Tag Archives: Nonprofit Leaders Guide to a Capital Campaign

Maintaining Capital Campaign Momentum

The Nonprofit Leaders Guide for a Capital Campaign Volume 11: Maintaining Capital Campaign Momentum

In this series, we have covered, defining the dream, determining the capital campaign goals, nonprofit consultants and architects, the capital campaign feasibility study, marketing materials, volunteer leadership, and sequencing solicitations—who to solicit first, and then who to solicit second.  Now that you understand what it takes to start a campaign, it’s time to consider how to maintain capital campaign momentum.

Consider how hard it is to maintain capital campaign momentum in month 14, 18 or 24.  Imagine if you have been working diligently for more than a year, gaining ground, but still not over the benchmark that you have set for going public with the campaign.  Many in the community know that a capital campaign is underway, it is always the worst kept secret, but you do not know when you will be able to make the big announcement. Sometimes it feels as if that day will never come.

How do you maintain capital campaign momentum?

  1. Regularly scheduled meetings. If you are only holding ad hoc meetings, there are no deadlines for solicitors to meet.  Volunteers, in particular, need deadlines to make the campaign a priority again and again and again.
  2. Change up the next meeting. If the same group is showing up at the meetings but you hear a lot of, “I couldn’t get to it this week,” or “I’m just waiting for everyone to get back to me,” it might be time for something different. Maybe it’s a training session, a joint session with the capital campaign building committee or a special guest speaker (maybe a beneficiary of the campaign or someone from a different nonprofit who has recently completed a campaign)?  Consider who would help bring a different energy into the room and remind everyone of why they are spending their valuable time on this campaign.
  3. Hire a nonprofit consultant like Mersky, Jaffe & Associates. We can help infuse energy and offer additional tips and strategies that can reinvigorate a campaign.
  4. Create new opportunities for excitement. If you need to raise $7 million to go public and you only have $5 million it can be disheartening.  But, you should remember, and celebrate that you have already raised $5 million! Instead of heading down a negative path:
    1. Set a new benchmark of $6 million that will trigger a capital campaign development committee offsite or thank you for all your hard work and we hope you will keep up the good work dinner. Something to work for and to allow you to celebrate your accomplishments along the way.
    2. Offer naming opportunities. For some major donors, the chance to name the social hall or the nursery school after a loved one will substantially increase the amount of their gifts. For small and mid-size donors you can encourage a small affinity group to pool their resources to name a room. If 5 friends who had pledged $5,000 increase their gifts to $10,000 they can reach the $50,000 level to name a training center or classroom. The bonus is the that the smaller donors will feel like they worked together for the nonprofit to make a bigger gift. A win-win for everyone involved.
  5. Add an additional co-chair. If the leaders are getting pulled in other directions by work, have changes in their personal life or are no longer bringing the same inspiration, it may be worth adding someone new to the leadership team.  This is a marathon, not a sprint, and sometimes you need a new training buddy to change things up and remind everyone that they need to keep moving towards the finish line.  Ideally, this new leader will be a current donor who can bring additional volunteers to the committee.  It is never too late to expand the capital campaign development committee.

A stalled campaign can be a failed campaign.  Instead, shake things up, keep things moving, and get back to raising money to help fulfill your nonprofit’s dreams.

Last Month: Identifying the Second Round of Capital Campaign Prospects

 

Identifying the Second Round of Capital Campaign Prospects

Capital Campaign Volume 10: Identifying the Second Round of Capital Campaign ProspectsNautilus shell cross section spiral

In Volume 9 of this series, I focused in on the first group who should be solicited on behalf of your capital campaign.  You can read it here but if you missed it, I will offer a spoiler and tell you that the first round of giving should always be the capital campaign committee and board of trustees or directors—from whom you want nothing less than 100% participation in the most meaningful way possible.

Now it is time to Identify the Second Round of Capital Campaign Prospects

How do you identify your next round of capital campaign prospects?

