Planning a Capital Campaign
Our last Nonprofit Tips and Tidbits defined a capital campaign and outlined when and why you might want to launch such a campaign. Today we talk about how to plan a campaign to maximize your chances of success.
1. Identify the projects for the campaign along with probable costs. The more detail you can have at the early stages, the more exactly you can plan the campaign and the greater success you will likely have from it. At this stage, you do not need exact costs, but a general idea of what you want to accomplish, how, and for how much (“how many zeroes”).
2. Write your case for support. I like to create two. The internal case for support outlines all the reasons someone would want to support your project and all the benefits it will create for your clients and the community. This version never gets shared in this format outside of your inner circle. Instead, it helps you plan your messages up front, which will help with the communication you will need as you continue to prepare to launch your campaign, e.g., board authorization, staff buy-in, and any regulatory approvals. I also find that this case statement helps you identify gaps in your logic or need statement. The external case for support boils down these arguments to their essence and lays them out in a well-designed marketing piece that you share with your donors and prospective donors.
3. Conduct a feasibility study. A feasibility study asks your top donor prospects their opinions of the project, your organization, and the campaign and if they would make a gift to support it. When you talk to your top 20-30 donors and prospects, you simultaneously get them engaged in the campaign and find out how much money you could likely raise. For example, if you need $20 million for your dream project but the feasibility study comes back that you can only raise $15 million, you can adjust your project accordingly rather than struggle to find the last $5 million. Often organizations will hire an external consultant to conduct the feasibility study for their objectivity and the confidentiality of the donor interviews.
4. Review internal capacity to run and manage a campaign. Imagine adding a $20 million goal to what your organization already raises. Even if you plan to raise that over 3-5 years, it may still more than double the annual productivity of your staff and board. I know few if any organizations that have that kind of extra capacity in their development operations. Knowing the additional resources that you might need to succeed can remove some of the stress and challenge inherent in the campaign.
5. Create a campaign plan. Bringing together the data from the feasibility study and internal capacity review, develop a plan that outlines your campaign goal, specific projects, timeline, campaign structure, and resources needed. Your goal should include a budget for the additional resources that you will need to raise those funds as it takes money to make money. As a rule of thumb, you should plan to invest about 5-10% of the campaign goal in expenses. Good news: you can incorporate these funds into the campaign goal. So, if you need $1 million for your project, you would raise $1.1 million inclusive of campaign expenses of 10%. Your campaign plan should also include any consultation you need for the campaign itself, marketing, or other aspects.
6. Secure board approval. As a large and consequential organizational endeavor, you need your board to approve the campaign projects, budget, and goal. You also will rely on your board to serve as key volunteers and advocates for the campaign to help you achieve your goal; this step serves as cultivation and engagement tool for your board members as well as approval.
Once your board approves the campaign, you have officially launched it! Hurray!!
Now what? Read the next Nonprofit Tips and Tidbits to learn how to run and manage a capital campaign.