NYC CapGrants: What They Are, Why They Matter, and How to Apply

4/23/2024

Editor's Note: This post was originally published in December 2023 and has been updated for accuracy and comprehensiveness.

NYC Fiscal Year 2026 CapGrants

New York City Council discretionary funding makes capital improvements and property ownership a reality for hundreds of nonprofits each year. City Council and Borough Presidents provide millions of dollars annually to fund capital projects, undertaken specifically by nonprofits, under the NYC annual budget. The FY2026 application process is imminent.

 

Now is the time to explore eligibility and to develop a strategy for applying.

 

What are City Capital Grants?

Capital grants are considered discretionary funding, which is a duly appropriated sum of money in the City’s budget. Discretionary funding is allocated to an eligible nonprofit organization by the NYC Council or one of its members.

 

If you are undertaking a capital project in New York City, you may want to consider applying for City Capital Funding. More than two hundred organizations apply each year. Under the budget, the city allocates more than $200 million for projects sponsored by nonprofits. Recipients of these awards are organizations of all sizes and missions, including social and human service agencies, health care providers, and cultural institutions. Funding can be part of your project’s capital stack.

 

Keep in Mind

·   CapGrants online portal opens in January.

·   Funding request form is due in February.

·   The application and funding process typically takes 18-24 months.

Step-by-Step

City officials sponsor the discretionary funds. A City Council Member, Speaker, Borough Delegation, or Borough President could sponsor your nonprofit’s project. A first step is to meet with your local officials and discuss their interest in funding your project.

 

The next step is to gather the appropriate expertise and administrative support needed to successfully take on a multifaceted process over many months.

 

Are City Capital Grants Worth Pursuing?

Funds can be available for as much as 90% of your capital improvements for projects up to $2.0 million and 50% for costs of more than $2.0 million. Consider how the CapGrant program impacted our client, the New York Immigration Coalition (NYIC), an umbrella policy and advocacy organization representing 200+ immigrant and refugee rights groups throughout New York.

 

For many years, NYIC had leased multiple small units in a Midtown South building. The opportunity to purchase and move all operations onto a single floor represented a new stage in the nonprofit’s growth and development. Specifically, NYIC could reduce its occupancy costs while building a core, long-term asset.                       

 

Securing a $5.0 million NYC City Council Capital Grant was an important factor in making the $8.5 million commercial condo acquisition a reality. The grant ensures that the new space can be built to the organization’s specific programming requirements, a significant accomplishment considering the building was built in 1960.

 

In addition to New York City capital funding, we also secured a $1.5 million Empire State Development Grant.

 

Three Key Considerations for Eligibility

FIRST, understand how New York City defines capital projects. An eligible project can be a real estate acquisition, construction of a new facility, expansion of an existing facility, upgrades/renovations, or replacement of a building system. To be clear, funds are earmarked for capital projects and facilities owned or acquired by the nonprofit.

 

SECOND, your project must further a City “purpose” for its entire useful life. Furthermore, it must have a useful life of five years or more, and services need to be open to all members of the public. The City places a use restriction on the project. Consequently, other sources for private financing are subordinate to the City’s interests. Typically, the City funds a portion of the project, and you must arrange the balance of the funding, which can come from your set aside cash reserves, loans, capital campaign, and federal/state funds.

 

THIRD, your nonprofit must have at least one City operating contract. For real estate projects (that are not for cultural institutions), your organization must have a separate, pre-existing contract with the City for operating funds in the current fiscal year and the preceding two fiscal years, with a minimum annual dollar amount of $50,000 each year.

 

How do I apply for a City Capital Grant?

Accessing funds for your project can be a lengthy and often tedious process, but, with discretionary grants typically ranging from $500,000 to $15M for a single project, well worth your time.

 

The general application and funding process involves the following key milestones.

1.   Comply with application requirements.

2.   Arrange funding to bridge capital grant.

3.   Demonstrate full funding of project.

4.   Comply with declaration of covenants.

5.   Arrange mortgages subordinate to NYC use lien.

6.   Engage with Mayor’s Office of Management & Budget (OMB) and the assigned processing agency, which is typically the Economic Development Corporation (EDC).

7.   Establish (with OMB) eligible project costs.

8.   Comply with your existing NYC operating agreement.

9.   Secure project, design documentation, and construction budget approvals.

10.  Receive fund disbursements—typically, up to 24 months after initiating funding process.                   

Discretionary grants can range from $500,000 to $15 million for a single project. Most of the awards are in the range of $500,000 to $5.0 million.