  1. Look at your donor list from your annual fund and consider who is close to the organization. Please note that I did not say, “Who has previously given a lot?” In the same way that the capital campaign leadership and the board should be the first group to give to the capital campaign, look for additional donors who are involved and will understand the benefit that this campaign will bring to the nonprofit. Donors who volunteer their time as well their financial resources, previous board members who have remained close and continue to volunteer, other committee members, and those interviewed during a feasibility study can fall into this category.
  2. Do a prospect research screening with a well-known company (we are big fans of Donor Search). The screening will help you uncover hidden gems as well as help you determine ask amounts. However, it will take time to review the names and ensure that the highest ranked prospects’ wealth is  not heavily based solely in real estate.  This is particularly true where a person may have purchased their home in 1993 for $400,000 only to find it is now worth more than $1,000,000. Also, beware of out-of-date information or false positives—when your prospective donor’s name is similar to someone located in a different part of the country.
  3. Ask the committee, board members and/or staff to review the screened donor list and give suggestions about who should be in the next round of solicitations. They can highlight volunteers/event sponsors/people who visit the facility who might otherwise slip by unnoticed.
  4. Collect anecdotal information to give you the best picture of each of your next capital campaign prospects. Once you have the next round of prospects, find out everything you can about them. Did they recently move or have a child?  Did they host another nonprofit’s fundraiser this year or start coming twice a month to volunteer? Every detail will help the solicitors be well informed with a better chance of success.

Once you have your list in hand, then, it is time to prioritize by potential gift.  You want to ensure that each person on this list has a chance to give a meaningful gift, but to move the needle on your campaign, start with your larger gift prospects. And, if these people are truly committed to the organization, they will want to give to your worthy cause.  Making each capital campaign ask that much easier.

Last Month: Who To Solicit First For Your Capital Campaign

Next Month: Maintaining Capital Campaign Momentum

Capital Campaign Volume 9: Who To Solicit First

Visions of DonationsLast month, in this series, I focused on the capital campaign development committee- you can read it by clicking here. This week we will move forward by focusing on who to solicit first. Hold on a sec, I need to turn on my ESP.

Yes, without knowing any of your nonprofit’s specifics, I can tell you who YOU should solicit first.    

I suspect that some of you might currently look like a cartoon character with dollar signs in your eyes.  However, with few exceptions, the previously mentioned campaign development committee and the board of trustees should be the first round of donors. It may not be as exciting as talking to your prospects with the largest capacity, but this will provide a better foundation for success.

These are the people who understand and have, in fact, written and approved the case for the campaign.  This group knows that the plan is well thought out and worthy of the community’s investment.  And now, 100% of the committee and board should be the first to put their money where their mouths are.

This is best practice by all accounts.  Even if your committee and board do not yet know it is a best practice, your major donors will. If someone has the capacity to give a $1,000,000 gift, you are likely not the first person to ask them for a large donation.  Over time, they have learned the workings of a well-run campaign.  And having 100% leadership commitment in hand is expected before major donors commit.

It doesn’t matter if leadership provides 5% or 50% of the financial goal, as long as each and every person gives a personally meaningful gift.

By now you might have realized that this requires the campaign development committee to solicit itself.  This should be done with utmost discretion.  Lack of sensitivity around the ability to give can leave bad feelings if handled publicly.  Instead, focus on the gift that feels right for the donor as well as how much closer it brings you to 100% participation  of the leadership community.

If you are still reading this article, you are probably on the development campaign committee, the board or serving as staff.  Be prepared to make your own gift.  Lead by example and you will encourage the rest to follow suit.

Last Month: Capital Campaign Volume 8: Who Will Make The Asks

Next Month: Capital Campaign Volume 10:Identifying the Second Round of Capital Campaign Prospects

Capital Campaign Asks- The Nonprofit Leaders Guide Vol. 8

Who Will Make the Capital Campaign Asks?

The Nonprofit Leaders Guide for a Capital Campaign Volume 8: Who Will Make the Asks

No series on capital campaigns can ignore the topic of the volunteer leaders who will be required to raise the funds.

Who should be on a capital campaign development committee?
You.  Yes, you, the person reading this article. How do I know that you would be a valuable asset to the development committee?  Because, you are already willing to invest your own personal time to learn about the process.  But, one person cannot do it all.

If you are ready to begin making capital campaign asks, there is probably a group of people who have been voicing their opinions and organizing the first steps.  Skip the sub-group who have clearly stated, from the very beginning, that they will not ask anyone for money.  There are some people who are willing to step outside of their comfort zones and some who stand firm. Don’t try to move the rocks.

Where else can you find solicitors?  Your standing development committee is a good place to start.  People who have been working on your annual fund will know a lot of the donors/prospects.  And, they will understand the reasoning behind building or renovating the facilities or creating or enhancing an endowment.

