Planning Ahead for Deferred Building Maintenance

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Grant Thornton's State of Higher Education 2017 - Deferred maintenancePlanning for deferred maintenance is a lot like saving for retirement — we know we should put money aside from the beginning. But the time for which it will be needed seems so far off that we dedicate the funds to more immediate concerns. Financing might become more available in the future, so why worry now? But then, in an aging community center, a water pipe bursts, flooding the entire building, and options are few.

Competition for donor dollars continues to intensify, along with pressure to control operating costs increasing salaries and benefits, debt service costs, and technology expenditures. Setting aside monies for future maintenance may not be top of mind for boards, executive directors and donors, but it must be done. The concept of saving for deferred maintenance is not new, but in recent years, attention to this matter has waned in light of more pressing issues. However, we are seeing progressively minded leadership now starting to take up this cause at not-for-profit organizations. Aging buildings, along with a focus on more energy-efficient uses, have brought this issue to the forefront.

Read the full article for guidance about establishing a facility maintenance plan that will stand the test of time, collaboration to determine priority projects, educating constituents about depreciation and annual costs, allaying objections to reserving funds for the future when there are needs for them today, practicing funded depreciation, expanding resource planning and working creatively with funders.
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Contact Dennis Morrone
National Partner-in-Charge, Audit Services, Not-for-Profit and Higher Education Practices
+1 732 516 5582

Elizabeth Ireland
Partner, Audit Services, Not-for-Profit and Higher Education Practices
+1 215 656 3070