ARE YOU LEAVING MONEY ON THE TABLE?
IS IT TIME FOR A CAPITAL CAMPAIGN?
Inevitably, most non-profit organizations consider conducting a capital campaign – one that covers all institutional needs or a major portion of a capital project such as the building or renovation of a physical plant, the purchase of a major piece of equipment, or the establishment of a major program. The campaign will usually count nearly every dollar given to the non-profit during the pledging period. The primary question is, of course, “Why should we launch a campaign in the first place?” Industry standards for setting your campaign goal are 10 to 15 times your annual fundraising production! So if you are raising $5 million from all of your sources, your goal could be $50 million or more. Think about this if you are raising more than $10 million. Don’t you think you owe it to your organization to at least test the feasibility of a campaign?
The best answer is that a capital campaign is still, after all these years, the most effective and efficient way to raise large sums of money in a specified time period. If a non-profit organization is to remain competitive philanthropically and programmatically and build on its current strengths, it must be able to raise significant dollars quickly, and the only way to do that is through a well researched and planned capital campaign.
Before making the commitment, there are several operational – and many may say psychological – considerations you as the non-profit must take into account. First, your organization must be working constantly to focus attention on its current mission, its vision for the future, and the objectives that must be accomplished for its vision to be fully realized. One of the major benefits of running a capital campaign is that it forces your organization to define or redefine itself with stated and measurable priorities. It compels you to articulate what you are doing and where you are headed.
Second, every nonprofit needs a Case for fundraising that is large enough to inspire the imagination and activate the donors’ desire to give. Most major gift donors like to be identified with big causes, and campaigns tend to be perceived as big because the organization’s goals are thought of as being ambitious. Developing a campaign cause inevitably helps to clarify the essential worth of your nonprofit; you are going beyond what it does to what its mission is about, and why its work is so vitally important.
A campaign also helps to redefine resources, interests, and efforts by leveraging a dynamic, high energy, and results-oriented operation. This coalescence helps to step up the pace and level of all the organization’s fundraising activity. A significant side benefit is that sights for giving are raised, particularly for boards. Sights tend to continue being raised throughout and beyond the conclusion of the campaign – if the leadership maintains the philosophy of commensurate giving, that is–and solicitation and giving based on the ability to give. It is also a great way of building a “culture of philanthropy” within your organization.
Achieving the maximum benefit from a campaign requires the discipline of a well-structured campaign organization with fixed assignments, target goals, quotas, and deadlines. Working within campaign timeframes can and should be exhilarating and will create an environment that builds morale, purpose, and cooperation. Thus, a capital campaign needs to always generate a sense of urgency and personal commitment to your non-profit’s mission and the need for vital, crucial, and necessary financial resources.
Finally, capital campaigns provide volunteer leaders and donors with the assurance that any major participation will gain high public recognition and lasting importance. This encourages the use of creative fundraising strategies, such as various planned giving instruments, that allow donors to stretch to their fullest gift potential.
What to Consider
The general elements outlined earlier apply to virtually any non-profit organization. There is also a number of variables that are highly specific yet still important to consider. For example:
Leadership
Neither the most persuasive cause, nor the most urgent needs, nor an exquisite sense of timing, nor the most lucrative sources of support ensure success in a campaign. Only dedicated leadership, at all levels of the organization including volunteer, board, presidential, and staff levels, can do that. If your non-profit has the necessary and mandatory leadership, you’ll more than likely succeed. If it does not, the campaign must be put on hold, and a program to develop its various constituencies of leadership must be implemented.
Internal readiness
If campaigns are to be successful, they must be “owned” by the entire organization rather than be perceived as belonging to one party or another. People at the board level who do not favor campaigning must be firmly converted. There cannot merely be a significant predisposition toward a campaign; instead, there must be unanimity. If your fundraising board does not help you raise charitable dollars, introduce you to other key prospects, or actually assist in the solicitation process, you do not have a fundraising board. I can tell you from experience that any board that meets only three or four times a year, has consent agendas regarding finances and board recruitment, and spends the rest of its time listening to guest speakers, is not a fundraising or engaged board no matter how much members have contributed personally.
