When a nonprofit decides that it wants to do a capital campaign, it can be an exciting time.
This type of fundraiser shows the community that the organization is growing and having a greater impact. As a result, capital campaigns can give a lot of excitement. Also, this initiative not only raises money, but it also increases brand visibility. So, if you think you should do a capital campaign in the next year to three years, this guide will help you get ready.
Capital campaigns involve 3 groups of people for success:
- Involvement of nonprofit board members and stakeholders.
- The help of management and key team members is also necessary.
- Engagement of donors and supporters.
Benefits of nonprofit capital campaigns
As said earlier, a capital campaign brings a nonprofit a lot of excitement. It’s a chance for your nonprofit to go beyond what you have done in the past. But, other benefits also come from this kind of fundraiser.
Inspires the community: Your capital campaign can inspire your community. Meaning, people will enjoy your new or improved building or programs, and it energizes them.
It is a moment of change: A capital campaign signifies growth. As a result, people know that something special is happening.
Strengthening relationships: One of the great pluses of a capital campaign is that it builds relationships. People who take part get engaged in meaningful ways with your nonprofit.
Making new friends: Another benefit of a capital campaign is the chance to make new friends.It can start with the feasibility study and happens throughout the fundraiser. A lot of goodwill happens with a campaign.
Recruiting a committee and hiring a consultant
Depending on the nonprofit consultant you hire, there may be different ideas for this kind of fundraiser. Yet, this guide intends to tell you about the general plan to know the process. One of the first things that you will do if you decide on a capital campaign is to recruit a committee. This group should consist of board members, advisors, and senior managers. Also, it should include donors and other key supporters or stakeholders. Members of the planning group could also serve for the fundraiser once it starts.
A decision the planning committee makes is deciding on the nonprofit consultant. Hiring a consultant is vital for several reasons. First, the consultant brings best practices with experiences from other nonprofits. Also, it is the consultant who works with you on a study for the fundraiser. Essentially, the assessment helps you determine the planning. And, input from critical people interviewed in the study inform the plan. During a capital campaign study, the consultant works with you to determine major donors. Large gifts are important for the success of your fundraiser. Often, the major donor prospects are the usual suspects. But don’t get surprised to see people included in the list who might not be on your radar.
Capital campaign core principles
As the fundraiser unfolds, the planning committee and consultant work together. This team prepares for the study, which also helps check the image of your brand in the community. Also, you’ll gain a better understanding of the interest of the community for a capital campaign. And, you’ll get recommendations about the final goal. The goal gets determined through financial projections. Finally, the consultant provides you with a budget, plan, timeline, and structure.
Still, this kind of fundraiser needs three things.
1. Case for giving
You might think that expanding your nonprofit must happen, but it’s vital to ensure that your community also believes the same. A case for giving is the “why” of your capital campaign. In other words, since you will ask people to donate, what is the reason for the sizable gifts requested? Is it for a new program? A new building? Expansion? Often, these fundraisers are for large amounts of money, in the millions or hundreds of thousands. And, it’s a fundraiser meant to be big because it changes your nonprofit.
The case for giving has to be compelling not only to you but also to your supporters. The consultant will work with you to adjust the case based on the interests of the community.
2. Capital campaign leadership
The success of your capital campaign depends on leadership. Meaning, the people recruited as lead supporters and volunteers are crucial. Often, nonprofits choose to recruit volunteers who served during the planning study. It’s a good idea to do that, and the people who serve on the planning committee should be your best supporters. But, volunteering on a capital campaign steering committee requires a longer period. So, the consultant asks interviewees about their interest and availability to volunteer. As a result, the consultant confirms people who could volunteer for the campaign.
Still, the board, management, and committee for the capital campaign are crucial. So, you want to ensure that you prepare and have on-board who have energy and passion for your nonprofit. Also, you want to ensure volunteers serve as bridge makers and door openers. They should help you connect to others who might not yet be supporters of your cause.
3. Prospect list
During the study, the consultant works with you to develop a prospect list. What they determine with the committee are people who could become the top donors. Generally, 80 percent of the gifts come from about 20 percent of the people, and sometimes its even 90% from 10% of the people. Major gifts play a large part in your fundraiser, and because we now have AI, this process should be easier. If you happen to have AI with technology, such as boodleAI or Gravyty, you can create a great prospect list.
