Capital Fundraising

Photos: Shobhit Sharma and (insert) Cytonn Photography, on Unsplash

This area of the site was written for very experienced trust fundraisers.

Although I’ve assessed for a few capital funders, I can’t say I’m a great authority on this specialism. However, the following will be a few ideas that may help.

Timings

Timings are one of the great challenges with big capital projects:

• Big capital projects involve more senior management/trustees (e.g., agreement and quarterly or even six-monthly meetings) which can slow things down significantly.
• It takes longer to fundraise for your project.
• You need the charity to spend money at an earlier stage than they might expect on things like architects, to give you what you need.
• It takes time to get planning permission. It does occasionally get refused, but the architect should have sounded the authorities out and so you should be able to get a sense from the architect as to where things are.
• Funders will come in at different points, depending on how much has been committed. When people talk about “lead gifts”, this is what they’re on about. You need to sound your main target funders out about eligibility of the work and how much money has been committed in order to get a timeline for the fundraising. 
• If the timings overrun, the building will cost a significant amount extra, as building inflation is notably higher than inflation generally.
• I’ve seen work drag round to winter and then get held off until the weather improves, again.
• Your funding package normally has time limits to it, that may or may not be flexible.
• If you’ve put in your targets that £X will come in during the Financial Year but the funder is paying against receipts, then you may need a payments schedule for the project before you can say when the money will come in. The project manager won’t necessarily think to tell you about changes to the schedule unless you tell them to.

Allied to that, communication is more challenging – because there are more staff, there are more senior people who are used to not talking to you much. In addition, a lot of people are doing something that is unfamiliar to them. 

As a result, you may think that the plans will run to time, but actually things might not actually be set up to run to time. Or, there may be a timeline that would work very nicely, thank you – as long as everyone ignores the time needed for fundraising!

What all this means is that you need to work harder on timings and communications about them than you’d expect. Don’t be surprised if, when you have your conversation, they end up with a different timeline, with higher costs as a result.

Trusts are more interested in changes to people’s lives than they are in buildings themselves

Much as funders might sometimes enjoy seeing their names on capital works, building projects are really just like services, in that they’re about changing lives. That means:

• That side of things has to have been thought through. If the funder doesn’t specify, I’d give targets for Year 1 and for the future in some way – outlining targets in Years 1-3 as an illustration, or describing in a quantified way how they’ll change in future years. Normally you’ll only actually report back on Year 1, though trusts occasionally ask for reports over a longer time frame.
• Everything happening in the building needs to be paid for. However, it’s not unusual for some running costs not to be committed at this stage. What I’d do is to start each section the benefits / project description with the things you know for definite and then indicate the extras that can be added. One thing you can do is talk about the building as a much-needed focus for projects and all the interest that there is to do more – positioning the building as a catalyst for wider change.
• If there are partners interested in running services in the building, you can push for commitments (which needs planning in – they may have a timeline to get to agreement, too). The more the building will be used in relevant ways as a result of the building work, the more attractive the project is for funders.

What needs to be in place before fundraising?

Most fundraising happens once you have architect’s sketches and rough costings (RIBA Stage 2) that everyone is signed up to and there is planning permission. 

Things to watch out for, here:

• Getting to Stage 2 sketches isn’t cheap, so the organisation may not be happy to hear you need them at the point that you do.
• It’s not unknown for charities to cut corners and do this with minimal consultations with services staff, service users, etc, giving you a lot less impact on services to fundraise for. Once or twice, I’ve actually had to do a lot of the consultations myself, and try to feed them into the design process.
• The project manager for the work is usually from a building, rather than a services, background (with good reason). However, that means that when you get the project, it may well not sell itself because everything is about improved spaces, rather than improved services.

Costs

It’s worth speaking to the architect about how they feel about the costs: are they likely to be reasonably robust without a Quantity Surveyor or a Surveyor getting involved? If the organisation is trying to cut costs at this stage, it might be taking some risks – in which case, you need to know.

However, costs are rarely 100% in the charity’s control. For example, costs can also increase in refurbishment projects, because no one quite knows what you’ll learn when you start demolishing things in order to rebuild. Also, contractor/subcontractors can default on delivery of what they said they’d do, resulting in delays and cost increases.

Costs for work on a historic listed building can require estimation by specialists.

Risks: people not thinking things through

Few people think as far ahead as services in a new building, which might not even happen if the FR doesn’t come through. As a result, late changes are an occupational hazard.

Effective project management?

Poor project management is another risk in big capital projects. Some big funders will ask about the credentials of the architects (or employed project manager) that you’ve chosen.

Naming and designating rooms

Beth Upton in her Live Q&A October 2921 makes some great points. (You can find the video on the Money Tree Fundraising YouTube channel):

• We all end up fundraising for individual rooms for specific purposes. However, to ensure we aren’t overly tying the hands of the charity down the line, it’s as well to get an agreement with the trust donating to you that the purpose could be changed, if necessary, several years down the line.
• Likewise, in naming spaces, it’s worth considering having names agreed to stay on the space or building for a period of time (which can be a good length of time, given that they’re normally big funders – e.g., 10 years). It could be: we guarantee it will be named for that period, or we guarantee it will be named until a future refurbishment, as we would like to be able to provide the opportunity to a future funder to help fund the refurb. We don’t anticipate to have to refurbish it for a decade (or whatever).