External readiness
This question concerns whether an organization’s grateful patients, alumni, friends, current and past donors, and corporate and foundation supporters are in a campaign frame of mind and supportive of the case. If they are not – and this can be assessed quantitatively – the campaign should be put on hold at least until appreciation is heightened through a program designed to create greater awareness, sensitivity, and participation. If your organization has not completed a campaign planning study in the last five years, someone has fallen asleep at the wheel. You should always be testing your needs with your donors and leaders, either formally or informally.
Organizational morale
Capital campaigns have a significant unifying effect on the entire organization’s family. To win a campaign requires a major team effort, a strategy in which all believe and participate, with a large and enthusiastic corps of volunteers, strong and consistent management, and so on. If an organization needs to develop a fundraising program or has a less-than-spectacular fundraising track record, a capital campaign may be just the shot in the arm it needs to pull things together.
Of course, there are at least some sound reasons to decide against launching a campaign.
When Not to Launch a Capital Campaign
Economic downturns, seasonal holidays, another organization’s campaign or campaign planning, economic uncertainties, the political climate, and your CEO’s great-granduncle’s birthday are decidedly not reasons to postpone a campaign. Economic uncertainties, organizational competition, and a host of other excuses will always be with us. If a non-profit were to wait until all indicators were perfect and favorable, it would never be able to launch its capital campaign.
There are, however, some factors worth considering, not the least of which is cost. Campaigns cost money, money that needs to be committed prior to any funds being raised. While well planned and executed campaigns are more than cost effective, your organization is still committing thousands of dollars to a process before it sees a profitable return. Expenses for a capital campaign can run between 5 and 10 percent of funds raised. If a campaign’s goal were, say, $15 million of new money over the next five years, the cost of the capital campaign could be somewhere between $750,000 to $1.5 million – a figure to be reckoned with, most assuredly.
Accountability can also be an inhibitor. Remember, capital campaigns are high-profile undertakings that create and feed on heightened public relations, marketing, and publicity. One of the expectations of a campaign is results. And if results are disappointing, leadership at all levels is held accountable, a proposition to consider for even the most experienced campaign volunteer. This is where we see senior staff fail, especially ones that have been with the organization for many years – they get complacent and do not want to put themselves or their positions at risk if the campaign comes up short – so then their needs become more important than the organization that pays their salary. We know of a major healthcare system that is leaving millions of charitable dollars on the table simply because the executive who has been there for decades does not want to work that hard.
Taking the Risk
Other elements of a capital campaign could be presented, but I believe we have discussed in some detail the ones that we consider to be the most important. Obviously, both positives and negatives need to be reviewed, discussed, and re-discussed in depth with your current leadership, and your potential volunteer leadership, before you make the final decision.
In summary, I’d like to leave you with some added benefits of conducting a successful capital campaign:
- Old networks are revised and strengthened, and new ones are identified or created.
- New volunteer leadership is identified, trained, and cultivated – not just for fundraising, but for other important purposes as well, including governance.
- New relationships are developed between the organization and its constituents and among your constituents.
- Campaigns also strengthen ongoing fundraising programs including annual giving and, if done correctly, planned giving.
- Campaign cabinets and committees can serve as useful and productive “proving grounds” for future volunteer leadership.
- Fundraising leadership, especially the development staff, will emerge from a successful capital campaign with the skills to move the organization even further along its evolutionary path.
Your successful campaign can have significant and favorable effects on your organization by raising awareness of your organization’s mission and funding needs as well as raising the sights and expectations of your volunteers and constituencies. These are benefits that will emerge and should continue long after the campaign has concluded. But you have to make it happen.
