Fundamental Fundraising Principles of Capital Campaigns

Document Sample
Fundamental Fundraising Principles of Capital Campaigns Powered By Docstoc
					Fundamental Fundraising Principles of Capital Campaigns
A. Objectives The fund-raising strategy should have three major objectives:
  

Raise a minimum of $x,xxx,xxx; Position the organization for future growth, especially in the area of community recognition and fundraising; and, Build upon the growing base of visibility and respect for the organization as a community partner.

B. Personal/Peer Solicitation Personal solicitation will prove to be the most effective means of soliciting leadership support to the campaign.  All gifts of $5,000 and above will be sought through personal solicitation.  All volunteers will receive instruction on effective solicitation methods.  All solicitations should utilize a personalized prospectus/brochure. C. Emphasis on Major Gifts The success of the campaign will be heavily influenced by the success of the Major Gift effort.  The top 10 gifts will have a significant impact on the total amount raised.  Major Gift solicitation will be conducted in a phase-by-phase approach.  Prospects for the Major Gift phase will be developed within all constituencies: Executives, Boards, Individuals, Corporations, Foundations, Vendors and others. D. Large Gifts Early - Within Each Phase In order to set the pace for giving and to generate momentum, larger gifts will be solicited in advance of general giving.
  

Even when dealing with internal gifts, a select number of leadership gifts will be sought in advance of general solicitation. Lead gifts are generally, but not exclusively, received from the Campaign Steering Committee members. Phase-by-phase approach applies to Major Gifts and all other segments

of the campaign to set the pace for giving. E. Specific Gift Requests All potential donors to the capital campaign should be asked to consider a specific gift plan based on the table of gifts required for achieving the minimum campaign goal.  All gifts will be requested over a five-year pledge payment period.  All donors will be offered forms of commemorative recognition. F. Commemorative Gift Opportunities An attractive commemorative system will be implemented in order to stimulate donors to give the large leadership gifts required for success.  Leadership will approve commemorative recognition opportunities.  All prospective major donors will be presented with a suitable commemorative giving opportunity.

Importance of Major Gifts
Major gifts will be the key to any successful campaign. Major gifts establish credibility and give the leaders a sense of accomplishment and confidence. Major gifts also set the tone for other donors’ giving patterns. Most campaigns can be summarized using the 80-20 rule. This rule says that 80% of the funds raised will come from 20% of the donors making gifts. For example, a traditional $1,000,000 campaign would need a lead gift of 10%, or about $100,000. It would also need two gifts of $75,000 to bring the total to $150,000. The next five gifts should total about $250,000, or $50,000 apiece. (The top ten gifts should equal about 50% of the goal). After that, ten gifts of $25,000 each will bring the campaign to $750,000, a little less than 80%). If a $1,000,000 campaign can secure these gifts, the remaining gifts should be fairly easy to find.

Successful Solicitation Tips
This area of our website focuses on the actual request for funds. It is directed toward requests to businesses, corporations and individuals, although much of it is useful in soliciting charitable foundations.

Leadership Gifts First – Solicit and receive gifts that are either larger, or come from prominent people first. People follow leaders – secure their support and the other donors will follow. Recruit Great Leaders – People give to people, not necessarily to causes. If you get the right people involved (peers of potential major donors), major gifts will naturally follow. Peer Solicitations Only – People respond best when asked by a peer to help a project. You don’t want to intimidate the prospect by having him/her solicited by someone "superior" to them. Nor should someone who is "junior" in status or social standing solicit a prospect. Who asks is extremely important. Solicit Only In Pairs – Face-to-face fund raising can be daunting and is accomplished more comfortably in pairs. By having two people on the solicitation visit, one is evaluating the reaction of the prospect while the other one is talking. If one solicitor forgets an important part of the process, the second one can jump in. The process just works better in pairs. Only Personal Visits, Never Solicit Over the Phone – If it is important enough to ask, it is important enough to visit in person. If you are too busy to visit in person and explain the case fully, chances are the prospect won’t take it seriously either. Solicitations over the phone cheapen the process. Appointment in a Quiet Place – Visit with the prospect in their home or their office (if it is a business gift). Avoid restaurants because there are too many distractions and no one is more likely to give because they feel guilty you bought them a $15 lunch. Of course, the best place for a solicitation is your organization’s central office – and include a tour. A tour is a powerful weapon when used correctly. Ask for a Specific Gift – Nothing is worse than asking for support, but not being specific. Let the prospect know what you would like them to consider, why you are asking for that amount, and how that gift would fit into the overall campaign. Spend as much time thinking about the ask as explaining the case. Offer Commemorative Opportunities – Even when donors say that recognition doesn’t matter, most people like to be recognized for a helping a great cause. As a general rule, most people will not give you a gift just because they get something named for

them. But if they believe in your case, they may give more if the recognition offered is meaningful.

