Capital Campaigns - Roadmap to Success

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					Capital Campaigns - Roadmap to Success
If your nonprofit is considering expanding or renovating, you're probably
thinking about launching a capital campaign. But how do you create an
effective campaign? How many donors do you need? How much money should
you try to raise? Here's a quick tutorial to outline the answers to these
questions and more.
A capital campaign is a significant project for a nonprofit organization.
A successful capital campaign, and the completion of the project for
which funds are raised, can be a transformational event. Ideally, when
viewed in retrospect the capital project will appear as a logical and
inevitable step in the development of the organization as it strives to
fully serve its audiences and community.
With careful planning and keen attention to detail, a capital campaign
can be a powerful bridge to the future.
A successful campaign is the result of many constituencies working
together for a common goal, including the board, staff, volunteers,
donors, and community representatives. As the project grows from an idea
to a proposal to reality, a Campaign Planis key to success. A
comprehensive plan provides a framework for action and a template that is
transparent and universally accepted. It is a document that speaks both
internally (to those who are managing the campaign) and externally (to
those who may be asked to contribute or who may be impacted by the
project). As campaigns are multi-year, a clear plan also serves as a
guide if key team members drop out and new team members are brought in.
1. The Goal
A key element of success is to accurately estimate the amount of money
needed to be raised.
The costs of planning, acquisition, renovation, and endowment must be
carefully determined. In addition, the following items need to be added
to any actual cost of building, buying, or starting an endowment.
• Ten percent for campaign materials, cost of consultants and staff time,
office extras.
• Ten percent for building project extras like insurance, building
permits, design costs, and estimates for cost overruns or unforeseen
• Ten percent additional for people who pledge but cannot or will not
finish paying, or whose stock gift depreciates.
• An additional ten percent for added protection.
2. Timing
Many nonprofits hesitate to undertake capital campaigns because board
members believe that the timing isn't right; typically, if the national
economy is slow, or if the stock market is underperforming. While there
may be good reasons for postponing a campaign, board members should
remember that the national economy is cyclical, and donors make annual
appeal gifts from discretionary cash and capital campaign gifts from
assets. Most organizations do not run a major campaign more than once
every few decades. Your supporters will be enthusiastic about supporting
a transformative project and will plan accordingly.
3. Organization
The nonprofit must have the capacity to undertake a capital campaign. A
successful capital campaign must have the full faith and support of the
organization's board of trustees.
However, support grows incrementally. The following action groups are
formed as the campaign progresses:
• Steering Committee. Typically composed of not more than twelve,
including board members, the executive director, a campaign consultant,
and perhaps major donors who are not on the board. The steering committee
organizes and spearheads the campaign.
• Outside Consultant. Generally, capital campaigns require the
participation of a part-time fundraising consultant who can help manage
the campaign, train staff and volunteers, and interview prospects during
the feasibility study.
• Campaign Committee. This group may be very large and include board
members, donors, and community supporters who want to take an active role
in the campaign. The campaign committee grows as the campaign gains
traction. Subcommittees may include finance, fundraising, architecture
and building, and public relations.
• Volunteers. These are campaign supporters who participate sporadically.
They may include community leaders who host fundraising events in their
homes, or who have a connection to a potential donor.
4. Campaign Case
The campaign case is the key document that provides a rationale for the
project. It is both an internal summation of the o rganization's goals and
a marketing tool to help inform prospective donors. The case must be
prepared early in the process and may be revised periodically.
5. Gift Pyramid
Once the total monetary goal has been set, a gift pyramid is created.
This shows the number and size of gifts needed to meet the goal. Gifts
may range in size from millions to under a hundred, depending upon the
goal of the campaign.
The figures are set to reflect the giving potential of the highest donors
and the total number of donors expected.
6. Prospect List
Once the gift pyramid is established, the names of prospects must be
attached to each of the gifts. This is the task of the Steering
Committee. Acting in complete secrecy, the committee compiles a list of
prospects. Next to each prospect name is the amount projected, and the
name of a person who will solicit the prospect.
If the prospect list cannot be filled with prospects to reach 50% of the
goal, then the project must be reconsidered.
7. Interviews with Prospects
If there is the slightest uncertainty about prospect support for the
project, a feasibility survey is required. An impartial consultant who is
not directly involved with the organization is selected to conduct
confidential interviews with key board members and do nors. The interviews
are about a half-hour in duration and are conducted at the interviewee's
convenience, in home or office.
8. Solicitation of Key Donors
The "Quiet Phase" is an initial private solicitation. It should begin
only after certain conditions have been met, including if the project has
been approved by the board of trustees and if the feasibility study is
positive. During the Quiet Phase, it is expected that 50% of the goal
will be reached.
9. The Public Phase
During the Public Phase, the solicitation effort is broadened to include
anyone not directly involved with the organization, including charitable
foundations, corporations, and government agencies.
10. Conclusion
A well-prepared organization need not be apprehensive about considering a
capital campaign. If the appropriate incremental steps are taken,
conditions can be assessed at every stage. If at any time conditions are
considered unfavorable the campaign can be postponed. If conditions
continue to be positive, the campaign can be allowed to progress to the
public phase and then to a successful conclusion.
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