Jump Starting Capital Campaigns: Non-profit involvement in Public-Private-Partnerships (P3)
What is a Public Private Partnerships? Traditionally they involve collaboration between a government agency and a private-sector company that can be used to finance, build, and operate projects, such as public transportation networks, parks, and convention centers. Financing a project through a public-private partnership can allow a project to be completed sooner or make it a possibility in the first place.
A Non-Profit is a Business
When I talk to groups that are starting a non-profit or trying to expand their sphere of influence with a capital campaign, I will ask them to tell me about their business. Too many of the leaders of these organizations look at me like I've grown another head. I ask the question to get this reaction. If the leader views their organization as a business I know they are on a track toward success but if they simply see themselves as a charity they are likely in need of some basic perspective changes. The 501c3 is simply a tax status, the reality is that a non-profit is a business who cares more about the people they are serving than they do about "profit". That being said if they ignore things like profit and self sustainability, even if their support is strong they will likely burn out or out grow themselves. The business perspective is the start to a successful capital campaign.
Public Private Partnerships with Non-Profits
A P3 Project involving a non-profit and a government agency are very common. It is a force multiplier non-profits can use to leverage a service the government wants to provide with the operations focus and understanding that will not be a drain on the government resources. Many facilities like hospitals, charter schools, museums, athletic/wellness facilities, and many other buildings are built using this methodology.
However, if you are considering this route it takes a good deal of planning, and business sense, and a group that understands the roadmap to success. There are many lessons to be learn, and many options to be considered about how the non-profit can create the most community benefit.
It is important to understand that the interests of a government and a non-profit do not always align. The key is understanding where your interests align and setting up agreements that will be of mutual benefit to the Capital Campaign. Some of the key issues to consider when entering into negotiations between a government agency and non-profit are the following:
- Economic and Fiscal Impact is Important
- Financial Self-Sustainability
- Business and Operations Planning
- Fundraising Proffers
- Operations Agreements
- Capital Construction Design and Building Process
- Corporate Sponsorship
- Ownership Structure (Building, Land, Contents of Building)
- Government Financial Cycles and Access to Funding
- Public Engagement Meetings and Public Relations
Not all of these apply to every project but they all should be considered as you approach the government about your needs. The most important point to accelerating and increasing the impact and smoothness of a P3 project is credibility. If you can build the confidence of the government agency and maintain the credibility of your information when you are soliciting funds from them the process is much smoother.
Additionally much of the information you use to approach the government will be very much appreciated by your donors.
Many organizations we are contacted by have already started a campaign or approached a government agency and when it came down to some key questions by donors or government officials it became clear they didn't understand the project enough to really KNOW what it was going to take to reach the finish line of their campaign, much less keep the doors open for the next 20 years.
In our experience, the first two key consultants that non-profits should bring on in the P3 process is a fundraising consultant (if not already on staff) and an experience owner's representative project manager. The fundraising supplies the fuel to keep the project going while the Owner's representative will define the budget, schedule, and when you do need to spend money an experience Owner's representative will know the right time, the right price, and will know how to plan so your operations costs are covered by your revenue