Capital Campaigns: Problem-Solving Your Biggest Efforts
If your nonprofit is planning a major project or new initiative, you’ll likely want to launch a capital campaign to raise the funds you’ll need to get started. A capital campaign will be a rewarding but extensive process for your organization to complete, especially the first time you launch one.
When your nonprofit undertakes such a large fundraiser, you’re bound to run into questions that require some problem-solving during each part of the capital campaign. Naturally, you’ll need to problem solve in the planning phase, but you’ll also need to monitor issues while you implement the campaign and assess the results after it ends.
This article will help you both to prevent and solve problems that come up as you go through the process of a capital campaign, including:
- Determining your campaign goal
- Performing a feasibility study
- Building relationships with prospects
- Soliciting gifts from supporters
Planning extensively for these large initiatives is extremely important. Focusing on prevention and resolution will reduce the risk of small issues becoming major problems that could derail your capital campaign.
Determining Your Campaign Goal
The first step in launching a capital campaign is setting a goal for the effort. This step is essential to preventing problems later because a goal that is too large will prove impossible to reach, while a goal that is too small may not fulfill your needs.
To start thinking about your goals, you’ll need to ask two questions:
- What do you want to accomplish?
- How much is it going to cost?
Fundraising teams may be tempted to answer these questions on their own. But you’ll probably want to get in touch with your organization’s financial team and other potential stakeholders to determine an accurate estimate for the funds your organization will need for the new project. Collaboration between fundraising and financial management is key to an effective planning phase for a capital campaign so that everyone’s goals align across the organization and funds are allocated appropriately.
Also, always consider the “why” of the campaign before diving into how you’ll raise the funds. As you determine the campaign’s goal, consider how it fits with your organization’s overall strategic plan. Information from your financial team will be vital as you determine how much funding you can currently allocate toward the campaign and how much you’ll need to raise throughout the private and public phases.
Performing a Feasibility Study
Once you’ve defined your purpose and fundraising goal for your capital campaign, you’ll need to figure out if your nonprofit can handle launching a capital campaign at the present time. Then, you’ll either want to know how you should start raising funds or what other steps you still need to take to get ready for the campaign. You can answer these questions by conducting a feasibility study.
Follow these basic steps when conducting a feasibility study before a capital campaign:
- Research your nonprofit’s history of fundraising efforts and past campaigns, focusing on the preparation, timeline, and results of each one.
- Work with a fundraising consultant to plan and conduct interviews with your organization’s stakeholders, like board members, community supporters, vendors, or contractors, to gauge their opinions on your proposed capital campaign and discuss any concerns they might have.
- Combine the results of the research and interviews to determine if you can launch your campaign right away or need more time to prepare.
Besides helping your nonprofit plan an effective capital campaign, feasibility studies can also introduce your stakeholders to the idea of supporting your campaign. Spreading the word early will help bring in supporters once you launch your campaign.
Feasibility studies also provide confidence to your donors. They’ll be more inclined to give with the assurance that you’ll reach your goals and accomplish the task you set out to do, as you’ll express in your case for support and other communications about the campaign.
Building Relationships with Prospects
As you interview your stakeholders during your feasibility study, keep in mind that some of these individuals might be your initial donors for the first or quiet phase of your campaign. You’ll need to continue developing relationships with these supporters throughout the feasibility study to secure their gifts once the campaign has launched.
However, your existing major supporters and stakeholders will not make up your entire donor list. You’ll also need to conduct prospect research and then build relationships with the new people you find.
Prospect research will allow you to find new individuals who can give major gifts that will make up the biggest chunk of your fundraising. A good prospect will have both the capacity to give a lot of money and an affinity for your mission.
You can look for prospects with both affinity and capacity markers using these donor research tools:
- Prospect generator tools: These tools can generate lists of donors that give to organizations with missions similar to yours, indicating that these individuals may have an affinity for your cause.
- Government records: U.S. Securities and Exchange Commission (SEC) investment records and Federal Election Commission (FEC) political contribution records can provide important information about prospects’ giving capacity.
- Social media platforms: Websites like LinkedIn can reveal professional connections, while platforms like Twitter or Instagram can help you better understand a prospect’s interests and values.
Once you’ve identified your prospects, you need to build relationships with them. After all, even prospects with the greatest capacity for giving don’t want to feel like you’re just reaching out to them to ask for a large gift. Forming genuine connections will help lead to lasting relationships.
When building relationships with prospects, follow these best practices:
- Get to know their interests and values. Asking prospects questions about themselves and remembering details about their lives in future conversations shows your interest in them not as resources but as people, helping to cultivate stronger relationships. Starting a conversation with prospects about your shared values can naturally lead to discussing your nonprofit’s mission. Document these touchpoints in a donor database or constituent relationship management system (CRM) that enables you to create profiles with notes, your communication history, and their donations.
- Give them several ideas to get involved with your organization. Suggesting events to attend or other opportunities for involvement provides prospects with a closer look at your community impact and allows them to engage with your mission before considering a financial gift.
- Wait until you’ve developed a solid connection with them to ask for a gift. Again, if you ask for a gift immediately, you might present your organization as more concerned with money than developing an authentic relationship with them. Aside from this, there isn't a specific guideline on when you should ask for a gift—you’ll need to figure out the right time to bring up the subject with each prospect.
- Thank them for any and all gifts. A kind letter or gift basket is a great first step to showing a major donor that they matter to your organization, making them more likely to give again. Later, you can take further steps to show them how important they are to your mission, like setting up regular meetings with them and asking for feedback on your nonprofit’s direction and activities.
Once you’ve identified and contacted several major donor prospects, you can start reaching out to your other donors. Although you’ll have many more of them and probably won’t be able to build as deep of a relationship with each one, a personal touch will still go a long way in finding and retaining these supporters.
Soliciting Gifts from Supporters
Naturally, each donor is unique and can contribute to your campaign in different amounts. So, you’ll need to develop a gift range chart during the quiet phase of the campaign. This chart will help you strategize which gifts to pursue first.
A big part of your strategy will be determining when, how often, and on what platform you’ll communicate with each donor to build relationships and solicit gifts at each level of your gift range chart.
This is a great place to use donor data to make sure you’re asking for the right amount from the right supporters. Strategic data points to consider as you start conversations with each donor include:
- Contact information, especially their preferred method of communication. For major donors, offer the choice to set up an initial meeting in person or over video conference. Then ask whether they’d prefer recurring communications to come via email, phone call, or another method—a question you’ll also want to include on contact forms for smaller donors.
- Wealth, including previous gift sizes, salary, and investments (if accessible), to solicit a gift that each person would consider reasonable.
- Engagement history, so you can prioritize communications with active participants in your organization.
Once you’ve wrapped up the quiet phase, which typically funds about 70 to 80 percent of the campaign, you’ll move on to the public phase of the capital campaign to raise the rest of your funds. At this point, you’ll reach out to the general public and other donors to secure the smaller gifts outlined on your gift range chart, helping you to reach your goal.
The areas listed here are some of the most important campaign steps where you’ll either need to prevent issues or problem-solve complications that arise when launching a capital campaign. Determining a goal, running a feasibility study, finding prospects, and soliciting donors will make or break your campaign. So, do your research, pay careful attention to details, and get help from a fundraising consultant to run the campaign smoothly.
Since a capital campaign can often last three or more years, problem-solving will be a continuous process for its entire duration. But if you plan well at the beginning, track your progress while the campaign is running, and evaluate your success at the end, you’ll be able to overcome obstacles and reach major fundraising goals for your nonprofit.
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