Understanding the Basics of Capital Campaigns
Embarking on a capital campaign is no easy feat, even for experienced fundraising professionals. Capital campaigns demand seamless communication, cooperation and event planning. So if you’re thinking of raising money for a project, it’s essential to understand how capital campaigns work.
In this guide, you’ll learn all about the fundamentals of a capital campaign, who they work best for and how to run a successful fundraising event.
What is a Capital Campaign?
Capital campaigns are extensively targeted fundraisers that aim to benefit non-profits. They typically help fund new buildings, building expansions, expensive equipment, endowments or relocation.
Every capital campaign has a specific objective and definitive timeline for reaching its financial goal. Most capital campaigns run between one and five years.
How are Capital Campaigns Unique?
What differentiates capital campaigns from ordinary fundraisers is their scale. Unlike regular fundraisers, capital campaigns have more specific goals and aim to raise tens of thousands to millions of dollars. They also occur in multiple phases that involve different key players.
Why Launch a Capital Campaign?
Capital campaigns help achieve specific and expensive goals. For instance, your business may need to fund a new building, a scholarship or an expansion that it cannot afford on its own.
For hospitals or clinics, capital campaigns might help purchase expensive equipment like radiology machines or expand an entire wing. On the other hand, schools or universities may need the funds from a capital campaign to cover scholarships within a specific field or to benefit certain types of students or to build new classrooms.
When to Start a Capital Campaign
As with any significant project, you can’t launch a capital campaign on a whim. You’ll first have to determine why your organization wants to start a capital campaign in the first place. Then you’ll need to come up with a target amount. This may involve getting estimates from builders, vendors or your accounting department. Finally, you’ll need to come up with a projected timeline. Ultimately the best time to start a capital campaign is as soon as you identify your organization’s next big step in expansion.
What Types of Non-Profits use Capital Campaigns?
Any non-profit organization can launch a capital campaign. However, they’re more commonly run by established organizations like:
- Healthcare institutions
- Educational institutions
- Arts and culture organizations
- Civic organizations
- Animal welfare and rights groups
- Environmental communities
- Community groups
- Cooperatives or co-ops
What Makes Capital Campaigns Successful?
The most successful capital campaigns are thoughtfully planned. Hard deadlines, a defined goal and a hardworking team are essential. Honesty and transparency with donors are also critical components of success. To entice people to donate, they’ll also need to know what kind of project they’re contributing to. One of the most effective ways to secure a donation is to incentivize participants. Let’s look at some incentives.
Some donors feel more encouraged to contribute when there are matching gifts involved. A matching gift is a donation that a company, generous benefactor or foundation pledges to make, usually in an amount equal to what smaller donors are contributing. Often the matching gifts have a deadline to help spur smaller donors to contribute more quickly. Matching gifts are often part of a company’s corporate social responsibility efforts and are an excellent way to develop long-lasting relationships with donors.
If you can’t find one organization to match your smaller donations, consider soliciting matching gifts for a specific time frame such as one week or one month during the campaign. Although this is not in the context of a capital campaign, one example of timed matching gifts can be found during public radio annual or semi-annual fundraising campaigns. Some public radio stations ask that each board member or leadership figure put up smaller amounts such as $2000 to match donations during a morning or evening membership pledge drive.
Before you write your pitch script that you’ll use with potential donors, consider what types of recognition will be most meaningful and attractive to each level of donor. Recognition ideas include:
- Naming rights to a new building, wing or room (including signage)
- Carved bricks or tiles with donor names that are part of a path or walkway near the new facility; larger tiles can be for larger donors
- Seat labels in a concert hall or other venue
- Plaques with donor names on a wall or on benches
- Specialty items/freebies such as T-shirts for smaller donors
- Shoutouts on social media where the donor is tagged
- Listing on website, blog post, event program or other location
- Mentions during an open house or other campaign-related event
How to Organize a Capital Campaign
The key to a seamless implementation process is to plan your capital campaign carefully. Take note of these first steps to ensure a robust strategy.
Before anything else, you’ll need to determine your financial objectives. Calculating this number will determine the size and scale of your project. You may need to involve professionals to arrive at this number. For example, if you are looking to add on a new wing to a building, you’ll need to consult an architect, engineer and a builder to get a good idea of the cost. You may want to send the project out for bids and have written estimates or a signed proposal in hand before starting the campaign so that you can minimize the risk of surprise increases in costs. It’s a good idea to add some additional funds on top of any building estimates you receive as costs are likely to go up during the time you spend fundraising.
Deadline & budget
Based on your financial target and the availability of your vendors to start a project, you will need to set a deadline for collecting funds. Most capital campaigns have a deadline of one to five years. Some organizations set interim goals where if they fundraise X amount by a certain date, they’ll start their project (such creating as a new building) and then keep fundraising until they meet their final goal.
Teams & resources
Assemble your team and provide clear, actionable roles. Assign respective resources to campaign leaders and key decision-makers. Set aside time to discuss any potential adjustments to your strategy and begin reaching out to stakeholders.
