4 Considerations for Nonprofits That Want to Provide Housing

In this post, we’re pulling back the curtain so you, as an impact investor, can see how we’re helping our nonprofit partners thoughtfully address the housing problem.

If you know a nonprofit leader who wants to provide housing to those they serve, here are some things they should consider…

1: Should you own?

In our experience, most nonprofits want to own the property they plan to use. We understand that desire, and we are fully supportive of it. And we’re happy to help nonprofits develop property and even build it for them.

What often hasn’t been fully considered, though, are the demands that come with ownership. Becoming a landlord means ongoing maintenance, property management, and responsibility for the structure itself. 

In theory, ownership sounds great. 

In practice, it means taking on a role many nonprofits did not plan for.

There’s also the financial reality. The amount of money required to purchase a property is significant. Adding $400,000 to $600,000 for a single unit to a capital campaign can be a heavy lift, especially for organizations already working hard to meet their annual budget. On top of that, it can be difficult for nonprofits to secure traditional mortgages.

Due to these reasons, ownership is often not the best first step. 

A more realistic growth strategy is to start by renting space with a mission-aligned property owner like Refuge Homes. This allows nonprofits to get a housing program up and running without the pressure of raising a large amount of capital upfront. It also allows us to take on the responsibility of maintaining the property while the nonprofit focuses on transforming lives.

Once a housing program is proven and operating successfully, then it may make sense for a nonprofit to raise the money to purchase their own property.

2: Who’s the tenant?

Another important consideration is clarifying who the tenant actually is. In a healthy housing model, the nonprofit is the tenant, not the program participant.

Program participants are living in the home as part of the program, not as tenants. That distinction matters. If someone quits the program, they must leave the house. They do not have tenant’s rights because they are not tenants. They are program participants receiving housing as part of the services being offered.

This structure protects the integrity of the program and ensures the housing supports the mission rather than complicating it.

3: How will you pay?

Nonprofits also need to think carefully about how housing will be paid for. If housing is provided for free to program participants, the non-profit must raise donations to cover the rent or mortgage every month. In other cases, participants may be charged a program fee that covers some or all of the housing cost.

From a cash flow standpoint, some of the strongest models we’ve seen use a co-housing approach. In these situations, multiple people live in the same property and rent rooms or beds. This often results in more rent being collected than the cost of the unit itself.

In those models, nonprofits can actually become cash-flow positive on housing. The excess rent is often used to offset staff costs required to support the program. This means that instead of being a financial drain, the housing actually helps support the organization’s operations.

Other programs take a blended approach. Participants may pay part of the rent, while donors subsidize the remaining portion. For example, if rent is $1,000 per month, participants might pay $400 to $500, with donors covering the rest. The right approach depends on the population being served and the goals of the program.

4: Will you have housing guidelines?

Housing works best when there are clear guidelines and standards in place. This often includes curfews, expectations for cleanliness, and shared responsibility for the space.

Some of our strongest nonprofit partners have clear guidelines and have built excellent cultures around them. As property owners, we love that these homes are kept in great condition.

Plus, having these guidelines benefit participants.

With the standards in place, the housing becomes another teaching environment. Many participants have never been taught certain life skills others may take for granted. Learning how to care for a home, follow routines, and respect shared space helps prepare participants to be successful once they exit the program.

When nonprofits intentionally create order, structure, and empowerment within the home, participants leave better equipped for independent living. Without that training, someone may eventually move into a rental on their own and lose it quickly because they were never taught how to maintain it. Housing provides a safe environment to learn those skills before that happens.

We’re actively working to codify these best practices and create sample housing guides for nonprofits, whether they partner with Refuge Homes or pursue housing independently.

Be part of what we’re doing

Providing housing well takes more than just good intentions. We hope these considerations will be useful for any nonprofit leaders whom you know. If you are an impact investor, we invite you to join us in what we’re doing as we partner with nonprofits to provide stable housing for those in need.

Learn about becoming an impact investor.