Lessons Learned from the Bush Foundation/Minnesota Philanthropy Partners Shared Facilities Project
Published: May 2014
Four years ago, both the Bush Foundation and Minnesota Philanthropy Partners (MN Partners) faced expiring building leases. After conversations between the two presidents, a decision was made to pursue a shared facilities project. The plan called for the organizations to co-locate in one building. By doing so, they hoped to leverage their combined purchasing power to lower costs on facilities and services, create opportunities for cross-foundation learning, and inspire other non-profits to explore the benefits of co-location.
In September 2013, the Bush Foundation and MN Partners moved into three contiguous floors of a downtown St. Paul office building. Each organization now occupies a single floor of the building, while the floor between serves as a shared reception area, lunchroom and conferencing space. The project proved time-consuming and required constant collaboration and engagement between the two organizations’ presidents, boards and staff. It worked, and today both organizations judge it a complete success. This learning paper is to share the insights and lessons learned during this project.
Background on the Shared Facilities Project
In 2009, faced with an expiring lease on office space spread over two floors—effectively preventing some staff interaction—our then President Peter Hutchinson actively sought an opportunity to share space with another philanthropic organization. He approached MN Partners President Carleen Rhodes and together, with our respective Boards and staff, they hammered out an agreement to pursue the idea.
Bush Foundation is a private foundation with 35 employees. MN Partners is a network of foundations, funds and organizations, including the Saint Paul, Minnesota Community, F.R. Bigelow and Mardag foundations, with 57 staff members and 26 supported staff. Both organizations agreed that the vision for this co-location project did not include merging our operations or combining core functions in any way.
Peter Hutchinson left the Bush Foundation in 2012. Both organizations agreed to put the co-location project on hold for six-months while the Bush Foundation searched for Hutchinson’s successor. This “timeout” proved beneficial for two reasons: first, it provided Bush Foundation and MN Partners with an opportunity to align their existing lease agreements so that they could move in to the new building at the same time (The original plan called for us to move in several weeks before MN Partners). More importantly, the “timeout” gave both organizations time to reflect on and reaffirm its commitment to the project.
We learned a great deal along the way, and in the end both organizations got out of the project exactly what it wanted.
What worked well
Starting early. When undertaking a project this big it’s always wise to expect the unexpected. The best way to prepare for the unexpected is to start early. In our case, planning kicked off a full four years before completion, which proved extremely beneficial. Several months elapsed between the time Peter Hutchinson came up with the co-location idea and when MN Partners signed on as a partner. It then took similar amounts of time to find a real estate firm and architect. Based on this experience it seems that it would be wise to start planning a shared facilities project at least two years in advance of an actual move.
Structured decision making. Shortly after our presidents signed a memo of understanding and presented it to both boards of directors, we realized that to keep things moving forward, we needed agreements on basic team structure and decision making processes. By establishing effective teams with carefully structured roles and responsibilities early on, we successfully kept the ball rolling. On major decisions, each foundation staff committee got one vote. If that was split, the presidents were asked to resolve the issue. Developing and committing to structured decision making throughout the process served this project well.
Collaboration. At the outset, we worked with MN Partners to produce a shared statement framing the core mission and goals of the project. A single real estate advisor was engaged to perform a facility needs analysis to determine space requirements and help decide whether co-location made sense. A shared services agreement was developed to document how facilities and services would be utilized, how bills would get paid and how common spaces would be governed. Common vendors—a general contractor, an architectural firm, a law firm— were retained through collaborative RFP processes. When two organizations collaborate in this way much greater purchasing power is brought to bear. We believe, for example, that vendors served our combined 37,000 square foot project much more aggressively than they might have dealt with just one organization’s 16,000 square foot project. This collaboration not only resulted in tremendous savings, but required both organizations to work as a team.
Engagement. The Bush Foundation and MN Partners had different but equally effective approaches to staff engagement. With a staff roughly half the size of MN Partners, we had the ability to engage all employees on a wider range of decisions. MN Partners certainly kept their employees apprised of progress on the project, but given their size and structure, decision-making was more centralized. Both foundations sponsored a joint all-employee bus tour of model spaces and then of proposed locations. Both also were careful to sound out employees on decisions related to their personal workspaces.
What didn’t always work well
Budgeting. At the beginning of the process, each organization established a budget for its own space and another budget for the shared spaces; consequently, our budgets were not aligned in a number of key areas. For instance, the estimated cost of the build out was inconsistent across budgets, which created stress on design decisions for the shared 24th floor. Both organizations underestimated their architectural budgets, in large part, because we underestimated how much time would be needed for the architect to coordinate differing opinions on items ranging from layout of the shared space to the color of the lunchroom tables. Addressing budgets jointly, very early in the process, would have helped us avoid these costly issues. Seek help from the experts. Architects, real estate advisors and other potential vendors can be real assets here, as ours were.
Board communications. This learning is limited to our experience at the Bush Foundation. In January 2012, on the same day we were going into the final budget meeting for the co-location project, Peter Hutchinson announced he was leaving the Foundation. The Board now found itself with a major decision to make on a project it had largely entrusted the president to manage. The project was nearly scuttled. Instead the Board agreed to a six-month “timeout” that proved beneficial, not only for all of the reasons mentioned earlier in this paper, but also because it gave the incoming President the ability to weigh-in on key decisions. The lesson here is that on a project of this size you should not be afraid of over-communicating with the Board.
Cross-team relationships. We learned quickly that our organizations did not really know each other and that our cultures were very different. For example, some team members committed more time to the project than others, which can be irritating for some but is a practical reality. Occasionally, our foundations would reach an impasse on issues such as who should our furniture vendor be, how should the common space be laid out, and how should we address branding. Some team members were hard-chargers, others more laid back and comfortable with compromise. We might have avoided some hard feelings had we recognized and openly addressed these dynamics earlier in the process.
It is a long haul. This project took four years from start to finish, and it was a tougher process than initially imagined. On reflection, that probably is inevitable when committees, presidents and the Boards of two organizations are involved in such a major project. But it was worth it! The space sharing is going extremely well.
Rely on IT experts. Our shared facilities project required an array of decisions around information technology, but our organizations have limited IT staff. We had to decide first which systems we would share. With that resolved, we moved onto questions such as how to configure the server room, how to deploy conference room AV technologies, what type of low voltage cabling to use, who should be our Internet service provider, and so on—an almost endless list of issues. Through the RFP process, we jointly selected an IT services firm that helped us answer these questions. As a bonus, the same firm helped immensely during the move, resulting in an IT system that was up and running from day one. We highly recommend engaging IT experts.
Sharing space is not for everyone. We know this because we were not always confident that we had made the right decision. Some employees questioned why they had to spend so much time on “this sharing thing,” and several board members raised questions about brand confusion and the likelihood of genuine cost savings. This is a decision that must be considered very carefully up front. Once made, however, you should not waver.
The project is over, but there are still huge opportunities. One of those is making good on our goal of creating opportunities for cross-foundational learning. We have taken some steps in that direction through joint social gatherings, and our shared space means that cross-pollination inevitably is occurring. However, this is a process that is just getting started. It will take time and work. We are still working out certain details on how we bill each other for our shared space activities. Questions such as how we pay for supplies, postage machines, shredders, and phone and Internet services are being addressed. There also are important decisions around reception staffing, conference room scheduling, the organizations’ differing office hours and disaster recovery procedures that we still are working through. The main thing we feel we need to do is keep the lines of communication open, and we are doing that. We continue to have frequent shared facility team meetings between the two organizations to address our common issues.