The study involves interviews by the consultant of anywhere from 30 to 100 people. It depends on the size of your nonprofit. During the study, people are asked where they see themselves relative to supporting a campaign. The consultant surfaces the motivation of donors to give to the fundraiser. The consultant seeks to learn the capability of people to give, not necessarily, the willingness. Also, the consultant seeks to find people for the capital campaign steering committee. Again, these should be people who support the fundraiser and who could open other doors.
Feasibility study questions answered for critical insights
As stated, the nonprofit consultant will likely tell you to do a study for the campaign. This study or assessment goes by several names. For instance, it is also called a capital campaign study or assessment. Also, it is a feasibility study or planning study. Regardless of the name, you want the answers and insights from the report at the conclusion. The nonprofit consultant produces a report as part of the work the company does for your group.
The study provides information, in a report, that is essential for planning. For instance, it gives you insights about peoples’ thoughts about your group and the proposed capital campaign. It also gives you an understanding of other issues as you’ll get crucial answers.
Feasibility Studies: What are They?
Feasibility studies are done to give data needed to decide on the possibility of starting a capital campaign. A feasibility study is an objective survey of the community of the group. It gauges the likelihood of success for a fundraising project. Also, it identifies strategies and potential donors and leaders for the campaign. The study works from a baseline of interviews of individuals inside and outside of the group’s core supporters, conducted over weeks.
At the same time, the nonprofit’s fundraising programs, materials, database, staffing, use of volunteers, and budgets get reviewed. All these areas might play a part in a capital campaign if it happens. A good study offers a wealth of data and information. After finishing the study, it is refined into a set of findings, and a report gets presented to the nonprofit group.
A well-designed feasibility study should reveal:
- Strengths and weaknesses of the nonprofit.
- Image of the group in the community.
- Potential, willing and effective leaders for the fundraising campaign.
- Names of potential major donors, and the reasons which they would support.
- Likelihood of success of a capital campaign in the community and its timing.
- Other major fundraising campaigns soon to launch or already happening that might compete for the same donors.
- Other ways for raising the funds and completing the project.
- Needs of the group for optimum success.
- Internal capacity of the organization to get the job done.
General questions for a feasibility study
- What is the view of people in the community toward your nonprofit?
- How do interviewees to the study envision the future of nonprofit?
- What is the reaction of people to your proposed capital campaign?
- How much money do interviewees believe you can raise?
- How much financial support do people believe they would give to the effort?
- What other things do people believe you should do for the benefit of the town?
- What are the most important programs or services, according to others?
- Do people view your nonprofit as the leader in the work you do?
- What challenges do you face that could prevent the success of a capital campaign?
Typically, this information gets gathered by the consultant on a confidential basis. The reason is that people feel sometimes feel better speaking sensitive issues with an outsider. Those interviewed often offer insights and ideas. But, they also express concerns that they might not have voiced to nonprofit leaders.
2 preparation phases for a capital campaign
Generally, there are two distinct phases for a capital campaign. The first is the preparation or strategy development and, the second phase of a capital campaign is the fundraiser itself, which we’ll get into a bit later in this guide.
1. Review of nonprofit issues and priorities
As we said, the recruitment of a capital campaign committee is critical. Often, nonprofits ask people to volunteer on an ad hoc planning committee. Then, once this phase finishes, a capital campaign committee work until the end. Recruiting a planning committee allows for volunteers who are most committed. As the fundraising campaign begins, you may find you need other voices. Also, members of the planning committee may learn they can volunteer only for a short time. They may be less inclined to volunteer for a year or two, depending on the size of your campaign. You may also find after the study that you should add a few others to the campaign leadership group. That’s why it makes sense to have a planning group and then a capital campaign committee.
The following issues include what the planning group and consultant should address. These things get done to prepare for a successful capital campaign.
- Define and rank the reasons for the capital campaign (i.e., the case).
- Determine how to ensure ongoing money for programs. Remember, donors get asked to give high gift amounts above and beyond the usual.
- Assess the capacity of your nonprofit to do a capital campaign.
