Volume III: Structures for Science

Ways and Means

Because of the high cost of building, equipping, and maintaining science facilities, the specter of ways and means -- budgeting, financing, and fund-raising -- will always be present in your discussions. As financial and development officers have been working with other campus leaders throughout the long process of planning your new spaces and structure, they will be able to make decisions about the ways and means of the project to keep your planning focused and on track.

The Project Budget

The project budget is an important document from both the construction and the development perspective. It includes construction costs and other costs directly and indirectly related to the project. The project budget must be sensible, arrived at in a rational manner by members of the project committees and their agents and consultants. It should support the facility program and stay within reasonable limits of your institution. The project budget illustrates, to prospective donors and to the campus community, the care with which you have proceeded in planning, and how this single project fits into institutional planning and priorities.

A comprehensive and concise management tool, the project budget is a summary of a multitude of decisions about the scope and quality of a major capital project -- your new science facility. Establishing the budget, particularly the construction budget, is a delicate balancing act, one that requires attention both to the facility program that has been defined and the resources available. How comprehensive your project budget is depends on the specific circumstances of your institution. As you develop the project budget you should think about whether or not to include: equipment, furnishings, fees for architectural, engineering, and consultant services, institutional contingencies, fund-raising expense, and short-term interest expense.

The project budget should be under review by the project team throughout the entire project. Critical moments that the budget should definitely be considered are at the end of the schematic design phase; at the end of the design development phase; at the point when 50-70 percent of the construction documents are complete; and when the construction documents have been sent out to secure bids from the contractor and subcontractors.

  • Effective Budget Development
  • Special Considerations

Operating Budgets

It is important in the planning stage to address the potential impact that the new spaces will have on your operating budget. The reasons are obvious: if annual operating costs increase, someone on your campus will have to pay attention to securing an equivalent increase in annual revenue and its source. In making these operating budget estimates it is critical to consider first intangible benefits and costs that might accrue.

  • Intangible Benefits and Costs
  • Operating Budget
  • Capital Funds and Costs

Fund Raising

Fund raising is an important aspect to the building process of a new facility. Many schools do not have the funds readily available to construct or renovate a new facility, and must work hard to find ways of raising the appropriate funds in order to secure the creation of the building. Your campaign to raise millions for science facilities is an opportunity to communicate with those who already support your institution. It is also an opportunity to reach out to those, both inside and outside of the institution, with the potential to be major donors.

  • Campaign Leadership
  • Fund-Raising Activities
  • Sources of Gifts and Grants
  • Benefits
Special Considerations
Intangible Benefits and Costs
The Operating Budget
Capital Funds and Costs
Fund Raising

Effective Budget Development

When developing a budget that is effective you must make sure that all of your bases are covered. Although this is not an exhaustive list this will help you see the key factors that you need to consider when developing an effective budget. You must:

  1. Manage expectations and acknowledge that change is inevitable.
  2. Establish a solid base of needs documented in the facility program.
  3. Study as many sites and building alternatives as possible within the context of the campus.
  4. Create a well-defined schedule for the project.
  5. Make sure that the budget is accepted by all members of the project team.
  6. Establish clear responsibilities among those involved for adhering to a budget that is consistent with and supportive of the facility program.
  7. Focus on the process, from the initial stages to the end, as a team effort.
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Intangible Benefits and Costs
The Operating Budget
Capital Funds and Costs
Fund Raising

Special Considerations

Circumstances unique to your institution may dictate special considerations when developing your project budget. It is not possible to anticipate all the inevitable changes that may be required as the project develops, because every building project is distinctive. By taking into consideration factors specific to your institution your budget will remain more accurate, and the potential for significant changes will diminish.

Cost Differences

The range of construction costs for science buildings that include a mix of wet and dry labs is in the general area of $140 and $250 per gross square foot. There are many factors that contribute to the differences in costs, and you should be aware when developing your budget that this variation does exist.

Contingencies and Escalation

It is critical to factor in contingencies, so you can respond to unforeseen conditions and for possible changes required by the passage of time. Contingencies must be based on previous experience and adjusted at each phase of the project's development.

Potential escalations are influenced by many factors, some of which you are in control of and others which you are not. For example unknown pricing and complexity during the planning of the budget might lead to project cost escalations, as well as unforeseen conditions and changes during construction.

