CAPITAL ASSISTANCE FUNDING: A RURAL HEALTH RESOURCE GUIDE
For additional information on funding for rural health:
This guide was revised and updated by Patricia LaCaille John, July
The use of trade, firm, or corporation names in this publication (or page) is for the information and convenience of the reader. Such use does not constitute an official endorsement or approval by the United States Department of Agriculture or the Agricultural Research Service of any product or service to the exclusion of others that maybe suitable.
The programs listed in this section are grouped by agency. Each program listing includes a contact for information on program eligibility, application requirements, available funding and the time-frame for submitting proposals. This information provides a starting point to help identify federal programs that offer direct assistance or other mechanisms to help finance a capital assistance project.
The competition for limited dollars is often intense, and program priorities may change from year to year. For this reason, it is important to thoroughly investigate each program and your prospect for success as a guide for deciding whether to pursue funding or other assistance from a particular program.
A helpful research tool for federal grants is the Catalog of Federal Domestic Assistance (CFDA). The Catalog is an annual listing of funding programs sponsored by the federal government. Information on grant eligibility, application procedures, selection criteria, and program deadlines can be obtained through a variety of indexes including subject, function, and agency. The CFDA is available at: http://www.cfda.gov.
Department of Agriculture (USDA)
The USDA's Rural Development mission area supports a wide range of economic development activities. Rural health providers should contact their Rural Development State Office to learn about the various opportunities for securing grants, loans and loan guarantees through USDA Rural Development programs.
The USDA has a link to Rural Development State Offices at: http://www.rurdev.usda.gov/recd_map.html. If you do not have Web access, call the Rural Information Center at 1-800-633-7701 to locate your Rural Development State Office. The Rural Development State Offices were previously known as Rural Economic and Community Development (RECD) offices and before that, Farmers Home Administration (FHA).
The following are examples of Rural Development programs that could be
used to help launch a capital assistance project:
Community Facilities Direct and Guaranteed Loan Programs
The Rural Housing Service administers the Community Facilities Direct and Guaranteed Loan Programs to help develop "essential community facilities" for health care, public safety and public services. Health care facilities such as hospitals, clinics, ambulatory care centers, rehabilitation centers and nursing homes can apply to RHS for direct loans or loan guarantees. They must be located in rural areas and towns with populations of 20,000 or fewer.
RHS may guarantee up to 90 percent of any loss of interest or principal on the loan. It will also make direct loans to applicants who are unable to obtain commercial credit. Funds may be used for facility construction, expansion or improvement, and for land acquisition. The funds may also be used to pay necessary professional fees and to purchase equipment required for facility operations. Loan requests for telecommunications links will also be considered. The program is open to public entities, nonprofit corporations and tribal governments.
Contact: Applications for the Community Facilities Direct
and Guaranteed Loan Programs are handled by USDA Rural Development State
Offices (see above for Rural Development State Office information). If
further information is needed, call the RHS Community Programs at (202)
720-4323. Website URL:
Business and Industry Guaranteed Loans
Loan guarantees of up to $10 million are available through RBS to develop businesses or industry, increase employment or control pollution in rural areas. The business or industry must be located outside any city with a population of 50,000 or more and its immediately adjacent area. RBS places a priority on projects in areas with a popu lation of 25,000 or fewer. Any legal entity, including individuals, public and private organizations and federally recognized Indian tribal groups, may be eligible to borrow money. Rural medical practices, clinics and pharmacies are examples of rural health-re lated businesses that may benefit from this program.
Under the loan guarantee, the Rural Business and Cooperative Development Service contracts to reimburse the lender for losses of principal and interest: up to 90 percent for loans of $2 million or less; 80 percent for loans over $2 million but less than $ 5 million, and 70 percent for loans over $5 million. Loan funds may be used for activities such as land purchases or development, equipment, start-up and working capital. They may also be used to finance business and industrial construction, conversion, acquisition or modernization.
