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Project Planning and Assessment Guide

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Introduction from the Executive Director

This Project Planning and Assessment Guide is designed to assist your non-profit organization with planning a community capital or construction project. Careful and realistic planning is the best predictor of a successful capital project. This handbook offers guidance to ensure detailed and accurate project planning, as well as a way to help you assess your project plan by answering a series of critical questions developed by the Ohio Cultural Facilities Commission.

The Ohio Cultural Facilities Commission (the Commission) is a state agency that oversees capital improvement funds appropriated by the General Assembly and Governor for planning, construction, renovation and expansion projects at Ohio's theaters, museums, arts education facilities, historical sites and publicly-owned professional sports venues. The General Assembly and Governor assign projects to the Commission in the state's biennial capital improvements bill.

The Commission does not play a formal role in deciding which projects to fund, but assists communities with operational policies and oversight mechanisms to ensure that the public resources entrusted to our care are spent properly. These standards are set forth by the Ohio Revised Code, the capital bill, the Commission, and the state's bond issuer. For more information about these standards, please contact the Commission.

Though the Commission does not participate in the selection of projects, we have produced this brief resource to aide you in the presentation of your project to community leaders and legislators, who may in turn be able to assist you in securing state funding.

A wealth of information on community capital projects and healthy nonprofit organizations is available from many sources. A brief resource list is available at the end of this handbook.

We hope this guide will help you plan and complete your capital project, and help build a pattern of success that will encourage others to invest in the arts and culture. We encourage you to share your experiences with your local community, with your legislators and with others who are thinking about undertaking a capital project.

Sincerely,

Kathleen M. Fox, FASLA
Executive Director

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Turning Your Legislator into Your Project Advocate

APPROPRIATING CAPITAL PROJECT FUNDS

Every two years – during even numbered years – the Ohio General Assembly and Governor create a capital budget bill listing all the projects for which the state is appropriating capital funding. The majority of projects in the capital bill are essential to the state's governmental functions such as state prisons, mental health facilities, state agency offices, state universities, etc. When funds are available, a small portion of the capital budget is allocated for "community projects." These community project capital funds are appropriated to sponsors of community projects, assigned to the appropriate state agency for oversight, and are usually financed through the issuance of bonds.

From the state's perspective, bond funds are similar to a home mortgage – the funds are borrowed and paid back by the state over time. They can only be used for "bricks and mortar" purposes: the construction or renovation of roadways and bridges, parks, state buildings, higher education facilities, and non-profit cultural venues such as theatres, museums, arts education facilities, historical facilities and publicly owned sports stadiums. There is great competition among projects from all corners of the state to receive community project capital appropriations, and this is especially true in tough economic times.

Capital Bill Funding Requests

Community leaders and project sponsors are responsible for approaching their area's representatives to the General Assembly to request state funds for their projects. There is no official application process, although legislators often ask the Commission to assess projects in their districts. When an assessment is requested by a legislator, the Commission will ask prospective project sponsors to complete the Sample Project Detail Form included in this guide. Projects that are successful in securing support are appropriated a specific amount of funds in a line item in the capital budget. Eligible projects are then assigned to the Commission in the capital bill for funding oversight.

Legislators as Project Advocates

When you ask your legislators for funding for a capital project you are asking them to be an advocate for the project to their peers. For them to advocate effectively, they need to understand the value the project brings to the community, and see convincing evidence that the project can be completed and can then operate successfully into the foreseeable future.

Providing sufficient useful information to your legislators will help them identify the best planned projects. A good way to present your project is to provide clear information and complete answers in a form similar to the Sample Project Detail Form.

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The Importance of Project Planning

UNDERTAKING THOROUGH PLANNING EFFORTS

Any organization undertaking a community capital project must do thorough and realistic planning that goes beyond the cost of construction and considers closely the impact the completed project will have on the organization's programming and ongoing financial health. Your planning effort should consider your mission and the services you provide to the community, explore the likely markets for your organization's services, investigate the community's support of your efforts, assess your organization's financial outlook, and map a plan for continued success. Well-planned capital projects succeed when the project is consistent with the organization's mission and the programming it provides to the community.

Realistic Impact

You should be realistic about the impact of your plans on your organization. This enhances the reliability of the information you develop. While "This roof replacement project will create the finest arrowhead museum in the Midwest" is probably an exaggeration, "This roof replacement project will protect the facility housing an arrowhead collection valued by the community" is a realistic assessment. (In addition, a roof replacement project will not necessarily increase attendance, but may decrease operating and maintenance costs.)

If the capital project is intended to expand the organization's audience, your statement of achievement should predict by how much. If the project is realistically intended to create a unique museum that will be of national importance, say so. The intended achievement should be proportional and consistent with the rest of the information about the project.

Conservative Approach

Have a clear understanding of how the proposed capital project will affect your organization's future. Many organizations take on too much debt, build too large a facility or otherwise take on commitments that outpace the income and contributions available in their market. All of these changes can turn a well-run, healthy organization into one that is struggling. Careful planning will help you define a project appropriate for your organization that will serve the community well into the future.

Cash Flow Projections

In understanding how the capital project will affect your finances, it is important to determine where the money for the project will come from and when it will be available. Pledges might be made early in the project but paid over several years. Similarly, planned bequests are wonderful but carry uncertain timing. Some funding, such as a state capital appropriation, will only be available when there are sufficient additional funds to complete the project. Developing cash flow projections for the project will ensure that sufficient funds are available to pay current expenses.

Outside Expertise

The staff of most nonprofit cultural organizations would have difficulty managing all of the diverse aspects of capital project planning and administration without outside expertise. Be sure to seek out the appropriate experts at each step of the planning process and build a quality team to manage the project through to its completion.

Depending on your project's complexity, you may decide to hire outside consultants to help create a business plan. You may need a market analysis or fundraising plan. A qualified architect should create architectural plans and specifications. You might author a logistical plan to help your organization move to a new facility or a staffing plan to address your increased size, hours, or programming. It all depends on the project's specifics.

Timelines and Contingencies

Hiring consultants, investigating options and preparing a realistic project budget all take time. Then, preparing plans and specifications and bidding contracts can be a lengthy process. To determine how long it will take to adequately plan for your project, list what you need to know and do, then generously estimate the time it will take for each item on your list. Organizations working with the Commission have averaged two years from initial planning to the beginning of construction for projects that include both simple renovation and ambitious new construction.

Simplified flow charts or Gantt charts may be helpful if you need to coordinate separate initiatives or if your project is complex. Conversations with people who have gone through similar projects can also provide useful information. Setting a provisional timeline in advance and allowing ample time for contingencies will help you understand how early you must engage in detailed planning and fundraising to meet your target completion date.

Project Manual

Coordinating a capital project is logistically challenging. Keeping track of the people involved with the project, as well as its many details, requires a high level of organization. We recommend you create a Project Manual that contains pertinent planning documents, contracts, correspondence, financial documents, and more. The Project Manual should be maintained by the staff person you elect to liaise with the project team.

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UNDERSTANDING THE COMMISSION'S ROLE AND RESPONSIBILITIES

The Commission's role with community capital projects is to establish and implement operational policies and oversight mechanisms to ensure that the public funds entrusted to our care are spent properly. We protect state interests by verifying that each project has significant community support and a solid management plan.

