By David A. Mersky
Labor Day has passed and summer is already in the rearview mirror. I know that because emails and phone calls have begun arriving in the office, asking us to come and talk to boards of organizations that are thinking about doing a capital campaign.
“Would you come and explain to the board what it would take?”
Over the years, I have learned that what we are really being asked to do is help Executive Directors and Development Officers guide their respective boards in overcoming some common misconceptions.
Indeed, the questions we receive upon arrival reveal what little experience board members and staff have in terms of fundraising to renovate a building, expand facilities to meet needs, or strengthen the balance sheet by increasing the endowment fund.
Here are some of the questions — and our responses — that well-meaning, but misinformed board members typically ask…
Won’t the capital campaign hurt our annual fundraising?
No. In fact, if you are intentional in your planning and engagement throughout the process, annual fundraising for operations should increase during a campaign.
By “intentional” I mean that your donors see the campaign as part of a comprehensive effort, one in which you ask for a capital/endowment gift as well as an increased annual gift — a gift that they would maintain during the time they are paying out their capital pledge.
Most people are sophisticated enough to know that you can’t just build a building or renovate a facility. You need resources to keep the lights on, pay staff, operate the programs, serve your clients, etc. The annual funds are needed for operations that are separate from the campaign or endowment.
How large should the board’s gift be as a share of the total?
It depends. If your board is made up of individuals of significant wealth who are passionate about what you do, they may account for 30–40% of the total. In other organizations, it may be 5-10%. Overall, when the board’s collective gift is announced, it should be 100% participation and evoke a “Wow!” Because when other people see this, they will also jump on board so that their gift calls up a similar response.
But beyond a specific percentage, what’s most important is that all board members give to the best of their ability and that they do so in a meaningful way. The most important metric is that everyone feels they have joyfully accomplished something together.
How large should the lead gift be?
Capital campaigns differ from annual fund programs in that in the former, the “pyramid of giving” is much steeper. Typically, 90% of the money comes from just 10% of the donors.
As with the board’s gift, the benefit of a large lead gift is that it sets an example. It says that somebody believes wholeheartedly in your cause, encouraging and emboldening others to participate.
We recommend identifying three to five individuals who have the wherewithal to make that lead gift. Then strategize on how you can bring one or more of those individuals into the inner circle.
Should we approach “Wealthy Person X” or “Foundation Y” in our community?
There is often an assumption that those in the community with a demonstrated financial capacity — whether an individual, a foundation, or a company — “should give to us.” But that’s not how effective fundraising is done.
Most of the money will come from people and organizations that already know you – those with whom you have already developed a deep and strong relationship and who believe in what you do.
Money alone is not enough to makes someone a prospect, there needs to be a connection. This does not mean that you shouldn’t find ways to makethat connection… but the initial step is not to solicit them for a capital campaign commitment. That comes much later in the scope of a relationship. You must first show them what you do, how they can contribute, and explain why they might want to be a part of it.
How long should a capital campaign take?
Successful campaigns take a minimum of three to four years from initial conception to conclusion of the “quiet phase,” at least half of which is advance planning and raising the majority of donations. From there, it may take another three to four years to reach your target participation rate and before pledges are fully paid.
This means you must plan to maintain engagement with donors and funders all along the way, so that they know what is happening. Otherwise, those who gave at the beginning may begin to wonder what has become of the gift they so generously provided.
More Than Just Raising Money
Done well, the value of a capital or endowment campaign transcends the campaign itself, serving you into the future:
- First, it enhances the culture of asking and giving within your organization, strengthening the skills of your fundraisers.
- Second, it reinforces relationships with your donors individually. Your reputation is enhanced with the 100, 200, or 500 people who have come together for a specific purpose at a particular time to help you achieve a goal.
- Finally, you have raised your visibility in the community at large. Your organization is recognized as one that sets bold goals, galvanizes a community, and accomplishes big things.
Taken together, these things set the table for you to carry out successful campaigns of all types, again and again in the future.