Contact: Rural Development State Office (see above for
Rural Development State Office information). If further information is
needed, call the Rural Business-Cooperative Service, Director of Business
Programs at (202) 690-4100. Website URL: http://www.rurdev.usda.gov/rbs/busp/bprogs.htm
Distance Learning and Telemedicine Grant and Loan Program
This program was authorized in the 1996 farm bill to support projects that provide distance learning and telemedicine services to rural areas. It replaces the RUS (formerly known as REA) Distance Learning and Medical Link Grants program. Starting in fiscal year 1997, eligible applicants can apply for both grants and direct loans through this program. The program allows for capital equipment purchases (i.e., purchase of end-user telemedicine equipment), but not for building construction or renovation. More information is available on the Web at: http://www.usda.gov/rus/telecom/dlt/dlt.htm
Contact: Call the RUS Telecommunications Program at (202) 720-9554; (202) 720-0810 (fax); E-mail: DLML@rus.usda.gov. Area contacts are: (1) Eastern Area (202) 690-4673 (phone), (202) 690-4670 (fax); (2) Northwest Area (202) 720-1025 (phone), 202-690-4654 (fax); and (3) Southwest Area (202) 720-0800 (phone), (202) 205-2921 (fax). Website URL: http://www.usda.gov/rus/telecom/staff/index_staff.htm
Department of Health and Human Services (DHHS)
Information on grants from the Department of Health and Human Services is available through GrantsNet at: http://www.hhs.gov/grantsnet/index.html. Information is available on funding resources by topic or agency as well as application procedures. A list of key contacts for federal grantmaking agencies is provided, as well as a calendar listing workshops, seminars, and conferences available to grants management professionals. Documents such as grants policy directives and the Grants Administration Manual are also available.
The Department of Health and Human Services administers the FHA Section 242 Hospital Mortgage Insurance Program (see the listing under Department of Housing and Urban Development) and the Federal Surplus Real Property for Public Health Purposes Program (listed under the General Services Administration section).
Certain program-related grants may allow a portion of the grant funds
to be used for equipment purchases or to upgrade a facility for use by a
specific program. Interested applicants should carefully review the
purpose of the grant, eligibility requirements and restrictions on the use
of grant funds. The following are examples of program-related grants that
provide limited assistance with equipment or facility improvements:
Community Access Program (CAP)
The purpose of this program is to assist communities and consortia of health care providers to develop the infrastructure necessary to fully develop or strengthen integrated health systems of care that coordinate health services for the uninsured and underinsured. Grants will vary in size, based on the scope of the project and the size of the service area. During the first year of funding for this program HRSA will support infrastructure development in communities that have already begun to reorganize and integrate their health care delivery systems. Up to 15 percent of grant funds may be used for: (1) alteration or renovation of facilities or (2) primary care site development. Grant funds may not be used for construction.Website URL: http://bphc.hrsa.gov/cap/
Contact: HRSA Community Access Program Office, (301)
443-0536; (301) 443-0248 (fax). Field Office Contacts are listed at the
CAP Website: http://www.hrsa.gov/staff.htm
Migrant and Community Health Centers
The Bureau of Primary Health Care (BPHC) administers a loan guarantee program to assist Health Centers in accessing capital for medical facility improvement. Health Centers funded under the Health Centers Act of 1996 are eligible under the Loan Guarantee Program for Facility Projects. Eligible costs include land and building purchase, renovation, refinancing existing debt, and limited working capital during start-up. Equipment costs are eligible as part of a construction, renovation, or modernization project.
Contact: Eligible centers should review Policy
Information Notice (PIN) 97-20 to obtain further information. For further
information contact the Bureau of Primary Health Care, Division of
Community and Migrant Health, Loan Guarantee Program for Facility
Projects, 4350 East West Highway, Bethesda, MD 20814, (301) 594-4300.
Rural Health Outreach Program
The Office of Rural Health Policy (ORHP) allows projects receiving
funds under the Rural Health Services Outreach Grant Program to purchase
equipment or vehicles, provided that: (1) the equipment or vehicle is an
essential component of the outreach program, and (2) the purchase does not
exceed 40 percent of the federal grant amount. The funds may not be used
for the purchase, construction, renovation or improvement of a building or
property. For information on eligibility and available funding, call ORHP
at (301) 443-0835.
