How many times does leadership pose that question? Or perhaps they ask, “Why is three times the budget of last year needed?” Many facility and portfolio financial strategies are built from capital expenditure forecasts with peaks and valleys, which is hard to explain to non-facility minded teammates. Securing the right amount of funding to maintain facilities involves a delicate balancing act, as organizations grapple with the intricacies of aging infrastructure, evolving stakeholder needs and ever-changing funding.

Facility managers, especially those responsible for large portfolios, often struggle to balance day-to-day maintenance needs with long-term capital planning needs. As the need to focus on reactive maintenance to keep facilities running, often lost is how much planned maintenance is being deferred.

This reactive nature begins with lack of funding or resources to maintain buildings. Successful facility funding starts with aligning an organization’s programming goals, operational needs, and long-term capital renewal plans. By coordinating these elements, facility managers can ensure that their funding strategy directly supports their mission and stakeholder needs.

Here are the key steps to determine funding needs:

Understand programming & stakeholder needs 

The first step is to get a deep understanding of an organization’s programming requirements and the needs of key stakeholders. This includes assessing how facilities are being used and what future demands might be. Understanding these needs is essential for crafting a funding strategy that meets program requirements.

Assess conditions

It is important to understand the condition of the asset portfolio and when major replacements need to be made. A facility condition assessment (FCA) is a great place to start. This involves evaluating the physical condition of assets, identifying areas in need of repair or renovation, and understanding the lifespan of key assets. Assessing conditions is a solid foundation to determine the scope of work for funding requirements.

The challenge with many FCA’s is trying to build a financial plan from the detailed, component level assessments that can overwhelm with information but do not provide actionable information. A typical capital expenditure forecast has many peaks and valleys which makes it hard to plan and ask for funding and difficult to manage. A better approach is to focus on the data needed to build a long-term capital plan that identifies consistent funding needs without the peaks and valleys.

Evaluate operations 

Evaluate how efficiently facilities are being operated and maintained. Operational inefficiencies can lead to unnecessary costs. Identify areas for improvement in operations to help optimize resource allocation and reduce ongoing maintenance expenses.

Determine target funding 

Once there is a clear understanding of programming needs, current conditions, and operational requirements, it is time to determine the funding necessary to address these areas. This includes capital investments for renovations, maintenance, and renewal strategies. How do FMs determine whether funding for capital renewal is at the “right” level? The key is to determine the acceptable condition to maintain facilities and to frame funding requests to leadership to maintain the desired level. Common metrics, such as the Facility Condition Index (FCI) is a great way to demonstrate the acceptable condition level of facilities. By demonstrating funding needs relative to the FCI, this becomes a risk management decision for an organization.

Prioritize projects

Not all facility needs are created equally. Prioritize projects based on factors such as safety, risk, regulatory compliance, mission-critical functions and overall impact. Prioritization ensures that limited resources are allocated to the most urgent and valuable projects.

Align workforce capacity with funding 

Ensure that the workforce is appropriately sized and skilled to execute the planned projects within the budget. Alignment ensures that projects will be completed efficiently and effectively.

By following these steps, FMs can establish an effective facility funding strategy that aligns with organizational goals, optimizes resources, and ensures the long-term sustainability of facilities. Proper funding for facilities is critical to ensure that assets are well-maintained and can effectively support organizational mission.

Editor’s note: This article originally appeared in FM Professional, the magazine of IFMA's Corporate Facilities Council.