The Commission does not have discretionary control over decisions regarding capital funds. Likewise, the Commission does not play a formal role in deciding which projects to fund.

After projects are assigned to the Commission, our staff works with communities and project sponsors to assist them through the required processes. These include project management assistance, funding administration and contract oversight. Careful planning and supervision by the Commission help maximize the impact of the state's investment over time by ensuring the projects, once completed, will operate successfully.

The Commission's role with state historical facilities is slightly different from its role with cultural facilities. While the state actually owns these sites, the Ohio Historical Society (a non-profit entity) is contracted to operate and maintain them on the state's behalf. The General Assembly and Governor selected the Commission to provide supervision for the state historical facilities projects and serve as a bond-funding agent for them. The society is not eligible to receive state bond funds directly.

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Critical Questions: Six Keys to Success

It is critical to be able to differentiate between unworkable projects and projects that will benefit the organization and the community. The Commission has identified, through its involvement with scores of capital projects, the core issues that must be addressed to determine your project's chances of success. By focusing on these core areas of concern, your organization will create a realistic, sustainable project that will add to your organization's successes.

A project is more likely to be successful and benefit both the organization and the community when the following six questions can be answered affirmatively with supporting information that is detailed, accurate and specific:

  1. Does the organization have a clearly defined mission and practical programming goals, and is this project compatible with those goals? Do these goals respond to community needs?
  2. Can the organization generate the community support, contributions and revenue needed to complete the project and succeed in the resulting facility?
  3. Have the planners of the facility considered the physical planning characteristics that are most likely to result in community revitalization?
  4. Has the organization adequately planned for the full scope of the project? Have architectural and construction plans, project administration, project costs, fundraising, cash flow, start-up costs and consequent demands on the organization been adequately addressed by the plan?
  5. Does the organization have the managerial skills and financial readiness to complete the project, continue to operate the facility and meet its future programming goals?
  6. Is the proposed project realistic and viable over the long term?

This guide is structured around these six questions. Doing the research and finding answers to the questions laid out in this document will help you create a path to a successful project of an appropriate size and scope.

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Aligning Your Capital Project with Your Mission, Programming and Community

Critical Question 1:

Does your organization have a clearly defined mission and practical programming goals, and is this capital project compatible with those goals? Do these goals respond to community needs?

Does your organization have a mission statement? If not, it should. In fact, the Commission requires you to articulate your mission in a Project Detail Form when you apply to receive your state appropriation. A copy of the Project Detail Form used by the Commission can be found at the end of this handbook. In it, you'll note that mission-related information, which helps determine the need for the project, is included.

A mission statement explains why an organization exists and what its purpose is. Since most cultural organizations are tax-exempt, 501 (c)(3) organizations (all organizations with state funds through the Commission must be either a 501(c)(3) or a local government entity), they exist because they fulfill a mission of service to the community. Your mission statement should be developed and adopted by your organization's board of trustees or directors, perhaps as the result of a strategic planning effort. New organizations should determine their mission statements early on. Established organizations should revisit their mission statements to determine if they still serve the community and are reflected in programming goals.

The work of both the board and staff should be directed toward fulfilling the mission. It is an important tool that can be used to determine how well the organization is performing. If the organization believes in its mission but finds that its activities do not reflect that mission, it may be necessary to reassess how the organization functions in the community. You should not move forward with any plans for a capital project until there is consensus about the organization's mission and its relevance to the community, as well as how the capital project will contribute to the mission.

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INSTITUTING MISSION-DRIVEN PROGRAMMING

Your programming should help promote your mission. Your programming consists of the products, services, and experiences you make available to the community. If the mission shows the intent of the work you do in the community, the programming shows how you fulfill that intent. In other words, there should be a clear connection between your organization's program and mission. If your programming does not reflect your mission or provide clear benefits to the community you serve, you should re-evaluate your programming prior to undertaking a capital project. Your facility should serve your programming, and improvements or expansions of your facility should be made primarily in response to programming needs. Keep in mind that capital improvements can create ongoing commitments that would limit your organization's flexibility, making it harder to respond to future changes in your mission and community.

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ESTABLISHING A MISSION-DRIVEN PROJECT

What is the purpose of your capital project, especially as it relates to your programming, operations, and role in the community? Can you explain what benefits this community capital project is intended to provide? Any capital project you undertake should further, not hinder, the pursuit of your programming goals, as well as help you achieve the following:

  1. Improve the longevity of your organization by preserving your facilities and/or the efficiency of their operations;
  2. Allow you to better deliver the programming you currently offer;
  3. Serve a larger segment of the community; or
  4. Provide mission-driven programming that is needed in the community.

It is important to understand your motivation for pursuing a capital project. What steps led to the recognition of the need for this project? Who has been involved in defining the direction and substance of the project? Who is driving the project? Is there a consensus that the project is needed? What competing concerns and community activities should be considered in determining whether to pursue the project? These questions allow you to stop and consider your efforts at an early stage of planning. Without a critical examination of the project's motivators, it is possible to commit the organization to actions that are not in its best interest.

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KNOWING YOUR COMMUNITY

Before understanding how your community can support your organization in its capital undertaking, it is important that you understand your role in the community you serve. Your organization impacts its community by the number and diversity of people it serves as well as the number and diversity of people it employs. Understand who you serve by examining current attendance numbers, the size and make up of the audience you reach, and how these relate to the demographics of your community.

You should also assess your understanding of the community itself. Look at census data, information you have collected from patrons, and information from other service providers in the community to create a profile of your community. Then examine the segment you serve and determine why your programming needs or deserves support. Create a compelling narrative of the context of your work. Be able to convey the story about the people in your community and how your organization serves them. This is important for your discussions with both local and out-of-town potential supporters.

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UNDERSTANDING HOW YOUR PROJECT BENEFITS THE COMMUNITY

With respect to your capital project, consider how the community will benefit. How will your plans affect your ability to serve your current constituents? Consider the number of employees for the current year and in the year following project completion. Will additional paid or volunteer workers be required to augment current staff and, if so, what are the associated costs? Is it realistic to expect an increased number of volunteers or, more importantly, increased attendance or new income streams? It is not wise to assume that a project with an increased attendance projection automatically deserves or will garner more support from the community. If there is no reliable supporting documentation to substantiate the claimed figures, your figures may be overly optimistic.

At the Commission, we ask organizations to consider community benefits and document them at the beginning of the planning process. The community benefits should really be an extension of the mission; together they will determine if there is a need for your project.

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Establishing Community Support

Critical Question 2:

Can the organization generate the community support, contributions and revenue needed to complete the project and succeed in the resulting facility?

Marshalling community stakeholders is an important step in ensuring the success of a project. In some communities, government, business and nonprofit organizations come together to build a consensus about what the community's goals and priorities are. If this occurs in your community, you should discuss your project with decision makers in the context of community priorities. Can your project be considered as part of a community planning or review process? If so, there may be a public document that is created that supports your project, which is helpful to use when talking to government leaders and potential funding sources.

