SEPTEMBER 24, 2018
NASHUA PERFORMING ARTS CENTER
CAPITAL CAMPAIGN FEASIBILITY STUDY
PRESENTED BY: BETSY MCNAMARA
FULL CIRCLE CONSULTING
10 FERRY STREET, SUITE 301B, CONCORD NH 03301,
INFO@FULLCIRCLENH.COM, 603-219-0699
TABLE OF CONTENTS
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REPORT SUMMARY
The campaign committee work group of the Performing
Arts Center Steering Committee has a high level of
confidence in securing approximately $6.5 million in
private sector funding: $4 million in private sector funding
to serve as an endowment and $2.5 million to support
construction and fit up of the Performing Arts Center.
Projected sources of private sector funding are:
Approximately $4 million - Proceeds of the sale of New
Market Tax Credits to private businesses
New Market Tax Credits (NMTC) are being pursued by City
staff. A letter from the consultant hired by the City of
Nashua to secure and sell New Market Tax Credits is
attached.
Approximately $2.5 million - Capital Campaign seeking
private charitable contributions from individuals,
The work group has a high
level of confidence that
the project will secure
approximately $6.5 million
in private sector funding: a
projected $2.5 million
through private charitable
contributions and CDFA
tax credits; and, a
projected $4 million from
the sale of New Market
Tax Credits.
foundations, and corporations along with the sale of NH Community Development
Finance Authority (CDFA) Tax Credits to area businesses.
This report focuses on the feasibility of a $2.5 million capital campaign in support of the
Performing Arts Center.
FEASIBILITY STUDY PROCESS
Overall planning for the Performing Arts Center is being conducted by three work groups
of volunteers: Operations, Design, and Capital Campaign. These work groups are
currently staffed by Tim Cummings, Director of Economic Development until the
formation of the planned private nonprofit organization.
The feasibility study is under the purview of the Capital Campaign work group, which is
led by:
e Judith Carlson, Nashua Arts Commission;
e Marylou Blaisdell, Downtown Improvement Committee and small business owner;
e Tracy Hall, President/CEO, Nashua Chamber of Commerce; and,
e Patricia Klee, Member of the Board of Aldermen.
In partnership with this work group, Full Circle Consulting developed a case for support
brochure and supporting materials that tell the story of why a Nashua Performing Arts
Center is worthy of private charitable support.
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Members of this work group identified people who are capable of supporting a capital
campaign for the Performing Arts Center including community leaders, business leaders,
people involved in the arts, and people interested in the economic development of
downtown. Of this list, 25 individuals were selected to be interviewed as part of this study.
Betsy McNamara and Amy Lockwood from Full Circle Consulting then conducted a total of
23 interviews that included 30 individuals. Those interviewed were promised
confidentiality and were asked the same set of questions. All responses are reported in
the aggregate; specific quotes are unattributed.
Of those interviewed, 33% describe themselves as already involved in the arts in Nashua,
63% own or lead a business in the area, and 60% describe themselves as actively
interested in the future of downtown. Thirteen percent were all three.
BACKGROUND
NASHUA PERFORMING ARTS CENTER
Conversation about bringing a performing arts center to Nashua has been ongoing for
years. Public debate about the project has focused on the size, location, scope, and cost.
In recent years the City has prioritized the development of a performing arts center. In
2016, the City contracted with Webb Management Services, whose mission is to build
creativity with sound and thoughtful planning, consulting, research, and facilitation that inform
and enable decision-makers to create and sustain programs and places for arts, culture, and
creativity that benefit their communities. Webb conducted a market feasibility study, led the
site selection process, and recommended a business plan for the proposed Performing
Arts Center.
Webb Management Services’ final report was presented to the Board of Alderman in May,
2017. All of its studies and reports are available online
at https://www.nashuanh.gov/1142/Performing-Arts-Center-Feasibility-Study. Webb
recommended the purchase and redevelopment of 201 Main Street in Nashua’s
downtown.
