Planning new facilities, expanding existing ones, or renovating requires specialized guidance and resources.

Phase 2 – Define and Validate the Project

Phase 2 includes research and exploration to more clearly validate why the project is needed while also ensuring that your organization/partnership has the capacity to undertake it successfully from start to finish. Ultimately any major effort should deepen the ability and strength to deliver a mission within a community. Keep in mind that we are never just constructing a building, instead, we are focused on the difference the mission can have in a community because of the building.

In the second phase, the project need is documented, the architectural program is developed, and the feasibility of long-term capital and operational funding is determined. This phase also includes picking an optimal site and developing a conceptual plan.

At the end of this planning phase, you should have identified:

  • The population that will benefit from the space
  • Whether or not the project fits with community or regional plans
  • Your social return on investment as defined by the scope of services you plan to provide
  • The essential people to lead the effort (building committee and capital campaign committee)
  • A suitable building location
  • A space program and conceptual design
  • A working budget and the available resources (capital and operating)
  • A business plan and a high-level plan of finance that articulates where the money will come from (conceptually) to build, buy or lease, and operate the facility in the short and long-term
  • Comparative unit cost estimate, such as cost per square foot
  • The type and size of building you need and can afford

Phases 1 and 2 can take anywhere from six months to three years depending on the capacity of the organization(s) involved and project scope. After completing the Phase 2 steps, do not progress to Phase 3 unless you are confident your proposed project is the right size, affordable, and sustainable.

Phase 2 – Steps

Step 1 — Identify Services to be Provided

Look Inward What are the current needs and long-term goals of your organization and the community you serve? How can the space support your program mission? If your community has a community comprehensive plan or an overall service delivery plan for the population you serve, how do your services fit into that plan(s)?

Step 2 — Determine Need for the Project

Look Inward What aspects of your current location limit service delivery? What functions would be improved with changes to your existing space or building? Do you need more or less space, more efficient space, a better location, or even an improved image?

Step 3 — Validate Community Need and Alignment

Dream + Connect Before engaging in a major capital project, it is essential to know how your mission and goals fit into the plan for your community, the population you serve, and the positive impact you hope to achieve in the short and long term. Many communities have established a community service continuity plan, a prioritized capital project plan, and/or a community economic development plan that has input and agreement from tribes, local governments, regional government, the State of Alaska, and even the federal government. This is not true for every mission, but the point is not to just assume it does not apply to you.

Additionally, understanding the demographics both now and into the future will help you “right-size” your project, know more about which partners you need to connect with, and generally how your need for more or better space fits into the larger context of your community. Understanding the larger context in which your mission operates is paramount for success both in the initial planning stages, the design, and when you seek funding for your project. We can be sure that if you don’t answer these questions, your potential funders certainly will because this is often one of the criteria they look for in a well-conceived project. Ultimately nonprofit missions exist to meet community needs. Since no single organization can achieve its mission on its own, your responsibility is to see and know how your mission fits.

Step 4 — Explore Collaborative Opportunities

Dream + Connect Building a new building is not always the best option. Take the time to explore the pros and cons of owning versus leasing and renovation versus new construction. There are almost always more cost-effective options to building a new facility such as engaging in efficient space planning, alternative lease options, or options to collaborate on shared space with others.

The range of building interventions to explore may include, but are not limited to:

  • Shared space: There are many choices to consider in the shared space model that range from owning the building and renting to other mission-related tenants to create a “one-stop” for the people you serve, to co-ownership that can take many legal and financial forms including merging of entities prior to sharing space, to simply being a landlord to other businesses. Many considerations with this choice will have an impact on your financial bottom line, tax status, and mission results. Asking these questions early is essential because a number of scenarios require additional layers of planning, but the rewards can be well worth the time. More information on shared options is available here.
  • Deferred building maintenance and building upgrades: This is a good option when the location works well for the program but building quality issues may present unresolvable barriers to ideal program function. A thorough and comprehensive building assessment may help clarify deferred maintenance and upgrade needs to support program delivery without embarking on a more costly new building.
  • Renovate or remodel existing space: This option may be relevant when the program location is good, but the space configuration and layout is a barrier to program needs. Many times an organization may think it needs more space, when in fact it may be that the existing space can be modified to be used in a more efficient manner.
  • Move to a new location: A nonprofit may just need to move to another facility, either individually or collaboratively with other nonprofit groups, so they can be in a preferred location, can be closer to their consumer base, can have space that best meets programmatic needs, or can best meet fiscal short- and long-term goals.
  • Build a new facility to meet program needs: After exploring space needs, assessing the existing building condition, and exploring other options, a new building may be the best option to house one or more nonprofit organizations.
  • Partner with the government to operate a new or existing facility: A way to maximize resources is to develop a partnership between a nonprofit and government where typically the government owns the facility and the nonprofit carries out the mission. These relationships take many legal and financial forms. It’s essential that during the Pre-D phase of planning, the partners clarify who is in charge of the facilities planning and who manages the capital campaign.

Step 5 — Evaluate Potential Funding and Develop a Plan of Finance

The process for developing a plan of finance should begin as soon as the project cost has been identified. Most funding for capital projects in Alaska is a mix including equity, government grants, tax bonds, and charitable donations from individuals, foundations, and corporations. Debt is also an option but should be considered as a last resort. You don’t need to know exactly where all the money will come from at the beginning stages of your project design, but you should have a general plan on how you will build, furnish, equip, and reliably operate and maintain your facility for the short and long-term. Consultants may be brought in to help advise on the plan of finance and later on the capital campaign, which is the effort to raise the charitable investment needed to complete the project.

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Step 6 — Prepare an Architectural Program

Once you know the direction you will take — either new, remodeled, or shared space — architectural programming is the next step. This research and decision-making process brings together your list of space wants and needs, including the level of desired energy efficiency, ultimately identifying the scope of work to be designed. Preparing the architectural program may be your first contact with a designer or builder. Additional consultants will be brought on later in the process.

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Step 7 — Evaluate and Select a Site

Acquiring the site and obtaining site control is a key benchmark in a project’s development. Once the land is secured, many funding options become available. When selecting a site, you will consider a range of factors such as location, zoning, user access, relationship to community development plans and priorities, transportation options, topography, views, light, and access to utilities. Property lines, setbacks and easements, location of roads, parking, and other landscape features should also be noted.

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Step 8 — Prepare a Concept Plan

Once you have selected a site and established a program, your architect can help you create a conceptual plan that shows where the building is located on the site, what the building (generally) could look like, and the functional relationships between program spaces.

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Step 9 — Prepare a Cost Estimate

Cost estimating is a critical piece of each phase of design. As the building design ideas are refined and formed into a comprehensive building, the precision of the estimate increases.

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Step 10 — Analyze Building Operational Costs

Having a space we want and one we can afford is often different. Take the time to analyze expanded service delivery costs and revenue to ensure you can sustain your space for the long term and that it will support your mission. Whether starting new or expanding an existing facility or program, these costs could include:

  • Operations (power, heat, security, and IT)
  • Maintenance (snow plowing, servicing of mechanical equipment, deep cleaning, grounds maintenance)
  • Furniture, fixtures, equipment, and supplies
  • Increased staffing needs

Also, consider those areas where investing more on the front end provides better long-term savings. These could include using efficient exterior walls, windows, and durable, low-maintenance finishes.

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Step 11 — Compile a Business Plan to Determine Financial Feasibility

Now is the time to prepare a full and detailed business plan that will not only account for overall project cost but will cover elements like fixtures, furnishings, and equipment. And it will answer two critical questions:

  1. Based on your cost estimate and funding portfolio, can you afford to construct a building or modify an existing facility?
  2. Based on the energy consultant’s analysis can you afford to operate and maintain it?

Doing this analysis will tell you whether the project is financially feasible over the long term – or not. The numbers will either work or they won’t.

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