Start by discussing the project with your board and local community leaders. Provide them with a summary of information you are assembling as part of your planning efforts. Any questions they raise will probably come up again as you approach people who are less invested in the community, the organization and the project.

Seek out people or organizations in the community who will provide vocal and visible support. Seek media coverage for the project, and contact leaders in the community who may support the project by promoting your efforts. A lack of key community support could raise red flags about whether the project and/or organization have longevity in the community. Enlisting community stakeholders is important not only because they may endorse your mission but because they can help you garner financial support.

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IDENTIFYING YOUR POTENTIAL FINANCIAL SUPPORTERS

Gathering the necessary financial support is one of the most important aspects of fostering community support for your capital project. If the community cannot provide the necessary audience, revenues and charitable contributions needed to keep the facility operating, it will fail. If your organization enjoys strong financial support now, will those same resources keep you solvent after undertaking a capital project? How reliable are those resources? Can and will the community provide what is required? Do the financial requirements created by the proposed project outstrip the available support?

You can measure your financial support by looking at readily available funds for the project. Cash on hand, irrevocable written pledges, documented in-kind contributions, operating endowments, private contributions, county government support, city government support, federal funds and property donations are some of the funding sources that should be examined. Being able to identify a diversity of funding sources, as well as their individual levels of commitment, will give your organization a more complete picture of its value to the community. In addition, if you are partnering with the state, it will help to satisfy your match requirement and provide evidence of your organization's stability. A significant portion of the Commission's Project Detail Form is dedicated to the financial and community support of your project.

Failure to secure funding for a capital project will end a project before it begins, but failure to secure the funds needed to keep a new facility open may have even more dire consequences. Such a scenario may jeopardize your organization's existence and will make it harder for your organization and other nonprofits in the community to raise capital and operating funds.

Completing a matrix of support and sources is a good way to determine the likelihood of having enough money available for your capital project. Government support is often more scarce in difficult economic times. Corporate contributions might be committed to other projects. Talk to your past funding sources about their likely support for the project. Most cultural organizations have some level of earned income, but most also require charitable contributions to stay afloat. Protect these income sources by matching your organization, programming and facility to the needs and wants of the community.

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Considering the Physical Planning

Critical Question 3:

Have the planners of the facility considered the physical planning characteristics that are most likely to result in community revitalization?

Cultural facilities can often serve as catalysts for development or revitalization, particularly when project sponsors engage in considered planning. Proper planning will invite pedestrian traffic and spur housing, office and retail development in the immediate vicinity of the project.

PLAYING A ROLE IN COMMUNITY DEVELOPMENT

Although one project alone will not transform a downtown, it can pave the way for continued incremental changes that eventually become a mature revitalization effort. Planning to locate your facility in an urban area ready for "infill" construction, or reusing a vacant building in a town center can help to achieve a goal of community revitalization. You might work with your community development and planning office to learn about areas that have been designated for growth by the local government, or to understand what public and private investment is being planned for a particular area.

Consider specific physical characteristics of facilities known to have the most catalytic effect on development in an urban environment. Surrounding development benefits when facilities generate steady pedestrian traffic, because the presence of people on the street generates excitement and encourages additional foot traffic. Pedestrians may be enticed to come to an area because of your facility, but may be enticed to stay when the area contains a mix of residential, business and cultural activities that attract a variety of people with different interests. Ideally, a cluster of cultural facilities and businesses should be dispersed along a pedestrian-friendly area with short, interconnected blocks, and located close to transit stops or public parking areas.

Is your community part of the Ohio Main Street program? Ohio Main Street promotes historic preservation and economic development of traditional downtown business districts. The program coordinates local efforts to expand and diversify commercial activity, strengthen public participation, improve amenities and create a cohesive visual identity for historic town centers. If your town is part of this program, establish a close relationship with the program coordinators, and consider closely how your cultural facility can be planned to complement and enhance ongoing efforts of the Main Street program.

The audiences you will draw to your facility and the energy created by your programs and events could be a spark for additional development in your community if the facility is well planned, and dovetails with other community-supported efforts at revitalization.

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Working Out the Details of Your Capital Project

Critical Question 4:

Has the organization adequately planned for the full scope of the project?

Planning is the centerpiece of creating a successful facilities project. Haverchitectural and construction plans, project administration, project costs, fundraising, cash flow, start-up costs, and consequent demands on the organization been adequately addressed by the plan? Once you've determined how your project meets your programming goals and analyzed your organization's financial health, you may be ready to undertake the arduous process of working out the details for your project. This step includes a significant amount of planning, and planning takes time. It is better to delay your project schedule if the current schedule does not allow you to be thorough and fully prepared.

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CONSULTING EXPERTS

The planning process for a capital project can be quite large in scope, and few cultural organizations are qualified to plan a project entirely in-house. Whether you are replacing a roof or constructing an entirely new facility, it is highly likely you will need to consult experts outside of your organization in order to create the best possible plan. There are two key roles that must be fulfilled in the management of a capital project. These are the design professional (architect, engineer, landscape architect) and the project manager/construction administrator. For simple projects, such as installing an HVAC system, you may want to start by talking to contractors in the appropriate trades about what should be considered or may be required. If you are working on a historically significant building, be sure to involve a historic preservation consultant or seek technical assistance from the Ohio Historic Preservation Office online at http://www.ohiohistory.org/resource/histpres/. Learn about options available to you if your building qualifies for a listing on a historic register.

Design Professionals

For larger projects, you should employ a professional design firm. A requirements study and/or architectural review should be considered to begin outlining the scope of your project. Spending a few thousand dollars to determine what your plans should realistically include is a better investment than creating your dream list of features, paying for architectural designs, and then learning that the cost will far exceed the resources you have available.

A design professional will take your requirements list and build it into a plan for construction, and can help ensure that your project complies with all applicable laws and regulations. They understand the peculiarities of building codes and zoning and can provide creative and functional solutions for renovating, upgrading, restoring or creating new space. The design professional you select should easily be able to demonstrate his or her qualifications for the kind of work you are requesting. Design professionals can be generalists or specialists. For each design firm being considered, carefully review the experience and qualifications of the individuals being proposed as well as the firm's expertise. Understand the area of focus and reputation of the firm, assess professional certifications, years of experience, career design experience (past projects and their size), and especially design experience with comparable projects/facilities (projects of a similar scope).

Your organization should have an active role during the design phase to ensure its vision for the finished project is understood by the design professional and translated into the bid documents. Your organization should not, however, become the architect or engineer of record. A nonprofit rarely has the proper licenses, certifications, experiences and resources on staff to perform the professional design function.

Project Managers/Construction Administrators

Your organization has goals for how the capital project will advance its mission, but translating those goals into a building program can be challenging. On smaller, less complex projects (painting the facility, paving a parking lot, upgrading lavatories, etc.), you may have a staff person or volunteer coordinate daily operations with construction and design. On larger, more complex projects, you should choose an independent project manager to act as a liaison between your organization and the contractor(s). This is often the most critical staffing choice made on a capital project.

Project managers help you identify priorities, less expensive solutions, and technical or regulatory problems before you commit to a plan. As the project goals are refined, a project manager may also assist you in hiring the professionals who will actually design and build the project, as well as assist you in developing the project costs. Appointing a project manager outside of your organization is often the best way to ensure objectivity in the planning process.

