Capital Campaigns: The Groundbreaking Guide
Capital Campaigns: The Basics
What is a Capital Campaign?
At its core, a capital campaign is a drawn out, extensive fundraiser.
But at a more complex level, a capital campaign is a concerted effort to raise a substantial amount of money for a specific project or undertaking. They always have deadlines that can be as soon as a year or as far away as five years or more!
Capital campaigns require coordination and cooperation from the organization and community. Without the support of board members, staff, and individuals within the area, a capital campaign has little to no chance of succeeding.
Why Do Nonprofits Use Capital Campaigns?
As stated before, nonprofits generally use capital campaigns for large projects that require significant, substantial financial backing.
More often than not, capital campaigns are used to raise money for a new building, but they can also be for:
The Acquisition of Land
Land is valuable for a number of reasons, but the main reason that many organizations wish to acquire land is because it allows for the possibility of future expansion. Capital campaigns are thus used to help organizations raise enough money to finance a purchase of land.
The Expansion of an Existing Building
Large organizations such as hospitals and schools often need to regularly expand their buildings in response to a growing population of patients or students. Such projects are massive undertakings and require a great deal of financial resources — which is why they are mostly accomplished via capital campaigns.
The Purchasing of Equipment or Supplies
Nonprofits sometimes require large-scale purchases to help further their mission. A hospital, for example, may need to upgrade existing radiology equipment, or a university may require a high-powered telescope for the astronomy department. Capital campaigns can help fund these major purchases.
What Types of Organizations Use Capital Campaigns?
Many hospitals or healthcare nonprofits choose to launch capital campaigns to raise money to construct new wings or buildings, to purchase new equipment, to replace or repair outdated machines, or to fund groundbreaking medical research.
Schools and Universities
Schools, colleges, and universities are the other type of organization that frequently uses capital campaigns as a fundraising method. Education-related organizations use capital campaigns to raise money for new buildings, scholarship funds, or new equipment.
Who Can Help You Conduct a Capital Campaign?
Capital campaigns are significant undertakings, so nonprofits usually turn to professional fundraising consultants to help plan and execute them. A consultant can help with campaign planning, feasibility studies, prospect research, fundraising and solicitation, event planning, and more.
Our Recommended Provider
The Process of a Capital Campaign
Planning a Capital Campaign
Your nonprofit needs to carefully plan out your capital campaign before you begin fundraising in order to ensure that the implementation process goes as smoothly as possible. Without a thorough plan in place, your team may not successfully anticipate issues before they arise and may realize too late that your fundraising strategy needs revision.
Some standards that should be set in the planning phase include:
The Financial Goal
Your financial goal will depend on the scope and size of the project your organization is undertaking. You should have arrived at this number after careful calculation and accounting for hidden costs.
Your deadline will largely depend on your financial target and the pool of donors you expect to donate. You don’t want to make your deadline too soon and risk not raising your goal. On the other hand, you don’t want to set a deadline that’s five years from now when it would only take two years to raise the money.
Capital campaigns are used to raise money for large projects, but they also cost money to prepare and launch. You’ll need to account for marketing materials, costs for events, and other fundraising expenses that may occur.
The Feasibility Study or Report
We’ll go over the details of a feasibility report in a later section, but it’s vital to the success of your capital campaign. A feasibility report is essentially “product-testing” your campaign. You want to make sure that the community will be willing to support your project, and a feasibility report helps you do just that.
A Dedicated Team
Capital campaigns aren’t one-man-shows. They require a dedicated committee (or multiple committees!) composed of committed individuals. Your committee(s) should be composed of a mixture of board members, staff members, people in your community, and volunteers.
Implementing a Capital Campaign
After all of the hard work in the planning phase, it’s time to implement your capital campaign!
There are two main segments within the implementation process:
The Quiet Phase is not made open to the public but instead relies on contributions from your major gift donors. During this stage, your committee members will reach out to your major gift donors and local businesses to solicit large donations. Usually, capital campaigns raise 50-70% of their total during the Quiet Phase.
The Public Phase begins with a kickoff event, sometimes at the building site (when applicable). Once the Public Phase begins, donors are able to give however much they want. Your committee can still solicit major gifts, but the focus should be on broad marketing to as many donors as possible.
Essentials for a Successful Capital Campaign
Feasibility studies are crucial to the success of any capital campaign. They essentially determine whether or not your donors and the community will be willing to support your organization’s project.
