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					Capital Campaigns: Fund-Raising Guidelines for Board Members
(Pamphlet that Steve Werner did a peer review on behalf of the National Center for Nonprofit Boards –
final copy is available through www.boardsource.org)

Introduction

In the lives of many nonprofits, there comes a time when they need to raise money for a
large expense. Buildings grow old. Equipment becomes outdated. Programs expand,
requiring bigger or newer facilities. A capital campaign is a common way to fund these
needs.

A capital campaign is an effort to raise a large amount of money for a construction
project, new equipment, or sometimes even the organization's operating expenses or an
endowment to support the project long-term. For small nonprofits, the goal of the
campaign may be to raise $100,000. For larger organizations, the goal could be more than
$100 million. Nonprofits generally conduct capital campaigns about every seven to 10
years. They are almost always the largest fund-raising effort in the life of an organization.
Each succeeding capital campaign goal is usually larger than the previous one, so, in
most cases, each goal is the largest amount the organization has ever tried to raise up to
that time.

Capital campaigns are enormous undertakings that require careful planning and a serious
commitment of time, energy, imagination, and patience. They engage everyone in the
organization — all board members, the full staff, members when appropriate, and all the
volunteers the organization can muster. Capital campaigns become the focus of the life of
the organization and absorb the energy of everyone involved. In most cases funds are
sought from all available sources — individuals, corporations, foundations, community
foundations, and governments. Some money is raised in face-to-face solicitations, and
some may come through direct mail, grant writing, or special events

During these campaigns, the active support and endorsement of the board is essential. In
fact, if the board is uncertain in any way about the viability of the effort or its value to the
organization, the campaign should not move forward.

A capital campaign does more for a nonprofit organization than produce income. It
mobilizes volunteer leadership, brings a focus to the fund-raising efforts, generates higher
visibility in the community, and can boost the morale of everybody involved. In short, a
capital campaign can enrich the life of the organization.

This book is written to present an overview of capital campaigns and to help board
members make informed decisions about these fund-raising efforts and understand what
will be required of them and of the organization as a whole.
How does the board decide if a capital campaign is needed?
It is the board's job to be sure a case can be made that the organization will be better off
after accomplishing the project. When deciding whether to launch a campaign, board
members should first consider these questions:
     1. It is necessary?
     2. It is urgent? Is it essential that the campaign be done now?
     3. Will it have a positive impact on the organization?
     4. It is consistent with the organization's mission and goals?
     5. Can it be developed in a prudent manner with careful planning and professional
         advice, if necessary?
     6. Will the campaign strike potential donor as exciting and vital? If donors don't
         approve or are uninterested, the campaign could backfire.
     7. How will the campaign be funded? Every campaign has cost. Some more than
         others. The Board must be certain to have a plan to underwrite the cost of the
         campaign.
     8. What percentage of the money raised will go to running the campaign? This is a
         question that donors often ask. (For more on campaign expenses, see page XX.)
     9. Who will benefit from the campaign? Students? Clients? Staff? Many donors are
         more interested in the effect the facilities have on people than on the facilities
         themselves. Instead of telling donors how the capital improvements will extend
         the life of the facility, tell them how the work will benefit recipients of the
         organization’s services or the community as a whole.

Capital Campaign Readiness Factors

These "readiness" factors should be in place before the campaign begins.

      A clearly defined and written statement of mission, goals, and objectives for the
       organization.
      A strategic plan outlining the five-year future of the organization.
      A history of balanced budgets and no recent financial troubles.
      A history of successful fund-raising including some large gifts from individuals,
       corporation, and foundations.
      A high level of visibility in the community.
      Prospective leadership donors to the capital fund drive.
      Strong and stable staff leadership at the chief executive level.
      A competent development office or volunteers willing to put in the time and
       energy to carry out this effort.
      A sound fund-raising plan.
      Strong and willing volunteer leadership.
      An active board committed to the campaign and willing to be involved and to
       contribute to the campaign financially.
      Being in a period of organization tranquility (i.e., no scandals or crisis situations
       that would detract attention from the capital campaign).
How much does it cost to conduct a capital campaign?
Capital campaigns have traditionally cost between 10 and 20 percent of the campaign
goal. These funds go to underwrite the cost of the campaign including staffing,
consultants, printing campaign materials, postage, and entertainment for special events
and meals related to the campaign. It is important to keep these costs as low as possible.
Donors often ask what percentage of the campaign goal goes to fund-raising expenses.
However, a campaign that is underfunded will suffer from a lack of human and financial
resources. Sometimes in-kind donations and pro bono work can bring down costs.

A fund-raising consultant or development staff should provide an estimate of the cost of
the campaign. The campaign steering group and the chief financial officer should develop
a campaign budget, the finance committee should review this budget, and the full board
should approve it.

Campaign costs are usually included in the campaign goal. For example, if the campaign
is for construction that will cost $1 million, and the campaign itself will cost $100,000,
then the campaign goal is $1.1 million. Some money will be needed upfront for
feasibility studies, campaign materials, and consulting fees, if necessary. Some
organizations start by taking money out of their budgets for securing a loan, or, in some
cases, a board member or other interested party may underwrite some of the initial
expenses.


