How To Get A New Facility Without Bankrupting Your Nonprofit

Back Article Nov 22, 2016 By Robin Epley

Say you run a typical nonprofit: Every day is another adventure in flying by the seat of your pants, operating on the goodwill of your mostly-volunteer staff and big-hearted funders. You’re probably working out of a dilapidated old building, but it’s OK: You know exactly where to put the drip bucket on your desk when the weather report calls for rain.

But what if you raised money for a new building? There are closed-door meetings and whispers in the halls at first. It’s a big job, fundraising for a cause as well as for a new construction project. You dream big — you’ve always been good at that. But how do you navigate the twisted way from the dream of a shiny, new headquarters to the steel and concrete reality of one?

“It comes down to how much capital do you have,” says James Beckwith, CEO of Five Star Bank, a community business bank that serves the Capital Region. “A lot of nonprofits aren’t building up reserves, year in and year out.”

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Many nonprofits aren’t ready for this long and involved process, although they might think they are, he says. “It’s a difficult thing to do.”

“Crocker [Art Museum], when they built their facility, that was a big endeavor that had a lot of community support and a lot of civic support,” Beckwith says. Most nonprofits aren’t as lucky or as well-connected and have to rely on grassroots efforts.

Leilani Fratis, CEO of the Placer County SPCA, knows exactly what Beckwith is talking about: The local SPCA has just broken ground on a new building. “We spent many, many years fundraising,” Fratis says. She adds that it was important to make sure that they were being specific about how much money they were asking for, whom they were asking it of and where their money was going. “We had to be careful to ask them to donate in addition to what they regularly give,” she says, “but not in exchange for.”

Fratis also recommends hiring an owner’s representative to work with construction companies who understands your vision and can relay it to the crew — so you can keep at the business of running your nonprofit instead of fielding calls. “Frankly,” she says, “you have an expertise in the running of a nonprofit but not in construction.”

Buildings are a very “sexy and attractive thing to give to,” Fratis says. But you have to remember that you’re still fundraising for day-to-day costs, she says, and it’s hard to fundraise once you’ve got a beautiful new facility and the roof doesn’t visibly leak — so make sure you’re still communicating your nonprofit’s needs to your donors.

“It’s easy to fundraise when you have a building that demonstrates a lot of need,” Fratis says, but after you move into your new digs, “that story of need has to change.”