During the construction phase, a project manager provides a single point of contact to represent your interests. When brought in early, the project manager can assist by evaluating drawings, developing a schedule, and awarding your contract(s) to a qualified bidder(s).

Having a knowledgeable project manager on your project team ensures timely communication of essential information, early identification of problems and potential pitfalls, and regular follow-up on outstanding issues. In all but the smallest of projects, a knowledgeable project manager increases the chances of your project being completed on schedule and within the project budget. As with the design professional, the most important indication of qualification is previous experience with comparable projects in a comparable role.

A staff member within your organization should be designated to work directly with the project manager and oversee the planning and construction of your project. This staff member should be actively involved with the construction process in order to understand cost, schedule, quality and environmental/safety issues that arise during the execution of a project. Unless your staff has extensive experience with construction projects, your organization should not put itself into the position of being a negotiator, estimator, scheduler, cost controller, or quality and safety manager. Again, most nonprofits do not have the resources, time or skill sets necessary to perform these duties.

If your organization receives a state appropriation, the administration of your capital project is of critical concern to the Commission. The consultants you retain to lead your project must have the appropriate qualifications in order to be approved by the Commission during your assessment. Please review the Construction Administration section of the Project Detail Form for more information about construction administration.

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CONSIDERING COSTS

Cost is one of the most important issues to consider in any project, and estimates should be increasingly precise as planning progresses. As you get more precise – and usually higher – cost estimates, you will want to examine your fundraising plans and progress, as well as your income estimates and the project's likelihood of creating a solid financial starting position for your ongoing operations. Often, priorities must be re-evaluated and difficult choices made in order to keep the project costs in balance with the resources available. In the planning process, it is important to consider both direct and indirect costs. A table for recording your project costs appears in the Project Detail Form.

Direct Costs

Capital projects incur both direct and indirect costs. Direct costs are those that are quantifiably related to the construction project. Materials, project management, and construction costs are all in this category. It is important to understand all the possible costs related to building and opening your project. The following is a fairly comprehensive list of the direct costs you should consider as you put together your project budget.

  1. Construction Costs
    • Construction costs including the following:
      • Building construction or improvements
      • Site improvements, including environmental remediation
      • Furniture, fixtures and equipment
      • Exhibits
      • Utilities (tap fees and connections, temporary usage on site, installation)
    • Contingency amounts on all the above (this should be an itemized line item, following the construction cost sub-total )
    • Costs for bonding (security, performance and bid)
    • Costs for professional liability insurance, builders' risk insurance, workers' compensation, property/casualty insurance, auto, and commercial liability insurance
    • Costs of land acquisition
    • Professional fees including the following:
      • Consultant for program of requirements (preliminary planning)
      • Architect/engineer fees (including professional liability insurance)
      • Project manager fees (including professional liability insurance)
    • Costs for permits
    • Costs for testing (i.e., soils, structural)
    • Owner's representative fees
    • Construction administration fees (may be covered under architect's fees)
    • Costs for boundary and topographic surveys
    • Costs for environmental reports
    • Administrative professional fees, including the following:
      • The additional cost of builders' risk insurance during construction
      • Legal fees
      • Accounting and administrative costs during construction
      • Title work, including updated title policies
  2. Administrative costs
    • Start-up costs, including the following:
      • Advertising
      • Financing costs, including local bond issuance, letter of credit or underwriting fees
      • Fundraising
      • Temporary storage
      • Staff salaries
    • Rent and utilities for temporary facilities during construction
    • Utility costs after possession but prior to opening
    • Program development
    • Moving expenses
    • Operating endowment

Indirect Costs

Indirect costs are also important, but they are harder to identify without careful consideration. If you suspend your programming, there are the costs of foregone income. A portion of your staffing costs are likely to continue while part or all of the facility is closed. There are costs related to moving and operating while the construction disrupts your typical work location or pattern. This can change responsibilities, programming schedules, cash flow demands and income patterns.

There are cost considerations for the facility opening or reopening, including possible special events or ceremonies, as well as costs to normalize operations once the project is complete. There are also the costs of developing and executing the necessary fundraising program. Are your fundraising goals so divergent from your normal fundraising activities that they require expertise you don't have in-house? What are the financial costs of managing the funds flowing through the organization to complete the project? Consider the following to help you determine how indirect costs may impact your operations:

  1. Date the facility suspends programming for construction;
  2. Percent of programming suspended;
  3. Estimated payroll and operating costs while programming suspended;
  4. Foregone revenues as a result of project construction;
  5. Date of opening or reopening;
  6. Date of full programming resumption; and
  7. Number of staff hours spent on project.

These indirect costs can impact your organization's operational readiness for undertaking a capital project. For state funded projects, the Commission requires you to consider these impacts and report them in the Project Impact on Operations chart, a sample of which can be found in the Project Detail Form of this assessment handbook. Keep in mind the state rarely covers indirect or administrative "soft" costs in its funding for capital projects.

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PROJECTING CASH FLOW NEEDS

In understanding how the capital project will affect your organization's finances, it is equally important to determine from where the project funding will come and when it will be available. Pledges might be paid over several years. Some funding, such as a state appropriation, may have matching fund requirements. Developing careful and realistic cash flow projections for the project will help you determine whether or not sufficient funds will be available to pay expenses when they are due.

Cash flow planning requires a detailed timeline of when construction and operational expenses will come due during the capital project, and when funds raised or income generated for those expenses will become available. Most successful fundraising campaigns include pledges that will not be received until well after the capital project expenses must be paid. For example, a corporation may commit a large pledge that represents ten percent of your fundraising goal, but it may make payments that equal two percent of your goal each year for five years. This is an excellent result for fundraising, but raises concerns for cash flow in the year when construction occurs and all funds must be paid out. Creating detailed cash flow plans that include a doubtful accounts allowance (covers costs in the event that not all funds pledged are collected) will help you avoid a cash flow crisis during construction or in the years following your capital undertaking.

Ideally you should strive to collect all funds before expenses are incurred, but this is not always practical or feasible. Organizations must often use short term bridge loans to finance cash flow shortcomings. This can be a risky proposition if the organization will carry debt for any significant period. It is extremely important to know that:

  1. The Commission recommends understanding the carrying costs and risks before taking on debt even for a short term;
  2. The Commission advises against taking on capital debt for which written commitments have not been confirmed; and
  3. The Commission does not release state funds for projects taking on capital debt that is not covered by written pledges or written guarantees.

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RAISING CAPITAL PROJECT FUNDS

Most nonprofit organizations conduct annual fundraising campaigns to support their operations and programs. The need for support may increase when a nonprofit takes on a capital project, so it is important to plan for an additional capital campaign to cover the additional costs of the project.

The Case for Support

In preparing for a capital fundraising campaign, the nonprofit organization must be able to articulate the reasons why it is undertaking the building project in order to compel donors to give. Creating a "case statement" or "case for support" is one of the first steps in preparing for a capital campaign, and it becomes the basis for other materials and messages used during the fundraising process. The case statement must address why the project is needed, what is included in the project, and what the project will cost. An effective case statement addresses how the project will support your organization's mission to serve the needs of the community and advance the organization's strategic plan.