What is a feasibility study?
A fund-raising feasibility study is usually conducted by an outside consultant and consists
of a series of confidential interviews with the organization's key supporters and
prospective major donors. It may also include a focus group or direct-mail questionnaires.
This information is used to determine if a capital campaign has a good chance of
succeeding.

A feasibility study also provides the organization with information about potential
donors, about the reputation of the organization, and about how much money the
organization might reasonably expect to raise. A well-done feasibility study suggests
what percentages of the goal will likely come from which sources, including individuals,
foundations, community foundations, corporations, and government.

A disinterested third party conducts the feasibility study in confidence, so the results are
objective. A feasibility study can be costly — between $35,000 and $50,000 dollars,
depending on size of the interview sample — but it is not always necessary. Smaller
organizations that find this an impossible cost can hold informal focus groups to test the
project instead. Although not as objective as feasibility studies, focus groups can provide
valuable information
In some cases, though, organizations should make every effort to do a feasibility study
before launching a capital campaign:
    1. If the nonprofit has no recent history of capital or major-gift fund-raising.
    2. If it has no recent history of successful annual fund-raising. The study may
        suggest that it would be a good idea to develop a comprehensive annual fund-
        raising program before embarking on a capital effort.
    3. If the organization has a low profile in the community.
    4. If the project could be seen as unique, unusual, or controversial.
    5. If the organization has recently been through a turbulent time.
    6. If the board lacks confidence in the organization's ability to raise the money
        needed.

When these variables are assessed, some organizations may find they are not ready to
conduct a campaign. For example, it is often better to have a successful annual fund-
raising effort before seeking capital gifts.

If the feasibility study indicates that the organization cannot raise enough money to meet
its goal, the project may be scaled down or phased in over a longer period of time to meet
the fund-raising realities. Sometimes the project is simply set aside for a couple of years
until the organization builds a stronger fund-raising base.

In addition to a feasibility study, board members should have information about the
economic climate in the community, about other organizations' current and planned
capital drives that might compete with their own efforts, and about the general health of
the business community. All these are factors that may affect the outcome of a campaign.


How is the fund-raising goal established?
This is one of the most critical decisions made before launching a capital campaign. The
campaign goal must be as accurate as possible. It is a benchmark by which the success of
the campaign will be measured. The board should take steps to be sure the goal is
reasonable, and no campaign should start without the board's endorsement of the goal,
which is announced to the public after the planning has been completed and major gifts
have been solicited. The goal is set when most or all of the issues below have been taken
into account:

   1. Determine the cost of the project. The estimate should be as close to the final
      cost as possible. If the project is new construction, it is best to get an estimate
      from a contractor or builder, not the architect, who is more likely to give a
      ballpark figure. Estimates on restoration and renovation work should come from
      someone who has experience doing such work. Some boards have members with
      this expertise who can also supply this information. Securing bids and accurate
      costs for equipment is easier than for building and renovation work. The cost of
      operating expenses and an endowment, if included in the project, can be easier to
      estimate based on organizational history.
   2. Take into account possible delays in construction and increases in costs.
      Thoughtful budgeting for capital projects takes into account the risk of overruns
      and higher prices than estimated. Most capital budgets include a contingency to
      cover this potential.

   3. Determine the cost of conducting the campaign, including staff hired for the
      campaign, consultants, printing, telephone and mailing expenses, travel, special
      events, donor recognition, and the final celebration.

   4. Consider the history of fund-raising in the organization. Has there been a prior
      campaign? How successful was it? What is the current state of fund-raising?
      Should the project be scaled back because a previous campaign did not reach its
      goal or postponed in light of other current campaigns?

   5. Review the results of a fund-raising feasibility study or marketing study.
      Have focus groups called into question the likelihood of raising the entire
      amount?

The Phases of a Capital Campaign

Capital campaigns are highly organized, with distinct phases. About 75 percent of the
capital campaign is spent planning and organizing before any requests are made for
donations. Here are the basic steps involved:

Step 1: Define the project. The chief executive describes in detail the project or projects
to be funded. For example, the chief executive could write a proposal for an addition to
the existing building, or a new building, with an estimate for the expense.

Step 2: Describe the reasons for conducting the campaign. The development staff or
development committee produces material explaining the reasons for the project and its
benefits to the organization, constituents and the community. This information goes first
to the board to get buy in for the capital campaign. Once the campaign has begun, it can
be used to create a case statement to hand out to potential donors and the public.

Step 3: Recruit the campaign leaders. The board chair appoints members of the
campaign steering committee. (For more on the steering committee’s role, see page XX.)
During this phase the board and the chief executive should also make a serious
commitment to be involved in the campaign.

