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Capital Support

 

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.

 

Paths to capital
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.

 

Endowment funding
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.