Did you perform a feasibility study?  If so, get in touch with the interviewees who said they would consider soliciting for the campaign. It will show that you are taking the results to heart.

Don’t forget the major donors!  Major donors make excellent capital campaign development committee members.  They understand the importance of financial support for your nonprofit and can ask others to join them in making this “once in a lifetime” gift.

How many people do you need?
Every situation is a bit different but, between 10-15 is a good place to start to make the capital campaign asks.  You have to assume some will have to step off of the committee due to unforeseen circumstances and you want to be able to spread the work among at least 8 people.  Capital campaigns take time to achieve their goals and you need a committee that is large enough to deal with the ebb and flow of committee member’s lives outside the committee.

No experience necessary
Training can, and should be, a part of a capital campaign development committee.  Volunteers will come in with vastly different experience but a bit of training can give everyone the confidence they need.  Some may choose to use outside consultants like Mersky, Jaffe & Associates or an in-house staff member with experience, but make sure everyone has the opportunity to feel like they will be successful in soliciting donations.

If you have more questions on capital campaign fundraising, consider signing up for the upcoming webinar, “How to Ask Someone for $1,000,000: and How Rejection Therapy Can Help” on September 15th.  Click here to sign up.

Read the rest of the series:

Last Month: Capital Campaign Marketing Materials

Next Month: Who To Solicit First

Guide to Capital Campaign Marketing Materials

Campaign PyramidThe Nonprofit Leaders Guide for a Capital Campaign Volume 7: Marketing Materials

Marketing materials work, as a whole, to offer the prospect information that will help inform their gift. Each piece – from a time table to gift pyramid and site page to a rendering, will help create the image and feeling that you are trying to promote. And, while each nonprofit is different, each piece should look professional in a way that elicits confidence and conveys that you are a good investment for the prospect.

What are some of the key capital campaign marketing materials?

  1. The Timetable – When starting a campaign you should set realistic expectations for when you plan to start construction. And everyone should know that it may be years away. People imagine that a major renovation can get done in a year, and that may be true, if you didn’t have all of these other factors to include on the timeline:
    • The start of the capital campaign. Have you created a committee to assess the needs of the nonprofit and its constituents?
    • When you intend to hire an architect
    • When you intend to hire a fundraising consultant
    • Board approvals.
    • When you intend to start soliciting
    • When do you hope you will publicly announce the campaign
    • When you intend to hire a builder
    • When the builder can start and his expected time table
    • Providing for delays
  2. Gift pyramid – Whether you think 80% of your donations will come from 20% of your donors (Pareto’s Principle, the 80/20 rule), 90% will come from 10%, or there will be a more even distribution, a drawing that represents giving levels can help the board, campaign committee and prospects visualize what will be needed to run successful campaign in your community.
  3. Renderings – Working with an architect can help you understand the costs involved but they can also help you by providing renderings. Floor plans offer an overview, but most people don’t understand how to read them – even those intimately involved. Instead, renderings, whether black and white sketches or three-dimensional models can show prospects what you plan to achieve. Be prepared that a nice color image may cost around $800-$1,000 each. And you may need a few, depending on the scope of the project. But, few people will donate meaningful gifts without “seeing” the committee’s vision.
  4. Leave Behinds – Everyone loves a good leave behind. Whether it is a fact sheet or a copy of the presentation, prospective donors will want to hold onto something to refer to and/or share with someone. This is not a high-end glossy brochure, but instead, something that can be updated from time-to-time with new images and added information.
  5. Website – Ideally, all solicitations will be in person, but general information that excites the prospects, gives some information, and offers a way to get in touch with someone to learn more can be a very useful piece of the capital campaign marketing materials.
  6. Recognition Policies, Gift Tables and Planned Giving Sheets – These one page documents can all help your solicitors give the correct information and full breadth of options to prospective donors. In this case, the visual impression is less important than the content.
  7. PR and Publicity Plan – Do you need community buy in? How will you announce the public phase of the campaign? Will you announce a ground-breaking ceremony and celebration of your accomplishments? This does not need to be developed until your capital campaign is well underway, but knowing who will handle this responsibility and how it will be developed can help keep additional volunteers engaged in the process if they do not want to solicit gifts or work on a building committee.

