Happy New everyone – we hope your Holidays were wonderful! This has been a busy start to our New Year with clients now in five states and growing. As promised in our November issue we are going to focus on the Art & Science of Capital Campaigns over the next few months and what you can do now to prepare in advance to have a successful campaign when your time comes to fruition.
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?
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 measurable priorities. It compels you to articulate what you are doing and where you are headed.
Second, every nonprofit needs a Case for Support 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 perceived to be ambitious.
Developing a campaign cause inevitably helps to clarify the essential worth of your nonprofit; going beyond what it does to what its mission is about, and why its work is so vitally important.
A campaign also helps to re-define resources, interests, and efforts by leveraging a dynamic, high energy, 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 to be raised throughout and beyond the conclusion of the campaign, if the leadership maintains the philosophy of commensurate giving, that is, solicitation and giving based on ability to give.
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 time frames can and should be exhilarating, creating 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 these vital, crucial and necessary financial resources.
Finally, capital campaigns provide volunteer leaders and donors with the assurance that any major participation will have 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 are 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, 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 be merely a significant predisposition toward a campaign; there must be unanimity.
External readiness
This question concerns whether an organization’s grateful patients, alumni, friends, current and past donors, corporate and foundation supporters are in a campaign frame of mind and supportive of the Case for Support. 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. Let me ask you one very important question here in the blog: When was the last time the CEO and board president met with your top ten donors just to say thank you for past support and let them know how their gifts are changing lives? IF the answer is more than 6 month do not start your campaign until this is done – quite frankly, they should be doing this for your top 100 on an ongoing basis throughout the year!
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, and 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 fund-raising track record, a capital campaign may be just the shot in the arm it needs to pull things together.
There are at least some sound reasons to decide against launching a campaign.
When Not to Launch a Capital Campaign
Economic downturns, seasonal holiday’s, another organization’s campaign or campaign planning, economic uncertainties, political climate, your CEO’s great grand uncle’s birthday are decidedly not reasons to postpone a campaign. Economic uncertainties, organizational competition, as well as 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, nevertheless, your organization is committing thousands of dollars to a process before they see 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.
Second, if your organization is experiencing “fundraising burn-out” a capital campaign is probably not advisable. Volunteers, staff, and especially senior management leadership will find a whole new workload imposed on their already busy schedules. If they are overburdened to begin with, any or all of the key players can burn out, finding other things to do or otherwise losing interest. Believe it or not, the best medicine and remedy for fundraising burnout is campaign momentum and a steady stream of fundraising success. You must be prepared, committed and determined.
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.
Finally, let’s take a brief look at the archenemy of all campaigns – the unexpected. The unexpected can and will happen, often completely beyond your or your organization’s control. During a recent hospital campaign to which we were counsel, the nurses went on strike, the employees threatened strike, the physicians were unhappy about their contract negotiations, the president had limited time committed to the campaign and the project was downsized, all within six months, coincidentally during the family phase of the campaign. Yet, we took a few side steps, adapted, got the right family leadership committed and they stepped in and carried on, and the campaign got back on track with only minimal delays. Not all organizations would be so fortunate.
Taking the Risk
Other elements of a capital campaign could be presented, but I believe we have discussed in some detail the ones we consider 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 conclusion, 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 between your constituents.
- Campaigns also strengthen ongoing fund-raising programs, including annual giving and, if done correctly, planned giving.
- Campaign cabinets and committees can serve as useful and productive “proving ground” 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, benefits which will and should continue long after the campaign has concluded.
I hope you have found these ideas useful. Over the next few months we will be addressing several aspects of a successful capital campaign for organizations of all sizes. Stay tuned!
Sincerely,
Ron J. Huddleston, FAHP, CFRE
President & CEO
