Most nonprofit organizations undertake a capital campaign at some time during their growth to fund the construction or renovation of a building or the acquisition of costly equipment. These efforts—which often require millions of dollars and several years to realize—especially need the assistance of a savvy grant writer to supplement the work of staff development directors, the capital campaign cabinet, and consultants hired to guide the effort.
What Is a Capital Project?
Capital projects are those in which the primary goal is to purchase, build, or renovate a building, or to acquire high-cost equipment. Often, capital-project revenue goals are in the millions of dollars. In these cases, the nonprofit organization launches a “capital campaign” that requests money of constituents, businesses, foundations, and other community members.
The campaign cabinet may include some board members of the nonprofit, but it should also include community members who are used to asking others for money and who are known to donate to various causes. In fundraising, unlike in grantseeking, “who asks” is always the most important factor in your success or failure.
A capital campaign begins with a feasibility study, usually performed by an outside campaign-consulting firm. The firm asks potential donors what they think of the nonprofit’s chances of raising the goal amount of money and then makes recommendations to the nonprofit about how to manage the campaign. The consulting firm and the nonprofit often next convene a team of community members who form the campaign cabinet and make calls on potential donors. Meanwhile, a grant writer begins developing proposals to submit to local foundations. Often, grant awards form the earliest donations to a campaign, signaling to other donors in the community that the project has potential for success.
Some campaign-consulting firms offer grant-writing services as a part of their campaign consulting; others leave it to staff or grant-writing consultants but advise them throughout the process.
Who Gives to Capital Campaigns?
Unless the nonprofit organization is a national one, almost all the money raised for a capital project comes from local funders, including foundations, businesses, and individuals. Capital projects sometimes get funding from the state if the project is a large public-use facility such as an arena, hospital, or convention center. State and federal governments do not generally provide capital in response to a grant application; capital allocations are often made as agreements between representatives and civic leaders. A grant writer can assist a capital campaign in securing government dollars by adding equipment purchases into relevant programmatic proposals.
For instance, a school might seek computers for staff under the federal Safe Schools–Healthy Students grant program as a part of a goal to increase communication among teaching staff and implement standards-based outcome reporting. The purchase of those computers might then reduce the needed budget of a capital campaign to build and equip a new middle school.
The Kresge Foundation in Southeastern Michigan is currently the only foundation that provides capital-grant funds to organizations without regard for where they are located. For several years, the foundation has structured its grants around a “capital challenge” requiring its applicants to identify new sources of funding in their local communities to match the Kresge grant and close out the campaign.
The Grant Writer’s Role
Though every community and every project varies in who gives what and in what amount, often, the grant writer will raise up to half of the campaign goal through formal proposals to local foundations. The grant writer may also be involved in writing a case statement for the campaign brochure and in crafting letters the organization will send to various individual donors.
Most grant writers, unless they are the directors of the nonprofit organization, don’t get involved in organizing the campaign, performing the feasibility study, convening a campaign cabinet, or determining naming opportunities. Instead, these functions are left to the expert consulting firms to perform.
Most capital campaigns include opportunities for donors to name the entire building, rooms within it, or other purchases made with donated funds. Some foundations like naming opportunities; others don’t. Be sure to ask in your initial meeting with the foundation whether they wish their donation to be commemorated in a naming opportunity or in a more simple way such as a plaque in the building lobby.
Writing a Capital-Grant Proposal
Foundations do not give capital grants to purchase equipment or a building. They give grants to enable the nonprofit organization to do something important with the equipment or building. Remember that important distinction every time you write a capital-grant proposal. The most important thing to the audience is what the nonprofit will be able to do with what it purchases. Perhaps it will increase its capacity for providing service, enable staff to communicate and collaborate better with other organizations, or provide a new and necessary service. As with project grants, the outcomes from a capital-grant proposal must improve some currently undesirable condition.
Some foundations provide different guidelines for capital requests, and many ask for additional sections to be completed. For the most part, however, capital requests follow existing foundation guidelines, but the responses are somewhat different. Following are suggestions for how to approach the basic sections of a proposal when requesting funds for capital projects.
Problem or Need Section
You can copy the general case statement for a capital campaign into the need section of a grant proposal; they are that similar. Describe the need for the capital acquisition and use data to support your argument. A sample follows:
The Great River City Media Center (CMC), located on the west side of Great River, State, is the premiere public-access media organization in the United States.
Demand for CMC’s services has increased as technology has changed. First, it added radio, then Internet and computer services, the I-VAN program for use in K–12 schools to teach digital filmmaking and editing, and a second television station, LiveWire 24, which broadcasts throughout the county with educational programming such as Classic Arts Showcase, NASA Direct, and Free Speech TV.
As programs and demand have increased, so has CMC’s staff—from twelve in 1997 when it moved from the Reed Library basement into the second floor of the west-side library on Bridge, to thirty in the early 2000s, when it had staff dispersed to a rectory and church basement next door to the library and to Steepletown, a west-side nonprofit-organization complex. From 1998 to 2002, community members’ use of CMC grew as follows:
- GRTV (Great River TV) saw a 15-percent increase in locally produced programming. It grew from one broadcast channel to two and from one primary program to three with the addition of I-VAN educational services and Community Media Services video production and AV services.
- GRRadio grew from sixty-five to eighty volunteers; from five or six annual concerts to twenty-five to thirty.
- GreatNet grew from forty nonprofit “clients” to nearly 100.
