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.
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
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.
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
Private foundation grants
Investments and/or endowment revenue
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
Ready to talk about how we can help?
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.