 

How Can City Capital Grants Make a Difference?

Capital projects can be instrumental to a nonprofit’s long-term viability and ability to fully realize its mission. However, in a difficult lending market, they are often put on the back burner.

For both nonprofits and businesses, the COVID pandemic had a significant impact on revenue and cash flows. However, for many nonprofits, regaining lost ground continues to be a struggle. Federal assistance programs like the Paycheck Protection Program (PPP) and the Employee Retention Tax Credit (ERTC) have  ended, requiring these organizations to double down on employee compensation and expenses. The difficult economic environment is exacerbated by rises in inflation and the cost of borrowing. Access to credit is very limited and generally available only to high-rated organizations.

Social and human service providers face additional hurdles, as these organizations are heavily dependent upon state and city operating contracts that typically receive payment long after services have been performed. The nonprofits are then forced to bridge the funding gaps with cash reserves or raise funds from outside donors: two options that further strain already tight budgets and depleted funding sources.

 

Capital grants are a sizable lifeline for important projects that would have otherwise been tabled for later or never. The CapGrant program can make projects once again feasible.           

Organizations serving our communities shouldn't be forced to exhaust limited cash reserves—just to survive.

 

More Help for Nonprofits

Current market trends will most likely continue for the foreseeable future. Consequently, many struggling organizations will need to adapt to this new economic environment to survive.

 

The good news is governments, foundations, and corporations are stepping up and providing critical funding to help struggling nonprofits. CapGrants are just part of the potential funding equation. For example, credit with lower rates and more favorable terms is available through certified Community Development Financial Institutions (CDFI). Similarly, government programs, under the Inflation Reduction Act, are adapting to new economic realities by providing non-tax-paying entities with comparable benefits to the tax credits received by commercial enterprises.

 

Start by partnering with an independent municipal financial advisor with experience guiding nonprofits through grant and other required debt processes. To fund your project in full, look for an advisor, like ThinkForward, who can think holistically about what’s possible, including assisting with required mortgages and arranging bridge loans for the capital grants.

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Programs

NYC CapGrants: What They Are, Why They Matter, and How to Apply

Editor's Note: This post was originally published in December 2023 and has been updated for accuracy and comprehensiveness.

NYC Fiscal Year 2026 CapGrants

New York City Council discretionary funding makes capital improvements and property ownership a reality for hundreds of nonprofits each year. City Council and Borough Presidents provide millions of dollars annually to fund capital projects, undertaken specifically by nonprofits, under the NYC annual budget. The FY2026 application process is imminent.

 

Now is the time to explore eligibility and to develop a strategy for applying.

 

What are City Capital Grants?

Capital grants are considered discretionary funding, which is a duly appropriated sum of money in the City’s budget. Discretionary funding is allocated to an eligible nonprofit organization by the NYC Council or one of its members.

 

If you are undertaking a capital project in New York City, you may want to consider applying for City Capital Funding. More than two hundred organizations apply each year. Under the budget, the city allocates more than $200 million for projects sponsored by nonprofits. Recipients of these awards are organizations of all sizes and missions, including social and human service agencies, health care providers, and cultural institutions. Funding can be part of your project’s capital stack.

 

Keep in Mind

·   CapGrants online portal opens in January.

·   Funding request form is due in February.

·   The application and funding process typically takes 18-24 months.

Step-by-Step

City officials sponsor the discretionary funds. A City Council Member, Speaker, Borough Delegation, or Borough President could sponsor your nonprofit’s project. A first step is to meet with your local officials and discuss their interest in funding your project.

 

The next step is to gather the appropriate expertise and administrative support needed to successfully take on a multifaceted process over many months.

 

Are City Capital Grants Worth Pursuing?

Funds can be available for as much as 90% of your capital improvements for projects up to $2.0 million and 50% for costs of more than $2.0 million. Consider how the CapGrant program impacted our client, the New York Immigration Coalition (NYIC), an umbrella policy and advocacy organization representing 200+ immigrant and refugee rights groups throughout New York.

 

For many years, NYIC had leased multiple small units in a Midtown South building. The opportunity to purchase and move all operations onto a single floor represented a new stage in the nonprofit’s growth and development. Specifically, NYIC could reduce its occupancy costs while building a core, long-term asset.                       