Gift Charts
So how do you know if you have enough prospects at various levels to justify a specific goal? Professionals use "gift charts" to determine whether enough prospects have been identified in each gift category. Campaigns are built around "equal sacrifice" not "equal gifts". It’s logical that Bill Gates, for example, should be asked to give more to a campaign than a board member who owns a small business. It’s all but impossible to raise any significant amount of money on the idea of asking everyone to make the same level of gift. You can’t raise $1,000,000 by getting $1,000 gifts from 1,000 people. Fact remains, it’s simply easier and more efficient to ask one person who can afford it to give your organization $500,000 than it is to ask 500 people to give you $1000. You work as hard for the $1,000 gift as you will for the $500,000. Gift charts are guidelines, not projections. They can be used to raise sights of donors and prospects and show the type of gifts required to reach a specific goal. Generally, the 80/20 rule comes into play. Eighty percent of the funds you’ll raise will come from 20% of your donors. If you raise $1,000,000 from 100 gifts, you’ll usually find that $800,000 of the amount raised will have come from a total of your top 20 donors. Is there a formula for determining an appropriate gift chart? Yes, to some degree. It’s not cast in stone and it depends on the type of organization (churches, for example, usually have flatter gift charts but higher participation). Generally, the chart works like this:  The lead gift is at least 10% of the goal, preferably 20%.  The next ten gifts equal 40-60% of the goal  Eighty percent of the goal will come from 20% of your donors.  As gifts get smaller on the chart, the number of gifts needed will almost always increase. In addition to the total number of gifts needed, its important to know that there is also something of a formula for determining the number of prospects needed in order to receive each gift needed. For example, if you need five $100,000 gifts to succeed, you’ll probably need 15 $100,000 prospects in order to get five $100,000 gifts. Keep in mind, however, that prospects may drop down into lower categories. You may identify 15 prospects who can give $100,000 each and only have five actually give – but those others may well make lower level gifts (say, $50,000 or so). So it’s not that you need to take

the total number of gifts needed and multiple by three. Below are several gift charts for various campaigns with various goals we’ve directed. It can give you an idea of how gift charts work. Gift Chart for $10,000,000 Dollar Capital Campaign

Gifts Needed 1 2 4 15 25 50 300

Total Gift (5 Years) $1,000,000 $500,000 $250,000 $100,000 $50,000 $25,000 $10,000

5 Annual Payments $200,000 $100,000 $50,000 $20,000 $10,000 $5,000 $2,000

Total Raised (Accum) $1,000,000 $2,000,000 $3,000,000 $4,500,000 $5,750,000 $7,000,000 $8,000,000

Gift Chart for $5,000,000 Dollar Capital Campaign Gifts Needed 1 3 10 20 40 75 Total Gift (5 Years) $500,000 $250,000 $100,000 $50,000 $25,000 $10,000 5 Annual Payments $100,000 $50,000 $20,000 $10,000 $5,000 $2,000 Total Raised (Accum) $500,000 $1,250,000 $2,250,000 $3,250,000 $4,250,000 $5,000,000

Gift Chart for $3,500,000 Dollar Capital Campaign Gifts Needed 1 2 5 10 20 50 75 125 Total Gift (5 Years) $500,000 $250,000 $100,000 $50,000 $25,000 $10,000 $5,000 $1,000 5 Annual Payments $100,000 $50,000 $20,000 $10,000 $5,000 $2,000 $1,000 $200 Total Raised (Accum) $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,375,000 $3,500,000

Gift Chart for $1,000,000 Dollar Capital Campaign Gifts Needed 1 4 10 20 30 100 Total Gift (5 Years) $100,000 $50,000 $25,000 $10,000 $5,000 $1,000 5 Annual Payments $20,000 $10,000 $5,000 $2,000 $1,000 $200 Total Raised (Accum) $100,000 $300,000 $550,000 $750,000 $900,000 $1,000,000

Gift Chart for $500,000 Dollar Capital Campaign

Gifts Needed 1 4 10 40 50

Total Gift (5 Years) $50,000 $25,000 $10,000 $5,000 $1,000

5 Annual Payments $10,000 $5,000 $2,000 $1,000 $200

Total Raised (Accum) $50,000 $150,000 $250,000 $450,000 $500,000