- Create a framework to launch the fundraising campaign. It includes the case, goal, sources for funding, timeline, etc.
- Surface any critical issues.
- Review and decide on advance and major gift prospects.
- Decide on the people to interview for the study.
- Perform the study and receive the report.
- Complete issues in need of correction/improvement.
- Finish the case statement for the capital campaign.
2. Capital campaign design and planning
The success of your fundraiser depends on the plan you do. Remember, this is a big event, and it’s vital not only to you but also to the community. There are many issues and smaller details that you have to address. But, your nonprofit consultant helps you every step of the way. That said, the following highlights what you have to ensure.
- Final case statement.
- Capital campaign theme.
- Campaign timeline with gift phases.
- Fundraising prospectus (both digital and any print).
- Marketing and media materials, including traditional, digital and social media. Note, materials should have consistent branding, positioning, and messaging.
- Lists of prospective donors with notations of any gifts already received.
- Development of prospect profiles for fundraisers.
- List of capital campaign leaders with notations of any volunteers who have accepted.
- Job descriptions for leaders.
- Solicitation training material.
- Sponsorship and/or naming opportunities.
- Marketing and public relations plan.
- Gift table.
- A description of challenge gifts and prospects.
- Corporate and foundation research.
- Estimated fundraising budget.
- A robust pledge collection system (monthly, quarterly payment reminders).
Nonprofit capital campaign phases
Again, depending on your nonprofit capital campaign, you may design a plan that is a bit different. But, for the most part, these are best practices. Meaning, most fundraising events of this type usually follow a similar pattern. So, once you’ve got the planning done and get started, the following happens as the campaign unfolds.
1. Solicitation (fundraising) phase
A capital campaign usually has two parts during its fundraising phase. The solicitation phase is when you get started seeking fundraising dollars. When this kind of fundraiser begins, you first enter into the “silent phase.” During the silent phase, the fundraiser is not yet publicly announced. Also, the nonprofit consultant partners with you to secure the highest gifts.
The reason to begin by asking for major gifts is that when the fundraiser does go public, people see success. In other words, it’s a chance to promote the capital campaign with money in the bank. Typically, at least 40% to 70% of the fundraising goal gets raised during the silent phase.
The public phase then follows the silent phase during the capital campaign. Once you enter into the public phase, you’ve achieved at least half of the total goal. During the entire fundraiser, you ask for gifts from individuals. But also corporations, foundations, and other groups you researched.
The silent phase focuses on the fundraising of major gift prospects. Because of the size of the gifts, most or all the fundraising gets done in person. During this time, you’ll find yourself answering more donor and volunteer questions. It’s an exciting period, and there should be a lot of energy. You’ll also find yourself making sure fundraisers get trained to make asks. And, you’ll also continue doing researching prospects.
Once you make the capital campaign public, you should have secured at least 40% to 70% of the goal. Likely, your nonprofit consultant advised you to create a collection system. Remember, a capital campaign means you ask people to make a large gift above what they usually give. During the public phase, you ask for general gifts (lower amounts). Surely, all or most of the major donors have given by this point. The public phase involves personal meetings, digital media, events, and telephone fundraising. All the fundraising efforts will be in the plan, written in advance.
2. Capital campaign wrap-up phase
With the help of your consultant, you will have a great fundraiser. And, you will achieve capital campaign success in pledges and money. Once you’ve reached, and gone past your goal, the wrap-up phase occurs. During this time, you may still make last-minute gift asks. You’ll also focus on making sure you collect funds, as expected.
During this period, you should make sure you’ve thanked supporters and donors. One of the ways many nonprofits do this after a capital campaign is to have an event to celebrate. Besides, the wrap-up phase is a time to let your town know about your success! So, make it a point to talk about it. Use the media, social media, and also through personal chats with supporters. Don’t forget to share the amount raised, particularly if you made more than your goal.
Finally, it is vital to move forward and spend the money. Remember, people stretched to give to your capital campaign. So, move as fast as possible to ensure the money gets used, as explained during the campaign. Keep your donors updated as you expand on your nonprofit work. And engage them by inviting people to see what you did with their great support. People like updates through letters, telephone calls, social media, and even celebratory or inaugural events.
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