As we’ve noted recently, capital campaigns are on the rise. A whopping 85% of nonprofits are either in a campaign or thinking about launching one. Here at Front Range Source, we’re seeing a major uptick in inquiries for feasibility studies and campaign counsel.
A few years ago, we posted a blog on how to gear up for a campaign. Rarely a day goes by that we don’t share this pre-campaign primer with nonprofits who call us expressing an interest in campaign fundraising. It’s a good reminder and a great tool to share with your board and executive leadership. So, here it goes again….
A BLUEPRINT FOR CAMPAIGN PLANNING
1. Start by creating a facilities and financial plan.
There’s not much you can do about a capital campaign until you really know what you’re raising money for and how much money you’re actually going to need to raise. Conduct a facilities needs assessment, analyze your facilities options, and price them out.
Go as far as you can toward making a decision about whether you’ll stay where you are and expand, buy an existing building, or build a new one. At least narrow down the choices and have some solid figures in hand for building/renovation costs and future maintenance costs.
Everything…and I mean everything…depends upon good facilities planning work. You can’t conduct any real pre-campaign or campaign efforts until you’ve done your due diligence in this regard.
2. Take a first pass at identifying where the money might come from.
Create a campaign gift pyramid that shows the size and number of gifts needed to achieve your goal. Blackbaud has a handy-dandy gift calculator to help you do this.
Show your leadership this gift pyramid and discuss a few key things:
a) You’ll need a lead gift of 10-20% of the total goal. This has traditionally been calculated at 10%, but the more successful campaigns I’ve seen in recent years go for the 20% lead gift. Is there someone in your circle, or at least close to it, that might be able to make such a commitment?
And, no, Bill Gates or Oprah Winfrey are not the answer. You can’t build a capital campaign on the hope that you’ll find an “angel” donor.
b) You’ll need approximately 4 prospects for every gift you ultimately receive. This is because some people will either say “no” or give you less than you hoped. Do you have, or do you think you can build, a prospect pipeline of that magnitude?
c) In a classic campaign, half the money is going to come from 10% of your donors. It’s awfully hard to raise $1 million by asking a million people to give a dollar each. Capital campaigns are all about the top of the donor pyramid.
You don’t have to identify where every dollar might come from at this point, but you do need to be able to populate the top of the pyramid with some viable prospects.
3. Create a compelling case statement.
Once you know what your facilities plan looks like and you have a sense of where the money might come from, put together a document that describes the need and the proposed solution for your facilities issue. And, of course, link this story closely to your programs. It can’t just be about the building. It’s ok if there are still a few loose ends. As long as you’ve got the core story together, you’re ready for the next step which is to find out if anyone besides you actually cares about your exciting plans!
4. Test your case amongst the people who can make the campaign happen.
Here’s where a feasibility study might come in. One way or another, you need to get your case in front of the people at the top of your pyramid long before you think about asking them for money. You need to know if there’s interest among your potential donors, you need to know how much they might give, you need to know if there are potential roadblocks well before those roadblocks arise. Outside counsel can do this for you and it makes sense because they can elicit candid information in a confidential environment.
Even if you choose not to retain counsel for a feasibility study, you must test your case with your top prospects. Entering into a campaign without some assessment of interest is a dangerous game. It’s better to take your time on the front end than to have your campaign falter mid-way or even earlier.
5. Get real about this fact: it takes money to make money.
Industry standards suggest that you’ll spend anywhere from 8% to 20% of your total goal on the campaign. This includes all the work described above, staffing, ongoing counsel, events, materials, etc., etc. You’ll need cash up front for the facilities planning work, in particular. If you do a feasibility study, that’ll cost money, too. Gauge these expenditures in the context of the overall campaign goal to see if they make sense for your organization.
6. Spend every waking moment (between all the hard work described above!) strengthening your current fundraising program.
If you haven’t been communicating much with your donors lately, start doing it now before you launch a campaign. If your major gifts pipeline is weak, start working on it now before you launch a campaign. Tighten up your systems and infrastructure. Get your board trained and asking for annual fund gifts.
Tweak every little thing that you can because you’ll need it all when the day comes to say, “We’re having a campaign”!