Over the years we've observed that one of the most common priorities that our customers often integrate into their strategic plan is the development of a capital campaign.
A capital campaign is one of the most exciting and transformative activities that you and your nonprofit can implement. According to Donor Search’s Capital Campaigns Guide, a capital campaign is “a targeted fundraising effort that takes place over a defined period of time.” These are separate from other kinds of fundraising activities because “they are massive projects that can span multiple years and cost thousands of dollars.” They often require extensive planning and strategic execution over various phases.
With such a time-intensive project, organizations need to take a deep dive early in the planning stage if they want the campaign to have success. A half-hearted effort won't work. You need excellent guidance, a thoughtful strategy, clear goals, and actionable steps. When these are in place, capital campaigns have the potential to produce wonderful results.
In this capital campaign primer, we’ll provide you with some ideas and links that will help you make your campaign a success.
What is a Capital Campaign?
Organizations use capital campaigns to raise a large amount of money for a specific purpose over a dedicated timeline. Campaigns are typically used for things like:
Constructing or expanding a facility
Purchasing land
A substantial acquisition of equipment or supplies
Funds to start new programs
Endowments
In general, capital campaigns should be used to raise money for unique projects, not long-term operations. The latter is best done through regular fundraising efforts.
What are the stages of a capital campaign?
Since capital campaigns involve a large, long-term goal, they occur in stages. The Capital Campaign Toolkit says that “capital campaigns generally take between two and three years,” and in that time are various phases.
A typical five-phase timeline includes:
Planning
Quiet phase
Kick-off
Public phase
Wrap-up
The planning phase should be thorough and include items like:
Completing a feasibility study that includes determining organizational readiness
Assembling the campaign committee, which may include a campaign consultant(s)
Establishing goals and the critical case for support
Setting deadlines
Coming up with a budget
Identifying the best capital campaign donor prospecting and management tool
Building your campaign’s branding and marketing material
Our colleagues at Partnership Resources Group have some excellent blog articles that will give you great insights into your planning process.
Comprehensive planning is where your campaign will live or die. This needs to be done before launching into the next phases.
Quiet Phase vs. Public Phase
The two key fundraising phases of a capital campaign are the quiet and public phase.
The quiet phase happens first, shortly after establishing you’ve completed your planning. The primary goal of this phase is to raise about 50%-70% of your funds through major gifts before taking the campaign public. This phase typically takes up to a year.
The remaining funds are raised through a larger population of donors after the official launch of the campaign. This public phase is usually initiated by a kickoff event and/or a public announcement. Then, you begin fundraising efforts in the community and through smaller donations.
Throughout the entire campaign it is important to keep your donors aware of progress since they have an investment in its success.
What will it cost?
The old adage that you have to spend money to make money is just as true for nonprofits as it is in the private sector. Fundraising costs money, and capital campaigns are no different.
According to Campaign Counsel, capital campaigns can be considered acceptable if they cost less than 15% of the campaign goals. Anything under 10% is considered “very efficient,” though larger campaigns may have a smaller percentage. For example, “if your goal is $10,000,000 the cost of your campaign will likely be in the 6-8% range.”
As you are planning your campaign, be sure to include these campaign costs in your overall fundraising goal. This way your organization makes back what it spent to raise the money.
Hiring a Campaign Consultant
One of the best investments you can make in your campaign is hiring a campaign consultant or firm. This person(s) can provide critical guidance and accountability that will ensure your campaign’s success.
Campaign Counsel offers a wide range of potential consultant costs, from “a few hundred or thousand dollars a month up to $30,000 or more per month for full-service, on-site campaign management.” If you’re considering hiring a campaign consultant or firm then this article from the Capital Campaign Toolkit provides good guidance.
Do you know how to appeal to your donors?
Abby Jarvis of the fundraising technology platform Qgiv, says that each donor goes on a journey with your organization before deciding to give funds. She explains: “though, each of your donors and supporters is unique and different, they all follow a similar journey as they get to know your nonprofit’s mission and make each gift.”
In the case of a capital campaign, you need to create a specific and compelling case for support that will lead your donors through the journey. This is critical.
One thing that you can integrate into your case for support is effective stories. To do this is by telling stories. We’ve written elsewhere about how effective storytelling can be for fundraising, especially when you consider Steven Screen’s idea of the “donor story.” While those tips apply to fundraising more broadly, you can reposition your stories to raise funds for capital campaigns as well.
Who should be involved in what capacity?
Capital campaigns involve the whole organization in some capacity, but different people will play different roles. Donor Search’s guide breaks down the people involved in two major categories: in-house team members and committee-related team members.
The in-house team consists of board members, staff, and volunteers. The board typically oversees the big picture decisions while staff members execute the plan. The executive director often plays a critical role in meeting with potential funders and overseeing the process. Volunteers fill in whatever gaps are left.
Most organizations also use a campaign committee to plan the campaign and handle any ongoing maintenance necessary. Donor Search says that the campaign chair “is going to be one of the most crucial team members” because they “will be in charge of overseeing your committee(s) and act as an ambassador for your capital campaign within the community.” As you begin planning your campaign, make sure you can identify a strong campaign chair who will handle all the necessary oversight throughout.
How do you get started?
Getting a capital campaign off the ground can take a lot of work, but Donor Search has compiled a list of 14 key starting points to help you in the early stages of your plan. Some of the outstanding pieces we will mention here include:
Getting a campaign committee together
Performing a feasibility study
Setting a deadline for your capital campaign
Finalizing a fundraising goal
Reviewing past successes and failures by analyzing fundraising metrics
Set a budget
Create a plan, including a contingency plan
Align expectations for your campaign
The list from Donor Search goes into greater detail for each step, which can help you develop your plan as you get started.
Closing Thoughts
Capital campaigns are great opportunities to raise substantial funds for specific projects in a determined amount of time. In order to succeed, they need to be carefully planned and executed. Before you kick off your capital campaign, think through the elements we highlighted here to make sure it’s right for your organization.