider that your employees appreciate direct, efficient and cost-effective accessibility to their office.

Landlord action item: Audit your current office portfolio against walk times to major transit hubs. Think long and hard about those buildings that don’t fall within the 10-minute mark as 71% of tenants won’t even consider them. Think creatively: a shuttle bus service to your building or business park can help mitigate any transportation issues and is considered a workable, practical solution.

Walking distance from local public transit: Within 10 min.

Walking distance from undercover access to local or regional public transit: Within 15 min.

Driving distance from home that employees commute by public transit: 20 min. to 1 hr.

Walking distance from regional public transit: Within 15 min.

LOCATION, LOCATION, TRANSITWHICH FACTORS MATTER MOST?

44%

53%

54%

71%

SUBWAY44%

53%

54%

71%

SUBWAY

44%

53%

54%

71%

SUBWAY44%

53%

54%

71%

SUBWAY

Clusters are keyWith growing advancements in technology and increasing global competition reducing the need for offices to be located in the central business district, 72% of tenants surveyed emphasized the importance of being in the “right place.”

Being in the “right” area means business proximity to vendors, competitors, interconnected companies and employees. Developing office space that fosters these attributes will undoubtedly attract and support long-term tenants. Furthermore, for office buildings struggling with vacancy, repositioning a building that clusters related and competitive tenants will create a competitive advantage through support, knowledge sharing, operating costs and logistical requirements.

Tenant action item: When considering your location options, take careful note of the neighbours and strategic positioning of the asset. You may be able to enjoy significant efficiencies if companies within your sector are close by. You will also have an easier time luring top talent to your business if they don’t have far to move.

Landlord action item: Organizations are shifting from vertical integration to clustering due to the low cost and accessibility of benefits such as knowledge sharing, logistical sharing and even a common employee catchment area. Landlords and developers should consider positioning assets to attract like-minded tenants in similar industries.

31%Critical

37%Important

18%Nice

Free parking

31%Critical

45%Important

18%Nice

Access topublic transportation

27%Critical

39%Important

22%Nice

Clients, vendors, partners Easy auto access

Being in the “right” area for business

31%Critical

41%Important

22%Nice

53%Important

29%Critical 10%

Nice

Q. How important is it to be close to the following?

Q. How far away are you willing to be from the following?

Survey respondents areautomatically enteredto win a $25 STARBUCKS gift card!

OFFICE TRENDS BENCHMARKING SURVEY

NOT-FOR-PROFIT SECTOR

{ SOURCE: COLLIERS 2014 TENANT SURVEY }

@ColliersNFP

SAMPLE FINDINGS

BALANCE BETWEEN ACCOUNTABILITY & IMPACT

This report delves into the insights from our 2015 Not-For-Profit Benchmarking Survey to provide the best way to allocate finite resources to achieve ACCESS, IDENTITY and COLLABORATION that optimizes the delivery of your organization’s IMPACT. ACCESS

IDENTITY

COLLABORATION

ACCESS

IDENTITY

COLLABORATION

OFFICE SPACE PROVIDES…

NOT-FOR-PROFIT GROUP02 I NOTFORPROFITADVISORY GROUP

NOT-FOR-PROFIT OFFICE TRENDS BENCHMARKING SURVEY

NOTFORPROFITADVISORY GROUP

VOLUME 1 FALL 2015

30 CFM&D October/November 2014 www.cfmd.ca

Imagine a scenario in which most employees of an organization have established a life around their current work location and either rely on being able to bike

to work or walk to work from a GO Train stop. If a decision is made to relocate to an office building a mere kilometre away, do the employees then have to purchase a separate TTC pass to be able to get to work on time? Does the new building offer secure bike storage? Will this add considerably to their commute time, causing personal issues such as child-care scheduling problems?