Rural Hospital Flexibility Program
This program was authorized by The Balanced Budget Act of 1997 to increase the ability of States and rural communities to identify and address rural health deficits. Funds may be used by states to: (1) develop and implement rural health plans with broad collaboration; (2) stabilize rural hospitals by helping them consider, plan for, and obtain designation as "Critical Access Hospitals" (CAHs); (3) support CAHs, providers, and communities as they develop networks of care; (4) help improve and integrate emergency medical services. States may use up to 15% of their total grant amount to lease or purchase equipment. Funds cannot be used for construction/ renovation/modernization, routine hospital operating costs, routine emergency medical services costs, or individual clinical services.
Contact: For information on eligibility and available
funding, call ORHP at (301) 443-0835.
Rural Telemedicine/Telehealth Programs
Rural health providers seeking capital support to set up and equip a telemedicine or telecommunications program can turn to a number of agencies for grant information:
Department of Housing and Urban Development (HUD)
The Department of Housing and Urban Development (HUD) is a source of
capital assistance through direct grants and mortgage insurance. The
following are examples of HUD programs that could benefit rural health
State Community Development Block Grant Program
Often referred to as the "small cities" program, the State Community Development Block Grant (CDBG) Program supports projects in "nonentitlement areas," defined as cities with populations of 50,000 or less, and counties with populations of 200,000 or less. States administer the program and award grants to units of general local government that carry out development activities. Local projects must benefit low- and moderate-income individuals and devote at least 70 percent of CDBG project funds for this purpose.
The CDBG program covers a broad range of community development activities, including health-related projects. Funds may be used for a variety of purposes, including: property acquisition; facility construction or rehabilitation; construction of streets, water and sewer facilities; planning activities; and public services. The program also provides assistance to nonprofit entities for community development activities and to private, for-profit entities for economic development activities. Website URL: http://www.hud.gov/offices/cpd/communitydevelopment/programs/stateadmin/index.cfm
Contact: To learn about the availability of CDBG funds in
your community, first contact your local unit of government (e.g., town,
township, county, etc.). Find out if the local government has received or
applied for CDBG funds from the state. If further information is needed,
call the HUD State and Small Cities Division at (202) 708-1332 to locate a
HUD State Office. State Office contacts are listed at the HUD Website:
FHA Hospital Mortgage Insurance Program
Hospitals can obtain mortgage insurance through the Federal Housing Administration to finance new construction and modernization or to purchase major movable equipment (e.g., hospital beds, wheeled equipment, office machines, etc.). Hospitals can enhance their credit-worthiness for loans and tax-exempt bonds, and obtain favorable interest rates by obtaining FHA mortgage insurance. The program is authorized under Section 242 of the National Housing Act. It is administered by the Bureau of Health Resources Development of the Health Resources and Services Administration (HRSA) through an agreement between HUD and the Department of Health and Human Services (DHHS). Website URL: http://www.hud.gov/offices/hsg/hosp/hsghospi.cfm
Acute care hospitals are eligible to apply. There is no dollar limit for the insurance, but the mortgage may not exceed 90 percent of the estimated replacement cost of the property covered by the mortgage. The application requires a Certificate of Need issued by the state in which the hospital is located, or an alternate study if there is no state agency requirement. It must be for a first mortgage on the entire hospital. The program will not cover projects for which construction has already begun.
Contact: Call the Health Facilities Program Branch,
Division of Facilities and Loans, Office of Special Programs, HRSA, (212)
264-4624. Applicants are also encouraged to contact their HUD State
Office. Call your local housing authority or planning office for
assistance in locating the HUD State Office. State Office contacts are
listed at the HUD Website: http://www.hud.gov/local/index.cfm
Mortgage Insurance for Nursing Homes and Assisted-Living
Nursing homes, intermediate care facilities, board and care homes and assisted living facilities can enhance their credit-worthiness by obtaining mortgage insurance through this program. Authorized under Section 232 of the National Housing Act, the program offers insurance for facility construction or renovation, for the purchase or refinancing of projects, with or without repairs, and for loan insurance to install fire safety equipment.
Contact: Call your local housing authority or planning office for the nearest HUD field office. State Offices are listed at the HUD Website: http://www.hud.gov/local/index.cfm. For further information, contact the Policies and Procedures Division, Office of Insured Multifamily Housing Development, HUD, (202) 708-2556.