Volunteer Commitment

The success of any fundraising effort is dependent upon the commitment of volunteer leaders. Fundraising staff or consultants can help to organize the campaign, but the ultimate success relies upon committed volunteer leaders who understand and support the organization and the project. These volunteer leaders must be willing to not only give their time but also pledge their own monetary gift to the campaign and personally ask others to give. An important maxim of fundraising is that "people give to people, not causes." While it is important to have a compelling project to attract donors' interest, it is equally important that prospective donors hear directly from their peers. Before launching the solicitations for the campaign, donor prospects should be identified and paired with volunteers who will personally contact them and who have the best chance for succeeding in persuading the prospective donor to give to the campaign.

Fundraising Goals

Capital fundraising campaigns need to have defined monetary goals established before widespread solicitation begins. Successful campaigns are typically based upon a total goal that has been subdivided into giving levels with an estimated number of gifts needed in each level. This sometimes is referred to as a gift chart. The first commitments to a fundraising campaign often set the benchmarks for the remainder of the campaign. For this reason, it is important to identify major donor prospects early, and secure lead gifts at the high end of the giving levels first before moving to others.

Although no project or campaign is typical, there are some guidelines that can be useful in structuring the giving levels. It is helpful to test the proposed gift chart internally before approaching potential leadership donors. For each proposed gift on the gift chart, an organization should identify approximately 10 potential prospective donors. Each of these prospective donors should be evaluated based upon past giving history, affiliations, likely affinity to your project, and commitments to other causes. After evaluating the prospective donors, you need to have at least three that you consider "highly likely" to contribute to your campaign, and for which you have a campaign volunteer willing to make personal contact. If, after such a review, you find that you do not have three highly qualified prospective donors for each needed gift on the gift chart, you may need to re-evaluate your campaign goal and your capital project scope and costs.

The Schedule

It is important to plan fundraising goals within specific timeframes so that the campaign progresses on schedule. The most successful fundraising campaigns have a timeframe within which the solicitations take place so that prospective donors and volunteer leaders can see tangible results in a defined time period.

Campaign Results

The state of the economy, competing priorities in the community, the community's level of interest in a particular program or project, and the potential for wider regional impact all may impact the likely success of a capital campaign. Before embarking on a capital campaign, it is important for your organization to assess all these factors and understand how specific circumstances may impact the feasibility of your capital campaign.

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EXECUTING THE PROJECT

Once the funding picture is in place and the project team has been selected, you should be able to develop a detailed schedule for design and construction, complete the design phase, bid and award construction contract(s) and start building the project. Early in the project, your staff, project manager and design professional need to decide how many and what types of bid packages will be issued. Many factors need to be reviewed and understood when making this decision, including the design firm's experience with multiple bid packages, the necessity for cross discipline reviews, the schedule requirements of the job, and the project manager's ability to coordinate and manage contractors. The cost savings of utilizing multiple bid packages and separate contracts can erode into delays, rework, cost overruns and construction claims when they are not managed and coordinated properly.

Bid Documents and Contracts

The design professional will create a set of bid documents consisting of plans, specifications, scope of work and a preliminary schedule for the work to be performed. It is a good practice to re-estimate the cost of the project at this point, particularly if the project has a significant time lapse since inception and/or significant changes to the scope of work as the design effort evolved. The design firm or an outside construction management consultant can provide this estimate verification for you. This step will enable you to seek additional funding if required and avoid putting the successful bidder "on hold" while you obtain more money. It is also a good idea to ensure your bidding process is compliant with applicable construction laws. The use of state, local or federal funds usually requires an open bidding process.

When bids are obtained from the contractors, it is important to hold a post-bid meeting with the two or three lowest bidders to verify they have all the project requirements in their price. The lowest price, while attractive, may not always be the right price if the lowest bidder has overlooked some aspect of the design or specifications. It is also important to pause and consider the amount you budgeted for construction compared to the contractor's bid price. Your budgeted amount should be greater than the bid amount (this is referred to as a contingency) to allow for contract growth via change orders. It is nearly impossible to build a project without change orders due to unforeseen conditions, customer preferences and other interferences.

Construction Schedule and Activities

After awarding the contract, it is important to have the winning contractor create a detailed construction schedule with descriptions of construction activities so that you can monitor the progress of work, authorize payments based on the amount of work complete, and ensure construction is finished on time. A thorough understanding of the schedule will also enable you to plan for things such as utility outages, temporary heat requirements, furniture, fixtures and equipment, as well as deliveries and off-site storage if required.

The schedule submitted and accepted by the project management team (your staff, design professional, and project manager) is referred to as the baseline schedule. The baseline schedule, when properly prepared, represents the contractor's ideal plan and should be updated monthly based on actual progress. It should include activities such as submittals, submittal review time, purchasing, major project milestones and detailed construction activities. All construction activities described on the schedule should include both the duration and the number of man hours assigned to the task in order to complete it. The first payment should not be paid to the contractor until a satisfactory baseline schedule is produced by the contractor and accepted by the project management team.

Construction Progress Meetings

As the project progresses, weekly or bi-weekly construction meetings should be held with the contractor(s), architect/engineer, project manager and the staff person you have selected to liaise among them. All aspects of the project should be discussed and documented via formal meeting minutes taken by the project manager. Topics should include safety, schedule, change order requests/costs, engineering or owner revisions, and quality. A two or three week "look-ahead" schedule should be submitted by the contractor that clearly outlines the short term plan and any potential obstacles to completing it.

On a monthly basis, the project manager and your staff should review and document current and projected costs for the project and compare them to the budget. This enables the project team to become aware of potential cost overruns at the earliest possible opportunity and to take proactive steps such as scope reduction or delay of certain portions of the work until adequate funds are available. While these decisions are not always easy to make, it is far better to eliminate or delay certain portions of the work than to have a design professional and/or contractor perform work for which you cannot pay.

Your team should take progress photos on a regular basis. These not only serve as records to document when work was performed and where certain hidden items are located (buried utility piping, above ceiling conduits, etc.) but have a historical value for the facility in the future.

Quality Control

At various times throughout the project, the need will arise for an outside firm to be engaged in a quality control capacity. This should be planned for and included in the project budget. Some tasks requiring independent quality control testing are soil compaction, concrete, asphalt, welding of certain piping systems and/or structural connections, roofing, and more. This testing can be contracted for directly, through the design firm or through the project manager. It is not recommended to contract for these services through the contractor as this presents a potential conflict of interest.

Inspection and Punch Lists

When the contractor is at or near completion of the project, a member of your organization, along with the design professional and the project manager, should conduct a walkthrough of the completed facility and develop a list of incomplete or defective work items. This is commonly known as a punch list and should be given to the contractor promptly for completion. Final payment of "retention"—a contractually defined percentage of funds held back from the contractor—should be tied to the contractor's completion of these items. In addition to a completed punch list, final lien waivers and as-built drawings (if required by contract) should be included with a final pay request.

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Assessing and Protecting Your Financial Health

Critical Question 5:

Does the organization have the managerial skills and financial readiness to complete the project, continue to operate the facility and meet its future programming goals?