Understanding a Capital Campaign Timeline
Capital campaigns typically occur in the following four phases.
The planning phase involves all the steps we mentioned above. It comprises budget and goal-setting, assembling your teams, and laying out check in points.
The quiet phase involves privately soliciting the most sizable gifts from primary stakeholders and donors. The quiet phase is typically when companies raise between 50% and 70% of their entire financial goal.
During the kick-off, companies launch their campaigns to the public. Typically, you might hold a press conference publicly recognizing primary stakeholders; you could have roughly 65% of your financial goal by this time. Depending on how much you have raised, you might decide to adjust your financial goals.
After kick-off comes the public phase, during which you’ll solicit the rest of your donations from the general public. Companies typically hold a major event to market the upcoming reveal.
Capital Campaign Team Members Explained
Every capital campaign involves people serving various roles. No capital campaign is complete without the following members.
Board members are responsible for securing gifts and managing your money flow. They are often involved in strategic planning, actual gift requests and sometimes how you execute your campaign. The board itself may need to approve the campaign goal amount. Individual members can be given assignments to solicit corporate and foundation matches.
Campaign chairs are a type of “brand ambassador” to your campaign. They are in charge of overseeing all committees and are also responsible for promoting your campaign. Sometimes, they are also your first major donors.
Your staff is the backbone of your entire campaign. Staff roles can vary, though some key players might be:
- Prospect researchers
- Event planners
- Gift officers
Planning committees are relatively self-explanatory. This team of roughly 10 to 15 members takes charge of campaign events and decisions. Most of the time board members, development staff and other volunteers make up your planning committee.
Volunteers can comprise anyone within the company or non-staff who works closely with your nonprofit. They have varying roles, including setting up events, ushering guests or providing in-office assistance.
Steering committee members are in charge of maintaining the campaign. They oversee tasks and events to ensure that everything happens according to plan.
Performing a Feasibility Study
Feasibility studies dictate whether your financial and overall campaign goals are attainable within a certain period of time. Many organizations enlist the help of campaign consultants, who are responsible for interviewing top donors and recommending any necessary changes.
At the end of your “test drive,” you’ll determine whether there is enough interest to move forward with your campaign and obtain a ballpark figure of how much you might make. The results of this study should be shared with your board to get their approval and buy in.
Setting a Capital Campaign Budget
Knowing how much money you want to spend on executing your capital campaign isn’t as simple as thinking up a number. Instead, consider it a best practice to aim for a budget that is 10% of your end goal. However, campaigns hoping to raise over $10 million should expect a budget of roughly 5% of this amount.
When determining your capital campaign budget, you’ll have to consider campaign costs such as event spaces, advertising and marketing materials. You may want to enlist a PR consultant to help you spread the word about your campaign in local media and/or to help you get publicity after the campaign. Hiring a campaign consultant may also take a portion of your budget. If your in-house team can oversee the entire campaign, hiring a consultant might not be necessary.
Creating Gift Range Charts
Gift range charts make it easier for campaign managers to break down financial goals into more manageable sections. With a gift range chart, you can develop an effective action plan, know what it takes to make your campaign successful, and track your progress every step of the way.
To create your gift range chart, list how many donations of a particular amount you’re looking to take in. An example gift range chart might look like this.
|No. of Gifts||Gift Size||Cumulative||Prospects Required|
Gift range charts are not concrete. Instead, they are guides that can help you determine how many prospects you need to tap at any given time.
You can also create a separate chart to track actual outreach. If you have a small committee, it’s not a bad idea to put the chart into a Google sheets or another shared spreadsheet where your outreach volunteers can all fill in information as they go. If you don’t know where to start, you might have your board or volunteers fill in names and contact info of prospects. Ideally your fundraising or membership software will help you generate a list of prospective donors and their contact info. Once you have that input, you can start by asking your board and/or or volunteers to fill in their name under the “Person Conducting Outreach” column if they know a potential donor. They can perhaps even strategize about the “Target Gift Size” for a potential donor. This spreadsheet can also help avoid duplicate efforts; having more than one person reaching out to the same donor can make your organization appear disorganized.
|Target Gift Size||Name of Potential Donor||Contact info||Organization Name||2022 Donation Level/Membership Level||Date of outreach||Person Conducting Outreach||Outcome|
|$30,000||Harriet Galage||ABC Widgets||Platinum Member||2/12/22|
|$10,000||John Smith||Big Foundation||Gold Member||3/10/22|
|$5,000||Frances Cordova||Cordova Consultants||Bronze Member||3/14/22|
Identifying Major Gift Donors
Major gift donors are the backbone of your campaign’s potential success. Anything between 50% and 70% of your fundraising may come from these donors.
When prospecting major gift donors, you want to prioritize entities with an affinity for your cause and the ability to provide large sums of money. You can vet gift donors through a process called prospect research. Nonprofits can identify the best corporate giving opportunities, optimize their fundraising activities and generate new prospects through this process. Places to start:
- See if your board members work for companies that would be a potential donor or offer to match donations.
