The Nonprofit Marketing Blog

Are You Ready to Launch a Capital Campaign? 3 Questions to Answer

I’ve been involved in capital campaigns for nearly my entire fundraising career and, quite frankly, I love them. I love preparing for them, sharing the excitement of new organizational dreams with current donors, and building interest and engagement with potential new ones.

Research shows that I’m not alone. According to a recent report from the Nonprofit Research Collaborative (NRC) Fundraising Survey, the number of nonprofits conducting capital campaigns has increased by 34% since 2011. This growth signals to me that more and more nonprofits feel confident integrating campaigns into their fundraising strategies.

Capital campaigns can be especially effective jumpstarting an organization’s new initiative or expanding its programmatic capacity. But many nonprofits look at campaigns as a cure-all to a whole host of issues. The reality is that campaigns are only as effective as the vision, capacity, and donor potential of the nonprofit.

When done correctly, capital campaigns don’t just raise more money for an organization. This unique and powerful fundraising tool:

  • Deepens current donors’ relationships.
  • Identifies and establishes relationships with new donors.
  • Increases greater levels of investment across all donor levels.
  • Offers an opportunity for sustained support in the future.

Simply put, capital campaigns can offer nonprofits the resources they need to achieve better results than ever before.

But before you decide to launch a capital campaign of your own, it’s a good idea to assess your readiness in the following three areas:

  1. Vision:

What’s the big, bold plan for your organization’s future that you want your capital campaign to fund? Your campaign case statement needs to answer that question. It should outline how this fundraising effort will make a difference and the impact you want to have.

For example, if you intend to buy or build a new building, how will that physical space change how you operate? Maybe it will house your after-school program and enable you to welcome more students. Maybe your new building will allow you to offer more programs to meet your community’s evolving needs.

Be clear in what you want, how it will help you, and how much it will cost. Then, test the case statement through a feasibility study with a core group of donors, stakeholders, and prospects. Their feedback will help you confirm whether or not the priorities you outlined will inspire donors.

Remember: Feasibility studies are also an excellent cultivation activity because you are inviting important stakeholders to share their input. Remember the old adage “if you want money, ask for advice?”

  1. Capacity: 

Capital campaigns are hard work and require everyone in your organization to be involved. Are your CEO and Board engaged in fundraising for your organization now?  Will they own the leadership of this effort over the long haul of the campaign? Their support (or lack thereof) can make or break a campaign.

Capital campaigns also require increased fundraising staffing. As you develop your campaign plans and budget, factor in how much additional staff time or members you will need and how much that will cost. A good rule of thumb is that capital campaign expenses generally amount to about 20% of a campaign goal (sometimes a little higher if this is a first-time campaign). Fifty percent of those expenses are usually spent on staff and campaign counsel. Build the campaign expenses into your overall campaign goal to ensure you have the capacity to be successful. Even if you are a small development shop, you will still need additional staff—even if only one or two extra people—to avoid burnout of existing team members.

Remember: It will not help your long-term success of your campaign if you don’t have the full internal leadership and staffing capacity to manage it from start to finish.

  1. Donor Potential:

    Sample donor pyramid.

Finally, use your donor management system to determine if you have the donor base to raise the gifts needed for success. If you usually raise $800,000 each year and you want to launch a $5 million campaign, you can only be successful if you have the major donor capacity among your current donor base or within reach both to support and lead this effort. A gift pyramid will spell out clearly the ratio of prospects to gifts you need to reach your goal. Other key ways to determine potential include:

  • Identifying 3-5 prospective donors for each gift needed at the different levels.
  • Analyzing giving trends of your donors.
  • Conducting wealth screening of a select subset of your contributors.
  • Engaging your Board and major donors in a peer review to broaden your net.

Remember: As you begin fundraising, always start with your inner circle—board and current major donors. Their commitments will inspire other donors to join them. 

As the saying goes, capital campaigns are a marathon, not a sprint. That’s why it is invaluable to evaluate and prepare your internal and external resources before you begin to ensure your success.

Have you conducted a successful capital campaign? Let us know by reaching out to us on Twitter: @Network4Good @@BOReillyWHC


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About This Blog

Linda Lombardi
Content Manager

We’re here to help you win hearts and minds—and donations.

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