Should You Let Nonprofits Use Vacant Space Temporarily?

Q: Is there any benefit to letting a local charitable or nonprofit organization temporarily use vacant space in a center to collect donations, sell or distribute merchandise, or give out information about their programs?

A: Yes. Charities and nonprofit organizations can benefit centers that have vacancies. It’s better to fill those spaces—even temporarily—than to have them dark. And if participating charities and nonprofits succeed at a center, they may want to become rent-paying tenants.

If an owner decides to do this, it can donate the space or rent it to the charity at a below-market rent. However, even if this is a short-term arrangement, the owner must adequately protect itself. For example, accidents and damage can still occur in the space. Therefore, it’s critical to get the charity or nonprofit organization to shield the owner from liability and to agree to certain rules before coming to a center.

Though a charity or nonprofit organization may pay no—or below market—rent or a license fee, the owner should sign a short-term lease or license agreement with each one. There are five safeguards when licensing or renting space to a charity or nonprofit organization:

1. Make the license “personal.”
2. Limit permitted use.
3. Set business hours.
4. Require the charity/nonprofit to indemnify the owner if it holds over.
5. Require the charity/nonprofit to accept the license area “as is.”