Since its earliest days, the WE organization has operated based on the philosophy that it can ensure fiscal stability, maximize its program delivery, and ensure its long-term impact by owning property as a form of endowment.
The rationale for WE’s Real Estate Strategy includes many factors:
WE Charity’s international development programs require on average a five-year commitment to provide WE Village’s holistic sustainable development model of education, water and sanitation, healthcare, food security, and economic opportunity. Given the organization makes a long-term, multi-year commitment to international communities, it is imperative that WE Charity has models of financial sustainability in order to fulfill its development commitment, even during times of economic downturn when charitable donations decrease.
Experts and independent evaluators who specialize in non-profit operations recommend that charities keep six to 24 months of reserve funds in place in order to withstand negative financial conditions (e.g. a recession or other financial shock). Purchasing property provides tangible assets for the organization that give it long-term financial stability and a valuable fiscal reserve to underpin its operations. Some organizations build their reserves with cash, equity investments, or revenues from endowment investments. But WE Charity does not have a traditional endowment and its Board of Directors believes that equity investments carry significant fluctuation risk, particularly correlated with financial downturns. So, its reserve is established through the ownership of real estate, which allows accessible cash reserves through mortgages.
By operating out of the buildings it owns, the organization also minimizes office space costs while establishing a form of reserve fund that not only gives long-term financial security to the organization, but also provides resources and services to stakeholders and community partners, every day.
WE Charity has received specific, targeted donor gifts towards the purchase of real estate. To be clear, no project funds or youth fundraising was used for the purchase of real estate. For example, WE’s Global Headquarters in downtown Toronto, the WE Global Learning Centre, was funded entirely through targeted gifts from donors.
The WE orgainzation has adopted a long-term vision to establish a nexus of innovation, a Campus for Good, that enables non-profits, social enterprises, and community services, within a hub in Toronto’s urban east core that fosters transformative change in the local and global communities. The WE Global Learning Centre and the soon-to-be completed WE Social Entrepreneurship Centre will together serve as the physical anchors of this vision, providing shared services to social purpose organizations. The goal is to encourage other social purpose entities to leverage WE’s shared use spaces and resources. As that transformation takes place, WE will work to ensure those most in need continue to have a home in the community, and benefit from the positive impacts the Campus for Good generates.
WE’s Real Estate Strategy is fully endorsed by WE Charity’s Board of Directors and has been independently verified by financial and governance experts. It has created long-term assets for the organization while enabling WE Charity to spend less than 10% of its funds on administration, with, on average, 90 cents of every dollar donated going directly to support programming.
By leveraging real estate as a long-term asset, and with the generous support from donors, WE has created a new model that one expert calls a “best practice for other non-profits to follow”. In his review of WE Charity's real estate practices, Scott McCallum, the former Governor of Wisconsin, said: "Based on my thorough review and my 40 years of experience working in the non-profit sections, I can conclude that WE Charity's investments in real estate assets represent a best-in-class example for other non-profits to follow."