Phases of a Capital Campaign
Before You Consider a Capital Campaign
Simply put, a capital campaign is a fundraising effort focused entirely on raising funds for a building project or endowment – money set aside for a non-profit’s long-term benefit. Generally speaking, capital campaigns raise very large sums of money. Of course, very large” is a relative term; smaller non-profits may seek to raise hundreds of thousands of dollars, while larger institutions such as hospitals or universities may raise millions or even hundreds of millions.
Because so much money is at stake, and because so much effort and good will is required for a successful campaign, non-profits do a good deal of spadework ahead of time to ensure that:
- The organization is financially ready for a capital campaign;
- Organizational leadership has what it takes to carry through a capital campaign;
- A reasonable and executable plan is in place for the project in question;
- >A budget is available to underwrite the fundraising project.
Once all the basics are in place, you’re still not at the starting gate. That’s because the most important question has not yet been asked. That question: “Is there enough money out there to fund this project?”
The Feasibility Study
A typical capital campaign raises the majority of its funds not from grants or small gifts but from individuals of wealth and from businesses. But are there enough individuals of wealth and businesses that care about your non-profit to the tune of $10,000 or more to meet your campaign goals? There’s only one way to find out, and that’s to ask. The usual method for asking is to carry out a feasibility study.
A feasibility study involves making a list of prospective big givers, creating a short but compelling description of the project you have in mind (a preliminary case for support), and then making appointments to call on and interview each prospect. Because this is such a delicate process, many non-profits hire professional consultants to carry out the feasibility study. That way, experienced strangers are the ones who actually ask “So – how much money do you think you might want to donate to this project?”
Once the feasibility study is complete, you can review the results to determine how much money might reasonably be raised from the community. Depending upon your answer, you may need to modify your plans upward or downward. If there’s no serious support at all, now is a great time to call it quits.
The “Quiet Phase”
The majority of capital funds are raised before the campaign is publicly announced. To achieve this, board members and volunteers (solicitors) make personal calls on individuals and businesses, building on the findings of the feasibility study.
Of course, it’s not easy to call on people and ask them for financial gifts, no matter how terrific the cause. To make it easier, capital campaign directors work with writers, photographers and videographers to create compelling campaign brochures and videos to help solicitors make their case and present their “ask.” For the biggest gifts, solicitors may actually offer naming opportunities: “Wouldn’t it be wonderful to see your father’s name on the new hospital wing? Imagine – the Joe Smith Pediatric Pavilion!”
The Public Phase
After the quiet phase is complete – and about 75% of the funds needed have been pledged – it’s time to announce the capital campaign. Psychologically, this places you in a terrific position: not only do you have vision and big plans, but you’ve already raised the lion’s share of funds to achieve your goals. Now, when you ask the public for what will be many small gifts, donors will be pleased to become a part of an already-successful project.
While the public phase is about fundraising, it’s also about public relations. By presenting yourself as an organization with vision and follow-through, you raise your profile in the community. By offering community members an opportunity to “buy in” for a small donation of $50-$100, you build your donor base. You also create a sense of connection to your organization among community members. When it comes time for the grand opening, you’ll invite donors large and small – and who knows whether that $100 donor might, some day, decide to add your organization to their will.
Are Capital Campaigns Necessary?
If you’re serious about a major building or renovation project, and you can’t just tap existing funds or a friendly relative for the cash, then yes, a capital campaign is necessary. If, on the other hand, you’re happy where you are – or have access to enough money to cover the costs of a bricks and mortar project – then there’s no need for the hassle of a multi-phase campaign.
Bottom line, though: before getting serious about any large scale capital project, be sure all your organizational and financial ducks are standing firmly in a row.