General Services Administration (GSA)
Federal agencies and departments report surplus properties and
equipment that are no longer in use to the General Services Administration
(GSA). If other federal agencies elect not to use the properties, GSA has
the authority to dispose of the properties to non-federal entities. Rural
health providers interested in finding out about available surplus federal
properties should contact the following programs.
Federal Surplus Real Property for Health Purposes
Under this program, the Secretary of Health and Human Services (DHHS) is authorized to deed or lease surplus real properties for public health purposes. The surplus real property will vary, but could include land, office buildings or public facilities such as hospitals. Eligible applicants must demonstrate their ability to maintain the property and carry out the proposed health program. Title V of the Stewart B. McKinney Homeless Assistance Act requires that a priority be placed on homeless assistance programs for use of the properties. If homeless assistance programs do not apply, applications can then be considered for health-related programs. Both public and non-profit institutions may apply. The DHHS Division of Health Facilities Planning publishes a list of health programs that would be eligible to use the surplus real property.
Contact: The Federal Register publishes lists submitted
by the Department of Housing and Urban Development (HUD) of surplus
properties to assist the homeless. HUD also maintains a toll-free number
for property information: 1-800-927-7588. For information about the
Surplus Real Property Program for Public Health Purposes, contact the
Division of Property Management, DHHS, Program Support Center, Room 5B-41,
Parklawn Building, 5600 Fishers Lane, Rockville, Maryland 20857, (301)
443-2265; (301) 443-0084 (fax).
Federal Surplus Personal Property Donation Programs
The General Services Administration (GSA) coordinates this program, which donates surplus federal property to public agencies, nonprofit health or educational organizations and public or nonprofit programs serving elderly populations. The donated property may be items such as communications and electronic equipment, medical supplies, furniture, motor vehicles, airplanes, hardware and tools, construction equipment, etc.
Contact: Information on federal surplus property is available through GSA Regional Offices. Call the Federal Supply Service of the GSA Property Management Division at (703) 305-5234 for the location of the nearest GSA Regional Office, or see the state Contact List at http://contacts.gsa.gov/Contacts.nsf/Contacts?Openform.
It is important to understand the foundation's guidelines for giving:
The following were selected as examples of foundations that include
capital support as a funding priority and have a record of funding capital
assistance projects for health-related facilities.
AOL Rural Telecommunications Leadership Awards
This awards program is a partnership between the National Center for Small Communities (NCSC) and the AOL Foundation. To be eligible for the awards, community leaders must demonstrate that they have enhanced rural telecommunications, through a public-private partnership, in a community of 10,000 population or less. Projects must be already underway and significantly achieved. The AOL Awards does not fund proposals to start new efforts. Awards for infrastructure technology are made for achievements in expanding the existing telecomunications system or attracting/creating new systems via wireless, satellite or cable technology.
Contact: National Center
for Small Communities, (202) 624-3550; (202) 624-3554 (fax); E-mail:
Bird's Eye Foods Foundation
The Bird's Eye Foods Foundation provides grants to not-for-profit organizations operating in communities where Bird's Eye Foods has facilities. Primary giving areas include health (hospital building funds, hospices, and medical research),community services, education, youth, agricultural research and cultural programs.
Contact: Call the Bird's Eye Food Division in your area:
(1) Eastern US, (585) 383-2407; (2) Western US, (253) 383-1621, ext. 3263;
(3) Midwestern US, (920) 435-5301, ext. 3559. Complete mailing addresses
for these divisions are available on the World Wide Web at: http://www.birdseyefoods.com/corp/about/foundation.asp
The Kresge Foundation
The Kresge Foundation awards challenge grants for capital projects, including building construction and renovation, and for the purchase of major equipment and real estate. There are no geographic restrictions. The Foundation accepts requests for the purchase of equipment or integrated systems that cost a minimum of $300,000. Applicants are expected to show progress in raising new gifts and grants for the project during the Foundation's review period and after the challenge grant is approved. The typical challenge period is between three and eighteen months. Proposals are accepted throughout the year, according to the following submission schedule: January 15, February 15, May 15, July 15, August 15 and November 15. Submission in advance of the deadline is strongly encouraged.
Contact: Contact The Kresge Foundation at
(248) 643-9630 or write to the above address for an annual report and
current grant guidelines.