A financial and operational review of your organization should be completed before a commitment is made to undertake a capital project. Understanding the stability and change tolerance of your organization will help you judge how likely it is to successfully navigate the challenges of a capital project. Also, a solid prediction of your organization's post-project financial and operating position will help you evaluate the wisdom of undertaking the project. Will you be able to continue serving the community according to your mission and programming goals?

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DETERMINING YOUR OPERATIONAL AND FINANCIAL READINESS

The goal of the financial and operational review of the organization is to make sure that the financial and operating infrastructure of the organization is proportional to the size, complexity and risk of the proposed capital project. Understanding size, complexity and risk is key to understanding the impact of the project on the financial health of the organization. A list of basic operational mechanisms cultural institutions should have in place regardless of size includes:

  1. Annual budgets approved by a governing board;
  2. Accurate annual financial reporting;
  3. A cash reserve to cover shortfalls; and
  4. Sufficient income to sustain programming activities.

If your organization does not have these mechanisms in place, navigating the logistical challenges of a capital project and the resulting changes in your operating income and expenses may make it difficult to remain solvent.

While different organizations such as the Better Business Bureau and the Ohio Association of Nonprofit Organizations have varying criteria for what nonprofit operational excellence looks like, they agree on the importance of the mechanisms listed above. The Commission believes that the proper use of these tools is the minimum requirement needed to show that your organization is operationally sound. The ability to assemble basic information about your finances, have financial reporting materials available, and have a realistic scope of the proposed project further indicates your organization's preparedness.

Along with financial records, your organization should have available a board roster, an organizational chart and resumes of director(s), manager(s) and development staff. These documents give an overview of how the organization is structured. Does the current structure support the changes expected upon completion of the capital project? What operational changes would be necessary to properly manage your new commitments?

Completing a capital project is significantly more rigorous than assembling a project plan and assessing your likelihood of success. If this planning effort is difficult for your organization to navigate, you should consider developing a stronger set of operational and fiscal controls before moving forward with a complex and expensive capital project.

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ASSESSING YOUR ORGANIZATION'S FINANCIAL HEALTH

In order to understand your organization's financial situation during a capital project, you should assess its financial readiness for the project. The assessment should be a snapshot of where the organization's financial health and ongoing viability stand today as well as where you will stand once the capital project is complete. There are separate strategies for assessing the conditions of the organization at each point, but the underlying question remains the same: Will the organization continue to be able to fulfill its mission and deliver its programming for the foreseeable future?

To understand your organization's financial situation, it is important to view the changes and trends of at least the two most recent fiscal years. There are two primary tools that together give an accurate initial picture of your financial situation: a Balance Sheet (also called a Statement of Net Assets), and an Income and Expense Statement (also called a Statement of Changes in Net Assets or a Profit and Loss Statement).

Balance Sheet

A balance sheet is a standard document that shows the organization's assets and liabilities at a specific moment in time. A balance sheet should be maintained monthly or quarterly and reconciled at the close of each fiscal year. If your organization is audited, a balance sheet is part of the audit documentation. In fact, a major portion of your IRS Form 990 income tax filing is a balance sheet. It is a familiar tool to any person with an accounting or financial background, and it is usually requested by any bank or large funding source considering support of your project. It shows cash on hand, endowments, real estate and other assets, as well as loans owed, accounts payable, and other financial obligations. It is a statement of what you have and what you owe.

Income and Expense Statement

An income and expense statement is usually maintained monthly or quarterly and reconciled at year end to show financial activity that has occurred in the fiscal year. It shows your income sources, such as ticket sales, charitable gifts, rental fees, and investment income, as well as your expenses, such as payroll and utility costs. An income and expense statement is like a checkbook register. It shows credits and debits to your organization by category. If your organization is audited, an income and expense statement is part of the audit documentation. It is the other major portion of your IRS Form 990 filing.

These two tools are the recognized standard for understanding the financial position of all types of organizations, including nonprofits. They provide a standard set of facts that reveal the financial realities of the organization.

These documents, though standard, may have varying degrees of accuracy and reliability depending upon the organization's size. It is likely that a small organization has no more than a 990 filing or internal reporting to show its income and expenses. The more complex or large your organization becomes, the more sophisticated your income statements and balance sheets will be.

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INCREASING THE RELIABILITY OF YOUR FINANCIAL DOCUMENTATION

Banks and potential outside investors, as well as the Commission, will need to know that the information being provided in your financial documents is reliable. Your board should address the issue of financial accountability and reliability when setting the budget and direction of the organization. As your organization grows in complexity or increases income, it becomes advantageous to have an outside party review and validate your financial documents.

Financial Audit

The more work you ask an outside party to do, the more expense you will incur to have your finances reviewed. The most thorough outside financial review is an audit. Audited financial statements, including a management letter and statement on internal control, are produced by an accounting firm after they have done a thorough review of all of your financial data. This is expensive for very small organizations, but is strongly recommended by the Ohio Association of Nonprofit Organizations for organizations with assets of more than $200,000 or that handle income and expenses of $200,000 or more annually.

Financial Review and IRS Form 990 Filings

At a lower cost and lesser degree of rigor, accounting firms can produce reviewed financial statements or compiled financial statements. Sometimes annual reports contain detailed financial statements created in-house. An IRS Form 990 filing includes both a balance sheet and income statement. If these are not available, assess your bank statements, accounting records, and other financial sources to create both a balance sheet and income statement.

Financial Assessment

Once you've gathered income statements and balance sheets for at least the two preceding fiscal years, consider the quality and completeness of the records. Is an audit necessary? Would you benefit from having an accountant organize or systematize your financial office? Are you able to provide adequate accountability to your board and donors? Is it time to add a finance officer to the board or staff? Review your financials for trends, as well as possible problems in your operations.

If you do not have a financial officer on staff or a financial expert on your board who is willing to conduct this review, you should hire an outside consultant. Interpreting financial data and identifying trends takes experience and insight. A consultant is even more important in the creation and review of financial projections once your capital project is completed, so it may help to get one on board from the onset of the planning process. With the help of a financial expert, ask the following questions:

  1. Do your financials show sufficient income to ensure stable programming into the foreseeable future?
  2. Is there an internal source of cash or ready access to cash for times of shortfall?
  3. Does the organization make realistic and sustainable decisions about income and spending?
  4. Does the organization retain a positive cash fund balance (surplus) at the end of the fiscal year?
  5. In years where a deficit does occur, are accumulated surpluses sufficient to cover the current year's deficit?
  6. Do the organization's finances appear to be on an upward, stable or downward trend?
  7. Is the financial situation stable enough to tolerate significant change, including the proposed capital project?
  8. Are there any overriding factors such as endowments or outstanding loans that counterbalance evident trends?

Suggest that your financial officer or advisor create a summary sheet that includes the measures and ratios used to help identify important issues and trends. An organization that is well run and financially stable can usually succeed following a capital project, provided that the project is well planned, responsive to the community and organization, and sized proportionately to the need and available support.

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FORECASTING YOUR ORGANIZATION'S FINANCIAL FUTURE

Do not take for granted that, after undertaking a capital project, your organization will continue to exhibit a healthy income and expense statement, a healthy balance sheet and healthy cash flow. Taking on a facility commitment that is overly expensive to operate will damage the long-term health of the organization.

