Capital Campaigns for Nonprofits: Steps for Success
When your nonprofit wants to undertake a major project such as opening a new building or starting a new initiative, you’ll likely consider launching a capital campaign to fund your project. Capital campaigns are a great way to raise large sums for special projects like these that are outside of your daily fundraising activities.
However, running a capital campaign can also be a long and complicated process that requires a great deal of planning and assessment even before getting started. Luckily, this guide covers the basics you need to know to conduct a successful capital campaign:
- 1. What is a Capital Campaign?
- 2. What Do You Need for a Capital Campaign? 7 Steps
- 3. What Makes a Successful Capital Campaign?
Capital campaigns may require more preparation than everyday fundraising, but when done right, they can be highly successful and help your nonprofit make major strides towards fulfilling your mission. If your organization is ready to take on your next big project, this guide will help walk you through how to prepare for your own capital campaign. Let’s get started.
What is a Capital Campaign?
A capital campaign is a large-scale fundraising campaign that is usually aimed at accomplishing several large projects. You can use capital campaigns to renovate or build new facilities, fund special projects that require capital investment, and more. The main criterium is that your project is a significantly larger undertaking than your regular fundraising and is allocated for specific purposes.
To find success, capital campaigns require significant amounts of planning and preparation.
What Do You Need for a Capital Campaign? 7 Steps
1. Start by assessing your past fundraising success.
Before you can set a reasonable fundraising goal, your team needs to evaluate whether or not your goals have been attainable in past campaigns.
Before you can set a reasonable fundraising goal, your team needs to evaluate whether or not you have attained previous campaign goals.
Conduct a rigorous data review to surface patterns of behavior and new opportunities and assess capacity by screening your database. Reviewing past data from campaigns can give you insights into what has worked best for you or fallen short in the past.
Understanding what you have aimed for in the past and what problems or barriers you encountered will help you assess what you can accomplish with this capital campaign. It also helps you proactively identify and unblock any issues that were challenges during past campaigns.
2. Set your fundraising goals
With a clearer picture of what may be feasible for your organization, you can sit down and set your fundraising goals for this capital campaign.
As a starting point, you’ll need to identify your campaign costs and the minimum amount you can afford to raise for your capital project. The bare minimum you need does not have to be your goal and if it seems feasible, aiming higher can be a great motivator for your team and for donors.
However, it’s important to use the information you gathered in the first step to make sure you aren’t setting unattainable goals. A goal that is not in line with your organization’s capabilities will only serve to discourage your team, especially the longer your campaign goes on.
You’ll want to set your fundraising goals with two distinct fundraising phases in mind. In the first phase, known as the quiet phase, you’ll focus on the top major gift leads. This phase can take upwards of a year and about 50-70% of your funds will be raised during this phase, so it’s absolutely crucial.
In the public phase, you’ll extend your reach out to the community and smaller donors. This will help you wrap up your fundraising and make that final push towards your overall goal.
3. Develop a preliminary capital campaign gift range chart.
After considering your nonprofit’s past successes, you should start drafting a gift range chart with your preliminary goal in mind.
A gift range chart helps you understand what you need in order to succeed and serves as a primary organizing structure for your fundraising. It allows you to work from the top down in a structured way that makes your fundraising goal more attainable.
Complete your preliminary gift range chart by:
- Breaking your fundraising goal into attainable gift ranges.
- Identifying the number of prospects you’ll need to provide gifts at different levels.
- Putting names to paper of concrete prospects to provide these gifts.
After creating this draft of your gift range chart, take a step back and ask your team: does this preliminary goal seem within reach? A gift chart will undergo even more changes after the planning and feasibility study, so it isn’t necessary to set it in stone now. Use their feedback and support to refine your chart until you have a solid structure that will serve your fundraising efforts well.
4. Secure the internal and external support you need.
One of the biggest mistakes a nonprofit can make when conducting capital campaigns? Going it alone.
No matter how established your organization is, every nonprofit can benefit from partnering with a nonprofit consultant firm.
As your team starts laying the foundation for your upcoming campaign, a nonprofit consulting firm can offer both extensive experience and important insight for your campaign.
Because they work with a wider array of clientele, they know what works and what doesn’t for nonprofits of all shapes and sizes. With their third-party expertise, they’re sure to help you set a goal that’s both attainable and furthers the progress of your organization.
In addition to external support, you should ensure that you have the necessary internal support to pull off your campaign as well. Before you move beyond the initial planning stages, ensure that you have one person who is leading your capital campaign and that you have the support of leadership.
5. Undergo a capital campaign planning and feasibility study.
Every campaign should undergo a planning and feasibility study (or “internal readiness assessment”) during the planning phase that is led by a nonprofit consultant firm.
During the assessment, your consultant firm will help evaluate your fundraising goal and help your nonprofit develop a concrete capital campaign plan.