 

Securing a $5.0 million NYC City Council Capital Grant was an important factor in making the $8.5 million commercial condo acquisition a reality. The grant ensures that the new space can be built to the organization’s specific programming requirements, a significant accomplishment considering the building was built in 1960.

 

In addition to New York City capital funding, we also secured a $1.5 million Empire State Development Grant.

 

Three Key Considerations for Eligibility

FIRST, understand how New York City defines capital projects. An eligible project can be a real estate acquisition, construction of a new facility, expansion of an existing facility, upgrades/renovations, or replacement of a building system. To be clear, funds are earmarked for capital projects and facilities owned or acquired by the nonprofit.

 

SECOND, your project must further a City “purpose” for its entire useful life. Furthermore, it must have a useful life of five years or more, and services need to be open to all members of the public. The City places a use restriction on the project. Consequently, other sources for private financing are subordinate to the City’s interests. Typically, the City funds a portion of the project, and you must arrange the balance of the funding, which can come from your set aside cash reserves, loans, capital campaign, and federal/state funds.

 

THIRD, your nonprofit must have at least one City operating contract. For real estate projects (that are not for cultural institutions), your organization must have a separate, pre-existing contract with the City for operating funds in the current fiscal year and the preceding two fiscal years, with a minimum annual dollar amount of $50,000 each year.

 

How do I apply for a City Capital Grant?

Accessing funds for your project can be a lengthy and often tedious process, but, with discretionary grants typically ranging from $500,000 to $15M for a single project, well worth your time.

 

The general application and funding process involves the following key milestones.

1.   Comply with application requirements.

2.   Arrange funding to bridge capital grant.

3.   Demonstrate full funding of project.

4.   Comply with declaration of covenants.

5.   Arrange mortgages subordinate to NYC use lien.

6.   Engage with Mayor’s Office of Management & Budget (OMB) and the assigned processing agency, which is typically the Economic Development Corporation (EDC).

7.   Establish (with OMB) eligible project costs.

8.   Comply with your existing NYC operating agreement.

9.   Secure project, design documentation, and construction budget approvals.

10.  Receive fund disbursements—typically, up to 24 months after initiating funding process.                   

Discretionary grants can range from $500,000 to $15 million for a single project. Most of the awards are in the range of $500,000 to $5.0 million.

 

How Can City Capital Grants Make a Difference?

Capital projects can be instrumental to a nonprofit’s long-term viability and ability to fully realize its mission. However, in a difficult lending market, they are often put on the back burner.

For both nonprofits and businesses, the COVID pandemic had a significant impact on revenue and cash flows. However, for many nonprofits, regaining lost ground continues to be a struggle. Federal assistance programs like the Paycheck Protection Program (PPP) and the Employee Retention Tax Credit (ERTC) have  ended, requiring these organizations to double down on employee compensation and expenses. The difficult economic environment is exacerbated by rises in inflation and the cost of borrowing. Access to credit is very limited and generally available only to high-rated organizations.

Social and human service providers face additional hurdles, as these organizations are heavily dependent upon state and city operating contracts that typically receive payment long after services have been performed. The nonprofits are then forced to bridge the funding gaps with cash reserves or raise funds from outside donors: two options that further strain already tight budgets and depleted funding sources.

 

Capital grants are a sizable lifeline for important projects that would have otherwise been tabled for later or never. The CapGrant program can make projects once again feasible.           

Organizations serving our communities shouldn't be forced to exhaust limited cash reserves—just to survive.

 

More Help for Nonprofits

Current market trends will most likely continue for the foreseeable future. Consequently, many struggling organizations will need to adapt to this new economic environment to survive.

 

The good news is governments, foundations, and corporations are stepping up and providing critical funding to help struggling nonprofits. CapGrants are just part of the potential funding equation. For example, credit with lower rates and more favorable terms is available through certified Community Development Financial Institutions (CDFI). Similarly, government programs, under the Inflation Reduction Act, are adapting to new economic realities by providing non-tax-paying entities with comparable benefits to the tax credits received by commercial enterprises.

 

Start by partnering with an independent municipal financial advisor with experience guiding nonprofits through grant and other required debt processes. To fund your project in full, look for an advisor, like ThinkForward, who can think holistically about what’s possible, including assisting with required mortgages and arranging bridge loans for the capital grants.

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