A non-profit contract is a contractor’s way of giving back to the community. It is usually offered to customers who can use a huge discount such as religious organizations (depending on the religious affiliation of the contractor); charitable institutions such as orphanages, shelters for the poor and the homeless, and other similar institutions; young couples who are just starting; and those specialty projects with great designs that the contractor may benefit as an added decoration to his portfolio.
As it is a non profit project, the contractor may still charge the customer very necessary items such as his transportation costs and minimal “per visit” rate depending if the project owner will agree, but more often – the contractor will just simply at least expect to be refunded his transportation costs during site visits.
Basically, the non profit deal leaves almost nothing to the contractor, save the site visit fee, and that he can add the project pictures to his portfolio. So what’s left for the project owner to fund are the materials and the workers wages and the supervisors’ daily or per visit rates.
If the contractor would ask for a supervisory fee for himself apart from the regular supervisors fees, and if the owner will agree, then the deal becomes a supervisory contract and no longer a full non-profit project since the contractor will now be receiving a minimal fee for his supervisory services.
How a non-profit construction deal works can be either “contractor-managed” or “owner-managed”. If it is to be “contractor managed” then the contractor will schedule a down payment from the owner and succeeding progress payments thereof, just like a normal contract, while “owner managed” means both payment schedules to materials and workers will be planned and scheduled by the project owner, and the contractor will simply supply the workers and the supervisors, all tools and equipments coming from the contractor will be rented by the project owner.
The non-profit and the supervisory deals have been offered by contractors since time immemorial since some contractors really like to execute some specialty projects and will do anything to get it to his portfolio, and sometimes – some religious or charitable projects are high value “giving back to the community” projects that a contractor find very appealing as a way for him to get some merits for his soul. Also, some young couples who are just starting also become high value projects for the contractor that he will offer non-profit deals as a way for him to get more referrals like when the young couple have strong connections or are belonging to the community’s upper strata.
So if you are one of the above, go ahead, and see if your contractor can offer you a non-profit deal so you can get an instant huge discount on your project today.
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