Step 4: Test the market. At this point, the organization conducts a fund-raising
"feasibility study" to get a sense of whether the campaign will succeed. Focus groups
consisting of constituents, past board members, current and potential major-gifts donors,
are brought in and interviewed to test the project and its price tag. If the market testing
raises serious doubts about the feasibility of a capital campaign, then the effort may be
scaled back, postponed, or abandoned. In some cases, the feasibility study may bring to
light some fundamental problems that the organization should address. Should it do more
to publicize its good works? Are there misconceptions in the community about its
reputation? Do donors have reservations about project the campaign is funding?

Step 5: Develop a campaign plan. Campaign leaders develop a comprehensive
campaign plan based on the insight gained from the market testing. This plan could
include a timeline, a campaign goal, a list of potential funders, and a case statement that
will be shared with the public.

Step 6: Identify and cultivate potential donors and conduct research. Board
members, campaign volunteers, and staff identify potential donors, or "prospects." The
organization may conduct research, called "prospect research," to gather information that
might help determine whether they would might have an interest in the organization's
work and, if so, how much they might be willing to give. A newspaper profile might
provide information about a prospect's interests, family, job, or involvement in other
nonprofit organizations. Nonprofit Web sites sometimes list donors according to the
amount they have given. Financial Internet sites may provide data on a prospect's
investments.

Once prospective donors are identified, campaign leaders develop a plan to "cultivate"
them — sending them brochures, press releases, and newspaper clippings about the
organization; giving them a tour of the facilities, inviting them to special events; and so
forth.

Step 7: Solicit leadership gifts. During this period, campaign volunteers solicit the
largest gifts the organization expects to make during the campaign, which could represent
as much as 80 percent of the total dollars that will be raised. This is sometimes called the
"quiet phase" because it takes place before the campaign has been announced to the
public.

Step 8: Announce the campaign to the public: Once the leadership gifts are secured,
the campaign moves into a phase during which the rest of the gifts are raised from the
organization's members, donors, staff, clients, and so forth. This may involve direct-mail
solicitations, special events, public service announcements, or other techniques.

Step 9: Recognize and thank donors. Just how donors will be thanked for their gifts is
determined during the first step of the campaign and is carried out as soon as gifts start
rolling in. Donors receive thank-you letters or cards in the mail. Online donors may get e-
mails. Some organizations offer premiums — a mug or a book or T-shirt — as a thank-
you to donors who give at a certain level. Some nonprofits list donors' names in their
newsletter or on their Internet sites. Large gifts may be recognized by plaques bearing the
donor's name or even a room or building named after the donor or a loved one. This is
sometimes called a naming opportunity.

Step 10. Campaign close and celebration. This is an event to honor donors, volunteer
leaders, and others who were instrumental in the success of the campaign. Depending on
the size of the organization and the goal of the campaign, this can range from a formal
reception or banquet to a casual pizza party or potluck dinner. This celebration officially
closes the effort.


Should the campaign goal include money for an endowment?

It is increasingly common practice to include money for an endowment in a capital
campaign goal. For example, a capital campaign to build a new theater may include in its
goal enough money to endow the office of the director or to endow the maintenance of
the building.

Requests of donations for an endowment do not usually compete with requests of gifts for
bricks and mortar because many endowment gifts are made in wills and life insurance. In
fact, some donors are more interested in endowing a professorship than in donating to a
building or renovation, since an endowment guarantees that the position will go on in
perpetuity.

Endowment fund-raising is different from other kinds of fund-raising. Endowments are
often funded with planned gifts — contributions made on the death of the donor — rather
than outright cash, and thus endowment grows slowly. Because of this, endowment fund-
raising often extends beyond the end of the capital drive. Whether the endowment goal is
included in the campaign goal or set as a separate goal, campaign leaders should be clear
on how much money is going to the endowment.

It is possible to raise cash for endowment, but an organization must be careful not to
compete with itself during the term of the campaign. The endowment goal should be
clearly defined and should be apparent to donors and prospects.

Endowment fund-raising requires the board to establish a set of policies about investment
counsel and practices, oversight, financial management, and naming opportunities. If
board members are unfamiliar with endowments, then some training with a consultant or
staff might help.

Should a campaign goal also include money for operating expenses?
Most organizations try to keep their operating monies and capital monies separate.
However, some institutions include annual fund-raising in the campaign goal, and count
that funding as part of their success. This does tend to confuse donors, and often leads to
uncomfortable discussions about the campaign goal. If an organization chooses to raise
money for operating expenses as well as construction or endowment, then careful
explanations to the prospective donors are required.

How long will a campaign take?
No one can define campaign length with certainty, though most run between three and
five years from the initial planning to the celebration at the end. The timetable should
become clear during the planning process.
Timing a capital campaign is more art than science. Almost no capital campaign ends
when scheduled. If anything, they tend to take longer than expected. There are few short
campaigns. Patience is an essential characteristic of successful capital campaign efforts.

What will board members be asked to do during a capital campaign?
The board operates on two levels during a capital fund drive. The first is to support or
endorse key decisions and the second is to help raise money.

   Endorsing key decisions. As decision makers, board members confirm that the
    project — whether new construction, renovation, equipment, or endowment — is
    appropriate for the organization. If so, it then authorizes the organization to conduct a
    campaign.