In November 2017 the citizens of Nashua approved an advisory question for a $15.5
million bond to acquire and redevelop 201 Main Street to create a downtown performing
arts center. The plan is to create a 500 -700-seat Performing Arts Center. A to-be-created
501(c)(3) nonprofit organization will act as building stewards and manage day-to-day
operations. The nonprofit will be managed by a volunteer Board of Directors. The City of
Nashua will not be involved in the day-to-day management of the Center.
This nonprofit Performing Arts Center will contract with a booking agent who will bring in
musical, dance, and theatrical acts. Symphony NH has expressed interest in utilizing the
Performing Arts Center for their smaller shows. The Center will also be available to rent
for private functions such as weddings and corporate meetings.
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A stipulation of the approved advisory question is that private-sector funding be used to
create a $4 million endowment to ensure long-term sustainability for the Performing Arts
Center.
PROPOSED ENDOWMENT FUND
The $4 million endowment will help to ensure long-term sustainability of the Performing
Arts Center. As an endowment fund, the $4 million principal remains intact; the annual
investment income may be used to support operations. The endowment fund will be
invested and managed by a professional investment manager and overseen by the
Performing Arts Center's board of directors.
OBJECTIVE
Full Circle Consulting was contracted by the City of Nashua to test the feasibility of a
private capital campaign to secure private charitable contributions for the Performing
Arts Center.
WHAT WAS TESTED
The feasibility study began in earnest in June; since then plans for the operating structure
of the Performing Arts Center have evolved.
Presented to
Interviewees
Current Plan
Responsibility for
Independent Nonprofit
Independent Nonprofit
responsibilities
the building Organization Organization
Nonprofit Hire and mange staff to run | Oversee contractor
responsibilities day-to-day operations
Third-party Book all performances All operations of the Performing
contractor Arts Center and booking of all
performances
Use of private
charitable
contributions
Toward establishing a $4
million endowment to
support the long-term
sustainability of the
nonprofit
The combined $6.5 million in
private sector funds will establish
a $4 million endowment and
support construction and fit up of
the new Performing Arts Center
The plan has always been to put the responsibility for the ongoing operations of the
Performing Arts Center into the hands of a nonprofit. Under the current plan the third-
party contractor will manage the day-to-day operation as well as the bookings. As the
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SPECIAL BOARD OF ALDERMEN
AGENDA
JUNE 9, 2016
NHS North Auditorium
7:00 p.m. 8 Titan Way, Nashua
PRESIDENT BRIAN S. MCCARTHY CALLS ASSEMBLY TO ORDER
ROLL CALL
PUBLIC HEARING
R-16-034
RELATIVE TO THE ADOPTION OF THE FISCAL YEAR 2017 PROPOSED BUDGET
FOR THE CITY OF NASHUA GENERAL, ENTERPRISE, AND SPECIAL REVENUE FUNDS
Sequence in Which City Department Budgets will be Discussed:
GENERAL FUND BUDGET DETAIL
Dept. Revenue Detail — (Yellow Section) 31
Dept. Appropriation Detail — (White Section) 56
Revenue Appropriations
GENERAL GOVERNMENT 57
101 | MAYOR'S OFFICE 62
102 | BOARD OF ALDERMEN 64
103 | LEGAL DEPARTMENT 66
107 | CITY CLERK’S OFFICE 32 68
109 | CIVIC AND COMMUNITY ACTIVITIES 70
111 | HUMAN RESOURCES 73
113 | BENEFITS 75
115 | CITYWIDE PENSIONS 78
118 | OTHER GENERAL GOVERNMENT 33
156 | EMERGENCY MANAGEMENT 79
183 | ECONOMIC DEVELOPMENT 81
FINANCIAL SERVICES 83
126 | FINANCIAL SERVICES 34 89
128 | RISK MANAGEMENT 91
129 | CITY BUILDINGS 94
130 | PURCHASING DEPARTMENT 36 96
131 | HUNT BUILDING 98
132 | ASSESSING 37 99
134 | GIS 38 101
INFORMATION TECHNOLOGY (IT) 102
120 | TELECOMMUNICATIONS 105
122 | INFORMATION TECHNOLOGY 106
non-profit moves out of the start-up phase of its development, it could take over the
staffing of day-to-day operations.
