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Fundraising Tuesday: How a Capital Campaign Fuels Sustainable Nonprofit Growth

November 14, 2023 by Dennis Fischman Leave a Comment

When was the last time your organization conducted a capital campaign? Ten years ago? Twenty? Even longer? Many organizations undertake capital campaigns because of specific needs, or perhaps a crisis that has arisen.

You may complete a strategic planning process that points to the need for more space or new programs and systems, and bingo—that leads to a capital campaign. Or, perhaps you are losing your lease, or a flood or earthquake has destroyed your facilities. A crisis like that often jump-starts a campaign.

But you will be well-served to think more broadly about how a campaign can help your organization grow and develop in more than just these ways.

This post will review the many reasons that capital campaigns are good for an organization’s growth. The reasons fall into two categories: specific things a campaign can raise money for that will help an organization grow, and the ways in which the process of a campaign boosts an organization’s strength and growth.

Specific Projects or Initiatives that Can be Funded by a Capital Campaign

Keep in mind that capital campaigns occur only once every 10 or 15 years. They don’t replace annual fundraising but are rather special initiatives that raise funds that boost an organization’s productivity.

These funds typically fall into these categories:

  • Infrastructure and Facility Improvements: Campaigns are often used to expand existing facilities, renovate outdated spaces, or build brand-new facilities. These improvements to the infrastructure enable an organization to do more and to do it more effectively for a period of years.
  • Technology: Organizations often use campaigns to invest in new systems and technologies that will make them more effective and efficient. These might include development systems, website improvements, scheduling systems, information tracking, and data analytics. The nonprofit world often lags behind with these investments, but when made wisely, they can transform an organization’s ability to function efficiently.
  • New Programs and Service Expansion: While campaigns typically don’t fund general operations, they can be used for front-end expenditures for new programs or rapid program expansion. Those programs can start more quickly with an infusion of resources from a campaign and then gradually fund the ongoing expenses through an increase in annual operating funds.
  • Board Restricted Endowment: While campaigns are not the best approach to build an organization’s endowment, most campaigns include some endowment component which provides opportunities for donors to contribute to the campaign through planned gifts that will not be needed for immediate cash investments.

Capital campaigns are excellent catalysts for growth. But they also have powerful transformational effects on an organization’s fundraising and visibility.

Capital Campaigns Strengthen Organizations in Other Ways, Too

Aside from the direct investments that a capital campaign funds, consider the diverse other benefits that it can bring:

  • Strengthening Donor Relationships: Capital campaigns are not just about fundraising. Campaigns foster meaningful connections with donors, as they inspire people to invest deeply in the organization’s mission. Through personalized cultivation and stewardship efforts, nonprofits can engage donors on a more profound level, turning them into lifelong supporters. These strengthened donor relationships extend beyond the campaign, providing a sustainable base of ongoing support.
  • Raising Visibility and Awareness: Capital campaigns also present an excellent opportunity to raise awareness about an organization’s work. As the campaign gains momentum, it generates media coverage, public interest, and word-of-mouth endorsements. This heightened visibility attracts new donors and volunteers who may become long-term advocates for the organization’s cause.
  • Building a Culture of Philanthropy: Successful capital campaigns involve the entire organization, from the board and staff to volunteers and beneficiaries. This collective effort instills a culture of philanthropy, where everyone is invested in the fundraising process and understands its importance. Such a culture ensures that fundraising continues to be a priority even after the campaign ends, sustaining the organization’s growth trajectory.
  • Capacity-Building and Professional Development: As organizations prepare for capital campaigns, they often invest in capacity-building and professional development for their team. This can include training on fundraising strategies, donor stewardship, and financial management. These improvements make an organization better equipped to handle the challenges of growth in a sustainable manner.

Careful planning, adherence to capital campaign best practices, and a hands-on approach will set you up well to achieve these long-term benefits, especially if you work with a campaign coach or advisor who can guide you through each step of the process.

More Than Just Money

Capital campaigns offer more than just financial boosts; they serve as catalysts for sustainable growth by forging strong donor relationships, increasing visibility, and fostering a culture of philanthropy within the organization.

 


Andrea Kihlstedt, Capital Campaign ProAndrea Kihlstedt | CEO & Co-Founder of Capital Campaign Pro

Andrea is the author of Capital Campaigns: Strategies that Work, now in its 4th edition, as well as How to Raise $1 Million (or More) in 10 Bite Sized Steps, in addition to other books. Andrea has been leading successful capital campaigns for more than 30 years. To learn how Capital Campaign Pro can support you through a capital campaign, visit capitalcampaignpro.com.

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Fundraising Tuesday: How Monthly Giving Can (& Should) Support Capital Campaigns

September 21, 2021 by Dennis Fischman Leave a Comment

A guest post by Amy Eisenstein of Capital Campaign Toolkit

Are you a monthly giver to organizations you believe in? If so, you know what monthly giving is like. Every month, you see the charge on your credit card. Periodically you get reports—either in print or through email—about what the organization is doing with your money and everyone else’s. Occasionally, you get an invitation to a special event. Toward the end of the year, you get a notice about how much you have given for your tax records.