It’s easiest to think of feasibility studies as product testing for your capital campaign. You must complete a feasibility study before you start fundraising for a capital campaign.
During a feasibility study, your organization or an outside consultant will sit down and interview 30 to 40 individuals from the community. The experts at the Capital Campaign Toolkit recommend taking a hands-on, guided approach in which your nonprofit’s leaders conduct the interviews personally with the support of a campaign advisor. You’ll then work together to distill insights and recommendations.
Questions to ask your interviewees during a feasibility study will range from personal (“What is your connection to the organization?”) to more broad (“Do you think this organization can raise the money for this project?”).
By the end of the feasibility study, your organization should be able to determine whether or not you have the support needed to raise money for your capital campaign.
What questions should you ask during a feasibility study?
Capital Campaign Committee
Before you begin planning your capital campaign, you’ll first want to gather a committee of dedicated individuals around you to help with its planning and execution.
Don’t feel obligated to create a massive capital campaign committee that includes every board member, staff member, and major gift donor in your organization’s history. The committee should be big enough to handle the particulars of the capital campaign but small enough to give everyone an opportunity to voice their opinion.
People you should consider for your capital campaign committee include:
- Board Members
- Staff Members
- Major Gift Donors
- Volunteer Leaders
- Community Leaders
Prospect research is a valuable tool that you can leverage to more deeply understand your donor base.
Prospect research can help you learn more about your donor’s:
- Past giving history to your organization
- Previous donations to other nonprofits and political campaigns
- Business connections
- Employment information
- Basic data like name, email address, and phone number
Having this information will help guide you toward your major gift donors. Because major gifts are going to drive the first half to two-thirds of your capital campaign, you’ll need to be well prepared to make those donation appeals.
With prospect research on your side, you’ll be more than ready to solicit those major donations from your supporters.
A Case for Support
A case for support is a document outlining your nonprofit’s justification for hosting your capital campaign.
For that reason, your case for support must be airtight and convincing! Convey a sense of urgency as concisely and clearly as possible. After all, donors want to know why you need their support and how they can help.
Your case for support should include:
- Your nonprofit’s background
- Your cause and services
- Your future goals
- The reason for the capital campaign
- An explanation of the capital campaign
A great case for support will be branded to your organization. Just take a look at this example from St. Ursula’s Academy, by Aly Sterling Philanthropy. As you can see from this example and Aly Sterling’s Capital Campaign guide, nonprofits can creatively showcase their financial goals and capture the spirit of their cause at the same time!
Specifically, the branded colors, the heartfelt text, and the easy-to-understand fundraising goals make this case for support tangible!
Capital Campaign Consultants
How to Hire a Capital Campaign Consultant
Capital campaign consultants bring valuable expertise and a refreshing, outside perspective that can help you plan and execute your capital campaign. However, the process of hiring a consultant can be rather involved.
After all, you’re building a partnership and a long-lasting relationship with someone who can understand your mission, meet your needs, and get along well with your existing staff.
Consultants for Capital Campaigns
For nonprofit leaders interested in taking a more hands-on approach to planning and running their campaigns, there are other capital campaign support options available.
For example, the Capital Campaign Toolkit combines online campaign resources with expert advising for budget-friendly support that gives you the best of both worlds. By playing an active, direct role in your capital campaign, your team will learn invaluable skills related to campaign planning, donor stewardship, major gift solicitation, and more.
With the Toolkit, nonprofits are guided through an organized capital campaign plan. The step-by-step plan, resources and templates, and coaching calls all guide you to campaign success. Further, you’re able to have one-on-one advising with one of their expert capital campaign advisors for additional support!
With a traditional fundraising consultant, your nonprofit will instead have an expert steering one or more parts of the campaign. Depending on your needs and organization’s preferences, this may be a good choice.
Your nonprofit’s fundraising consultant can work with you in the initial stages to plan your capital campaign by conducting a feasibility study, helping you draft your case statement, and developing collateral related to the capital campaign.
However, your fundraising consultant can also help your nonprofit with big-picture fundraising needs, both related to the capital campaign and to your other fundraising projects.
Some common services consultants provide include:
- Campaign direction.
- Strategic planning.
- Executive search.
- Embedded staffing.
- Board governance.
- Internal development.
Expert consultants like Aly Sterling Philanthropy and Averill Fundraising Solutions offer traditional fundraising services that can help your capital campaign hit the ground running and set your nonprofit up for success for years to come.