    The campaign staff then draws up financial goals and a campaign budget, which the
    campaign steering committee reviews. The committee recommends to the board
    whether to accept the budget as it stands or to make adjustments, and the board then
    votes on the budget.

    Before the campaign begins, the board authorizes the investment practices and polices
    that may emerge as part of the campaign. Some campaign pledges come in over a
    period of years, so the organization may get a "bridge loan" so construction can
    continue even though some of the pledges are not yet due. If a portion of the money
    raised is to go to an endowment, the board authorizes decisions about how that money
    will be invested and what percentage can be spent each year.

    The board must also authorize the hiring of a campaign director to run the campaign
    or a consultant.

   Fund-raising. All board members are asked to "give" and "get" (to make their own
    donation and to help raise money from others.) Their own donation should not be a
    token gift but a contribution that is a stretch for them. For some, that may be $50, for
    others it could be in the millions. This is important for several reasons. When asking
    other donors for gifts, board members need to be able to say they gave a stretch gift.
    And before foundations and corporations give grants to a campaign, they often want
    to know if everyone on the board has contributed.

    In addition to making their own gift, board members are expected to help bring in
    donations from others (personal acquaintances, business associates, or corporations).
    Some board members will actually ask for donations, others will not, but they still
    contribute to fund-raising. They can identify potential donors and cultivate them by
    telling them about the organization, sending them newspaper clippings about the
    organization's accomplishments, and inviting them to special events.
   Board members also help with prospect research (gathering information about
   potential donors to help in fund-raising). For example, a board member may know
   that a prospect is head of a successful business or has inherited wealth. That
   information can help the campaign staff determine how much to ask the donor for.

   If a board member knows a prospective donor well, he or she may be asked to be one
   of the two or three people who visit that person to ask for a gift. In fact, the board
   member may be the one who actually "makes the ask."

   After a gift is made, board members play an active role in thanking donors. This
   responsibility can include sending them thank-you notes and continuing to keep them
   abreast of how their contribution is helping the organization and its clients.

In what ways is a nonprofit held accountable for a capital fund drive?
Making sure the organization is accountable for the money raised is ultimately the board's
responsibility. Board members should keep in mind the following ways in which the
organization can be held accountable.

      Financial accountability: Money raised for a specific purpose should be kept
       separate from other funds so that it can be reported separately.
      Gift records accountability: A record must be kept of every donation and the
       details of that donation — for example, any restrictions a donor may have placed
       on a gift. This is essential both for the donors and for future organizational fund
       raising. Usually campaign records are held at least five years.
      Reporting accountability: To keep donors informed, the organization must
       report to them regularly on the progress of the campaign, the dollars raised, and
       the progress of the project. This can be accomplished with newsletters, a
       campaign bulletin, or other methods.
      Stewardship accountability: All donors should know that their gifts have been
       used exactly as they wanted them to be used. If the donor has put restrictions on
       the gift, he or she should be assured that those restrictions are being honored. For
       example, if a donor restricts her gift to the purchase of diagnostic equipment for a
       new hospital wing, she should receive regular reports on the progress of the
       project and the use of her gift.
      Management accountability: Someone who represents the board, such as a
       project manager, should be responsible for the day-to-day oversight of the project
       to be sure it goes smoothly and so that the board will know right away if problems
       arise.
      Campaign cost accountability: The cost of campaigns should be clearly defined
       in a campaign budget, which should be part of any prospectus provided for
       donors. Campaign budgets should also appear in any end of campaign reports. All
       volunteer and staff leaders should be able to answer basic questions about the cost
       of fund-raising and the cost of the project.
The Five Make-Or-Break Decisions During a Fund-Raising Campaign
1. The selection of the project or projects to be funded.
2. The establishment of a campaign goal
3. The appointment of a professional campaign director
4. The selection of the campaign chairs or co-chairs
5. The identification of the top 10 donor prospects.


Does the organization need capital campaign staff and consultants?
In most cases nonprofits need both fund-raising counsel and additional staff to conduct a
successful capital drive, though some successful campaigns are run entirely by
volunteers.

Many organizations hire temporary staff to work on the campaign, since the current fund-
raising staff continues to conduct other fund-raising during the drive. Campaigns with
goals of $1 million or more generally require one full-time director and one
administrative support staff person. As the campaign gets bigger and more complex,
more staff may be needed. Of course, a large goal that is met with few gifts requires
fewer staff members.

Fund-raising consultants can be useful in capital campaigns because of their experience
and because they have an outsider's perspective. It is important to choose consultants
from established, reputable firms. Board members and key staff should interview several
prospective consultants and check their references before hiring one. Some consulting
firms provide the campaign director to run the campaign as well as counsel.

Many nonprofits have raised money without staff or consultants. In this scenario, the
burden falls entirely on the volunteers, particularly board members. Committees
consisting of board members, donors, supporters, and friends of the organization do the
work of staff, and the board and other leadership volunteers make all the fund-raising
calls.

An all-volunteer campaign has very low cost, and volunteers are intensely involved in the
effort. But the volunteer leadership needs to be strong and everyone involved should
understand the time commitment required.