Each campaign is unique, but there are general capital campaign marking materials in a successful campaign. And above all, we hope you achieve your dreams and find success.
Last Month: The Nonprofit Leaders Guide for a Capital Campaign Volume 6: Feasibility Study Results
Next Month: The Nonprofit Leaders Guide for a Capital Campaign Volume 8: Who Will Make the Asks

Capital Campaign Feasibility Study Results

The Nonprofit Leaders Guide for a Capital Campaign Volume 6: Feasibility Study Results

The Results are in

The capital campaign feasibility results are in! (If you are unsure how we got to this point you can read the beginning of the series by clicking here). Does it show that you can have confidence in raising your $9.3 million dollar goal or do you have to alter your plans to fit your budget? Will your board want to move forward with a campaign? Did your community support your case for giving?

The results of the capital campaign feasibility study should clearly have an impact on your next steps, after all, that is why you conducted a feasibility study. But there is not always an obvious path to follow. Even if two organizations get similar results, the road forward might not be the same because every community is different. Let’s break down some of the decisions you will have to make.

The dollar amount that the capital campaign feasibility study predicts your organization can raise, based on the current case for giving, is the primary indicator for your nonprofit to examine.

If the amount listed in the results is equal to or greater than the amount required for the project, your community will support this endeavor and it is clearly worth moving forward. Not much of a decision, in most cases.

If the amount listed in the results is less than the goal that was tested during the study, take a look at the verbatims from the interviews. There are usually trends that emerge:

  1. Your community does not support the project described in the case

You are looking for clues to what people are really saying. Are you suggesting a building overhaul but most people don’t notice any problems with the current structure? Is the case supporting too much infrastructure and not enough exciting improvements? Is there interest in increasing the endowment or paying for specific programs much greater than building renovations?

One of the questions we ask is whether there are other factors that would increase an interviewee’s gift. Answers may include, “a more defined vision of the building,” “Organization X would have to improve their fiscal management so I can have confidence that money will go where I want it to go,” or even, “I would have to understand how this campaign would improve our community.” These very different answers show that the case did not resonate. Now it is time to decide whether you should revise the case and interview a portion again, clarify your vision and assume the support will come, or decide that now is not the time for a capital campaign.

  1. Your community is not used to giving capital campaign gifts and the amount of money that needs to be raised would be unachievable with your donors.

If your community is not used to contributing major gifts—10 to 15 times their annual support, if they have never participated in a capital campaign, or they have neither the income nor the wealth to allow them to donate what is required, a capital campaign might be beyond your reach. Sometimes the lack of major donors arises when we recommend a feasibility study of 30 people and the organization cannot name 30 people who could be major donors to the campaign. Other times, it surfaces when individuals who the nonprofit believed had potential, indicated otherwise during the study (or through prospect research prior to the study). Still other nonprofits don’t know who on their list has potential. No matter how you slice it, a capital campaign requires major donors. It requires a lot of them. With the results in hand, it is time to consider whether or not your community has the wherewithal to support this endeavor.

  1. Your community does not have the means to support the project described in the case

Sometimes there is a question as to whether there is enough money in the community. You know some donors have potential but you need to find out what is realistic. If the results include many responses like, “I wish I could give more,” a capital campaign might not be on your horizon in the near future. Instead, use those same volunteer hours to increase your annual fund and donor base and reassess the situation in a couple of years.

Will you move forward with the campaign? Update the case for giving? Research your donor base to find hidden gems? So many questions and I will add one more. If you know you need a capital campaign, will you hire a fundraising consultant?

Why should your hire someone like Mersky, Jaffe & Associates? Consider the costs of undergoing a campaign with your current staff and volunteer leadership. What will not get done while attention is shifted to a capital campaign? The question is is particularly important for staff. If a campaign will result in reduced stewardship with current donors, a switch of focus from annual giving to capital giving or overworked staff that leave, the cost will be too high to the nonprofit. Then, consider that the projected costs of the new building will increase each year. So if it takes you an additional year and a half to run your own campaign (assuming you have some experienced development volunteers willing to donate a significant amount of time for three years or more) it could cost an additional 10-15% of your current project budget.

A nonprofit consultant will not do the work for your organization. There will still be staff and volunteer time that is needed. But once you eliminate a large portion of the learning curve and the missteps, the time will be well spent.