But rarely, if ever, do you get a call from the DD or a board member or even a thank you note that feels like anything personal. However, you keep right on giving. Why?

Because you know the organization does important work and it would take something big to shake your confidence. Your giving is on automatic pilot.

Now, the naysayers will argue that this kind of giving is bad for major gift fundraising—and capital campaigns are the supreme version of major gift fundraising. They argue that donors get trained to give at amounts that are well below what you might otherwise ask for during a major campaign.

That’s true as far as it goes. But it doesn’t go far enough.

The Same Donors Give Recurring Gifts and Special Gifts

You will understand why monthly giving is good for capital campaigns when you think carefully about the difference between recurring gifts and special gifts. For in that idea is the magic sauce of great fundraising.

Monthly giving is the ultimate form of recurring gifts. Like all gifts that support your annual operating budget, they are needed year in and year out. The concept is that people will give at an amount they believe they can sustain over time.

I first understood this concept when I was standing in front of a donor plaque in the lobby of the athletic facility at the college where my husband taught. I knew many of the donors to the college. And looking at the donor listing on the wall, I saw the names of many of the wealthiest people in town at the $1,000 level. Only when I realized that the plaque recognized people for annual contributions did it make sense.

Those wealthy people who gave $1,000 each year also give much larger gifts to support the college’s capital projects. The same donor listed for a $1,000 gift on the annual funding plaque was also listed at the $1,000,000 level on the donor listing for the capital campaign.

Bingo! Donors give at modest levels for recurring gifts and at much higher levels for special, occasional projects.

The recurring gifts build a long-term relationship and commitment to the institution. The special requests enable them to make transformational gifts every once in a while. Just because a donor gives a monthly gift of $50 or $100 doesn’t mean that they won’t also make a gift that is many times that amount occasionally for a big special project.

Recurring giving builds donor relationships over a long time. Special giving multiplies the commitment. Click To Tweet

Capital Campaigns Don’t Cannibalize Annual Giving

Monthly donors who give to your capital campaign will keep right on giving even when they make a second, very large gift. And that’s why capital campaigns aren’t likely to cannibalize your annual fund.

Again and again, we see that the very same donors who give recurring gifts for years are the donors who give extraordinarily large gifts to capital campaigns now and again. When they are asked for very large gifts for a special project, they understand that you won’t expect them to make that huge commitment year after year. And they calibrate the size of the gift accordingly.

How to Turn Your Best Monthly Donors into Capital Campaign Donors

  1. Identify your top 50 donors. Capital campaigns depend on a relatively few very large gifts for their success. In a typical campaign, the top 20 donors will give more than 50% of the campaign goal.

Turn your monthly giving into a glide path for your capital campaign by identifying your top 50 donors who are recurring givers and treat them particularly well. Use the many research tools available to you to identify those 50 donors. Look at their capacity, giving patterns, and values.

Select those people for white glove treatment. Invite them to meet your president. Communicate personally with them. Send them insider information. Thank them more diligently.

  1. Get to know those top 50 better. Beyond better stewarding their support, actively set out to get to know them. Find out why they give and what they enjoy giving to. Learn enough about their history and background so that you develop instincts about them. Learn how they like to be asked for gifts. Determine who in your organization should build a relationship with them.
  1. Treat those top monthly donors well. Don’t let their monthly giving experience replicate the one I described at the beginning of this post and simply put them on auto-pilot. Pay more and better attention to them even while they are giving at a lower, recurring gift level. Personalize and target your communications to this unique segment.

 

  1. Involve those top donors in your project and campaign planning. One of the keys to securing the top gifts to a capital campaign is to find ways to involve your top prospective donors in the early steps of planning the project and your campaign.

You might invite them to a small group meeting with the architects, for example, to give some early feedback about the design. You might invite them to review an early draft of your case for support. You might involve them in the feasibility study—either serving on that committee or being interviewed for the study.

  1. Ask them in person for a big gift they will want to give. As you get to know those donors you will learn how they like to give. You’ll learn about other gifts they have made. You’ll develop instincts about what size and kinds of gifts they like to give. And then, when the time is right, you’ll be able to ask them in person for a gift to your campaign that fits their patterns.

Use Your Monthly Donor Relationships to Get Ready for Your Campaign

When you ask someone for something they want to do, chances are they’ll say yes. So use the pre-campaign period to identify, research and cultivate your best monthly givers so when you are ready to ask them for a campaign gift you’ll know what to ask them for. It makes simple sense, doesn’t it?

Step-by-Step Campaign Checklist & Guide

This intuitive guide breaks down each step of your campaign, and the timeline allows you to visualize your whole campaign, from start to finish! Download this free campaign checklist now!

 


Amy Eisenstein, Capital Campaign Toolkit

Amy Eisenstein

Amy Eisenstein, ACFRE, and Andrea Kihlstedt are co-founders of the Capital Campaign Toolkit, a virtual support system for nonprofit leaders running successful campaigns. The Toolkit provides all the tools, templates, and guidance you need — without breaking the bank.

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