Unique Capital Campaign Ideas
Capital Campaigns and Fundraising Events
Fundraising events can be a great opportunity for your nonprofit to directly interact with your donors and form deeper connections with them.
But by their very nature, fundraising events are meant to help your organization raise more money.
Because capital campaigns often run for months and even years, there is plenty of time for your nonprofit to host fun events that bring in more donations.
Obviously, the one event you’ll already have to plan is the kickoff event between the Quiet Phase and the Public Phase.
But you can host all sorts of fundraisers that will bring your community together to raise money for your campaign!
Click below to check out some amazing event fundraising ideas!
Capital Campaigns and Matching Gifts
Matching gifts have the potential to speed up your capital campaign two fold.
These corporate giving programs reward employee giving to nonprofits by doubling or sometimes even tripling employees’ donations to eligible organizations.
Not every donor will work for a company that matches donations, and even if they do, every company has different guidelines and restrictions that must be followed before the matching funds are released.
But, your organization should still promote matching gifts to all of your capital campaign donors anyway!
Why? Well, since 50-70% of your capital campaign funds will come from major gifts, those donations mean even more when they are doubled.
It can’t hurt to remind your donors of matching gift programs!
Asking for Donations During a Capital Campaign
Asking for donations can be tricky.
Asking for major donations for a capital campaign can be even tougher.
Major gift solicitation requires a lot of face-to-face time with donors and even more follow up than regular donations. In both cases, asking for donations can be a nerve-wracking experience.
But have no fear! We’ve got resources for asking for donations.
Whether you’re making appeals in person, on Facebook, or somewhere in between, we’ve got tips and strategies for making those solicitations.
Some useful tips for soliciting donations include:
Asking for Corporate Donations
Companies big and small are often willing to support nonprofit projects like capital campaigns.
Not only does it allow them to be more philanthropic, but they receive tax benefits and form meaningful partnerships with organizations.
Therefore, it’s a smart move for some members of your capital campaign committee to ask businesses for cash and in kind donations for your capital campaign.
Some companies will respond favorably and donate generously while others will have guidelines about the types of nonprofits and projects they donate to.
The best route to take is to research which companies offer grant programs and regularly donate to nonprofit organizations.
Give your capital campaign fundraising efforts a boost by asking for donations from companies!
Online Donation Tools
Fundly is a crowdfunding platform that enables nonprofits to raise more money online. The platform uses social sharing to help nonprofits get the word out about their capital campaign.
Fundly also has a peer-to-peer fundraising platform and CRM, making fundraising and data tracking easier than ever!
Qgiv has multiple types of fundraising software that can all be used in conjunction with one another to help nonprofits raise more money during (and even after!) their capital campaign.
Qgiv has donation page software, a mobile giving tool, a peer-to-peer platform, and on-site kiosks for in-person fundraising.
SalsaLabs can help your nonprofit organization or schools raise money and reach out to donors and advocates with comprehensive fundraising and advocacy software packages.
SalsaLabs can help you raise money via online donation pages, peer-to-peer fundraising forms, and marketing and communications software.
Capital Campaigns and Challenge Grants
A capital campaign committee may elect to apply for a challenge grant to take their fundraising efforts to the next level.
Challenge grants are funds that are released by a grant-making entity after a nonprofit has completed a challenge.
Normally, these challenges are fiscally based, meaning that they are perfect additions to capital campaigns.
A challenge grant will sometimes match the challenge amount anywhere from .5:1 all the way up to 2:1.
This means that your nonprofit could stand to triple the funds that you raise during your capital campaign with the help of a challenge grant.
Do some research to find out if there are any challenge grants available in your local area to help your capital campaign reach its maximum potential!
Additional Capital Campaign Resources
Capital Campaign Timeline
Capital campaigns must follow a very defined timeline with specific checkpoints throughout.
For a detailed explanation of each of these checkpoints, read DonorSearch’s article about capital campaign timelines.
Sometimes, nonprofits need help from an outside source during their capital campaigns.
That’s where capital campaign consultants come in! We’ve found the best consultants and consultant firms out there. Take a look!
Capital Campaigns Planning Steps
Need some help when it comes to planning your capital campaigns? We’ve got you covered!
Check out this great resource about everything there is to know about planning capital campaigns from Aly Sterling Philanthropy!