How are volunteer fund-raising efforts organized?
A small or large campaign with or without staff needs volunteer leadership. Below is an
outline of a simple and effective structure.


The campaign steering committee, which can be made up of a combination of board
members, staff, and volunteers, defines the project to be funded and sets the campaign
goal. In addition, it:
    drafts the case statement, which is included in the brochure and prospectus;
      helps recruit the chair or co-chairs for the drive; and
      works with the campaign staff, if there is one.

The campaign steering committee does not make key decisions about the campaign but
makes recommendations for the board to do so.

The steering committee should consist of five to seven people who know the organization
well, have an interest in the project to be funded, and know the philanthropic community.
They should have good decision-making skills and, ideally, some experience with capital
fund-raising. This group is usually formed in the beginning of the campaign and disbands
in six months or less, when its job is done.

The campaign chairs or co-chairs recruit and lead the campaign team and are the visible
leaders of the fund-raising effort. They should be well connected in the community and
have excellent leadership skills.

In addition, the chair or co-chairs are also responsible for:
     making a leadership contribution to the campaign;
     soliciting gifts from the campaign team;
     educating, cultivating, and soliciting gifts from prospective leadership donors;
     participating in donor recognition; and
     working closely with campaign staff.

A key to campaign success is volunteer leadership. The ideal campaign leaders are people
whose reputations rank them among the most respected people in the community. They
should know and understand philanthropy and, ideally, have some experience with
capital drives. They may or may not be current board members.

The board chair and chief executive of the organization should work with the steering
committee to recruit the chair or co- chairs. It may be better to recruit co-chairs than a
single chair. The work is so labor-intensive and demanding that two people can more
easily fill the role. Volunteers who accept these roles should expect support from staff,
and counsel.

Chairs and co-chairs should be among the top donors and serve by convening the
campaign team, signing corporate and foundation proposals, making calls on prospective
major donors, and representing the campaign to the public.

Some organizations choose to have an honorary campaign chair or co-chairs besides the
working campaign chairs. Honorary chairs are usually recruited because of their name
recognition and their reputations. They generally do not play an active role, but their
names are of such value that they lend a sense of prestige to the fund-raising effort. They
should be donors and may agree to seek a major gift or two during the campaign.
Campaign Team
This group makes the campaign happen. These volunteers have a very demanding role
over the course of the campaign and should be able to spend at least eight hours a month
on the campaign. They need to give money of their own and raise money from other
people. They should be committed to the organization and believe in its mission.

Their primary responsibilities are to:
    work with the staff to develop campaign strategies,
    cultivate and educate prospective donors,
    solicit gifts, and
    be involved in the recognition and stewardship of donors.

The size of the campaign team can vary based on the size of the goal and the amount of
time team members have available. Board members may be part of the campaign team, if
they are willing.

Campaign Support Groups
It often takes more than board members to make a campaign successful. Other volunteers
can be asked to step forward and take important roles in the campaign. They may be
established groups such as guilds in hospitals or groups created just for the campaign
such as a group of past board members. "Friends" groups, and many others can also be
involved in organizing and leading the campaign.

How is the work of the chief executive affected by a capital campaign?
A successful campaign cannot be done without the active engagement of the chief
executive. Most chief executives spend at least 25 percent of their time on a capital drive.
They work hand-in-hand with the campaign chair, the campaign director and the fund-
raising consultant to educate, cultivate, and solicit gifts from prospective donors. Given
the workload of executives, it is essential that plans be made to shift some of the chief
executive's usual workload to others on staff during the campaign. Everyone should take
care to use the chief executive only where the potential impact is the greatest or where the
outcome is critical to the success of the campaign. For example, the chief executive does
not need to attend campaign team meetings, but must always be on call for major gift
fund-raising activity.

The Top Five Things That Should Not Happen During a Capital Campaign
Major problems in the organization can jeopardize a capital campaign. Sometimes these
issues can be resolved by the organization's board or staff, but more often it is helpful in
these circumstances to bring in a consultant. Smaller organizations without the budget to
hire a consultant may be able to find help from nonprofit support organizations or local
United Ways.
    1. A public organizational scandal or other negative high-profile incident.
    2. The resignation of the C.E.O. of the organization.
    3. The resignation of the campaign manager or director.
    4. A significant miscalculation of the cost of the project of 25 percent or more.
    5. Serious internal struggles within the board and staff.
What kinds of materials are necessary to support a capital campaign?
A range of choices is available in the development of campaign materials. How much
money is spent depends on the organization, its budget, and the image it wants to portray.
A sophisticated organization may want high-impact, glossy brochures. If a grassroots
group produced the same kind of campaign material, donors might think it was too lavish
and that the group was spending money foolishly.

Here is a sample of what might be developed.

      A campaign prospectus is a comprehensive document designed to attract
       corporations, foundations, and major donors. It includes the case statement. It tells
       the story of the project and includes budgets, calendars, a list of board members,
       and other materials the organization deems appropriate. Because the prospectus
       can be expensive to publish, some organizations are doing away with it and
       providing the same information in simpler, less expensive documents. Other
       organizations find it an essential component of a campaign. Those that do still use
       them, print only a few.