NO EMPLOYEE LEFT BEHIND

It is critical for organizations to consult their most important asset — their people — when contemplating a move. This is especially true for non-profit organizations, whose employees work not so much for the pay cheque as their sincere belief in the organization’s mission. Herewith, tips for leading an effective engagement process

BY PETER DAVIES AND MATT JOHNSON

[ management memo ]

Employee engagement is an important aspect of all real estate decisions, and it is arguably the single most important aspect of real estate decisions for non-profit entities. It is no secret that most employees of charities and other non-profit organizations don’t show up for work every day for a substantial pay cheque. Most deeply believe in the organization’s mission and many people obtain a tremendous amount of satisfaction from working as a team towards those objectives.

Like other types of organizations, when most non-profit entities consider whether to renew their office lease,

relocate, or purchase a building, internal conversations often begin with talk of financial implications, market conditions, employee growth forecasts and expected lease prices.

While these are all important considerations, it is vital for today’s successful non-profits to build a proper foundation for a subsequent real estate decision by truly engaging their most important asset — the employees who help fulfill the non-profit’s mandate.

Gather as much data and employee feedback as possible at the outset of the process. The timing will vary according to the size of the organization; however, organizations should ideally begin the employee engagement process at least two years prior to lease expiry. An effective engagement process should ideally cover desired office space features, varying workplace demographics, and location analysis.

OFFICE SPACE FEATURES

An anonymous, customized employee online survey can help uncover common trends and themes within the workplace. Use clear messaging to ensure that employees recognize while all preferences cannot be accommodated, every effort will be made to listen to everyone’s thoughts and concerns. For example, tailored questions ask respondents to rank the importance of being within a few minutes’ walk of a subway station, on-site bike racks, natural lighting and sustainability elements within the building.

In the non-profit sector, surveys have shown that top employee desires in a building include access to natural light, quick and convenient access to public transportation, barrier-free accessibility, proximity to amenities, good air quality, ample common and meeting areas,

�Anonymous surveys can help to determine what office space features employees value most.

Prepared For:SUJATA GANGULI | Executive DirectorST. CLAIR WEST SERVICES FOR SENIORS2562 Eglinton Avenue West, Suite 202Toronto, ON M6M 1T4

Prepared By:

MATTHEW JOHNSON* | Vice President, Co-Chair, Not-for-Profit Advisory GroupPETER DAVIES* | Vice President, Co-Chair, Not-for-Profit Advisory Group* Sales Representative

COLLIERS INTERNATIONAL1 Queen Street East, Suite 2200Toronto, ON M5C 2Z2+1 416 777 2200

NOT FOR PROFIT ADVISORY GROUPSectors

HEALTH

HOUSING

EDUCATION

ASSOCIATION

RELIGIOUS

SENIORS HOUSING

CHARITIES

INSTITUTIONAL

FUNDING PRESSURES/CYCLES

DEFENSIBLE SOLUTIONS

EMPLOYEE & CLIENT ENGAGEMENT

BRAND OPTIMIZATION

KNOWLEDGE TRANSFER

BARRIER-FREE SOLUTIONS

TRANSPARENCY/ BOARD GOVERNANCE

RISK MITIGATION

Focus

ACQUISITIONS/DISPOSITIONS

TAX REBATES/APPEALS

OFFICE LEASING/ TENANT REPRESENTATION

BUY VS. LEASE ANALYSIS/APPRAISALS/PROPERTY VALUATION

LEASE REVIEWS/AUDITS

LEASE RENEWALS/ RELOCATION

EMPLOYEE ENGAGEMENT/ MAPPING

BENCHMARKING/ STRATEGIC PLANNING

Services

OUR TEAMMATTHEW JOHNSON* Co-Chair, Colliers Not-For-Profit Advisory Group Vice President +1 416 643 3754 [email protected]

*Sales Representative

This document/email has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and /or its licensor(s). © 2013. All rights reserved. This communication is not intended to cause or induce breach of an existing listing agreement. Colliers Macaulay Nicolls (Ontario) Inc., Brokerage

PETER DAVIES* Co-Chair, Colliers Not-For-Profit Advisory Group Vice President +1 416 643 3739 [email protected]

COLLIERS INTERNATIONAL One Queen Street EastSuite 2200, ON M5C 2Z2

@ColliersNFP collierscanada.com/notforprofit

*Sales Representative

www.collierscanada.com/notforprofit

@ColliersNFP