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Funding, Donations and Zoning for Non-Profit Projects

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Though standard commercial developments and private non-profit developments have many similarities, there are differences between the two that create unique challenges for non-profit projects. Although most design standards, construction procedures, permitting processes, and contractual requirements are similar for both, the following differences must be considered:

  • Funding and Timing Considerations
  • In-Kind Donations
  • Community Engagement and Zoning

Funding and Timing Considerations

A typical commercial project must have a full commitment of funds (which can come from bank loans, cash, municipal participation, tax credits, etc.) before contracts are issued to design and construction professionals.  However, a non-profit project is typically associated with additional challenges of timing for funding.

Before a non-profit projects begins its journey through design and construction, private donor funding sources may not have the urgency or ability to immediately fund the entire amount of their commitment. Larger funding sources normally come in the form of multiple lump sums over a period of time (say an average of 3 years) vs. the normal commercial funding source, which usually comes in the form of a lump sum bank loan funded upon finalization of the development deal.  If the project is a Federal, State or municipal project, then funding is included in the yearly budgets and allocated to separate projects Both of these forms of funding are usually more definitive and timely than raising the funds from individual donors.

Because of this, private non-profit projects have a tendency to take longer to be fully funded due to timing and multiple sources of donor participation.  Most non-profits will not proceed until all funds are “banked”, making the project start date push out until all funds are received, sometimes 3 years beyond the initialization of the Capital Campaign.

In-Kind Donations

In-kind donations are offerings from donors that cannot contribute cash, mostly in the form of donations of goods or services. These donations are very generous in nature, but can also be time-consuming. The process involves relocating materials from the source of donation, storing for future use in the design, modifying the design specifications so that the in-kind materials can be incorporated correctly into the work, and accommodating the (usually small) quantities of in-kind material.  Materials of this nature are very much welcomed, but are typically delivered later in the project than new materials after collection, processing, and installation. In the end, they can often cost just as much, if not more, than newer materials.

Community Engagement and Zoning

Most non-profit projects are involved in specific types of projects (such as education, environmental, arts, or specialized healthcare) that are developed on a donated site which may not be properly zoned. This requires engaging the surrounding community in an awareness campaign in order to gain support for the project. By engaging the community, the project team can potentially avoid protests that could stop or delay the local municipal permitting process. Typical Municipal, State, or Federal projects will not often have the same issues, since they are generally located on a properly zoned site.

These considerations often affect non-profit projects and can serve as possible delays during projects.  However, with proper planning and special procedures, Hourigan has been able to minimize the impact on schedule and cost associated with non-profit projects.

 

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