You have the capital campaign feasibility study results in hand. What are you going to do with them?

Last Month: The Capital Campaign Feasibility Study

Read the rest of the series:

Volume 1: The Overview

Volume 2: Defining your Dream

Volume 3: How to Determine Capital Campaign Goals

Volume 4: Capital Campaign Staff, Architects and Consultants

Volume 5: The Feasibility Study

Volume 7: Capital Campaign Marketing Materials

 

The Capital Campaign Feasibility Study

feasibility interview Capital Campaign Volume 5: The Capital Campaign Feasibility Study

When it comes to a capital campaign feasibility study, some people think it is an essential tool, and others think they are unnecessary, as “we know our donors and members, who will give and what will motivate them.”. Needless to say, we fall into the former category. This week, I will focus on the role of the feasibility study in a capital campaign and why it is worth the investment.

Seven benefits of hiring a consultant to perform a feasibility study:

  1. Creating the case for the project. Each capital campaign feasibility study interview consists, in part, of the interviewee reading a case for the capital campaign. While the project can, and often does, change as a result of the feedback obtained from the interviews conducted during the feasibility study, the case is often the first time that most organizations articulate in writing exactly what they have in mind. That process helps board members and staff focus on the scope of the capital campaign, how much the project will cost and how the funds will be raised.
  2. List Prospective Donors. Capital campaign feasibility studies interview diverse stakeholders from different demographic and degrees of involvement. But, almost all of the potential interviews should be with people who can give or influence a major gift to the campaign. While this may seem skewed, and we all know people with different income levels play a large role in nonprofits, a capital campaign is about raising large sums of money. And those large sums will only come from major donors.
  3. Engage Prospective Donors. Cultivating and stewarding donors should be a year-round practice for your nonprofit and a feasibility study is a great “touch.” You are engaging prospective donors early enough in a project that their opinion has a real impact. Following the adage, “Ask someone for money and you will get advice, ask someone for advice and you will get money” can have a positive impact on the results.
  4. Find Volunteer Leadership During each interview, there comes a time during which the questions shift towards the interviewee’s personal interest in the project. Will they give to support this idea? How much would they consider at this time? Would they be willing to help work on the campaign? A strong case for a beloved nonprofit is enough to excite people to join the volunteer leadership and help make this vision a reality.
  5. Learn how current and past donors think about the organization and its leadership. Candor, whether you like what is heard or not, will help those involved understand how the community views the nonprofit. Does everyone love the executive director but avoids the board president? Is the community unused to donating large sums and so it is perceived as an oversized goal? Is the organization perceived as too disorganized to pull off a campaign? You might not like what you hear, but you will go into the capital campaign with your eyes wide open.
  6. Predict fundraising. This is, of course, a major objective of the capital campaign feasibility study. Will your community support this endeavor? Do they believe you have the volunteers and staff to lead the way? Will they put their money where their mouth is?
  7. Consultants understand how the organization works. There are at least three reasons to use consultants to perform a feasibility study.
    1. Few organizations understand the intricacies of a survey and how to analyze the results.
    2. You will get a much more honest response if the interviewees are extended the opportunity to engage confidentially with someone who will not take anything personally, report it back to their mutual friend, or have to be seen at the next board meeting.
    3. The consultant learns about the organization which helps immeasurably when it comes to consulting on the capital campaign.

During the feasibility study, we can assess the volunteers and staff for their strengths and weaknesses. It helps us understand who has what responsibilities, and who might need training or additional staffing. Each organization is unique, and the study allows our suggestions and implementation strategies for the capital campaign to be appropriately tailored. And, as the campaign is under way and donors are discussed, there is a way to share knowledge, without breaking the confidentiality of a feasibility study interview, with the development committee. And inside information, can help raise more money.

If you would like to learn more about a capital campaign feasibility study for your nonprofit, please click here to email me.

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Read the rest of the series:

Volume 1: The Overview

Volume 2: Defining your Dream

Volume 3: How to Determine Capital Campaign Goals

Volume 4: Capital Campaign Staff, Architects and Consultants

Volume 6: Feasibility Study Results

The Nonprofit Leaders Guide for a Capital Campaign Staff, Architects and Fundraising Consultants

The Nonprofit Leaders Guide for a Capital Campaign Vol. 4 of 12: Capital Campaign Staffing, Fundraising Consultants and Volunteers

Capital Campaign Staff and Dreamer

In Volume 3 of this series, How to Determine a Capital Campaign Goal, I wrote that personnel needs would include, “staffing to handle the organizational and financial management of the campaign.” Let’s break that down.

