Capital Project Financial Model

chart 3dCapital Project Road Map – The Financial Model

Fundraising, financing and budget risk – these are the three most important financial areas of your capital project. Keeping your numbers “right-side up” has always been complicated – until now.

Approach

Lotte Lieb Dula’s capital project financial model translates project data from diverse sources into the components of time and money. Utilizing the model and its incisive reporting tools, non-profits can easily answer the following questions:

Project Budget

  • Have we properly budgeted for all costs, including soft costs, contingency and financing?
  • Is our project contingency sufficient?
  • Is there a way to quantify the risk on our project?
  • What is the risk of change orders on our project?
  • What information will I need from the Owner’s Rep?
  • Have we overcommitted to design or construction costs?
  • Will we have to make decisions to cut the budget? Is it too late?
  • What happens if our cost estimates exceed the capital campaign target?
  • How do our stats compare with similar projects?

Capital campaign

  • Is the campaign target sufficient to pay for all project costs?
  • When do we need to complete the campaign?
  • What happens if pledges come in more slowly than expected?
  • What metrics should I review regularly with the finance team?
  • Should we add expected payment dates to our pledge forms? (hint: YES!!)
  • What effect will donor payment variances have on cash and project loan requirements?
  • How can we motivate our donors to pay more quickly?

Cash Flow and Financing

  • Do we have sufficient cash to fund monthly construction costs?
  • What amount of financing will we need?
  • When will we need it?
  • What metrics should I review regularly with the development team?
  • How long will it take to pay off our construction loan?
  • How much will our loan cost?

The financial model has these features:

Project Metrics

  • Detailed project budget
  • Detailed project cash flow
  • Project risk calculators, including:
    • Executed change order tracking
    • Pending change order tracking
    • Other project exposure tracking
  • Expenditure reports:
    • Inception to-date
    • This month
  • Project commitment analysis
  • Template for owner’s rep reports

Capital Campaign Metrics

  • Fundraising detail report templates, including:
    • New pledges and cash receipts
    • Capital campaign cash flow by donor
    • Quantified solicitation report

Cash Flow Metrics

  • Detail monthly cash flow projection including:
    • Pledge cash inflows
    • Loan cash inflows
    • Project cash outflows
    • Pledge receipt account balances
    • Loan estimates
    • Loan balances
    • Template for bank loan draws

Integrated Financial Metrics

  • Capital campaign progress by %
  • Pledge vs. commitment ratios
  • Contingency ratios
  • Project pledge and loan cash requirements

  Next: get tips on strategic planning elements for your project Here