Nonprofit Accounting Basics
How to Run a Successful Capital Campaign
To launch a capital campaign is a major decision for any nonprofit. Capital campaigns are not for all organizations. Those who decide to start one must ensure:
- they have articulated a clear purpose
- this is the right time for the campaign
- the internal and external elements are in place to make it successful
Capital campaigns require considerable financial and human resources, demand an extended time commitment from the leaders of the organization, and necessitate thorough planning to turn the campaign into a victory.
Define the Need
Capital campaigns are multi-year fundraising operations to raise funds for a building, reconstruction, remodeling, crucial capital improvements, major overhaul of machinery, or other important purchases that cannot be financed through the normal budget process. Examples include a venue for a symphony orchestra, a new roof for a church, an added wing to a homeless shelter, or an updated radiology department for a hospital. Endowment campaigns are also capital campaigns with special characteristics and elements.
More than any other fundraising engagement, capital campaigns are dependent on the board’s commitment. Without the board’s approval and active involvement, it is not wise to launch this plan. The board must fully support the idea, be ready to commit the time and effort, participate in events, and materialize the major part of the lead gifts (the top gifts that justify the continuation of the campaign). The board orders the feasibility study and, depending on the results, gives the green or red light for the kickoff.
A feasibility study is an essential first step. Its purpose is to measure the organizational readiness and assess the external factors that need to be in place for a successful capital campaign. It tests the general sentiment about the organization in the community and provides feedback as to whether the time is ripe for a capital campaign. It identifies potential donors and the size of their gifts. It lays the foundation for the campaign.
The ultimate key to success is thorough planning. So much is at stake. Without detailed preparation, the organization takes a risk of losing more than just time and initial expenses. A plan for success includes the following:
- Setting the goal. The campaign must be clear about its financial target.
- Setting start and end dates. The feasibility study should help determine the right moment and the needed time to reach the target in the most cost-effective manner.
- Preparing support documents. Capital campaigns usually need their own case statements, brochures, letters, and pledge cards that reflect the competent approach and the professional stature of the organization.
- Planning the budget. Include the cost of running the campaign and the cost of the feasibility study in the budget. Sometimes a special grant might cover the feasibility study.
- Calculating the hierarchy of gifts. Relying on the feasibility study, determine how many lead gifts and in what denominations you need.
- Dividing the tasks. Appoint your campaign chair and chairs for special activities. Assign duties to staff, board members, and volunteers. Hire an outside consultant if necessary. Hold people accountable.
- Developing contingency plans. Be prepared for unplanned challenges. Practice what-if situations. Make sure all bases are covered.
Keys to Success
Besides careful planning, there are other ingredients of a successful campaign.
- Keep good records. Categorize your donors and how they paid. Track any restrictions to the donations. Keep a list of acknowledgements sent. These data will help you with your future fundraising activities.
- Grow with the task. Learn to ask for major gifts if you usually deal with smaller contributions. Seek advice and support from board members or fundraisers who are experienced in asking for contributions.
- Be quick to send out thank-you notes. Your immediate response shows the donor that his or her gift really mattered. Keep thanking your volunteers. Recognize the staff’s and board members’ efforts.
- Be creative with naming opportunities. Capital campaigns are legendary for providing long-term or permanent options for recognition. Have a hierarchy of options available so an unexpected major donor will get appropriate recognition.
- Incorporate fun. Capital campaigns last a long time and are tedious. Celebrations lift spirits and boost energy.
- Keep the momentum going. If enthusiasm continues, aim higher.
- Evaluate the results and the process. There is something to learn from every campaign.
Avoid Common Mistakes
- Don’t start a campaign just because you need money. Everybody needs money.
- Stop action if the feasibility study does not give you a green light.
- Be flexible if circumstances require change.
- Don’t set the goal too low or miscalculate the timing.
- Don’t ask the wrong people the wrong amounts. Research your donors carefully.
- Don’t go public until you have secured the lead gifts.
How to Re-Energize a Slow Campaign
You may need to invigorate the campaign and extend your deadlines if the goals are not met as planned. This may mean you go back to the donors and ask for challenge gifts. You may extend the pledge period and send out new reminders. You can increase your public relations activity to bring the campaign back to the front pages. But you must also know when to cut losses and stop short.