Imagine a couple who started their family and purchased a large home to care for their children. Those five bedrooms were put to good use over several decades, but now that those children are all grown up, it’s an empty nest. You love your home but you just don’t need all that space anymore. It’s hard to upkeep and the costs that come with it seem to be unnecessary.
Most of us have been in the situation above or have supported their parents in downsizing. It is a tough decision and can be incredibly hard because there are a lot of emotions tied up in a building that has served your family well for decades. But there comes a time when the benefits of downsizing outweigh those ties.
It’s time now to make that decision on behalf of Civitan International. Recently, the Civitan International Board of Directors authorized staff to pursue selling the world headquarters building. It’s a decision that we strongly support and here’s why.
First, operating our own building is one of the organization’s largest expenses but yet we only use 1/3 of the facility. It doesn’t seem responsible to use our financial resources on a building which for the most part stays dark or uninhabited.
Second, we understand that while the organization has undergone some tremendous efforts to become financially stable, there is more to do. We believe this step is a part of that process.
Next, we believe our organization is defined not by a building, but our mission. And, we believe it is our obligation to use as much of our resources as feasibly possible for the betterment of that cause. For too long, we have spent more money on ourselves than we have needed to spend. We desire to place it otherwise in the hands of those at the Civitan International Research Center, who are changing lives on a daily basis.
Finally, we believe this step allows us the chance to truly reflect the lines of the Creed we all recite frequently. In the end, we want to make sure our beloved Civitan survives an ever-changing world and the challenges that come, so that we can continue to serve others and build a better and nobler citizenship.
President Bob Jones
President-Elect Patsy Perkal
Immediate Past President Kendyl Massey
Past International President Duane Capps
Past International President Debbie Juhlke
Past International President Joe Parker
Past International President Bill Buscher
Past International President Gay Aaron
Past International President Mark Eisinger
Past International President Danny Jackson
Past International President Mike Brown
Past International President Polly Mooney Forestier
2018-2019 Senior Director Fred Matthies
International Director Julia Floyd
International Director Dianne Hansard
International Director Tony Workman
International Director Carol Wolters
International Director Marta Ford
International Director Ann McCarty
International Director Mogens Brun
Past International Director Joe O’Toole
What is Renew by 2022? It’s a conscious, internal effort of Civitan International to “renew” the organization to center on increasing its viability over the next three years and ensuring its sustainability for years to come.
What’s involved? The effort includes 3 pillars of progress over that 3-year span:
1) Achieve Financial Stability – Make solid and informed financial decisions that put our influence and impact above ourselves while equipping the organization to handle any possible financial storms of the future
2) Evolve Our Membership – Open up opportunities for all generations to serve through Civitan in a changing world by being innovative yet supportive of efforts that have worked over time
3) Focus on Mission – Recommit ourselves to our cause, putting it first and foremost in everything we do
How did this come about? In 2017, Civitan celebrated its 100th year in service and also experienced a leadership transition at world headquarters. It was a time to reflect on the organization’s true health. Overall, the organization needed some critical changes in the areas of finance, philanthropy and membership. For example, it had overspent when membership revenue was declining. Also, there were clubs on the books that truly didn’t exist. And, the organization was spending too much on expenses related to the fundraisers it was holding for our flagship project.
Volunteer leadership became more aware of the needs while staff was more open to making changes so the organization will continue for years to come. After two years of work, much more initiative is needed to fulfill the goal of sustainability.
What are some of the effort’s major plans?
- • Continue to trim costs on the international level to ensure the most money is going to the mission, specifically building operations, employee and administrative costs
- • Developing new club platforms or “lines of business”
- • Reviewing our relationship with the Civitan International Research Center and likely recommitting a new pledge once the $20 million is reached in the 2020-2021 year
We’ve cut a lot already. What more do we need to do?
Over the last two years, various activities and efforts have been reviewed to see what return on investment the organization is receiving from them – or – if they could be done in a different way to save money. There are still areas where volunteer leadership believe the organization is overspending. In addition, Renew by 2022 puts forward a philosophical shift that even if we have the money to spend on things outside the mission – should we?
