Capital campaign 101: Find success with these fundraising best practices

What is a capital campaign?

Are you looking to build a new church, grow your organization’s endowment or reduce debt? A capital campaign may be the solution for your nonprofit.

A capital campaign is an intentional, intense, relatively short-term period of fundraising that a nonprofit conducts to achieve one or more specific project goals, such as building an endowment, constructing capital improvements, reducing debt or funding a program.

At some point in the life of every nonprofit, the organization’s leadership will recognize the need for a capital campaign. A campaign is an opportunity for the organization to take the next step in its development. A successful fundraising campaign spurs growth in areas such as facilities, programs, financing or constituents served, allowing the organization to more fully achieve its mission.

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Purpose of a capital campaign

Unlike an annual appeal, a capital campaign is designed to achieve specific project goals, not provide ongoing support.

For example, a fast-growing school may see a need for more classroom space for children. Funding the construction of additional classrooms cannot be covered through the annual budget, so a capital campaign is necessary. Campaigns also differ from annual giving in that they are high profile. Modern campaigns employ strategies including press releases, videos, public gatherings and celebrations, while annual giving programs probably enter the public’s view only at the close of the calendar or fiscal year.

It is important to remember that there is never a “perfect time” to launch a capital campaign. By its scope and nature, a campaign will occupy a substantial portion of the staff’s, volunteers’, and constituents’ time and energy. It is easy to look at local or national circumstances and conclude that the launch of a capital campaign should be delayed. However, the circumstances will never be perfect. There always will be obstacles to overcome, especially if the initiatives to be funded by the campaign are visionary.

Capital campaign checklist

Before embarking on a project such as a capital campaign, it is important to reflect on whether your organization is ready. Consider:

  • How could your organization better fulfill its mission with the new facilities, funding or additional staff being contemplated?
  • Are your supporters aware of your long-term vision for the organization?
  • Are your supporters aware of the challenges facing your organization?
  • Is your development infrastructure (i.e., databases, procedures, staff) prepared to handle the activity and pace of a campaign?
  • How confident are your supporters in your organization’s leadership?
  • Have you tested support for your capital campaign project ideas through a feasibility study?
  • Would your projects have a broad appeal – beyond your current base of supporters?
  • What happens if you don’t embark on a capital campaign? What would the next two, five, 10 years look like for your organization?

Why hire a capital campaign consultant?

Confronting those questions, it is easy to feel overwhelmed. As in most nonprofits, you and your staff probably are already overworked. Taking on the extra work of a capital campaign may seem daunting. Luckily, organizations such as the Steier Group are here to help. You can enlist the services of an on-site capital campaign consultant, commonly referred to as a campaign manager. He or she is available to focus solely on the campaign, helping you determine your organization’s level of readiness, assess the achievability of your goals, draft specialized documents such as case statements and request letters, and assist in training staff and volunteers to solicit campaign donations.

Capital campaign management is a full-time job. Having a fundraising consultant focused on your effort for 40 or more hours per week can take much of the pressure off you and your staff. In addition to an on-site manager, the top fundraising consulting firms provide a strong support team of graphic designers, copy editors and grant writers. Your organization can draw on the professional experience of these consultants to create a customized capital campaign strategy and capital campaign timeline that will offer the likeliest chance of success.

A Steier Group campaign manager also will be able to draw on more than 1,300 campaigns the company has conducted since 1997, bringing to the table a dynamic and impressive array of fundraising options, customized to fit your circumstances. After the public phase of your campaign, the Steier consultant will finish his or her on-site work with you and continue to provide support throughout the pledge period and a final review.

Preparing for a capital campaign

If your board, staff and executive director have thoroughly vetted the above checklist of questions, it is time to begin preparations for a campaign. In cooperation with your capital campaign consultant, consider conducting a census of your supporters to ensure that all contact information is up-to-date and that you have a clear picture of who remains invested in your mission.

The next step of any campaign should be a thorough feasibility study. Arming yourself with as much knowledge as possible about your organization and its donors is vital to capital campaign success.

During a feasibility study, or planning study, your campaign manager will interview key supporters about your proposed fundraising goals. Your consultant will be able to identify potential major gifts, gauge volunteer interest and test support for your proposed campaign goals. In short, a feasibility study will allow you to determine whether your vision for the future of the organization matches that of your donors and, if not, what course corrections need to be made.

If the fundamentals appear ready — meaning the vision, donors and volunteers are in place — it’s time to identify your campaign leaders and begin preparing for the three phases of the capital campaign: preparation, solicitation and follow-up.

The Steier Group recommend for its clients to start the capital campaign immediately after a feasibility study. Delaying the start of the campaign loses valuable momentum.

How long should a capital campaign last?

The length of a capital campaign depends on the size of the organization and the complexity of the fundraising approach. Small organizations will run shorter campaigns, while multimillion-dollar campaigns for large organizations can last years.

Preparation phase of a capital campaign

Proper planning is vital for a special fundraising effort such as a capital campaign. If your organization has a strong strategic plan and has conducted a thorough feasibility study, you are ready to embark on a campaign!

The first step of a capital campaign is the preparation phase. During this part of a campaign, three key objectives must be achieved: First, you must gather and train your campaign leaders and volunteers. Next, you must design your campaign materials in order to appeal to your supporters. Finally, you must assess each donor prospect in preparation for solicitation.