Capital campaign staff:

  • Attends and keeps notes of development committee meetings (notes can be taken by a volunteer as long as it is consistently achieved, archived and sent to the committee)
  • Acts as a point person for other staff.
  • Advises on the organization’s policy issues.
  • Establishes and/or manages the financial structure for the campaign including donations, pledges, acknowledgments, billing and, in some cases, project financing.
  • Follows the “to-do” list that emerges from each meeting. Are their prospects or donors who need to be called or contacted by the organization? Will the next meeting require a projector or specific handouts? Is there a relationship that needs to be nurtured?
  • Keeps the ball moving. There are a lot of moving parts and volunteers are volunteers. Capital campaign staff will show up each day and dedicate time and energy towards making your dreams a reality.

Architects

We often hear the question, “when do we get the architects involved?” There is no right answer but here are a few guidelines, as well as a few considerations about what you can expect from the architects.

You have decided to make a structural change to your building (or build a new one). There is no way to understand the costs without engaging an architect. It’s hard, for some organizations, to imagine spending that money so early in the process but that is the only way to understand what you would do if

  • money were no object, or
  • there was a financial limit to your campaign, or
  • you are required to make certain changes (local codes have probably changed since you last altered your building).
  • you wanted to know what it would all look like.

Their magic will help you create a space that fits your organization but includes aspects that you could never have imagined. And while they may want to do something a bit more expansive than you had first thought, a good architect can find the balance of realistic improvements and visionary structure. All while helping you understand the true costs involved.

Fundraising Consultants

Do you need a fundraising consultant? Yes, and not just because we are fundraising consultants, we are nonprofit consultants who provide:

  • Structure for a campaign
  • A tightened timetable
  • An unbiased feasibility study
  • An understanding of the results of a feasibility study
  • Help in developing the necessary marketing materials
  • Help in assessing ratings
  • Prioritizing prospects
  • Solicitor training
  • An unbiased point of view
  • Momentum when the process seems to be slowing or volunteers start to feel burnt out or tired of the process
  • Experience with staff, architects, financing, and building

Nonprofit consultants should provide confidence in the process. They help the development committee, staff and volunteer leadership see the possibilities and achieve their goals. And because nonprofit consultants are not volunteers, they do not suffer the same fatigue that often hits campaigns at some point in the process. Nonprofit consultants provide accountability to the leadership that the campaign will start well and stay on track.

And if you ask our clients, that is worth the costs incurred.

Read the rest of the series:

Volume 1: The Overview

Volume 2: Defining your Dream

Volume 3: How to Determine Capital Campaign Goals

Volume 5: The Feasibility Study

To speak to someone at Mersky, Jaffe & Associates about how we can help your capital campaign,
click here or call me at 800.361.8689 and at the prompt, press 3.

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Nonprofit Leaders Guide to Determine Capital Campaign Goals – Vol. 3 of 12

The Nonprofit Leaders Guide a Capital Campaign Vol. 3 of 12:
How to Determine Capital Campaign Goals

Dream GoalLast month in this series, The Nonprofit Leaders Guide to a Capital Campaign, I focused on defining your dream for the campaign. There is no capital campaign that can succeed without a clear understanding of why you are raising money, how it affects your mission, and whether the leadership and community support this vision.

The piece was not an assessment of whether there is financial support to reach your capital campaign goals. There are additional steps that are necessary before you ask that question. Today, we will focus on one of them, how to determine a capital campaign financial goal.

Capital? Endowment? Both?
Some campaigns focus exclusively on raising capital to build/renovate a structure, or on establishing funds to support the programs and costs associated with a building but many campaigns today focus on both. So many, that in fact we might have to make up a new term to easily explain the combination. How about Capowment campaign? Endowital Campaign? CapEndow Campaign?