Selection of the Construction Delivery Method

The method of contracting you use determines the selection process for the construction members of your project team, so you must consider which type you would like to use while in the initial stages of budgeting and planning. There are three contracting arrangements used to deliver construction projects:

  1. General Contracting (GC)
  2. Design/Build (DB)
  3. Construction Management (CM)

There are variations within each of these areas depending on the specific circumstances. Let us note here that entire books have been written on this topic, and that we will only share what we feel are some of the important factors to consider when deciding the method used on your project.

You should determine the range of allowable methods, as some construction delivery methods are not allowed due to statute or administrative precedent. You should analyze capabilities and project goals to determine the priorities of the people in your institution. You should then match your priorities with contracting methods.

Energy

Science facilities consume a large amount of energy and this must be considered as the project budget is developed, including the impact of the project on existing utilities and the capacity of the institution to meet the energy needs of the new facility. By establishing an overall building energy budget that accounts for energy used during building design and construction, equipment cost, and operating energy use over the expected life of the building, you are able to select building systems and materials in the context of broader goals for the project, rather than on a case-by-case determination.

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Effective Budget Development
The Operating Budget
Capital Funds and Costs
Fund Raising

Intangible Benefits and Costs

Intangible Benefits

The new facility has the potential to increase collegiality amongst faculty, promote curricular innovation, increase student and faculty research. The new space may be instrumental in retaining your best faculty, and in attracting strong new faculty It may add significantly to the prestige of your institution attracting prospective students from the brightest segment of the application pool. These benefits are difficult to quantify, but they clearly add to the luster of the institution and help to create the opportunities and milieu that promote a thriving, dynamic educational environment for the natural science community on your campus.

Intangible Costs

A major project is extremely demanding on all institutional resources; it requires considerable time, energy, oversight, and attention, probably beyond what anyone expects at the beginning of planning. This is time and energy away from other campus responsibilities in classrooms, labs, and/or administrative offices, which adds up to a significant cost. Faculty, administrators, facilities managers, and support staff expected to participate in the planning over and above their other responsibilities may lose morale and productivity. The president and other administrators need to anticipate these time commitments and the pressures they may place on staff and faculty, and consider ways to support, encourage, and help those involved in the planning of the new facility.

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Effective Budget Development
Special Considerations
Capital Funds and Costs
Fund Raising

The Operating Budget

Operating Revenue Factors

Improved facilities for science teaching and research often result in a rise in the general level of activity in science departments. This higher level of activity will result in increases in both revenue and expenses. All or some portion of the increase in operating costs will have to be met by an increase in unrestricted budget support. Some of these increases can be met by savings or income from other lines in the operating budget, including: savings in insurance costs, savings in annual maintenance costs, and science endowment fund revenue.

Operating Expense Factors

Improvements in science facilities may require larger budgets for direct program costs, such as faculty salary budgets if student enrollments, supplies, and lab use increase. Other operating expenses that need to be considered include: building operation/maintenance, equipment maintenance, equipment upgrade/replacement, building depreciation, and debt service. In general, estimates based on historical information will become underestimates exceeded as new facilities come on line, and the ambitions of faculty and students alike become more expensive.

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Effective Budget Development
Special Considerations
Intangible Benefits and Costs
Fund Raising

Capital Funds and Costs

Some institutions, by choice or necessity, will select sources of capital project funds which may have significant impact on future operating budgets. The most obvious of these is debt financing, but it can also involve institutional funds, such as endowment or unrestricted reserves, and planned gifts.

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Effective Budget Development
Special Considerations
Intangible Benefits and Costs
The Operating Budget

Fund Raising

The energy and attention required to plan and to raise funds for a new science facility is, of necessity, focused inward. Once the major decisions have been made about the scope, quality, and site of the new facility however, it is important to look outside your institution. Contemplating, and then planning for and carrying out, a fund raising effort to secure new or renovated science facilities is both daunting and exhilarating.

To be effective in securing support for your facility you need to address this larger context and be prepared to tell your story based on what contribution the project will make to your students and to society at large. Project Kaleidoscope argues that your immediate fund raising goal will be easier to achieve if you also make the effort to connect your individual project to larger societal goals. What potential donors want and need is assurance, and reassurance, that the project is a feasible one and that it will succeed. Fund-raising success with any project is directly related to being able to provide prospective done with clear evidence of an institutional endorsement of the proposed facility.