One of the areas that has been identified by the Civitan International Finance and Audit Committee and its professional advisors is our world headquarters building. It costs the organization at least $130,000 per year to own and operate its own building. That doesn’t include any significant maintenance work, which has been of urgency as of late. One example is the main HVAC system. It was not replaced during the recent restoration and originates with the building, which was constructed in 1976. In the last two years, the organization has pumped more than $20,000 into keeping the system working. After consultation with different corporate realty companies in the Birmingham area, we’re told the organization could see some significant cost savings by selling the building and pursuing another option to house our headquarters. In addition, this is a philosophical move on behalf of the organization. The current world headquarters building is more than 18,000 square feet, but less than 1/3 of it is currently occupied due to a lower staff size than years past (and advances in technology). Is it fiscally responsible to maintain a headquarters building where the majority of space goes unused? Could the money we’re using on a large building we’re barely using be sent to our mission?
This seems like ill timing, considering we just restored the building. Why now? And how are we going to honor those Civitans who so graciously gave in order to see the building renovated?
We are so thankful for the donors who gave so generously to the restoration, because without their gifts, the building wouldn’t look as great as it does. In fact, corporate real estate advisors who have examined it suggest that the restoration added around half a million dollars to the building’s value. While the building has significant issues with the HVAC, those advisors believe it is a favorable time to sell it, considering it’s in the best shape it’s been in decades.
We do not want to forget the graciousness of our donors to the capital campaign. Much of the recognition that is visibly apparent at world headquarters for the 2015-2017 restoration period will be able to transition to a new location. In addition, we’re formulating ways to give some extra recognition to individual donors who gave at extraordinary levels for the campaign. These individuals will be personally contacted and informed of these opportunities. Part of the vision of Renew by 2022 is to spotlight those generous contributions and illustrate how they will continue to add value to the future of our organization and mission.
How much cost savings are we talking about with this move?
It really depends on the options available at the time of the sale, but we could end up leasing an entirely new building, leasing a portion of the current building from the future buyer, or even purchasing a smaller building. Research done in June 2019 with the options available in the Birmingham area shows that, if we pursued leasing a new building, the organization could save at least $56,000 a year, and that doesn’t include the maintenance costs we would avoid. Over a five-year span, that’s at least a quarter of a million dollars.
Have we tried renting parts of the building out?
Over the last two years, representatives of several non-profit agencies have taken part in various meetings at world headquarters – therefore exposing these individuals to the possibility of sharing office space.
We’ve had one or two agencies inquire along with two businesses, but those negotiations have gone no further. In addition, the possibility has been discussed with corporate realty experts and a few vendors who service the building. All agree some construction would be needed to share the space with another company or non-profit, costing the organization more money than probably would be returned through a leasing partnership, at least in its first one to three years.
Will we be a credible organization if we don’t own a building?
There have been numerous changes over the last decade regarding how businesses and non-profits operate versus how they did when we first moved into One Civitan Place more than 40 years ago. More employees are remotely working and a brick and mortar location is mostly used for meeting and minor operational purposes. That’s not the plan here. We just think a smaller location is ample, and won’t hinder us in any capacity, thanks to technology.
Several other service organizations have seen changes with their operations in this way. In fact Zonta International announced last fall they are looking at selling their world headquarters, while Sertoma is consolidating their volunteer structure to accommodate membership declines and refocus on priorities.
What’s next for this specific effort involving world HQ?
The International Board has approved the action of putting the building on the market, which will likely happen after the main HVAC system, which is currently down, is fixed in some capacity. From there, a volunteer committee will help staff entertain offers received and will drill down on any that seem to be acceptable. Any that are will be presented to the board upon recommendation, and the International Board will approve the sale. With the help of corporate real estate advisors, staff will choose a new location for the headquarters that is fiscally responsible and realistic for operational needs. In addition, staff will pursue an option that still includes an archives room and display area as well as ample space to operate the Supply House.
What will happen with the money that comes from the sale of world HQ?
Some of it will be used to pay off a mortgage that is currently on the building, which was secured last year in order to restructure long-term debt that had been carried by Civitan International since the early 2000s. The International Board will guide the direction of the rest of the sale proceeds, but it would likely be put into investments or a reserve to strengthen the organization’s financial future.