      A campaign brochure is a three- or four-fold document used widely throughout
       the drive. It describes the campaign and might include financial bar charts and
       graphs, naming opportunities, and other information useful to potential donors. It
       should be attractive and well done.

      Scripts, "brag" sheets, and training materials are used for the training and
       support of volunteers and staffs who are making fund-raising calls. Scripts help
       give volunteers a sense of how to discuss the campaign with prospective donors.
       Brag sheets are usually lists of organizational successes: What great things have
       happened in the life of the organization?

      A campaign newsletter is a bulletin sent regularly to donors, prospects, staff, and
       others to provide regular updates on the campaign. Some organizations include
       campaign updates in e-mail and on their Web pages.

What happens to other fund-raising efforts during a capital campaign?
All of the day-to-day fund-raising goes on as usual, and donors to the capital campaign
should understand that a contribution to the capital campaign is not a substitute for other
giving, such as to the annual campaign. It is possible that the rate of gain will slow in
other fund drives or that the return will flatten for a short period, but if the campaign is
well planned, they should not decline.

The board can ensure that the regular fund-raising program continues to be successful by
seeing that:
     Annual fund-raising and special events are staffed at an appropriate level,
     Board members continue to help secure new annual donors,
       All staff and volunteers continue giving time and energy to the usual fund-raising
        initiatives,
       Separate teams of volunteers are recruited to lead each of the fund-raising efforts
        so there is no overlap in volunteer leadership, and
       Campaign managers lay out the schedule for the capital campaign and the annual
        fund-raising so they do not directly conflict. Campaign material and requests for
        gifts should be staggered so donors don't receive two requests for money at once.

How are staff members other than the development staff involved in the campaign?
The staff of an organization can become involved in a capital campaign in several ways.

       Giving. Some groups, such as universities and hospitals, raise money from staff.
        Nonprofit staffs are often underpaid and overworked, so a request for funds must
        be done with care. It is best to have staff leaders do the asking, and to make the
        request by mail. And it should be made clear that whether or how much they give
        will be kept confidential and will have no bearing on their job. A carefully
        constructed one-time ask by peers has the best chance of working.

       Research. In some nonprofits, members of the staff have information about
        potential donors that might be helpful to the campaign. Staff often have
        relationships with clients or people served that give them exposure both to their
        financial resources and their level of interest in the organization. Teachers in
        private schools, physicians in health care organizations, and social worker are all
        potential informants. Of course nothing should be done that violates the
        confidential, professional relationship of these individuals. Without violating any
        rules of confidentially, staff should be asked to provide whatever insight or
        relevant information they might have.

       Expert witnesses and advocates. Often the staff knows more than anyone else
        about the nonprofit's programs and the need for new or upgraded facilities. Staff
        members can be quite articulate and passionate about the organization's cause.
        Those who are willing and who feel comfortable doing so may contribute by
        talking to prospective donors, answering their questions, and accompanying the
        face-to-face solicitation with a board member or development staff member.
        Integrating them into the campaign can enrich the effort.

       Contact with the public. Because staff members often have contact with
        prospective donors, they should be trained in how to respond to their questions,
        even if they are not involved in the campaign in ways outlined above. If staff
        members are not supportive, they can undermine a campaign.


The strategic approach to a capital campaign
Different organizations approach capital campaigns in different ways, but working in the
following directions can help ensure success in raising funds.
Inside-Out: The leadership for a capital campaign comes from inside the organization.
Board members, staff, members, and others close to the organization should be the first
solicited, and the first to volunteered money. After those inside the organization have
been solicited, campaign leaders can shift their efforts to people outside the organization.

Top to Bottom: Big gifts come first and small gifts follow. The solicitation process
should be driven by this mandate. It is tempting to start with smaller gifts, but almost
always a mistake.

PPPA (Prepare, Prepare, Prepare, Ask): Planning and preparation represent 75
percent of the work of a campaign. Asking is only successful when it follows careful
planning. Research potential donors before asking for a gift so the ask won't be too large
or too small. And spend time cultivating the donor so he or she is very familiar with the
organization and its needs. Deciding who should be present and who should do the asking
is also a sensitive issue. Don’t ask first. Plan first.

What if the cost of the building or capital needs increases during the campaign?
If the estimate for a project turns out to have been too low, the campaign team, with the
board's approval, must decide what steps to take:

      Change the goal to reflect the new cost. This is a public action that spreads the
       new goal throughout the constituency. This change often casts doubt on the
       credibility of the campaign planning and can make donors back away from the
       project.
      Retain the goal, but continue to raise funds beyond the goal with a quiet
       explanation to the donors only. People have come to understand that the cost of
       building projects often change during a period of construction. Almost always the
       change is an increase. Most donors will not be surprised.

Board members, staff, campaign team members and leadership donors all should be
informed if there is a meaningful change in the cost of the project. Openness is an
essential component of successful fund-raising.