Campaign Leadership

A successful fund-raising campaign requires the commitment of many people. Involving the president and members of the senior staff, development officers, trustees, and faculty is critical in preparing for and implementing fund-raising efforts for the new facility or spaces.

Fund Raising Activities

Development officers are the main people in charge of the fund-raising campaign. It is important that they come up with a clear plan, case statement, and strategy for following through with it. The plan should include potential donors, the time line for development of campaign materials and the solicitation, and the likely amounts that can be expected from major donors and categories of donors. The case statement is a very important document where you articulate your vision of how the new science facilities will improve science, teaching, and research and how this vision fits within the institution's long-range goals. The case statement is the document which is created to capture the attention and interest of prospective donors. Strategies are also an important part of the fund-raising activity. Strategies should include such things as models and drawings.

Fund Raising for New/Renovated Science Facilities: The Case Statement

The creation of a convincing Case Statement is vital to the presentation of your needs to use with prospective donors, particularly foundations, at the point when the institution is ready to seek external funding for new or renovated science facilities.

The Case Statement pulls together information into a coherent whole from the design committee and other faculty, department chairs, deans, architects and administrators. It articulates a vision of how new science facilities will improve science teaching and research within the institution's long-range goals and mission. It is valuable for developing internal institutional commitment to the enterprise as well as explaining plans, goals and needs to potential donors. While each institution's Case Statement will be a unique document, each will address the following:

  1. Donors want to know how the new facility will serve science departments and improve teaching, research and learning. You can bring site plans to life by describing how laboratory design and building configuration will enhance learning and student/faculty interaction, and at the same time attract students to science. Emphasize plans for particularly distinctive curriculum changes and how these will impact the physical layout of the building.
  2. Because donors to science facilities want to be assured of the importance of science within the liberal arts curriculum of the institution, you need to include evidence of institutional support for strong, and expensive, science departments and facilities. The sciences are then positioned as part of a coherent, thoughtful, balanced undergraduate curriculum, and the donor's gift supports a science facility as well as institutional goals.
  3. What will it cost? Donors need to know the full project cost, and the impact of their gift or grant. Often, donors are keenly interested in the institution's plan for raising the millions in addition to their own grant needed to build or renovate science facilities, and appreciate being informed of gifts and grants already received. They may also want the option of naming laboratories or buildings. A policy which outlines the size of gift required to name specific spaces should be in place from the beginning of fund raising for the facility.
  4. The Case Statement should include evidence of the strengths of the science departments served by the new facility. Donors like to reward excellence and are interested in faculty research, awards and honors, in alumni who have gone on to distinguished careers in science and medicine, and in student/faculty research projects and published papers. Short profiles of one or two individual faculty, students and alumni enliven proposals and are effective in illustrating particularly outstanding teachers and courses.
  5. Emphasize the positive. Focus the statement on improvements and the future, away from a litany of the deficits of existing facilities. Without much urging, donors will assume you are raising millions for a new facility because you have an exciting plan which will house and exciting program. This is what they are interested in supporting.
  6. If possible, position new or renovated science facilities within long-range plans for total campus renewal, and within long-range plans for overall support for science education. For instance, you can pull together plans for science endowments for professorships, research, equipment and/or maintenance with facilities costs and demonstrate administrative and fiscal responsibility for future needs. Donors care about their investment in the institution, and want their grants to contribute to future institutional health.

Sources of Gifts and Grants

Every endeavor to raise funds must also raise friends. From the beginning of thinking about a possible facility you should have in mind how to use the project to raise both friends and funds in ways that will be of long-term benefit to your institution. Such sources include foundations, government grants, and corporations. Development officers should coordinate the involvement of institutional leaders, including trustees and faculty, in the cultivation and solicitation of these various categories of potential donors.

Benefits

There are many benefits to fund-raising campaigns. One important benefit of a campaign is the clarity it can bring to the articulation of institutional goals and priorities. Through using creativity and actively reaching out and soliciting the help of the entire campus during campaign drives there is a great potential for community spirit and energy to be created and expanded.

At all times during the planning and implementation of the fund-raising campaign, the development officer(s) keeps in close touch with the project shepherd and project manager, and continues to work carefully with institutional leaders to coordinate fund-raising for the specific project.

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Effective Budget Development
Special Considerations
Intangible Benefits and Costs
The Operating Budget
Capital Funds and Costs