Learn more about running effective capital campaigns with this guide.

Capital Campaigns: Resources and Tips for Nonprofits

Train your team in running effective capital campaigns and other fundraising efforts with Nonprofit Courses.Nonprofits raise money for a ton of different purposes. There are programming costs, day-to-day logistics, and other mission-driven needs. But what about those larger projects that require huge investments like purchasing a new building or expanding on an old one? Enter capital campaigns.

A capital campaign is a unique type of fundraising campaign that has the potential to raise a lot of money for your organization—when done right.

At Nonprofit.Courses, we know all about running effective capital campaigns, and we’ve dedicated the time and resources to help others do so as well. In this guide, we’ll discuss the following to help you better train your team before launching a campaign:

Ready to learn more about successful capital campaigns and how to run one for your organization? Let’s dive in!

Frequently Asked Questions About Capital Campaigns

Whether you’re looking to host your first capital campaign or simply optimize your fundraising strategy going forward, you’ll likely have some questions about the process. We’ve compiled a few of the most-asked questions (and answers) concerning capital campaigns and how to get started:

What are capital campaigns?

Strictly speaking, a capital campaign is an organized effort over a specific period of time using one or more fundraising methods to seek money to purchase or build a building, land, or large piece of equipment—what accountants define as “capital.”

While the term is still in use, it’s really not applied in the same way as it was first conceived. It’s more accurate to call what most nonprofits describe as “capital campaigns” as simply “campaigns.” That’s because the people who ran the first capital campaigns quickly discovered a major flaw in the “capital campaign” concept: the double ask.

Let’s say that you’re a regular $10,000 donor to your local hospital’s annual fund. The hospital depends on your gift, and thousands of others, to pay for indigent care for the area’s homeless.

This year, however, the hospital announced a major expansion, including a new institute for indigent medicine with special facilities to address the unique needs of the homeless. You’re approached for a $100,000 capital campaign pledge to be paid over five years. Yes, the $20,000 payment each year is double your current gift, but you see the need and you’re up for it. You say yes.

A month later it’s annual fund time, and your friend, Annual Fund Al asks for your $10,000. Hold on! You just made a commitment to the new institute. Your $20,000 commitment was a stretch. You can’t do an additional $10,000 on top of that! Al and his buddies on the hospital’s development committee are all getting the same answer across the board and come to realize that “double asks” don’t work.

Thus, the problem. A campaign that is purely a capital campaign tends to diminish the available funds to the annual operating support of a nonprofit. This problem is magnified at the lower end of the giving scale where you depend on large numbers of donors to make many small gifts to fund operating expenses.

That’s why today’s campaigns incorporate multiple opportunities for giving that are not specifically “capital” in nature. A typical major campaign solicitation might be a “combined ask,” incorporating a request for annual operating expenses and the capital objective of the effort.

What is a capital campaign plan?

While anyone can solicit a charitable gift at any time for any purpose for your nonprofit, it’s not surprising to find that effective fundraising isn’t random. In fact, by introducing the word “campaign” into the conversation, you imply an organized effort with specific objectives. And of course, the key to this organization is a plan.

A campaign plan is a step above a fundraising plan. Fundraising plans tend to focus on a single method of soliciting gifts—like proposals to foundations, direct mail, peer-to-peer, events, or whatever method you use. For example, creating a plan to run this year’s direct mail program is a fundraising plan.

A campaign plan organizes those methods for a defined period of time to meet one or more revenue, and thus missional, objectives.

For example, say you’re building an endowment for a chemistry scholarship. Your campaign plan might include major gift solicitations to alumni who did well in the chemical industry, proposals to foundations and companies that support chemistry education, and a “Good Chemistry” dinner-dance at Valentine’s Day. Your coordination of all of these is a major part of your plan because you want to be able to announce your final success in meeting your goal at the event.

How do capital campaigns raise money?

Capital campaigns themselves don’t raise money. The methods of fundraising you choose to use as part of a campaign raise the funds. The campaign is just an umbrella label—a marketing tool—to focus your fundraising efforts around one or more mission objectives.

So how do capital campaigns raise money? Any way you want! Direct mail, in-person solicitations, and engaging fundraising events are some of our favorites—and we’ll discuss other ideas in more depth below.