What happens if the campaign does not reach its fund-raising goal?
This can happen from time to time even with the best planning and campaign
organization. The donors simply are not as generous as expected, the economy may have
taken a dip, or for some other reason the project is underfunded. This is a situation that
must be handled with care. Organizations that fail to reach a goal can suffer the
consequences for years. They may face negative publicity, have trouble raising money in
the future, and struggle to recapture their footing.


The organization can make a number of choices at this stage:
        1. It can continue with a trimmed-down version of the original plan, cutting
           costs where possible.
        2. It can borrow money to complete the project.
        3. It can finish the project in phases and fund it over a longer period of time.
        4. It can extend the length of the campaign, secure new volunteer leadership,
           and move on.

Leadership gift donors should be told exactly what steps are being taken and why. They
may even be asked to give again in another phase of the effort.

If the project simply cannot be built because the funds are so much less than needed,
there are three common strategies.
     1. The organization asks donors if their gifts can be used to support another
        project. With major gift donors this request should be made in person.
        Solicitations for smaller amounts can be made by the phone or via direct mail. For
        example, the original goal of the campaign may have been to build a new,
        freestanding building. The new goal might be to build a wing to an existing
        structure that serves some of the same purpose. If the donors decide they want
        their original gift returned, then do so promptly and gracefully. If donors wish you
        to keep the money be sure that the use of the funds is clearly identified.
     2. The organization offers to return the money to all donors.
     3. The organization can hold the funds for a period of time, invest cautiously and
        begin a new campaign in 24 to 36 months. Again, it may be wise to let donors
        know about the change in plans.

In any case, donors should be able to see that the organization has used their money in a
thoughtful and productive way even if the full project is not funded. This is part of board
stewardship.

Other Ways to Fund Major Projects
If an organization finds that a traditional capital campaign is not the most appropriate
way to fund a particular project, there are a variety of other ways to secure the money
needed.

The Rolling Capital Campaign
In some organizations, more than one building must be funded. A typical way to handle
this is to conduct a capital campaign that it is focused exclusively on leadership gifts. An
organization with multiple capital needs develops a segmented campaign that moves
from one project to the next. The construction work is done as each project is funded. The
next building campaign then starts. In most cases the focus of fund-raising is on the
leadership gift level for each project. Donors may give to one segment of the campaign or
multiple segments. As each segment of the campaign is finished, there is a dedication and
celebration to reinforce the success of the effort.

Major Gifts Campaign
This is much like the rolling campaign in its focus on leadership gifts. However, it differs
in that only one building is being funded. This is a quiet fund-raising effort seeking large
gifts from a few individuals, corporations, or foundations. Each gift usually represents 5
to 10 percent of the goal for the campaign. This is a likely format only for large
institutions with a substantial of major gift prospects.

For example, a small private school in California raised $1.5 million for a swimming pool
from three gifts of $500,000 each.

Mix and Match Campaigns
In this instance the organization may use money from multiple sources to fund the
facility. That may include some organizational reserves, some leadership gifts, and a
general capital fund drive.

Equipment Campaigns
This situation offers a wide range of strategies. When only equipment is needed, such as
a bus, new computers, or athletic equipment, and there is no capital construction, the
organization may integrate the effort into the ongoing fund-raising. For example, for a
year or two the proceeds from the annual fund-raising event would go to equipment
rather than general operations. Or a few prospects may be asked to underwrite the
equipment with personal gifts. A limited number of corporations and foundations might
also be asked to underwrite the project.

Bank Loans
From time to time organizations make loans to underwrite the cost of capital needs.
These loans are paid off over time from the current income of the organization. While
many boards do not like to put the organization in debt, there are times when that is the
best strategy.


How does an organization end a capital campaign?
The decision how and when to end a campaign is a critical one for the organization.
There are a number of alternative strategies either to use separately or in some
combination.
    Close the campaign when the goal has been reached and a celebration can be held.
    Close the campaign when it was scheduled to close even through all the money is
       not raised. Celebrate what has been raised. Continue to raise the money needed.

No matter the circumstances of the closing of the campaign, the board should set out the
strategy for communicating the news of its closure to the constituency, to all donors and
to all those involved in and affected by the campaign.

Organizations use a wide range of activities to formally close a campaign. There often is
a celebration to honor the campaign team, the donors, and the staff. Usually such an event
is held to salute all the partners in the campaign and to honor their hard work and
generous support. The board should be actively engaged in such an event.

Recognition, both permanent and temporary, should be in place by the close of the
campaign. Donors should see their names in appropriate places and on donor lists.
How are donors thanked?
Thanking donors for their gifts is fundamental to good fund-raising. It is often said that
recognizing donors' contributions to a campaign is the first step in soliciting them for the
next campaign. Past donors are a nonprofit's most likely future donors, so a good fund-
raising effort focuses on developing relationships with people who will give year after
year.

A good recognition program is planned before the campaign begins. The organization
may show its appreciation to donors by sending them thank-you letters, listing their
names in a newsletter, or holding a special event for them. The larger the gift, the more
effort is put into the donor recognition. Some organizations reserve a wall in their lobby
or other public place for plaques with donors' names. A theater may put recognition
plaques on chairs. Other organizations may place donors' names on a brick walkway.