The first step in understanding the future financial health of your organization is to develop a realistic estimate of the likely revenue and operating expenses of the facility in its proposed configuration. The Commission recommends that you create a projected operating budget for the first five years of operation after the project is completed. This is complex and difficult to do but is often accomplished by commissioning a feasibility study or writing a formal business plan. While it is a standard part of any business plan, it is strongly recommended that qualified and credible outside consultants be used to help create the pro forma income statements for the facility. Talk to many consultants. Find out what their relevant experience is, and ask to talk to previous clients, similar to yourself, that can verify the reliability of their studies' findings. If you cannot afford an outside consultant, learn to write a competent business plan yourself. Often business planning books have detailed chapters on income and expense projections. It is also helpful to identify comparable undertakings with your peer institutions in areas with similar population densities, income and education levels and use them as benchmarks.

Testing Your Projections

Once the business plan or feasibility study is completed, it may be necessary to assess its accuracy. Since the financial projections – whether presented in a business plan or in pro forma tables – are educated guesses, you will need to assess the quality and reliability of the assumptions underlying the numbers presented. You need to understand if they are a complete and realistic picture of the organization's financial future.

For certain smaller projects that do not substantially alter the structure of the facility, the organization or its operations, less investigation is required to assess the projections. Projecting recent trends into the near future should be the standard followed by these projects. If the business plan assumes events that differ from recent trends, make sure to include a detailed explanation of the analyses used to determine all of your projections.

For organizations planning a new cultural facility or other substantial changes to the organization's operations, a greater degree of analysis should be undertaken. There should be a high level of detail in the income and expense projections that would allow you to test the accuracy of the assumptions on which the overall financial projection is based.

Pro forma income statements and balance sheets are the primary tools used to internally analyze your organization's future financial health. Each projected number should be examined to determine what assumptions were used to develop the amount, what comparisons were made to substantiate the amount, and how reliable the final projection is. Look to the comparable projects you've identified and examine the results of national surveys that are relevant to the specific type of project you are planning. Look for studies conducted by organizations such as the National Endowment for the Arts, The Association of Science-Technology Centers, American Association of Museums, or The League of Historic American Theatres, to name a few.

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CREATING AN OPERATING OR MAINTENANCE ENDOWMENT

If it appears that operating or maintenance expenses will increase after the completion of the proposed capital project, consider raising money to endow an operating or maintenance fund as part of your financial planning. Endowments are stable sources of invested funds that make interest earnings available to cover operating or maintenance expenses that cannot be paid for through earned income or annual fundraising. Include support for the endowment in your larger fundraising program. An endowment can help cushion the hardship of economic downturns and allow you to protect your capital investment. Having such a cushion eases the pressure faced by many organizations to choose between paying for programming or maintaining a facility.

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Ensuring the Future Sustainability of Your Project

Critical Question 6:

Is the proposed project realistic and viable over the long term?

At each stage of the planning, your organization's leaders and project team should conduct a project reality check. It is very easy to get caught up in the vision of a grand and beautiful facility, but it is vital to make sure that the vision is made actionable by setting attainable goals. At each stage, it is wise to step back and ask, "Are we being realistic?" Also: consider completing your project in phases to provide options for managing cash flow, construction costs and capital campaign goals.

You should also ask the same question of the consultants and experts you bring on to assist you in undertaking the project. Question the assumptions they are making about project cost, income, fundraising goals, and operating expenses. If their planning assumptions are based on the experience of other organizations, are they looking at truly comparable cases? What attributes make them truly comparable? To push a project through to completion, your staff needs to be enthusiastic about it, but at least at each planning milestone insist on skepticism.

Costs will usually be higher than what you or your consultants expected. Take steps at each stage to control costs and moderate the tendency to add "just one more thing." Insist that your accountants, financial advisors, and fundraising team plan conservatively by including a sufficient contingency fund or other safety net for unplanned expenses.

Hope and vision get capital projects started, but realistic, conservative, and detailed planning get projects finished.

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Resources

Associations & General Resources

American Association of Museums
Arts & Business Council of Americans for the Arts
Association of Science-Technology Centers
League of Historic American Theatres
National Endowment for the Arts
Nonprofit Financial Center
Ohio Association of Nonprofit Organizations
Ohio Cultural Facilities Commission
Ohio Historic Preservation Office
The Foundation Center

Capacity Building

Nonprofit Community Resource Center at the University of Delaware: Nonprofit Capacity Building Program
www.udel.edu/ncrc/NPcapacity_building.html

The Foundation Center: Lessons in Building Capacity
www.fdncenter.org/pnd/offtheshelf/ots.jhtml?id=92600013

The Urban Institute: Building Capacity in Nonprofit Organizations
www.urban.org/UploadedPDF/building_capacity.PDF

Cash Flow & Financial Management

Alliance for Nonprofit Management: FAQ's about Financial Management
http://www.allianceonline.org/FAQ/financial_management

The Cash Flow Management Book for Nonprofits
www.bookworkz.com/business/accounting/0787953857.html

The Grantsmanship Center: How to Make Cash Flow Projections
www.tgci.com/magazine/04fall/cashflow1.asp

Finding a Consultant

The Foundation Center
http://foundationcenter.org/getstarted/faqs/html/consult.html

Yale School of Management: The Goldman Sachs Foundation Partnership on Nonprofit Ventures
http://www.ventures.yale.edu/consultingservices.asp

Fundraising

Association of Fundraising Professionals
www.nsfre.org

Capital Campaign Fundraising
http://nonprofit.about.com/od/fundraising/a/capital_cam.htm

Capital Campaigns – Strategies for Nonprofits
www.fundraiserhelp.com/capital-campaigns.htm

Strategic Planning

Alliance for Nonprofit Management – Stragetic Planning
www.allianceonline.org/FAQ?strategic_planning

Internet Nonprofits Center – What is strategic planning?
www.nonprofits.org/npofaq/03/22.html

The Foundation Center – Strategic Planning
http://foundationcenter.org/getstarted/topical/boards.html

Business Planning

Business Plan Pro
www.bplans.com/spv/3050/index.cfm?affiliate=

Sample Business Plans
www.bplans.com/sp/businessplans.cfm

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CAPITAL PROJECT DETAIL FORM

The Ohio Cultural Facilities Commission reviews sponsoring organizations and their projects prior to the project being presented to the Commission for approval of expenditure of funds. Whether your project is improvements to an existing structure or the construction of a new facility, all sponsors of projects with capital appropriations through this Commission must complete and submit a Capital Project Detail Form electronically, along with supporting documentation, prior to the start of any evaluation of your project. The Project Detail Form is reproduced below. Use it as a companion to this guide to help you gather the information you will need to assess your project planning, and to answer the questions critical to your board and potential supporters.