Silly names aside, when you are setting your campaign’s financial goals make sure it encompasses the full costs, which only start with the estimated construction costs. You must also include:

Financial

  • The additional projected costs if it takes a year (or more) to raise the funds (also known as the inflation rate) as the cost of construction will increase at least 5% each and every year.
  • Soft costs, e.g. fixtures and furnishings.
  • Financing for bridge funding to cover the cost of construction while you are waiting for all the pledges to be fulfilled, particularly if you plan on allowing five-year payouts (often employed as a way to help donors give more).
  • Contingency funding that could be as much as 10% of the construction costs to allow for the unforeseen.
  • Software and systems (if necessary) to ensure donor tracking is effective and efficient and that funds are collected and applied appropriately.

Personnel

  • Staffing to handle the organizational and financial management of the campaign.
  • Architects and engineers to cover the costs of design, drawings, renderings and necessary changes as the plan evolves, otherwise nothing happens.
  • Fundraising Consultants (like Mersky, Jaffe & Associates) can help you raise more money in a timely, consistent manner but add to the expense—usually in the 3% to 5% range depending upon the size of the campaign—and should be considered as part of the necessary costs of a campaign.
  • Marketing or legal help as necessary

Then, there is the endowment portion. Saying you want money to support your nonprofit is not enough. Donors want to know whether the asset-based revenue will be used for current or new programs. Will it help pay for general maintenance, or will it support scholarship opportunities for the preschool? Each dollar that will be earned from the fund should have a clear purpose.

Which do you determine first–the capital campaign goals or the available funding?
Some people believe you should determine what funding is available before setting your goal. That seems logical. Don’t spend what you don’t have, right? But, a larger goal for something that the community supports will raise more money than a generic idea for some future construction project that people will theoretically support. And a larger goal yields larger gifts, because people give in relation to the “big picture.”

There may be a time after a feasibility study that you determine your goal is too high but don’t limit yourself before you even start. It is only when you can offer a case for giving on specific aspects of the campaign to prospective donors that you will understand your community’s will to support it.

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Read the rest of the series:

Volume 1: The Overview

Volume 2: Defining your Dream

Volume 4: Capital Campaign Staff, Architects and Consultants

 

Nonprofit Leaders Guide to a Capital Campaign: Defining the Dream – Vol. 2 of 12

Defining Your Capital Campaign Dream  –Volume 2 of 12

architectural sketch concept

How do you build the bridge from the idea that you want to make improvements to your nonprofit’s physical space so that it serves your nonprofit more effectively to seeing the new space enhanced, made energy efficient and, even, the new carpets installed? There is a well-worn, step-by-step path you can take to building that new addition. There will be a lot of work involved and a fair amount of people. It won’t be easy, but when you drive by that hospital or synagogue admiring their new addition, you can be reassured that it can, and has, been done before.

The first place to start is defining the dream. And to do that, you should be prepared to answer at least the questions in the four categories below, and possibly others, as well.

Why are you considering a capital campaign? Do you want to “right-size” the building, making it larger or smaller? Is there an opportunity to purchase a new building or piece of land? Is it time to update or upgrade the current structure for reasons that are visual, environmental or just general maintenance? Would you like to increase your endowment?

How does the current state of your facilities and funding affect your ability to fulfill your mission? What could you achieve programmatically and financially with a more efficient infrastructure? Could you create additional programming and serve more clients, members or program participants if you had 25% more space? Are you carrying costs for unused space—which might be rented or sold—so that those funds could be used to support your mission and vision?

Is there consensus about what should be achieved in a capital campaign? Is the leadership supportive of a campaign? Are the needs obvious to everyone involved? Is there agreement about the priorities of a campaign? Will the idea of a campaign come as a surprise or has it been whispered about for years? Has a campaign been attempted and abandoned in the recent past? What will you do differently this time to create consensus this time?

Do you have the support of the organization’s leadership? Will the 100% of the board be philanthropically supportive and commit their time and energy towards a capital campaign? Is there a core group who will work to define the dream? Will the executive director and staff be excited to work towards this goal? Is there a pool of volunteers who will form the nucleus of a development committee? Are there sufficient development committee members willing to solicit donations face-to-face? Do you have people to work on a building committee?

Answering these questions will help you explain what you want to achieve, why you want to raise this money, and who will help you along the way. Each and every person you invite to participate in the campaign as a volunteer or contributor will ask you why you want to initiate a such an effort. So, dream big, just have the answers to back up your dream.

Read The Nonprofit Leaders Guide to a Capital Campaign Vol. 1 of 12: The Overview

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Read the rest of the series:

Volume 1: The Overview

Volume 3: Campaign Goals