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Public Funding Sources: How Budget Appropriations Can Elevate Your Capital Fundraising

Claire Magula, Senior Consultant

When your organization is planning major capital work, it’s important to not overlook public funding resources. Public funding opportunities include grants, appropriations, and loans from city, county, state, and federal government entities. With so many potential public funding sources available, it can be difficult to form a coherent public funding strategy and keep track of the options.  

 

Budget appropriations are an exciting funding opportunity that may be unfamiliar - and a bit intimidating - to your organization. In this article, I’ll cover the basics of appropriations (what the heck is that, anyway?) and how to position your organization to take advantage of this funding source.  A strategic appropriation can potentially be one of the largest funding sources for your capital project and is often an essential fundraising strategy to complement and leverage individual and private institutional giving. 

 

Appropriation Basics 

A budget appropriation is when a legislative body earmarks funding for your project in their annual budget. Budget appropriations can happen at any level of government; however, we most commonly pursue them at the federal and state levels. At the federal level, budget appropriations are made by both the U.S. Senate and the U.S. House of Representatives and signed into the federal budget annually. In Washington state, capital budget appropriations are made by State Senators and State Representatives and signed into the state budget annually.  Typically, each legislator has a set amount of funding per year that they can appropriate to the community projects of their choosing, which means they must pick and choose between many compelling projects.  

 

Appropriations are a great funding option because they can be a source of significant revenue for your project and involve a less cumbersome application process than many other government grants. Having your elected officials support your project can increase overall confidence in your project from other donors and can spur donations from private funders, many of whom like to see funds committed to the project in advance. On the other hand, it’s important to recognize that appropriations are a political process, contingent on having support from your legislator, with the project aligning with their legislative priorities, navigating the sometimes-murky application process, and subject to shifting political pressures and budgetary constraints. Despite the challenges, budget appropriations can be a key factor in successfully reaching your fundraising goal and completing your capital project. 

 

Building Relationships 

Like most fundraising, appropriations are contingent on cultivating relationships. To get an appropriation for your project, you need to find a sponsor - a legislator you've built a relationship with - who supports your project and will advocate for it during the budget process. Ideally, you’ll have more than one sponsor - i.e., a Senator and Representative; or at a local level, a Mayor and multiple City Councilmembers.  

 

If your organization wants to pursue legislative appropriations, start building relationships with your elected officials, at all levels of government, when the legislature is not in session. It is never too early to foster those connections, even if your capital project is a few years down the road. If your organization doesn’t have existing relationships with elected officials, start creating them by reaching out to their offices. This is also a great opportunity to engage your board and other community supporters who many times have large and diverse networks. These people can be powerful advocates for your organization and may have relationships that can help open doors. It is also important to remember that elected officials are politicians - it can be strategically useful to research their priorities in advance and to frame your project in a way that will be mutually beneficial to them.  

 

Elected Officials to Contact: 

Federal: US Senators for your state; US Representative for your congressional district 

State: State Senators and State Representative for your legislative district 

County: County Council Members (or comparable leaders) 

City / Town: Mayor, City Councilmembers (or comparable leaders) 

 

Once you reach out, it’s normal to not hear back - be persistent. If you don’t get a response in a week or two, follow up - repeatedly - until you do. Sometimes making a phone call is a great tactic, too. It’s also normal for elected officials to have dedicated staff members managing constituent relationships and appropriations processes, and it is OK if you primarily interface with those folks. 

 

Once you get movement, focus on familiarizing the elected official (or their staff) with your organization, your work, and the impact your capital project will have on the community. Invite them to visit your organization for a tour. Or if geography is a barrier, set up a virtual meeting. Ultimately, your goal will be to ask them to sponsor your budget appropriation.  

 

Application Process 

Applications are available on request through your elected official’s office. It is normal for the application to become available on short notice and have a very fast turnaround time. It can be extremely helpful to find previous year’s application forms to use as a reference to prepare your proposal in advance. It is also common for different legislators to have different application forms, due dates, and submission tools (even within the same legislative body). And, it’s normal to get slightly different or inconsistent information from different elected official’s offices. The best strategy is to be in touch with legislative staff and ask to be alerted when the applications become available. 

 

Timing 

Budget appropriations happen annually in conjunction with state and federal fiscal budgeting.  

 

In Washington State, appropriation applications open in early January, when the legislative session starts. Funding decisions are announced in the Spring, after the legislative session has concluded. That means you need to start your lobbying process in advance - the earlier, the better.   

 

At the federal level, appropriations correlate with the federal budget process. Applications open between February and April, with awards being announced over the summer, and once again, it is advisable to lobby for support well in advance. 

 

Planning for Post-Award Management 

Appropriations awards are signed into law as part of the city, county, state, or federal budget. Budgets are set for the next fiscal year. For example, in 2024, the U.S. Congress is working on the Fiscal Year 2025 budget. That means it can take a full year between applying and being able to utilize funds - so planning and applying in advance is critical.  

 

Awarded appropriations are typically administered via a contract with a government agency. In Washington State, they’re administered by the Department of Commerce and subject to state grant contracting guidelines. At the federal level, they’re administered by various government agencies (depending on the project), and subject to the Code of Federal Regulations Title 2 (which is typical of all federal grants), and other agency-specific rules and regulations. It can be extremely helpful to work with those agencies in advance to understand award management and compliance issues. It is also important to assess your organization’s experience and capacity for managing state and federal grants, and plan accordingly for capacity building in advance.  

 

It’s typical for appropriations (like most public funding) to be reimbursement style. Your organization will likely not be able to execute the appropriation contract until you can show the administering agency that your organization has all other financial resources needed to complete the project on hand. Appropriation awards usually require that they be the last money spent / reimbursed - ie, you need to use other sources of funding first. That means it is crucially important to plan your cash flow and other fundraising needs well in advance.  

 

In conclusion, appropriations can be a transformative source of funding for your organization’s capital projects. Success is contingent on building strong relationships with your elected officials, well in advance of making your request; being persistent in your outreach; anticipating a short application turnaround time with little advance notice; and, planning well in advance for your organization's cash flow and grant management needs. With cultivation, patience, and strategic foresight, appropriations can be a substantial, catalytic source of funding for your capital project with the impact to motivate private funders and reach your organization's fundraising goals.  

 

Reach out to the team at Ostara to learn more about appropriations and to help develop a custom public funding strategy for your campaign.  

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