PROJECT INFORMATION

Sponsor Organization's Legal Name

Facility Legal Name

Facility preferred name

Facility Owner Legal Name

Project site address

City          OH     Zip code         County

Web address

THIS IS A TEst
Type of Facility: ___ Art Museum ___ Science and Technology Center
  ___ Visual Arts Center ___ Performing Arts Center
  ___ Local Historical Facility ___ Other
Type of work to be completed (Check all that apply) : ___ Construction of New Facility ___ Feasibility or Planning Study
___ Renovation of Existing Facility ___ Addition to Existing Facility ___ Exhibit Fabrication and Installation

Are there mortgages against this property? YES   NO   UNKNOWN
Are there liens against this property? YES   NO   UNKNOWN

Please provide a brief description of your organization, your governing structure, meeting frequency, mission statement, etc. Limit your response to no more than 200 words.



If the Project Sponsor anticipates owning this facility or other property needed for the project but currently does not, please describe your plans and schedule for purchasing the property. Limit your response to no more than 200 words.



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PROJECT DESCRIPTION

Your responses to the following questions will be used to create the information made available to the Commission members, the Legislature, and the public through the Commission's legislative resource guide, annual report, web site, and other Commission publications.

Please describe the facility where the project will take place. Is it a new facility? Historic facility? How does the public use and benefit from your facility? Limit your response to no more than 200 words.



Please provide a description of the project. If this is a multi-phase or multi-part project, please define the part(s) to be funded with the state appropriation. Describe the current status of the proposed project. If known, provide a brief description of the proposed timeline. Limit your response to no more than 200 words.

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DETERMINING NEED

What is your organization's mission?

What programming activities do you undertake to fulfill that mission?

What is this project intended to achieve for your organization and community, especially relating to your programming and operations?

What steps led to the recognition of the need for this project?

Who has been involved in defining the direction and substance of the project?

Who in your community is publicly supporting the project? (attach support letters if available)

Describe the community/region/audience that you serve.

How will the community benefit from the project?

Has this project been part of a community planning or review process?

If so, is there a public document that supports your project? Please include.

Market    
  Annual Attendance Employees
Current    
First year after project    

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PROJECT FUNDING SOURCES SUMMARY

Please provide detailed information on the funding sources for this project. For the "Funding Sources" table, anticipated funds are those funds expected to be raised but unconfirmed. Confirmed funds are those funds the project is certain to receive, as demonstrated by written documentation. The total column should equal the sum of anticipated and confirmed funds. State funds that have been appropriated should be considered confirmed funds.

Funding Sources: Anticipated + Confirmed = Total
State Funding      
Cash on Hand      
Private Contributions      
County Government      
City Government      
Federal Government      
Other (list source below)      
Total Funding      

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PROJECT COST SUMMARY

For the "Project Costs" table, the "Total Project Costs" field at the end of the table should be less than or equal to the "Total Funding" field in the "Funding Sources" table. Generally, state bond funds may only pay for "bricks and mortar" (hard costs). Under certain conditions, some soft costs may be paid out of state funds; please check with your project manager. Your budget table will be reviewed to confirm that you have allotted sufficient non-state funds to cover all project soft costs, or other costs for which the Commission cannot provide reimbursement.

Project Costs  
Hard Costs Cost Estimates
Construction or improvement costs  
Contingency Funds (at least 10% of construction costs)  
Site improvements (including environmental remediation)  
Fixtures / Furnishing / Equipment  
Exhibits  
Other (describe)  
Subtotals  
Soft Costs & Administrative / Professional Fees  
Architect / Engineering Fees  
Permits  
Surveys, tests and environmental reports  
Utilities  
Bonding fees  
Insurance (Builder's risk, property and gen. liability)  
Percent for Art (indiv. State appropriations = $4 M)  
Operating endowment  
Architectural program / Program consultant  
Construction Manager / Project Manager  
Owner's representative fees  
Accounting and administrative costs  
Legal fees  
Title work  
Other (describe)  
Subtotals  
Total Project Costs  

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PROJECT IMPACT ON OPERATIONS

Project Impact Month / Year
Date facility suspends programming for construction  
Percent of programming suspended  
Estimated payroll and operating costs while programming suspended  
Foregone revenues as a result of project construction  
Date of opening or reopening  
Date of full programming resumption  
Number of staff hours spent on project  

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PROJECT SCHEDULE

Construction Schedule Month / Year
Fundraising campaign start  
Fundraising campaign end  
All pledged funds in hand  
Site acquisition  
Design completion  
Bid award  
Groundbreaking  
Construction completion  
Grand opening  

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CONSTRUCTION ADMINISTRATION

Please describe the experience and qualifications of the designing architect. Include their name, firm, professional certifications, years of experience, full career design experience (past projects and their size), and especially their design experience with comparable projects/facilities (projects of a similar scope). Enclose a resume.

Please describe the experience and qualifications of the person responsible for construction administration. Include their name, firm, professional certifications, full career construction experience, and especially their experience administering comparable projects/facilities. If the designing architect will provide construction administration services, please describe their full career construction administration experience, and especially their experience administering comparable projects/facilities. Enclose a resume.

Name

Company

Years experience

Total hours devoted to project during construction

Average hours per week on project

Additional company support staff hours

Please describe the experience and qualifications of the person responsible for representing the owner/sponsor's interests during construction. Include their name, firm, professional certifications, full career construction experience, and especially their experience administering/monitoring comparable projects/facilities. If the owner/sponsor is unable to secure the services of a qualified representative, in some cases the Commission project manager will assist the designated sponsor staff member in attending to the owner's interests during construction. Talk to a project manager about this possibility before completing this application. Professional, qualified representation is strongly encouraged by the Commission. Enclose resume(s) of key staff/consultants.

Name

Company

Years experience

Total hours devoted to project during construction

Average hours per week on project

Additional company support staff hours

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POST PROJECT ASSESSMENT

How will you assess the project's success when it is completed?

What steps will you take to ensure that the project receives appropriate public exposure? (The Commission has a program that it asks all sponsors of state-funded projects to complete that will help recognize the state's contribution to cultural facilities.)

How do you plan to provide the financial support for the long range maintenance and improvement needs of your facility?

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AMERICANS WITH DISABILITIES ACT

Does the facility meet ADA guidelines? If not, describe the ADA compliance issues relevant to the proposed project.

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ENVIRONMENTAL STUDIES

The environmental requirements for each project are determined by the specific situation of the facility, manager, and project. Environmental studies may or may not be required. Completion of phase one and two environmental studies are not a prerequisite for completing this application, however, you should discuss the specific requirements for your project with your Cultural Facilities Commission project manager.

Has a Phase One Environmental Study been completed for the project site?
YES     NO

Findings?

Has a Phase Two Environmental Study been completed for the project site?
YES     NO

Findings?

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ADDITIONAL IMPORTANT PLANNING MATERIALS

___ Detailed construction estimates prepared by an architect, landscape architecture, engineer, or construction manager

___ Bid tabulations

___ Consultant background information

___ Detailed construction schedule prepared by an architect, landscape architecture, engineer, or construction manager

___ Documentation of all funding sources available to complete the project

___ Detailed project cash flow estimate for full project period through close out and completion of capital campaign

___ Balance sheet and income and expense statement for the most recently completed fiscal year (such as audited financial statements or IRS 990)

___ Projected income and expense statement for the five years following the project's completion with accompanying narrative describing assumptions

___ Fund raising plan

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