That specific plans for the operational structure of the Performing Arts Center have
evolved does not impact this study's assessment of the overall perception about the
Performing Arts Center and a capital campaign to support it. The key points of the
mission and the fact that the City of Nashua is not involved in the day-to-day operations
have remained the same.
FACTORS IN A SUCCESSFUL CAPITAL CAMPAIGN
Key factors in the success of a capital campaign are:
e Reception to the case for support;
e Lead and major donor interest in the project;
e Campaign leadership; and,
e Organizational fundraising capacity.
The feasibility study set out to test:
e The perception of the Performing Arts Center as presented and its impact on
Nashua as a whole, on downtown, and on area businesses;
¢ How effective the case for support materials are in inspiring interest in charitable
support and volunteering for the project;
e Interest in contributing in support of the campaign, and at what level; and,
e Interest in volunteering for the campaign.
The end result is recommendations as to:
e What about the Performing Arts Center is most motivating and most concerning to
prospective donors;
e A feasible capital campaign goal; and,
e The capital campaign strategy.
PERCEPTION
PERCEPTION OF THE PERFORMING ARTS CENTER AND CAPITAL CAMPAIGN
CASE FOR SUPPORT
In response to the case for support that was presented:
e 66% of those interviewed believe that the Nashua Performing Arts Center will be
good for the Nashua community, economy, and employers.
e 40% are extremely enthusiastic about the project and have high confidence in its
SUCCESS.
e 43% can be described as happy if the project is successful but are not willing to lead
the charge.
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e 10% are firmly opposed to the project as it is and/or opposed to City investment in
the project.
e 14% said they would be part of the capital campaign committee and 19% will
strongly consider it.
e 82% of respondents said that the project justifies a capital campaign.
All interviewees were asked to rate (on a scale of 1 to 10 with 10 being the highest) the
perception of the importance of the Performing Arts Center to Nashua, its economy, and
its employers.
Those that answered these questions rated the:
Importance of the Nashua Performing Arts Center to the Nashua community as 7.8 out
of 10.
Economic impact of the Nashua Performing Arts Center on Nashua as 7.25 out of 10.
Positive impact on employers in the area as 7.6 out of 10.
INTERVIEWEE COMMENTS
“This has the potential to be an important economic driver in downtown.”
“Main Street is the face of our City. We want to create an environment where people want
to live and be. It will be great to have live music in in downtown.”
“Bringing residential development to downtown is a key component of its revitalization.
To bring residents to downtown, Nashua needs arts and culture downtown. This will be a
building block that could bring great things to Nashua.”
“Putting this downtown will help the downtown restaurants only.”
“The Performing Arts Center could make some architecturally important changes to the
building that could update downtown.”
“This is a fundamental building block to making downtown an inviting destination.”
“This is too expensive and the city should not be investing in it.”
“| hope this will attract all different kinds of audiences. It could help Nashua strengthen its
multi-cultural community.”
“This will make Nashua a destination and bring foot traffic to downtown.”
“Downtown needs this.”
“This is way overdue. Let's just do this. There is nothing to do downtown but eat.”
“This is very important. Culture is something that brings people to the city.”
“If the arts community wants a performing arts center, the arts community should pay for
it?
“| think every community should have a performing arts center. | would go there.”
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“| love the thought of the vitality this could bring.”
“This would be positive for our business without question. The most recent Stay Work
Play survey highlights that young employees feel there is nothing to do in NH.”
“This will make downtown Nashua vibrant.”
“It will be a community and regional attraction. It could help strengthen the arts in
Nashua. It’s a very positive thing for this city.”