  1. Recruiting and training campaign leaders and volunteers: Capital campaigns require a lot of work. Hiring a capital campaign consultant will lessen the burden on your staff, but the work doesn’t end there. Volunteers are key to capital campaign success. A complete feasibility study should identify potential campaign leaders and volunteers. Your organization’s leadership should work with your on-site campaign manager to identify and recruit the best prospects to be leaders. And your campaign leaders should work to identify and recruit the best volunteers.
  2. Design standout capital campaign materials: The communication materials you create during the preparation phase will serve to inform your donors and entice them to support your cause. Do not skimp on this process. A poor case statement, for example, will reflect poorly on the organization and fail to motivate donors. In today’s media-saturated world, in which a barrage of messages of all kinds compete for attention, your organization needs to speak in just the right voice. In addition to great print materials, a capital campaign video can lead to fundraising success.
  3. Wealth research, donor profiling and database analytics: These are the tools for assessing donor prospects. A strong donor database puts your organization ahead of the game once a capital campaign starts. Using wealth research tools and donor profiling techniques, your capital campaign consulting firm should be able to identify your top prospects and assess each one’s giving capacity. This knowledge allows your organization to maximize its capital campaign potential. You don’t want to leave a major gift on the table because you did not properly research your prospects.

Solicitation stage of a capital campaign

After the preparation phase, your organization should move into the solicitation stage — the heart of a successful fundraising campaign. It has two key parts: the silent phase and the public phase.

Silent phase (or major-gift phase)
Major gifts will supply the bulk of your capital campaign fundraising total. The 80/20 rule applies. Cultivating your relationships with these donors is paramount.

During the silent phase, it is common to host cultivation dinners and meet with your top donors. Your organization’s leadership should be heavily involved in these events, because they will yield more buy-in from donors.

At the Steier Group, we know that personal visits lead to more donations. In our research, we found that donors, when asked in person, gave 54 percent of the requested amount. In comparison, donors gave 29 percent of the requested amount when approached by telephone and 33 percent when approached by mail.

Before announcing your capital campaign to the world, you’ll want to secure as many major gifts as possible. You can use these gifts to create momentum for the public phase of the capital campaign.

Public phase
This is the time to share your goals and successes with a broader audience. In this phase, you will host your capital campaign launch event. Such kick-off events should be fun and should engage the rest of your potential donors with the campaign.

Although the bulk of your funds will come from the major-gift donors, strong momentum in the public phase can lead to great success for your organization. In addition to meeting or exceeding your fundraising goals, the public phase allows you to cultivate and engage new donors. These new donors, in turn, can be the foundation of future capital campaigns.

Make sure you use the tools available to maximize the success of your public phase. From an attractive capital campaign website to an engaging fundraising video, there are many ways to make this part of the campaign successful and fun for your donors, volunteers, and staff.

And no capital campaign public phase plan is complete without a commitment weekend. Use this event to attract as many new donors as possible, even at small giving levels. It’s a great technique for a final push over your financial goal.

Follow-up phase of a capital campaign

After you’ve asked donors for support, it’s imperative to follow up with them. There are two main tasks in this follow-up: Thank your donors and remind them to fulfill their pledges.

  1. Thank your donors: Imagine sacrificing to make a donation to an organization you care about but never hearing a word of appreciation. How might you feel? Not thanking donors risks alienating your most important constituents. It puts the fulfillment of their current pledges at risk and reduces the chances they will follow through with more donations in the future. Even a simple letter or handwritten note can express your gratitude to donors for their sacrifice.
  2. Pledge redemption: Most funds “raised” during a capital campaign are not money immediately available to your organization. Most donations will come via a pledge fulfilled over three or five years. These capital campaign pledges are not legally binding and won’t – until fulfilled — help you pay off your organization’s debt or build a new building. You must convert these pledges to cash. Consistent follow-up, in addition to thanking your donors, will keep the capital campaign and your organization top of mind and ensure that pledges are fulfilled.

It can be easy to forget about these simple but essential tasks once the solicitation phase is over. Your capital campaign consultant should provide you with a plan for thanking your donors and redeeming their pledges.

Calming your capital campaign fears

In our more than 20 years of conducting capital campaigns for nonprofits, the Steier Group has heard every fear in the book. Some of the concerns are valid – capital campaigns do fail, for a variety of reasons. But if you follow the steps outlined above and plan properly, your organization should be set up for success. Among the typical fears:

A campaign will hinder annual giving
We have great news here. We’ve found that capital campaigns tend to bolster annual giving programs, not hurt them. Why? There are a few theories. Capital campaigns increase an organization’s visibility and provide an avenue to cultivate existing donors in a way that perhaps they’ve never experienced. It also allows organizations to invite and attract new donors to their causes. This often leaves the development office in a better place after a campaign.

Donor fatigue
This is a valid concern. But it is one that can be addressed through proper campaign planning. Timing your capital campaign, especially if you have run several in recent years, is crucial. Use your non-campaign years to thank your donors and foster mission awareness. Donors don’t mind being repeatedly asked to support a cause they understand is worthy.

Missing goal
Failing to reach the financial goal is the most common fear for any organization leader. Such a failure often is rooted in the planning phase, whether it is rushing into a campaign without counsel or getting carried away in setting fundraising goals. Often leadership has the best of intentions in trying to tackle as much as possible through a campaign. But the fact is that, say, a $4 million project might be feasible while a $6 million project isn’t. A campaign planning study will produce a good road map for what your organization can accomplish. Make sure to follow the map. We’ve found tiered goals are beneficial, for instance. When things don’t go as planned, fall back on your core group of volunteers and supporters and, if necessary, adjust your timeline. If you have a well-designed plan and a commitment to the campaign, you will hit your goal.

Conclusion

Capital campaigns are complex endeavors. They require a lot of work, but they are incredibly rewarding. In our more than 22 years of fundraising experience, the Steier Group has seen a multitude of churches, schools, museums and other nonprofits across the country achieve success. If your organization is ready for a capital campaign, please contact us. We’d be happy to help you reach your goals.