With the help of your consultant firm, your organization will need to take the following actions to successfully conduct your study:
- Analyze your nonprofit’s fundraising history. Past campaigns, as well as relationships with major donors, are necessary for determining a nonprofit’s current financial health for running a capital campaign.
- Craft a compelling case for support. This document will help you communicate to donors and stakeholders why your campaign is worth supporting. Working with an expert can help ensure that your case statement is effective.
- Interview organizational stakeholders. Your consultant will use these interviews to gauge the perception of the attainability of your nonprofit’s fundraising campaign plan, as well as what kind of role your stakeholders anticipate they’ll play during your campaign.
Once you’ve conducted all of these steps, your consultant will review the results with your team and offer actionable recommendations for how to proceed with your campaign, or where you can make improvements before launching your campaign.
6. Build strategic relationships with capital campaign givers.
If you want your capital campaign to be a huge success, your team will need to take a look at your solicitation and cultivation strategy
After all, your supporters want to feel that your nonprofit truly appreciates and needs their support. Don’t leave these relationships as an afterthought!
Keep in mind these best practices to increase gifts to your capital campaign:
- Follow up with past supporters who have given to previous campaigns. You already know they believe in your organization, so it may be easier to gain their support for this campaign.
- Network with givers so that they can connect you with other individuals who may also want to give to your campaign.
- Find out why a prospect turned down your ask. They may not have the giving capacity or enthusiasm you had expected, and learning what’s in the way of their contribution can improve how you approach them for future gifts.
When supporters feel like they’re key partners in your organization, they’ll be more likely to give and more inclined to promote your campaign to their personal networks. This means the more personalized your cultivation efforts and solicitations are, the better!
One way to ensure that your interactions with supporters are tailored to each individual is by using the data stored in your nonprofit CRM or constituent management software to create strategic solicitation plans that match up with your supporters.
Don’t forget to store any new information you collect during this time within your constituent database, too. That way, all of your future fundraising and stewardship efforts can build on what you’re learning now.
7. Maintain a reasonable capital campaign timeline.
There’s nothing worse than a capital campaign that meanders on and on.
A typical capital campaign lasts between three and five years. However, depending on when you reach your goal, this timeline can be shortened or expanded. The only question you should ask yourself is: how much money do you want to leave on the table?
If your nonprofit decides to call it quits early, you run the risk of missing out on future contributions from prospects who aren’t yet ready to give. However, if you find your campaign is petering out, ending it early can benefit your nonprofit by giving your team a chance to start preparing for your next campaign, this time equipped with the knowledge gained during your most recent one.
Similarly, if you extend your fundraising deadline, you may lose valuable time you could be spending preparing for your next major fundraising campaign.
On the other hand, if your campaign is in full swing when the deadline rolls by, why end it arbitrarily? As long as you have fundraising momentum, your nonprofit may as well keep it going.
What Makes a Successful Capital Campaign?
A capital campaign is a big undertaking for any nonprofit organization and requires extensive collaboration and planning. Without the proper support and preparation, your organization may face challenges in meeting your campaign goals. That’s why it’s important to start off on the right foot with an excellent plan, the necessary internal support, and an external partner to provide assistance.
Why you should work with an expert
Because the preparation for a capital campaign is so important for its success, you don’t want to cut any corners. Additionally, planning and feasibility studies essentially require an outside expert perspective, making them difficult to accomplish internally. It’s crucial that your planning and feasibility study provides you with accurate, unbiased results so that you can move forward with confidence or know what to improve before launching your campaign.
An expert not only has the experience to help you properly prepare for your campaign, but they also have the resources and outside perspective to give you the most accurate results possible. Beyond helping you determine your internal readiness to take on a capital campaign, a fundraising consultant partner also provides fundraising counsel, strategic direction, and institutional capacity building. A top-notch fundraising consulting firm, like Averill, can offer all of these key services:
- Campaign Direction
- Campaign Planning
- Planning and Feasibility Studies
- Annual Fund Direction
- Embedded Staffing
- Leadership Learning
- Executive Search
Averill Fundraising Solutions is a full-service fundraising consulting firm whose leaders and partners have more than 120 years of experience. Our flexible model follows industry-leading best practices to meet your needs while maximizing your return on investment. We’ve helped raise over $3,500,000,000 for nonprofits in every sector: faith-based institutions, educational organizations, healthcare nonprofits, and human service organizations.
If your nonprofit is looking for a true partner in fundraising that has years of experience under its belt, consider Averill for your next capital campaign.
As you consider taking on your own capital campaign, these resources can help you make sure you’re ready:
- Fundraising Consultant Fees: The Ultimate Nonprofit’s Guide: Learn more about the costs of hiring a fundraising consultant to help with your capital campaign.
- 4 Easy but Effective Ways to Go Above and Beyond for Donors: Just like with regular fundraising, your donor relationships are a crucial part of ensuring the success of a capital campaign.
- 4 Effective Strategies to Organize Nonprofit Campaign Data: As you embark on your capital campaign journey, make sure you’re collecting and analyzing data.