Focus Area Overview

Institutional capitalization represents a multi-part effort to promote the practice of sound capitalization principles in the field.

A well-capitalized organization has the financial resources to cover its short- and long-term obligations, weather economic downturns and be able to take advantage of opportunities to innovate as needed to advance its mission and achieve its goals.

We define capitalization as the accumulation and application of financial resources – operating and working capital, operating reserves, risk capital, endowment and building reserves – to support the achievement of an organization’s mission over time.

A comprehensive capitalization plan takes into account an organization’s mission and vision, its business model drivers, time horizon and life-cycle and its role in the marketplace. With this information, the capitalization plan outlines the various types of funds required for a given organization. It then articulates the amount of funds needed, the timing of specific needs and the methods for obtaining the required resources.

Since each organization is unique, so too are its resource needs. There is no standard capitalization formula; however, chronically undercapitalized organizations put their missions at risk.

Our goal is to promote the widespread application of sound capitalization and facility management principles among cultural organizations and funders in an effort to help strengthen individual organizations and advance these practices in the field as a whole. For more information, read our guide, Capitalization Philosophy and Terms.

We pursue this work through field education and research efforts, direct grantmaking to arts and cultural organizations and a robust evaluation effort. The lessons learned will be captured and shared with the field.

The initiatives are:

Facility investments and building reserves

Facility investments and building reserves, which provides grants for facility renovation and repair projects and for building reserve funds within the context of an organization’s capitalization plan.

Strengthening arts facilities

Strengthening arts facilities effectively, or SAFE, a partnership with the Nonprofit Finance Fund to seed and grow building reserve funds for 14 children’s museums and community schools of art within the context of their respective capitalization plans. 

Sector leader investments

Sector leader investments, which makes strategic investments in transformational projects that support a shift in an organization’s business model in response to field-wide pressures.

Eligibility

For eligibility information, visit the initiative of interest.

Application Process

Each initiative has its own application process. Visit the initiative of interest for more information.