Folks,
We're doing budgeting at Kalmbach this spring for next fiscal year. Looking at the $10,000 annual preservation grant that we award each year to a deserving project, and I wanted to pose a question to you about this. What would you think if we made this into a challenge grant? The terms would be: We'll provide up to $10,000 for the project, but your organization has to raise $10,000 in order to get it. Would our non-profits welcome this or not? Or what would you think about it if we made it a competition: Choose three finalists and the one that raises the most money by the deadline, gets the $10,000.
I know how difficult fund raising is for railway museums. Would this make it better? Or worse?
Jim

Hi Jim,

I don't like the idea of a challenge grant competition (pick 3, one who raises the most wins) because then it gets tricky for the "losers". What do they do, return the (other) money raised?

If you did a challenge grant, I would suggest setting it at 50% of the award (ie.: $5000.) 10k is an awful lot of money to raise on short notice. $5k is doable, especially with national exposure from Trains. ("Hey, Trains will give us 10k, if we raise 5k.")

That being said, I really appreciate the simplicity of the Trains grant - no gimmicks or long forms. Just a short email with a description, etc. We trust that you will pick the best project; and so far you have.

Keep up the good work,

-Ed Lecuyer
Volunteer, Grant Writer
WW&F Railway Museum

I agree with Ed, and would like to add that making it a competition might make certain efforts seem futile against a more popular project.

I hate popularity contests--which is what too many of these kind of challenges turn into.

I'd much rather see projects win where, say, $10k goes a long ways towards making a big difference, unlike, say, a $10k contribution towards a million-dollar proposal.

But it's your money. Stick the conditions you want to on them.

Jim,
Although you would still get plenty of applicants, a challenge grant would require more complex rules. Could the applicants simply offer matching cash already on hand, or would they have to raise new money? If cash on hand was acceptable, it would reduce the number of cash-poor applicants. Also, it's harder to raise cash based on the small possibility of receiving a challenge grant. That's a lot of hassle for a long shot. Most challenge grants are assured if you can match them. Probably best to stay with the present approach.
Aaron Isaacs, editor
Trainline/Railway Museum Quarterly

Seems to me that the bigger the museum, the more likely they would win. If that would be good or bad might be another topic of discussion.

Jim,

The Maine Narrow Gauge Railroad Museum generally supports a challenge grant.

Your first proposal sounds like a typical matching grant situation. We match the Kalmbach grant dollar for dollar. This magnifies the impact of the Kalmbach dollars and puts us to the test of fund-raising, not just seeking grants.

The second proposal is much more interesting, scary, and complicated - a fund-raising competition. The major objection might be that most railroad museums and nonprofits are rather lean. Someone has to drop everything and engage in some quick fund-raising to see if we win the grant. It may be hard to justify the investment of limited staff or volunteer time in such a crap shoot.

The prior commentors also raised some very good points. Big versus small, retained earnings versus pledges/newly raised funds, etc. I would suggest requiring newly raised funds or pledges restricted to the project to level the playing field. Otherwise a wealthy organization could just use money in the bank to fund their share of the project cost. In fact, a large institution who has already budgeted $20,000 for a project would seem to have a tremendous competitive advantage.

Jim,

A challenge grant is a good idea. It is a great motivator to get a group to get others to contribute. People will give when they know they are cause their donation to be doubled.

The competition part is troubling to me. We have been involved in the American Express Members Project and I know some groups have been part of the Pepsi Challenge. Only the most popular tend to win. This puts the small museum or small project at a disadvantage.

Perhaps you could give $9000 to the winner and two small runner up awards? The space in Trains Magazine to name them might be as valuable as the actual award.

I don't like the competition part either. It makes it extraordinarily difficult to plan and fundraise.
Donors want their gifts to have effect. Donors don't like uncertainty. Donors are willing to accept the uncertainty of not satisfying the challenge because they are partly responsible for that, and because it's part of how challenge grants work.

But add "you're in a race with other groups" and it's just way too much uncertainty. No donor ever wants to be played for a sucker. He doesn't want to find out down the road that his donation never stood a chance because he was up against a much better financed group. That's going to turn off the donor.

The right way to do this is offer it to Group 1 for 60 days, then group 1 loses it and group 2 has it for 60 days, etc. until someone wins.

The idea of a matching grant is a good one though. What if you have a winner and a runner up. The winner gets the grant up to what the raise and if they fall short the runner up get to raise money to get the remainder.

Example: The repaint old #96 project wins and raises $8 grand toward the $10, the runner up Main Street depot museum gets a shot at raising $2 grand for the remainder.

I'm not big on the matching grant part for $10k. For our group, that represents about 2 years of non-grant revenue and I think we would be at a tremendous disadvantage against larger organizations and effectively lock us out of even trying to compete.

Have you considered a hybrid situation? Take the $10k pot and:

a) Kalmbach awards $5k at its discretion, as is does now.
b) The remaining $5k is the challenge grant to another organization, with $5k required in matching funds (which I feel is much more reasonable).

That way, two organizations benefit from your annual effort, the effective money towards preservation is up 50%, and you get time to judge the results of your modified generosity without some organizations feeling blown out of the water from the git-go.

Thanks for soliciting the opinions!

Matt Bumgarner
Alexander Chapter-NRHS

...or, you could leave the awesome TRAINS annual Preservation Grant just the way it is

Stephen

What about tweaking the focus of the Trains grant?

For example, how often do these topics come up on RYPN:
- ROW ownership
- Pole Barns or other covered storage
- Restrooms/Visitor amenities

In all 3 of these cases, they represent tremendous expense to the organization, and are not "sexy" projects that the membership tends to support financially.

Restoring ol' 97 is easy. Keeping her under cover is harder.

Maybe put the Trains award towards these sorts of projects, rather than artifact restoration? In this case, a matching requirement (against funds not yet received) would be a benefit.

Another alternative is to do the award to museums who have had an unfortunate event. I think Trains did this for a year or two following the hurricanes in the Gulf. Here, the national publicity of Trains could help highlight an operation who has suffered a flood, fire, roof collapse, large theft, vandalism, etc. and could use some extra help.

Regardless, thanks for everything you do (including revitalizing Trains into a great magazine.)

Jim,

I think the way it is is best.

Much of our capital fund raising projects end up with a challenge grant of some sort or the other. These are bigger grants, over 200k or so. Trying to work in a 10k challenge dilutes our efforts and may cause some of the bigger donors to think we are not serious. We also channel all our fund raising to one project that may take a year or two. Part of our problem in my opinion, but I digress

Now don't get me wrong. 10k is great. And I applaud TRAINS for making these funds available.

Dale Grice

That's a very good point. What have I always said: 1 Get a railroad. 2 Buy land. 3 Build carbarns. If you want to have maximum bang for your buck in railway preservation, focus on none else.

I'm not even saying "only give grants to groups that can put the cars indoors". I'm saying only give grants for infrastructure purposes.