Donald W. Reynolds Foundation
Under current guidelines, projects must be located in Arkansas, Nevada or Oklahoma. Potential applicants must have at least a five-year record of successful programmatic and administrative operations to be eligible. Construction grants under $2 million and renovation or capital equipment projects under $500,000 will not be considered. The maximum grant award is $15 million. Applicants must first submit a three-page Summary Proposal between January 1 and 4:00 p.m. on May 31. A final Grant Application will be forwarded to selected applicants by July 31 for submission by noon on September 30. Interested applicants are strongly encouraged to contact the Foundation for a copy of the current guidelines before applying for a grant.
Contact: Contact Donald W. Reynolds Foundation for
current guidelines or call (702) 804-6000 for further information. For
questions about the Capital Grants Program, send an email to CapitalQuestions@dwrf.org.
Otto Bremer Foundation
Maintaining the vitality of rural communities is a primary focus of the Otto Bremer Foundation. The foundation prefers funding projects that meet long-term needs and help communities become self-sufficient. It is particularly interested in receiving proposals for community-based projects in rural areas that have limited access to other sources of support. Applicants must be 501(c)(3) nonprofit organizations serving residents of Minnesota, North Dakota or Wisconsin. The foundation will consider applications for health-related building or equipment grants, including requests for matching or challenge grants. Applications may be submitted throughout the year. The Board of Trustees meets monthly to consider funding requests. Potential applicants are encouraged to contact the foundation staff prior to developing and submitting a proposal.
Contact: Contact Otto Bremer
Foundation, (651) 227-8036, firstname.lastname@example.org, or write to the
above address for a copy of the annual report and current guidelines.
The Kate B. Reynolds Charitable Trust
One of the largest foundations in the Southeast, the Kate B. Reynolds Charitable Trust supports 501(c)(3) nonprofit organizations located in North Carolina. The Trust devotes three-fourths of its available funds to the Health Care Division. The Division supports projects that target underserved groups and has an emphasis on projects in rural areas. The Trust will consider capital assistance requests, including grants for construction or purchase of equipment. Applications to the Health Care Division are accepted until the close of business on March 15 and September 15. Potential applicants are encouraged to contact Health Care Division staff to discuss their proposals before submitting an application.
Contact: Contact The Kate B. Reynolds Charitable Trust, (336) 723-1456, email@example.com, or write to the above address for the annual report and a copy of the guidelines for the Health Care Division.
Some states have programs to guarantee portions of loans for health
organizations that seek capital financing. They may also offer grants and
loans for capital development projects. Larger projects may be eligible
for assistance through the bond issuance authority of the state.
Rural health providers should not overlook local resources to help meet their need for capital assistance. These contacts may be able to suggest strategies for obtaining technical or financial support for a particular project. Some possibilities include:
The National Association of Development Organizations (NADO) was created in 1967 to promote rural community and economic development. Its membership includes regional development organizations which provide assistance to local governments, businesses and nonprofit organizations.
The NADO Research Foundation produces The Regional Development
Digest, which is available online. Recent issues have included
articles on revolving loan funds and community foundation investment in
local development partnerships. The April 1999 issue focuses on rural
America. For information on member organizations, contact NADO (202)
624-7806; (202) 624-8813 (fax), firstname.lastname@example.org. Website URL: http://www.nado.org/
A capital campaign is used to raise funds for a specific purpose, such
as the construction of a new building. It generally involves an intensive
effort to meet a specific financial goal within a certain time period. The
following publications provide information on how to evaluate the need for
a capital campaign and detailed steps for organizing and managing a
Big Gifts: How to Maximize Gifts From Individuals, With or Without a Capital Campaign. M. Jane Williams. Detroit: The Taft Group, 1993. 330 pp.
Key elements to a major gift program are discussed in this "how-to"
book for nonprofit organizations. A profile of major gift donors and the
motivation behind giving serve as background to the process of designing a
major gift program. Part Three of the book is devoted to capital
campaigns. The author includes detailed accounts of successful campaigns,
ranging from campaigns for small, community-based groups to large,
multi-million dollar institutional campaigns.
Capital Campaigns: Strategies that Work. Andrea Kihlstedt and Catherine Schwartz. Frederick, MD: Aspen Publishers, Inc., 1997. 232 pp.
