15 Mar Capital Campaigns – Part 2
In recent weeks, I’ve received several requests for capital campaign presentations. Can I just come down and help the Board understand what a campaign is and how it works? Sure.
Just in case there are others interested, here is what I tell people who ask:
- First, capital campaigns have a specific purpose, or in some cases, a suite of specific purposes. They have a beginning, an end, and a specific goal amount. Many land trust campaigns include the full conservation costs in the campaign (purchase price, closing costs, first day stewardship, first year stewardship, and stewardship endowment). Other campaigns raise money for several projects at the same time and tie them together with a marketing theme. But the point is that the money raised will not be expected to represent ongoing needs, like operations expenses or salaries.
- The campaign goal is estimated to be 120% of the net amount needed for the project. Of the extra 20%, the first 5% is for uncollectible pledges. The next 7% is for campaign expenses including costs of the Feasibility Study, printed materials, travel expenses, additional staff if needed, and consulting. The remaining 8% is to help offset any loss of operating funds during the campaign or to handle cost overruns, or both.
- For most organizations, the amount that can be raised will be limited by board members’ willingness to ask, more so than by donors’ willingness to give. Therefore, it is very important that the board approves the launch of a campaign with full knowledge of the roles and responsibilities they are taking on.
- Campaigns are constructed using a pyramid approach. Few donors at the top give most of the money while there may be many donors at the bottom. The larger the topmost gift, the narrower the bottom can be. Conversely, if the top gift is smaller, the base of the pyramid must be commensurately wider. I generally look for a lead gift representing 20-40% of the goal. As a planning concept, I recommend asking five prospects for gifts at that top amount. In the happy circumstance that more than one says yes, the organization can decide to increase the goal or complete the campaign more quickly. Being able to name five such qualified donors is one of the most important indicators of campaign success.
- After the amount of the topmost gift is determined, gift ranges underneath can be projected with a number of donors assigned to each, such that the sum of the ask amounts adds to the campaign goal. For campaigns of $5-15 million, it is common for the pyramid to include 50-100 donors. For each of these donors, we will project needing three qualified prospects. In other words, $5-15 million campaigns often involve the personal solicitation of 150-300 prospects.
- I have worked with organizations in which the Executive Director personally conducts 75-90% of the solicitations. In general however, I recommend spreading this work out a little more than that because it prevents ED burn-out and because it helps organizations more fully develop their fundraising muscles. If each member of a solicitation team works with 10 prospects, you will need 15-30 solicitors. You’ll also need mid-level management (captains), training protocols, solicitations materials, and strong overall campaign management.
Capital campaigns are not trivial undertakings.
- Capital campaigns for most land trusts run 18 months to about three years, and can involve a year or more of preparation before launch. Five year campaigns are not very common.
- If your campaign is $500,000 or less, a Feasibility Study would be helpful, but probably not worth the cost. For campaigns of $1 million and more, Feasibility Studies are highly recommended. In-between is a gray area – a judgement call.
- Successful campaigns will have five key elements:
- Clear Vision
- Great Leadership
- Qualified Donors (sufficient to fill out the pyramid)
- Compelling Case for support
- Strong Planning
Do you have questions about capital campaigns? Call, email, or comment on this post.
Photo by Reymark Franke courtesy of Unsplash.com.
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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 Connecticut, Maine, New York, and Pennsylvania. I’m also planning to attend the River Rally in Mobile, Alabama.
Will I see you there?