A study commissioned by The Kresge Foundation’s Arts & Culture Program finds that arts organizations have experienced a wide range of outcomes when acquiring low-cost or free buildings, also known as “$1 buildings.”

In many cases, the actual costs of acquiring these $1 buildings were much higher than organizations anticipated, according to the study, conducted by Boston-based TDC. Organizations often had not undertaken detailed planning prior to an acquisition, and the increased costs were particularly surprising. 

In some instances, a new building prompted changes in an organization’s operating model and had unintended effects on a group’s culture, artistic product and relationship with audiences.

“It is our hope that this study becomes a valuable resource for other organizations, as well as funders and community leaders,” wrote Regina Smith, interim managing director of Kresge’s Arts & Culture Program, and Elizabeth Curtis, president of TDC, in a mailing that accompanied the report’s release.

Though some common themes emerged, the report emphasizes that unique circumstances surround every acquisition and that buyers often have different motivations, which often greatly affects the outcome of their building acquisition.

The report, “Too Good to be True? The Opportunity and Cost of the $1 Building,” features an analysis of 17 arts organizations and their level of financial health before and after $1 building acquisitions. Organization leaders, funders and city officials offer reflections on the process and share lessons learned for others considering similar deals. 

The study also contains a qualitative summary of the impacts new facilities had on programs, audiences and organizational structures. 

The Kresge Foundation works to expand opportunity for low-income people in America’s cities. Its Arts & Culture Program seeks to build strong, healthy cities by promoting the integration of arts and culture in community revitalization.

TDC offers consulting and research services to nonprofit organizations and funders.

Download a copy of the study.