- Introduction
- Acknowledgements
- 1: Getting Ready
- 2: The Costs of Space
- 3: Understanding Credit
- 4: Professional Services
- 5: Finding Space
- 6: Residential Leases
- 7: Commercial and Industrial Leases
- 8: Buying Real Estate
- 9: Types of Mortgages
- 10: The Mortgage Application
- 11: Ownership Models
- 12: Purchasing Alternatives
- 13: Chicago Zoning Ordinance
- 14: Chicago Building Code
- 15: Chicago's Neighborhoods
- 16: Property Taxes
- 17: When You Find a Property
- 18: Inspections
- 19: After Moving In
- 20: Insurance
- 21: Utilities
- 22: Rehabbing Your Space
- 23: Safe and Healthy Spaces
- 24: Green Practice
- 25: When Disputes Arise
- 26: Space Emergencies
- 27: Facility Development Planning
- Bibliography
Funding Your Project
Developing a facility requires thinking about capital funding, described in this chapter. Depending on your project or development partners, you might qualify for funding from a many disparate sources. Explore all avenues.
Three types of funding are usually needed to finance the planning, design, construction/rehabilitation and maintenance of a facility:
- Seed money
- Capital support
- Operational funding
Seed Money
This type of funding gets you through the planning and feasibility stages of your process -- and can be the most difficult to find. Seed money is dedicated to the development project, not the organization's regular operations. It is helpful to hire professionals to evaluate readiness, fund feasibility studies, support capital fundraising, manage a capital campaign, and prepare for the construction phase. These funds may also pay for design work on a fundraising prospectus.
During the seed money phase, your group is looking for relatively small sums of money, not the “big bucks” required for design and construction. Your success in attracting seed money, and your growing knowledge of other funding sources, will help you to decide whether or when to go ahead with the project, and how large of a project you can afford.
Sources for seed money include:
- Government Agencies: City, state and federal agencies offer grants for different types of projects.
- Private Sources: These include foundations, private community organizations such as the Rotary Club, and local corporations interested in your project and/or the arts. The Chicago Donors Forum and the Foundation Center can help you to research grants and other types of funding for nonprofits, housing and small businesses. In addition, check out the Foundation Partnership for Corporate Responsibility and Social Funds.com.
- Redevelopment Agencies: These organizations provide assistance during the development stage of a construction project.
- In-Kind Services: These include donation of pro bono professional services, volunteer and staff time, office space, equipment and supplies, and business services. These are reduced-rate and free services (accountant, attorney, receptionist, etc.) and supplies that you need to run your organization.
Capital Support
This funding is used for design, land acquisition, “bricks and mortar” construction, permanent equipment, and furnishing. Sources for capital funding for construction include:
- Government Agencies: City, state and federal agencies offer grants for different types of projects.
- Tax Increment Financing (TIF): This funding tool promotes investment and redevelopment in blighted areas. City funds are used to build and repair roads and infrastructure, clean polluted land, and rejuvenate vacant properties, usually in conjunction with private development projects.
- More information about Chicago’s TIF Program
- Find out where Chicago's TIF Districts are located
- Categorical Grants: These make public monies available for specific purposes, such as affordable housing. You might be able to access funding or receive certain tax breaks if you locate your project in a community under transition, an empowerment zone, a TIF District, or a Landmark District.
- Individuals: Research individuals who donate funds to specific causes. Many capital campaigns begin with a large lead gift from an individual. Use the Chicago Donors Forum and the Foundation Center to research philanthropic families and individual grant givers.
- Corporations and Foundations: Use the Chicago Donors Forum and the Foundation Center to research grants and other types of funding for nonprofits, housing and small businesses from corporations and foundations. Also check out the Foundation Partnership for Corporate Responsibility and Social Funds.com.
Operational Funding
No form of support is easy to come by, but funds to keep a facility running after it is built are unquestionably the most difficult to raise. For that reason, during a capital campaign you must devote some of your energies to securing the money that will permit the new building to keep its doors open. The momentum generated by the capital drive provides a needed boost for the operating fund campaign.
Sources for operation support to run the facility may include:
- Earned Income: This is money raised by the facility/organization through \activities such as facility rental, ticket sales (performances, lectures, concerts, etc.), sale of artwork and souvenirs, festival profits, etc.
- Contributed Income: Funding in this category includes money made from annual giving campaigns, membership drives, the endowment fund, etc.
- Public Support: This type of support might come from various city departments (including City Arts grants) reserved for general operating expenses.
- In-kind Donations: This type of support may come from a variety of individuals, organizations and businesses and may include professional services such as legal counseling or accounting.