Capital
support is for major new initiatives above and beyond your organization's
usual operating expenses. Capital expenses include:
- purchasing a new building or property
- investing in expensive equipment and materials, computer systems
and collections/acquisitions
- expanding, renovating or building facilities or structures
- endowments (gifts intended to be kept permanently and invested
to provide income for the organization's continued support)
Illinois funders are more conservative than the national average,
dedicating just 6 percent of their donations for capital support.
There are two ways of getting capital support:
- Seek a capital grant by researching what funders provide this
type of support (many do not)
- Conduct a capital
campaign
Mounting a capital campaign involves extensive staff and financial
resources. It must happen in addition to your usual fundraising;
taking on a major capital improvement has many extra costs associated
with it. It is time-consuming, which must be built into the plan.
Many organizations turn to consultants to help them set up and manage
a capital campaign. Board members' involvement is key to the success
of a capital campaign.
Therefore, in addition to the cost of the main goal of your funding
initiative, you should also include expenses such as
- the cost of conducting the feasibility
study to validate that it is possible to raise the funds
for these expenses from this pool of possible funders for this
organization
- the cost of the campaign itself (hiring additional fundraisers,
for example)
- moving, renovation and temporary space costs
- debt interest on bridge loans for unpaid pledges
- cost overruns
To approach potential funders for capital support, you develop a
case
statement (not a grant proposal). The case statement must show
that the capital campaign is justifiable and relevant to the organization's
mission.
Organizations conducting capital campaigns often hire a consultant
or dedicated staff member to manage the process. More detail on
hiring a consultant is covered in the Grantseeker
Resources section of this site.
An endowment
fund is a savings account for your organization, an operating reserve.
Donors give money for long-term investments to ensure future operations.
Interest from the funds is sometimes used as annual income to assist
with an organization's current needs.
Endowment campaigns are usually undertaken only by firmly established
organizations. To embark on a campaign for an endowment fund, you
will need to have a 5-, 10- or 20-year strategic plan for the future
of your organization and the funding needs that will arise in the
future.
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