- Research potential grants from foundations. Look for foundations that would support your organization’s mission or the type of project you are seeking to fund through your campaign.
- Ask your board members to identify potential donors in their professional circles. Perhaps they work with a vendor who may want to become involved in the campaign.
- If you have certain companies in mind on your outreach list, you can ask your board members to look through their LinkedIn contacts to see if they have contacts at those companies.
- Are there other nonprofits in your community who have recently completed capital campaigns? Reach out to them to see if they have information to share about donors who may have helped them or were looking for projects like yours to support.
Depending on your budget, you might choose to work with a prospect research consultant. These professionals have an investigative background and can help manage all your prospects and data.
Capital Campaign Best Practices
The best part about launching a capital campaign is its formulaic nature. This can help you structure your project while also leaving enough room for adjustments. Incorporate these best practices into your campaign to ensure a positive outcome.
Before the campaign
The secret to a successful capital campaign is a meticulous planning process. During this stage of the game, you’ll want to cover all your bases – from your budget to your launch plans and projections.
Invest in tracking software
If you can’t afford to work with a campaign consultant, utilizing fundraising or membership software can significantly impact your success. These platforms can automate repetitive administrative tasks like tracking outreach to members or potential donors, posting meetings, hosting online donation forms and more.
Run a feasibility study
As we mentioned before, a feasibility study is imperative to determine your campaign goals and what you need to do to achieve them. Conducting a feasibility study usually involves interviewing dozens of potential donors and using this information to direct your campaign.
After running your feasibility study, it’s time to set your concrete goals. You’ll also have to consider your budget, which may include consultancy fees, marketing efforts, and event funds.
During this time, you’ll also want to create a gift range chart to give yourself an idea of how many prospects you’ll need to engage.
During the campaign
As your campaign progresses, you’ll want to leave some room for change while keeping a few elements consistent. Give these tips a try.
Keep your branding consistent
No matter the changes you make in the middle of your campaign, you’ll want to ensure that your campaign branding is cohesive. Doing so keeps your campaign recognizable and helps donors and participants avoid confusion. You can hire a designer to create a logo for the campaign. Ideally the logo will align with your organization’s primary logo in terms of colors used, font(s) and overall style. A graphic designer can also create campaign materials and graphic elements such as icons you can use in print and online. Custom icons can quickly visually represent elements of the campaign. An infographic can illustrate why the campaign is needed or intended outcomes.
Offer incentives to major donors
By this point, you should’ve already made at least 60% of your campaign’s financial goal. If not, it’s time to entice your donors with some incentives.
Some fundraising tactics won’t work as well as you’d anticipate – but there’s no need to panic. By varying your fundraising efforts and remaining flexible, you can rise above even the most troubling obstacles.
After the campaign
Contrary to popular belief, the work doesn’t stop as soon as your campaign ends. The wrapping-up process provides an excellent opportunity to thank and re-engage donors as you celebrate your combined achievement.
Wrap up with an event
There is no better way to thank major donors than by hosting an event. Highlight your best contributors such as those who matched donations. If you were fundraising to build or expand facilities, invite campaign donors to the groundbreaking ceremony. Or hold an open house for them once the building is complete. Be sure to send invitations well in advance — at minimum two weeks. It’s a good idea to give major donors a heads up as much as two months out to have them save the date so that they can be present for the big day. If your event is dependent upon completion of construction, talk to your builder about potential delays so that you don’t host the event prematurely.
Write a news release and invite media outlets to attend your event; mention top donors both in the release and at your event in the hope that they will be mentioned in any media coverage. These events are part of a donor retention strategy, but shouldn’t stop there.
Evaluate your campaign results
Evaluating your campaign’s success can provide valuable insight into your target audience and how they respond to your strategies. Use this data to inform your future campaigns.
Capital Campaign Grants
If your budget doesn’t allow for a full-scale capital campaign, applying for a grant can help you achieve some financial goals. Unlike challenge grants, capital grants don’t require organizations to match funds, making them easier to obtain.
You can obtain a capital campaign grant from a foundation that works with nonprofits similar to yours.
If you think your organization might benefit from a capital campaign, don’t forget the components to a successful project:
- A clear mission and vision: What do you hope to achieve through your capital campaign?
- A unified team: Do you have a committed and hardworking team to help you achieve your financial goals? Know who your key players and decision-makers are.
- Qualified donors: Have you thoroughly beaten the bushes to find potential donors? Don’t forget to leverage your board and other volunteers on this task. Are the donors ones you can tap for future campaigns?
- Carefully planned stages: Plan every step of your campaign for success, but allow for potential changes.
The Bottom Line
Capital campaigns are valuable to many non-profit organizations who need help raising money for a major project. Through careful planning, nurturing positive relationships with major donors and allowing room for flexibility, you can raise more money than you’d anticipate!