CMC’s programs and expansion would not be possible or necessary without the interest and commitment of community volunteers and public-access users. Before individuals or organizations get involved with public-access media, they attend an orientation about the CMC’s radio, television, Internet, and media-literacy programs to determine their areas of interest. Though CMC has not promoted “orientations” in any formal way, demand for the introduction to the CMC’s programs has grown in the past several years. Whereas, five years ago, an average of nineteen people attended the monthly orientation, now attendance averages thirty per session. This brings in more than 300 individuals annually to the organization. The community looks to CMC to take on the latest technologies and is therefore increasingly drawing individuals interested in pod-casting, digital imaging, and Internet media.
Because the demand for I-VAN training in the schools has increased, CMC has done two things. First, it has established an I-VAN Club in the recently acquired storefront on Walter Street (formerly called the “annex”) for the use of core-city young people. Second, it has developed teacher-training materials on DVD and CD that teachers can use to teach video production and editing in their classrooms. I-VAN staff are available by telephone and online to support teacher training and answer questions. In large part because of the success of I-VAN, CMC has identified a new niche that involves training K–12 teachers throughout the county to use media as a teaching and learning tool through the intermediate school district.
By 2002, CMC had outgrown its facility on Bridge Street. Staff were dispersed to three different sites, exchanging rent for CMC services. CMC began to explore possibilities for expanding in a way that would not disrupt services, but would, in fact, enhance them, and that would preserve the investment in technological infrastructure at the main office.
In 2004, the CMC was approached by key area funders and a neighborhood business alliance and asked to acquire and manage the historic Walter Theatre on the city’s southeast side. The Theatre had been restored by a neighborhood organization approximately five years earlier. The restoration effort fulfilled the neighborhood organization’s primary goal to serve as a catalyst for further revitalizing the Walter Street neighborhood. However, the Theatre had failed under several directors to sustain operations from programs, and its board of directors had looked for a resolution for more than six months before determining that it would surrender the property and a nearby facility they called the “annex” to an established nonprofit organization. The City Media Center appeared alone at the top of the list.
The acquisition of Walter Theatre and the annex was an opportunity to expand CMC’s reach and visibility on both sides of the Great River and to fulfill several of the CMC’s short- and long-range goals in that it offered:
- A venue for its concerts, televised debates, and other programs
- Additional space that was desperately needed following program expansion that had placed staff in three different sites on the city’s west side
- Storefront access to CMC’s educational programs and a presence in one of the city’s most economically depressed neighborhoods
Evaluate the programmatic functions of the capital project. If a new building will increase the number of people your nonprofit is able to serve, design a means for gathering data and demonstrating that you have increased capacity for service within a specified time.
There are some capital efforts that do not involve programs. They are often public-works projects such as new sidewalks or public art or some other urban-renewal effort. It’s difficult to establish evaluation criteria or tests of such capital projects. If the project has been built, clearly that is success. If it hasn’t, the grantee should return any grant funds previously pledged. Nonetheless, foundations want an evaluation section in their grant proposals. In these cases, keep it simple—say that the project will be judged successful if it is constructed on time and within budget. Do not promise an evaluation just for the sake of evaluating. If you promise an evaluation, even one that doesn’t make sense, the funder may hold you to your promise.
Unique Proposal Sections
Depending on the donor’s requirements, capital proposals may include questions that you will not find in a foundation’s typical guidelines. Common sections are relatively easy to complete or attach and include:
- A list of cabinet members
- A list of donors and their amounts
- A list of targeted requests by name and requested amount
- Architectural drawings
- Purchase agreements
- Proof of regulatory compliance
- Narrative description of existing and planned facilities
When a nonprofit organization undertakes a capital campaign, all members of the board, the campaign cabinet, and staff are expected to make a donation. Foundation donors want to see that those closest to the nonprofit have faith in the campaign and are investing their own money, too.
Writing a Program Plan
The most important component to a capital-campaign grant proposal is the plan both for how you will raise the necessary funds and how you will use new equipment or facilities. Following is a sample plan:
The CMC’s goal for growth, improvement, and acquisition of a venue was a perfect match with the request by the Walter Street Business District and other community agencies to explore and ultimately acquire the Walter Theatre properties.
The capital campaign allows the acquisition and equipping of the Theatre, relocation of current staff who were dispersed in rented facilities, improvements and sorely needed updates to GRTV and GRRadio broadcast equipment, and high-tech network and broadcast connections between the two sites.
The Theatre acquisition formed Phase I of the capital campaign. In Phase II, CMC seeks to “electrify” the Educational Center and Theatre to allow for remote broadcast of television and radio, install a media-making environment, and equip the Theatre with cameras and a control room. The Theatre will continue to be used for film, live performances, video, lectures, fundraisers, and other community-use purposes, and performances can be broadcast in numerous ways.
CMC also plans to install a “hot studio” in a storefront in the Educational Center. It plans to link to the city’s new wireless-Internet canopy to allow local residents and Theatre users Internet connectivity for asset mapping, community communication and development, job-search assistance, economic development, distance learning, and creative-arts applications.
CMC has developed a drop-in computer center for local residents, based on an expressed need from neighbors. The Center houses desktop computers and CMC’s twenty-station mobile computer lab that is part of I-VAN. In the Educational Center, students can stop in after school and casually explore computer resources such as media production, educational games, research, and homework applications. I-VAN staff operate the drop-in center and the I-VAN Club for neighborhood youth who use digital-editing equipment to create video projects about curriculum subjects and neighborhood people, events, and businesses.
Once the Theatre and Educational Center are fully equipped and operational, CMC plans capital-campaign Phase III to include improvements and sorely needed updates to GRTV, LiveWire24, and GRRadio broadcast equipment, including digital conversion and digital network and broadcast connections between the CMC’s Bridge and Walter Street locations.
Phase IV of the campaign includes construction of a two-truck garage and a maintenance endowment to be held at Great River Community Foundation.
The phases are prioritized by organizational and community need. As individuals and foundations have donated, CMC has completed portions of the project in accordance with donor wishes.