Capital Campaign Stages and Stalls (Part 2)
Capital campaigns are the primary tool which a nonprofit uses to realize its visions for the future. They raise large sums of money in a relatively short period of time to grow and improve infrastructure to meet the needs of the nonprofit’s clients and community. There are many ways to prepare for and implement capital campaigns. This series of articles provides a simple overview of the stages a nonprofit will go through in their journey, along with the most common times the process can stall.
In the first article of the series, we explored Stages One and Two, the Needs Assessment and Feasibility Study. Now we dive into Stage Three, the Capital Campaign and its first two phases.
While we have the experience and insight to make an educated guess as to the path that a typical campaign will follow, please allow me this one disclaimer: The following information is an oversimplified outline of what a completely generic, fictitious yet totally realistic capital campaign will look like.
Capital Campaign Stage Three: The Campaign. Look at the horizon and take little steps.
I have heard about campaigns that were fast and easy, but over the past 16 years, we have never managed one, or even met an organization that experienced one. Maybe the stories are real: major donors lining up to make seven- and eight-figure gifts in the first few months of a campaign, paying in cash and not wanting any say in the project’s design or programs. I doubt it. I think these stories are urban legend.
In our experience, capital campaigns are hard work. They are rollercoaster rides that are both thrilling and scary. I like rollercoasters, especially the ones that I’ve been on before. That way, I know what to expect. Where I can smile and enjoy myself for a while, and where I need to clench my teeth and hold the hand of the person next to me. That’s why it’s so important to surround your capital campaign with people you trust, and why it is imperative to never lose sight of your mission. This combination of people and purpose will sustain you through the ride!
The following five phases are typical to most capital campaigns. We include each of the phases’ goals and potential stalling points.
Capital Campaign Family Phase
Begin by forming a small working committee of 3-5 organizational leaders, including board members and administrators. The committee’s first goal is to finalize the case for support and transform it into presentation materials for the campaign. The case for support outlines the needs and benefits of your project from your donors’ perspectives. It’s a long narrative on the nonprofit’s background, the need for the project, the benefit of the project, its budget and its vision. The campaign materials that grow out of your case for support include:
Campaign brochure
Frequently Asked Questions insert
Project renderings
Additional materials that are produced during the Family Phase include gift charts, ask letters and naming opportunities. In addition, your nonprofit should begin educating prospective donors by sending out monthly campaign newsletters. Mailing newsletters is still preferred, although emailing them is becoming more popular, particularly when the nonprofit’s donor pool is young.
Once your campaign materials are complete, it’s time to solicit your nonprofit’s family. This includes your staff, board members and volunteers. We ask for family support first for one simple reason: if the family does not financially support the project, then the community will not financially support the project!
Family Phase Goal: 100% participation
The amount of money raised from your family is important. We have managed campaigns where the family has considerable wealth and can donate millions of dollars. In other instances, the family may only have the capacity to donate $100,000 or less. Whichever the case, the goal is to ensure that the family has given to the best of their ability.
Family Phase Stall: Getting bogged down
There is a ton of work to get done in this phase. Many nonprofits don’t have the staff to get all these steps done in a reasonable amount of time, 4-6 months. Bring in experienced professionals to help. Your campaign video and brochure can be especially difficult to complete. Take care that the quality of your materials reflects your nonprofit’s operating revenue and image. If you have a small nonprofit that is not well known, don’t worry about professional lighting for your video or glossy paper for your brochure.
Capital Campaign Quiet Phase
When we begin a capital campaign, we usually do so quietly; we don’t want to tell the world about our plans until we have proven our ability to raise substantial funds. The Quiet Phase focuses on lead gifts, which come from individuals, corporations or foundations who are willing and able to give in the 10 percent or higher range of your campaign goal. So, in a $10 million campaign, donors who you believe will give $1 million or more should be asked in this phase.
This phase is populated by people who know and love your organization. They do not need to be educated or cultivated on the needs and benefits of your project. They want to give because they believe in your nonprofit and want you to succeed! In addition, you have an established relationship with them. When you call, they will answer, or call you back soon. Lastly, these people have made gifts to you in the past, preferably large gifts relative to the size of the program or project.
Quiet Phase Goal: Half the funds
A good rule of thumb is to reach the halfway point or beyond within this phase. This phase should be easy because your donor pool is low hanging fruit. It is easy to reach and ripe! Your campaign plan should have a relatively small population of donor prospects within this phase, somewhere between five and 50 depending on their giving potential and the size of your campaign. Keeping the population small and the ask amounts high will help build momentum and credibility for the remaining phases of your campaign.
Quiet Phase Stall: Picking unripe fruit
A successful Quiet Phase focuses its efforts on established donors. The problem that nonprofits run into here is that they try and solicit a lead-gift donor before he or she has any experience with their organization. Save the unestablished donors for the next phase. They will be more apt to give after they see other people supporting the campaign. There are times when you don’t have to wait on asking an unestablished donor prospect to join the campaign during the Quiet Phase: when he or she participated in the feasibility study and specifically indicated his or her desire to be a lead-gift donor.
What’s Next?
A Capital Campaign is an extensive process. In Capital Campaign Stages and Stalls (Part 3) we explore the final three phases — the leadership, close-out and public phases — and their goals and potential stalling points.
Is your nonprofit looking towards the future? Browse through our free capital campaign resources or contact us for more information.
Kevin Wallace is president of CampaignCounsel.org, specializing in capital campaign planning and management. Reach him by email or visit www.campaigncounsel.org.