The opening chapters of this extensive resource provide definitions and
principles of capital campaigns, tips for evaluating organizational
readiness, as well as the pros and cons of using consultants. Other
chapters explore feasibility studies, prospect research, and campaign
planning. A troubleshooting guide, which includes more than two dozen
potential problems along with possible solutions, is provided in the
Conducting a Successful Capital Campaign: A Comprehensive Fundraising Guide for Nonprofit Organizations, 2nd ed. Kent E. Dove. San Francisco: Jossey-Bass, Inc., 1999. 528 pp.
Nonprofit organizations are guided through a detailed strategy for
planning and carrying out a capital campaign. The author takes into
account the fact that many nonprofit groups are operating with limited
staffs with multiple responsibilities. An effective campaign requires the
development of a strategic plan and involvement of the organization's
leadership and volunteers. There are specific steps for strategic
planning, recruiting volunteers, cultivating donors and managing the
campaign. Sample case statements, audits, campaign materials and the
action plan from a hospital foundation capital campaign are included.
General Fund Raising
The following organizations provide resources, including publications,
to assist organizations with fundraising efforts.
AFP Resource Center
The NSFRE Fund-Raising Resource Center maintains an extensive collection of reference works, periodicals and other materials pertaining to fund raising, philanthropy and nonprofit management. Both members and non-members can contact the Resource Center through its toll-free number (see above). Fees are charged for any materials mailed to non-members. Bookworks is a free publication that lists fund raising resources available for purchase from the Resource Center. Publications and other resources can be ordered by calling 1-800-666-FUND, or on the Web by selecting Books, Videos, Gifts from the Webpage at the URL listed above.
The National Society of Fund Raising Executives (NSFRE) is a membership
organization for development professionals. It is concerned with
professional and ethical standards for the fund raising profession and the
promotion of philanthropy and volunteerism.
The Association for Health Care Philanthropy
Representing over 1,500 hospitals and health care organizations in the
United States and Canada, the Association for Health Care Philanthropy
provides information and training opportunities for professionals who are
managing resource development programs in the health field. The
Association produces numerous publications on health care fundraising and
philanthropy, including annual reports on charitable giving to health care
organizations, self-study guides and handbooks, such as Why and How to
Start a Healthcare Fund Raising Program. Contact the Association for
further information on publications, programs and fees for members and
non-members. Featured Book Recommendations on Campaigns and Fundraising
The following publications provide guidance for nonprofit fundraisers.
Building a Strong Foundation: Fundraising for Nonprofits. Richard L. Edwards, Elizabeth A. S. Benefield, Jeffrey A. Edwards, and John A. Yankey. Washington, DC: NASW Press, 1997. 167 pp.
This comprehensive guide offers practical applications, tools, and
resources to assist nonprofit fundraisers. Chapter 2, The Process of
Fundraising, includes sections on launching a fundraising campaign and
layered fundraising strategies. Other chapters cover planned giving,
prospect research, special events, and cause-related marketing. Several
appendices list additional resources.
The Chronicle of Philanthropy. Washington, DC: The Chronicle. Bi-weekly series.
This publication, issued bi-weekly, is a major source of news for the
nonprofit sector, including fundraisers and grantmakers. The Website
offers a summary of the contents of the current issue and about six months
of previous issues, as well as full text for selected articles. Complete
text of all articles is available only by subscription. Subscription
information for both print issues and E-mail updates is available at the
Website, along with conference announcements and links to other related
Fund Raising Management Magazine. Garden City, NY: Hoke Communications. Monthly series.
Fund Raising Management is a monthly publication devoted to all
aspects of fund raising. Contributed articles include information on
successful fund raising efforts, fund raising "tips" and strategies,
current trends, legal concerns and professional development issues.
The Nonprofit Handbook: Fund Raising, 2nd ed. James Greenfield, editor. Somerset, NJ: John Wiley & Sons, Inc., 1997. 744 pp.
The editor of this encyclopedic reference book has engaged the expertise of 42 experienced fundraising leaders to cover every aspect of the subject in 33 chapters. Capital fund appeals are covered in Part IV, Major Giving Programs, along with grant-seeking strategies and various aspects of planned giving.
USDA, Rural Information Center
National Agricultural Library
10301 Baltimore Ave.
Beltsville, MD 20705-2351