Are You Ready for a Capital Campaign?

After years of working with nonprofit organizations on “major gift campaigns” to build buildings, to secure endowments, and to fund other significant projects with hefty (five to seven-figure budgets), I have learned that if nonprofit organizations are able to address a few key questions prior to embarking upon a major gift campaign, they will be more likely to succeed.

Yes, it is true I have seen some nonprofits tackle a major gift fundraising effort after being told by respected professional advisors they have absolutely no chance of succeeding. But, in fact, some have succeeded beyond their wildest dreams. As President Abraham Lincoln (1809-1854) once said,

“The probability that we may fail in the struggle ought not to deter us from the support of a cause we believe to be just.”

More often than not, however, a little advance consideration about where your organization stands vis-a-vis a potential major gift effort will save you time, money and potentially, embarrassment.

Ted Grossnickle formulated a list of basic questions your organization should ask before considering a major gift campaign. I have added comments of my own to dovetail with Ted’s excellent suggestions. Originally posted on the website of the Association of Fundraising Professionals, Ted’s article about organizing capital campaigns is no longer available. But happily, I captured the information beforehand.

1. Your nonprofit is needed. The organization is actively making a difference in the community and can make an even bigger impact in the future.

2. Your nonprofit is known and respected. The community knows about your organization, and when you recruit board members, they consider it an honor to be asked.

Note: do not assume this means your nonprofit must have been in existence for a long, long time. Ted might disagree, but I have been able to help “startups” raise significant funds, when seasoned consulting firms have told them this simply will not happen. There are several things for which one must prepare, of course. You might enjoy reviewing, “How Startups Can Break Into the Big Leagues” on ISSUU, and my blog article, “Nonprofits and Startups | Birds of a Feather.”

3. Your nonprofit is focused and healthy. The organization has a practical strategic plan that fits with a capital campaign. The organization is financially healthy, meaning it has a balanced budget, access to credit, and financial and audit records that are in order.

4. You have a base for fundraising. A strong corps of annual donors exists, and you have had success with increasing gifting levels by active stewardship.

Having said this, if your nonprofit is addressing an exciting “new” need, you may find entirely new donors flock to your cause. I have seen this happen, but I have also seen the new donors jump on board with a small gift to, “see what happens,” before making a major gift. Be patient, and let potential major gift donors “test the waters.”

Your Board should be “on board” for a major gift campaign to succeed.

5. Your board of directors is ready. Each member of the board makes an annual gift to the organization, and many have made additional special or extra gifts. Board members understand what a campaign would require in terms of their own individual and collective financial support and time. The board is willing to help cultivate and solicit gifts, and each member has helped identify one or two donors that can make a gift for the campaign. The board has put a development committee in place, and board champions are advocating for fundraising.

I do know major gift donors who request a formal statement before you can submit an application, stating that each and every member of the Board has made a financial contribution, even if that is as low as say, $5. Do not let people sit on your Board who are unable to give even the smallest amount. Expertise is not enough for them to be present there.

6. The staff leadership is ready. The CEO is respected by staff, board, donors, clients and the larger community, and willing to commit time to working on the campaign. The organization either has a full-time development director or has addressed which staff member will be responsible for the campaign. The CEO and board have secured campaign counsel, or addressed why they are not hiring counsel.

In regard to the last sentence, “campaign counsel” can also mean hiring an experienced capital campaign professional on staff for the duration of the campaign. I have served in this capacity on several occasions – and sometimes I have found outside counsel to be a poor investment. Consider this carefully.

7. You’ve done your homework. The organization knows what it needs to raise funds for, can articulate the outcomes and has a written and refined case for support. A feasibility study has been conducted to test the case before going forward with a campaign, and you’ve set a realistic campaign goal.

A personal caveat, if and when you conduct a feasibility study, be sure the people doing it are a good fit and that they communicate comfortably and well with your donors and potential donors. Here is a link to an article with additional discussion about feasibility studies.

8. You can effectively tell your story. You have a written plan to communicate your campaign and its key messages. Staff and board members can tell the organization’s story and communicate why a campaign is necessary.

I would add to this, your plan should make use of multiple channels of communication, including social media. It is common wisdom not to publicly announce a major gift effort until at least 60% of the goal has been secured already. I can’t think of a better way to support the “public portion” of a major gift campaign – which traditionally falls at the conclusion – than by using social media. You might also consider developing and using specially tailored “apps,” both for use by insiders during your major gift campaign, and for the general public as the campaign moves into its final, public phase.

What would I do? If my team were comfortable with the idea, I would create a private Facebook “group” for campaign insiders to communicate throughout the life of the effort, and perhaps beyond for donor and volunteer “alumni.” I also believe systems like Microsoft Office 365 could be tailored specifically for use during major gift campaigns (Office 365 includes a closed loop for email communications, calendaring meetings and the like).

9. You can spend money to raise money. The organization has identified a budget for a campaign and has allocated funding for it. The budget includes funds for donor recognition and communication, training and materials, counsel and equipment. It also has a provision for travel and meals.

This is an excellent consideration. On a personal note, I am asked fairly often if I will work on a “percentage basis,” which is considered unethical according to industry best practices. The reason behind these requests is often that the nonprofit isn’t sure it will succeed with a major gift campaign, and it wants to put the burden of success or failure on the fundraising professional hired to do the job. Not good. Don’t go there, smiles.

And, most importantly,

10. Your campaign is important, exciting and will make a difference! Your board and staff are excited about what this campaign can mean. You can create important changes in people’s lives if you succeed in raising the funds.

In closing, I would like to share another article on Carolyn’s Nonprofit Blog you may find helpful, “Taking a Step Back Will Lead You Forward.” This is the text of a presentation given to ADRP: Association of Donor Relations Professionals in 2018. It provides real-life experiences with nonprofits wishing to launch major gift efforts and shows how I was able to overcome hurdles and fundraise with great success. In brief, I suggest you do your own, thorough internal review of positives and negatives, write those down, address them in writing, and incorporate them into your case for support. Honesty is the best policy. I have seen “impossible” major gift efforts succeed once such an introspective review has been conducted.

Additional Resources

  • Feasibility studies – my follow-up article to this blog post shares some concerns that I have about feasibility studies, and provides some ideas for conducting more successful ones.
  • Aly Sterling for Nonprofit PRO, “Organizing a Capital Campaign: The Essential How-to Guide” (2018). I like this opening line, “Your organization is working on a large project; maybe it’s a new building, a renovation or another ambitious undertaking. Projects like these are complicated, and one of the most important parts of the process is determining how to pay for it.”
  • Training! I am impressed with the offerings of the Lilly Family School of Philanthropy. Follow the link to read about the educational programs it offers, including managing capital campaigns.
  • My blog article, “Volunteering and Charitable Giving” points to one aspect of successful major gift campaigns that few mention. That is, volunteers and donors working on campaigns succeed best when they know staff members involved are fully engaged, that they genuinely care, and that they will go the extra mile to see the overall project succeed. Poor nonprofit staff morale will kill the positive energy of volunteers and donors working closely with your nonprofit. Be careful.
  • You might enjoy Tom Watson’s article for Forbes, “Learning to Listen: Where Organized Causes Really Begin” (May 23, 2014). The kind of listening Tom describes is what those organizing major gift campaigns need to consider. In the section below, you will find advice related to this. In brief, I have found those closest to the organization are best able to conduct meaningful conversations along these lines.

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