“This will bring people to downtown and keep people (and their money) in the
community. It will be so easy for people to get to.”
WILLINGNESS TO FINANCIALLY SUPPORT THE CAPITAL CAMPAIGN
Those interviewed for the study were asked if they would consider a contribution in
support of this capital campaign. 56 % said yes. 22%
said maybe. 22% said no.
Those who said they would contribute to the
campaign were asked to identify the range of gift they
would consider if they could give over two years.
Fifty-six percent of
those interviewed
; Ata said they would
Typically, capital campaign feasibility study
participants find this a difficult question to answer
because project planning is still under way and they capital campaign;
don't have time for serious consideration. Very often 22% said maybe and
the amounts identified are lower than what is actually 22% said no.
contributed. Additionally, it is now clear that the
project is able to take pledges over three to five years
instead of just two, meaning that contributions could
be larger than indicated. These caveats were taken into consideration when identifying
the total campaign goal likely to be feasible.
consider a gift to this
WILLINGNESS TO VOLUNTEER IN SUPPORT OF THE CAPITAL CAMPAIGN
A campaign committee comprised of volunteers passionate about the Performing Arts
Center, willing to make their own stretch gift to the campaign, and happy to seek people
out to ask for their contribution to the campaign is critical to the campaign’s success.
Of those interviewed, eight said they would volunteer or consider volunteering on the
campaign committee.
OTHER DONORS AND VOLUNTEERS IDENTIFIED
Study participants were asked to give names of those they thought capable of giving a gift
of at least $25,000 in support of the campaign; sixty-five individuals were identified.
Study participants were asked to give names of those they thought would be interested in
and effective at serving on the Campaign Committee; fourteen individuals were identified.
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CAPITAL CAMPAIGN STRATEGY
A capital campaign is defined as an effort to secure charitable contributions from donors
in support of a nonprofit organization that is embarking on a large and important project
that will be a great leap forward for the organization. This is different than an annual
fund, in which a nonprofit asks donors to support the costs of its annual operating budget
so that it may deliver programs and services.
Capital campaigns are also distinguished by the fact that gifts are larger than is typically
made to an annual fund, and contributions may be pledged with payments spread over
three to five years.
Capital Campaigns have five distinct phases.
Lead Gift
date ets)
Major Gift
Phase
Campaign
B Public Phase Appreciation
Readiness ia
«Jun - Oct 2018 * Oct 2018- Apr + May-Dec 2019 * Jan-Jun 2020 + Summer 2020
+ Feasibility study 2019 + House parties * Public events * Donor
+ Case statement + Lead Donor * Foundation + Mail appeal appreciation event
and materials solicitation proposals » Challenge grant? * Open House
+ Budgets * Achieve 65% of + Individual visits * Social and + Appreciation
+ Identify campaign goal * Achieve 90% of traditional media mailing
prospective campaign goal campaigns * Social and
donors traditional media
+ Identify and campaigns
convene
Committee
This project is in the campaign readiness phase. This is where the feasibility assessment
takes place, the case statement and supporting documents are created, and a committee
of passionate, connected volunteers is recruited.
The lead gift phase is when the campaign secures the 10 to 14 leadership gifts that will
bring the campaign to at least 65% of its goal. This is phase that in any capital campaign
traditionally demonstrates if the campaign will make its goal.
After that is the major gifts phase, in which more donors step up to make gifts that are a
bit smaller than the lead gifts. This phase gets the campaign to 90% of its goal.
Both of these phases of the campaign typically take place with very little fanfare or
publicity. They are under-the-radar, one-on-one conversations between the nonprofit
seeking funds and the prospective donors that are considering these transformative gifts.
The most visible phase of a capital campaign is the last of the fundraising efforts: the
public phase. This is when the nonprofit seeks hundreds of smaller gifts ($5 to $2,500) at
once that will bring the campaign to its goal.
Finally, there is the appreciation phase. This is a wonderful opportunity to invite the
community to share in the success, tour the building, join together to celebrate. This
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