For very large donations, the organization may offer the opportunity to name a building
or a room after a top donor or in memory of someone close to that donor. These naming
opportunities are offered as incentives to donors to make large gifts.

Whether to offer naming opportunities is a decision the board should make after careful
consideration. Names on buildings or rooms may last as long as the room or the building
is standing. Before the campaign begins, the campaign team, staff, and the head of the
organization should compile a list of named gift opportunities for the board's
consideration. The board then considers several key questions:

      Are the naming opportunities consistent with the values of the organization?
       If a cigarette manufacturer wanted to donate a large amount of money to a
       nonprofit hospital, naming a wing of the hospital after that company would
       probably conflict with the hospital’s mission and values.
      Is the naming opportunity in keeping with tradition? For example, many
       major universities name buildings only after retired professors, and not after
       contributors to the building.
      Is the board comfortable that this is the appropriate approach for the
       organization? Most boards would find it inappropriate to let the organization
       build statues of all major donors on the grounds.


About the Author
Edward C. Schumacher is the president of Third Sector Consulting, a fund-raising
consulting and training firm based in Seattle, Washington. Ed has worked for 40 years in
the nonprofit community as a consultant, executive director, development director, and
staff member. Over the past 15 years, Ed has provided counsel and trainer participants in
more than 20 capital fund drives ranging in size from $250,000 to $60 million.
Ed’s involvement as a volunteer has been extensive, including service on boards for
nearly 23 years in positions such as board chair, capital campaign chair, annual fund
chair, and chair of long-range planning.

Ed teaches for the Fund Raising School, a program of the Center on Philanthropy at
Indiana State University, and is also an adjunct faculty member at the University of
Washington Graduate School of Public Affairs. He is also a board member and an
instructor for the University of Washington’s Fund Raising Certificate Program.

Ed has degrees from Towson State University and Western Maryland College, and has
taken advance course work at the University of Michigan and Cornell.

Suggested Resources
Organizations

The Foundation Center is a good resource for listings of foundations that support capital
campaigns. To find a Foundation Center library near you, visit them on the web at
www.fdncenter.org.

The Center on Philantrophy at Indiana University provides workshops and seminars on
capital campaigns.

Your local college or University may have a fund raising certificate program that would
have a considerable segment devoted to capital campaigns.


Publications
Andringa, Robert C. and Ted W. Engstrom. Nonprofit Board Answer Book: Practical
Guidelines for Board Members and Chief Executives. Washington, DC: NCNB, 1998,
208 pages, hardcover.
This book goes beyond theory, using real-life experiences to answer many questions
concerning nonprofit board governance. Written for seasoned, as well as new, nonprofit
leaders, this book covers nuts-and-bolts information on recruiting committed and active
board members, assessing board performance, ensuring board diversity, and knowing
when and how to ask inactive members to step down. Each chapter includes a list of
suggested action steps.

Ellis, Susan J. Maximizing Volunteer Resources. Washington, DC: NCNB, 1999, 23
pages.
While the vast majority of nonprofit organizations involve volunteers in direct service or
support roles, the subject of volunteers rarely if ever is raised in the boardroom. This
revised booklet discusses the importance of volunteerism, new trends in volunteerism,
and issues affecting board members who also function as volunteer staff. The booklet will
provide you board with answers to fundamental questions.
George, G. Worth. Fearless Fund-Raising for Nonprofit Boards. Washington, DC:
NCNB, 1996, 24 pages.
Author Worth George has developed a system that will help disinclined board members
get started on their fund-raising responsibility. By providing specific choices and
instructions, this booklet helps to encourage once-reluctant board members to become
active fund-raisers. The booklet¹s centerpiece is a worksheet of 40 specific fund-raising
activities that range from simple to sophisticated, and all play an important part in the
overall plan. With so many options to choose from, board members of every level of skill
and experience can find a way to contribute to this critical role of fund-raising.

Grant Thornton, LLP. Planned Giving. Washington, DC: NCNB, 1999, 28 pages.
Written by the accounting and management-consulting firm Grant Thornton, LLP, this
booklet explains in clear terms the different planned giving options available to donors.
Board members will learn about present and deferred gifts, bequests, charitable trusts,
and annuities. A planned giving campaign requires the commitment of time, effort, and
proper management on the part of both board and staff. Find out if planned giving is right
for your organization and for your donor base.

National Center for Nonprofit Boards. Fearless Fund-Raising. Video. Washington, DC:
NCNB, 2000, 60 minutes, plus 20-page user¹s guide.
Few relish the thought of asking for money, however worthy the cause. But for most
nonprofits, raising money is an important way to ensure the necessary resources for
programs and services. This video features a team of fund-raising experts and nonprofit
leaders who explore the board¹s role in the fund-raising process. The workshop format
also provides answers to questions from real board members and nonprofit members. The
20-page user¹s guide provides questions and exercises for additional discussion. A must
for your fund-raising library.

				
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