Capital Campaigns – Part 1

09 Mar Capital Campaigns – Part 1

I’m getting a fair number of requests for information about Capital Campaigns, and I’ve now been invited to write proposals for five separate Feasibility Studies. Maybe the economy is picking up enough to give everyone confidence.

Regardless, I thought I’d devote a couple of blog posts to campaigns – and I invite you guys to join the conversation.

Let’s start here: If you accept the premise that people make three different giving decisions in support of an organization:

• Repeat gifts, often annual, and often unrestricted,
• Project-specific gifts to get something specific done, often associated with “major gifts” because they are often larger than these same donors might commit on a repeat basis, and
• Planned gifts.

If you accept those premises, consider this: robust, sustainable organizations work on all three types of giving at the same time and most of the time with the same donors. Annual giving is great cultivation for major giving, and both are great cultivation for planned giving. Planned giving conversations can easily lead to enhanced annual giving for the lifetime of the donor.

If this describes you, capital campaigns are tools organizations use to raise the level of performance for all three giving decisions and build loyalty and commitment in their donor-base.

Capital campaigns are useful when one of your projects is so enormous – or so much bigger than anything you’ve tried before – that it’s going to take a full-organizational effort to get there.

Capital campaigns are useful when you have a number of smaller projects that can be thematically tied into a larger marketing whole. An easy way to see this is to picture five independent $50,000 projects. It is unlikely that you would be successful in attracting a $50,000 gift for any one of them alone. But if you can tie them together into a $250,000 “Wetlands and Watersheds” campaign (as an example), attracting a $50,000 gift is far more likely.

Capital campaigns are useful when you have a number of well-cultivated prospects for whom you just haven’t quite found the right project yet. Campaigns provide a brighter spotlight for giving that may attract larger gifts and “call the question” for some fence-sitting prospects.

Campaigns are NOT recommended for projects with no clear end-point or with otherwise recurring expense cycles, like staff positions, easement monitoring, or nature education programs – unless the purpose of the campaign is to create an endowment to support that program or project permanently.

I also do not recommend capital campaigns for small projects like the $50,000 project mentioned above. But honestly, it’s more about the words “capital campaign” than it is about how you go about raising the money. Just call it a special project appeal and save the words “capital campaign” for something bigger.

Feasibility Studies

Most knowledgeable and/or experienced fundraisers will recommend feasibility studies for campaigns over $1 million. They usually cite three reasons:

• To test feasibility for a specific campaign goal,
• To test the strength of a “case” argument for support, and
• To identify major donors.

To this list I typically add three more:

• To prepare loyal donors for what’s coming, allowing them to plan their philanthropy in advance;
• To boost confidence of solicitors who may be veterans of multiple campaign efforts; and
• To reflect how the public views the organization.

There are two phases to Feasibility Studies. The first phase tests internal readiness. Does the organization have the staffing, technical, and communications systems in place to handle a campaign? Are board members aware of, prepared for, and committed to their roles as ambassadors and solicitors for the campaign? What must be done first to increase overall confidence in a successful effort?

The second phase of a Feasibility Study tests external readiness. In the external study, we create a compact marketing document called a “case statement” and use it to interview donors we suspect might be interested in the campaign. The interviews are conducted individually, in person, and are designed to:

• Test the core messages in the case statement,
• Uncover any hidden barriers to moving forward,
• Better understand the view of the organization from the donors’ perspective,
• Identify leadership critical to success, and
• Test the feasibility of the campaign goal.

Should you do a Feasibility Study? If your campaign is $500,000 or less, it would be helpful for all the cited reasons, but probably not worth the cost. For campaigns of $1 million and more, absolutely. In between is a gray area – a judgement call.

Before you commit to a Feasibility Study, read my post on the subject here: Don’t Do a Feasibility Study (At Least Not Yet!)

I’ll have more on Capital Campaigns next week.

-da

Photo credit: Snowdrops by Hans courtesy of Pixabay.

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Fundraiser’s Almanac
Here’s what I’m thinking about for March. What are YOU thinking about?

• Spring Appeal Planning – I could print all of my Spring Appeal letters NOW, even if they won’t be mailed until April or May. Getting ahead is GOOD. I’ll need a great project to raise money for, a four-page letter, something to add texture to the envelope, and a segregated membership list (so I can ask for different amounts from each sub-audience).
• Editing Appeal Letters – The secret to good writing is good editing. I will want to draft my Spring Appeal letter any way it comes out – just to get it done. I’ll make it long enough to work with – 4-5 pages at least. I’ll tell a story and weave the story all the way through. Then, when I’m mostly happy with it, I’ll follow these steps to editing. Much of it is counter-intuitive, so I’ll close my eyes and trust the advice – at least this once – against all objections – and most especially my own. Why? Because I’ll raise more money!
• Print the First Renewal Letters Now – Right now, I know every member who will be renewing this year. I know what they gave last year about this time. And I know what I will be asking them to give this year. In other words, I have everything I need to merge their letters and print them – right now – in March. Why not do it?
• Researching Foundation/Corporate Grants and Calendaring Due Dates – I’m going to take some time now, in March, to schedule and conduct a brainstorming meeting with three or four colleagues – including program staff if possible. Specifically, I’ll be reviewing current grantor relationships and going over where I might be with current funding. I’ll be using volunteers to conduct foundation research, so it will be helpful if that volunteer can participate in this meeting as well. We’ll make a list of grantors and grants of which the group may have personal knowledge. Also we’ll brainstorm a list of key search words the volunteer could use in the research.
• Donor Strategies: Good News, Save the Date – The most persistent barrier to successful major gift fundraising is that board members do not know the donors and donors don’t know the board. Two underused strategies for donor cultivation are Good News and Save the Date events. Good News is just something that has recently happened that I can share before it becomes more commonly known. A project closed, a preserve opened, a nesting pair discovered, a key staff member hired, a child delighted. It can be small or huge. I’m going to make sure that my board members are the conveyors of that news. What matters is that we thought highly enough of the donors’ role that we chose to deliver the news personally. And let’s face facts. Some donors and prospects can’t or won’t meet personally with us. So sending a Save the Date message may prove helpful instead.

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Will I see you at a conference this spring? This spring I’m heading to state conferences in Wisconsin, Colorado, Connecticut, Maine, New York, and Pennsylvania. I’m also planning to attend the River Rally in Mobile, Alabama.

Will I see you there?