Scenario Building for Nonprofit Capital Projects

When organizations are starting to investigate the possibility of a capital project, it’s important to remember that you always have choices.

Too many organizations jump straight into thinking they need to initiate a large philanthropic fundraising campaign without fully exploring all options.

Possible Scenarios

Organizations can buy, build, rent, expand, renovate, merge, share, or consolidate programs in your existing space.

You have lots of options and you should explore them all.

Restructure to increase efficiency using existing staff and facilities

Renovate and expand current facility

Subcontract, partner or co-own a facility with another organization

Lease a new facility in a strategic location

Lease multiple new facilities in strategic geographic locations

Purchase and renovate a new facility

Purchase land and build a new facility

Sources

Most capital project financing is a blend of sources.

Which sources depends on your programming and mission but potential sources include debt financing, organizational equity, government funding, tax credits, and private donations.

Cash reserves

Earned or tenant income

Government allocations (lottery dollars, tourism dollars, etc.)

Tax credits (new market tax credits, etc.)

Historic preservation dollars

Short or long term debt

Individual giving

Private foundation grants

Bequest income

Investments and/or endowment revenue

Government grants

A Comprehensive Budget

Making sure that all elements are included in your budget planning is essential. How much money a project requires goes far beyond just the construction costs, and needs to include the following.

All capital project expenses

Expanded operating expenses

Fundraising and project management costs

Download our guide to effective scenario building for the earliest stages of your campaign planning process, and reach out to find out how we can support you through the process.

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Amy Varga

President

Amy Varga is a beloved fundraising trainer, coach and consultant. She and her team at The Varga Group have guided over a hundred nonprofit clients to raise millions of dollars through their services in capital campaign counsel, major gifts training, leadership coaching, and board development projects.