What are capital campaigns used for?

As mentioned above, capital campaigns are used for capital projects. Usually, that’s defined as major equipment, land, or buildings. Some organizations include endowments in the definition of “capital.”

More general “campaigns,” on the other hand, can be used to raise money for anything. You may create an endowment campaign to bolster your nonprofit’s financial stability, or perhaps cast your annual operating fundraiser as an annual campaign. You might even host a “mini-campaign” to seek funds for a specific program objective!

While you can have fundraising programs to meet any of these objectives, a “campaign” implies a coordinated effort among many fundraising methods to reach a common goal.

What types of organizations run capital campaigns?

Capital campaigns tend to be run by nonprofits that have capital needs—those whose mission requires buildings, land, or major equipment.

However, any nonprofit can use campaign concepts and methods to meet the revenue needs of any mission objective, whether they have “capital” needs or not. That means just about any organization can run a campaign—including educational institutions, hospitals, churches, social welfare charities, and more.

What are the phases in a capital campaign?

The basic campaign sequence occurs in three key phases: planning, quiet (also known as silent), and public. Let’s go over each one and how you can get the most out of your efforts:

Planning Phase

The planning phase is not just getting your ideas on paper. It’s about identifying and organizing your missional, and thus financial objectives (typically through developing a strategic plan) and finding out whether you even have the community support to raise money for your cited as your need (often accomplished with a feasibility study).

After you determine what you want and what your community will support, create your campaign plan by setting the goals for what you will fund and for how much, then outline a timeline and fundraising methodology to meet those goals.

Tip: It’s important that your plan has complete board support before moving forward.

Quiet Phase

After all of the planning, it’s no surprise that to your key constituents, your quiet phase isn’t so quiet. Using a “top/down, inside/out” strategy, solicit your biggest potential gifts first, starting with those people who are closest to your organization—including your board and top nonprofit staff leadership.

The objective in the quiet phase is to secure at least 40% (although ideally 60%) of your total campaign funding objective. Why? That’s key to your next step: the public phase.

Public Phase

The public phase is just what the name says—the time when everyone in your constituency and the broader public knows that you’re on the hunt to meet major mission (and, of course, revenue) objectives.

This is where how well you did in the quiet phase makes a big difference. It’s pure psychology. If the public sees that you have already raised so much of the total, the remainder looks much easier to complete.

This is magnified if you have influential names making significant quiet phase gifts.

Let’s face it. Humans are social creatures who respond to hierarchy. If well-known community leaders (whether people, companies, or foundations), are behind a project, the chances of others getting behind the effort greatly increases.

How do I train my capital campaign team?

It’ll be hard to pull off a successful capital campaign if nobody on your team knows what they’re doing or how their tasks play a role in the overall effectiveness of the mission. You don’t want to rely on a guess-and-check method to find out what works, either.

The good news is that capital campaign methodology is very well established. Today’s technology allows for better organization and a broader array of fundraising methods to enhance and accelerate your campaign.

Plus, the availability of low-cost and on-demand training means you can equip your staff and volunteers with the resources they need to do their jobs better. That’s where Nonprofit.Courses comes in! Our wide array of online courses on nonprofit-related topics, like capital campaigns and more, mean you always have the educational resources you need in your back pocket.

Capital Campaign Best Practices

Planning and pulling off a successful capital campaign can be difficult—but it doesn’t have to be impossible. Here are some tried-and-true best practices for hosting profitable capital campaigns and driving results:

1. Work With a Capital Campaign Consultant

Over many years, staff leadership, fundraisers, boards, and volunteers regularly move in and out of an organization. Since most campaigns are multi-year programs, the chances of having the same staff in place from one campaign to the next are slim. And while all staff and board leadership should receive education on campaign basics, a successful campaign can hinge on whether anyone has the experience to pull it off.

That’s why we suggest working with a fundraising consultant: a consultant specifically experienced in capital campaigns can be invaluable to meeting your objectives and better pursuing your mission.

While a typical in-house fundraiser may go through a capital campaign once every five (or more) years, a campaign consultant could easily advise five campaigns in a single year. Plus, they could bring the added benefit of knowing your specific geographic discipline’s market and funders, and provide an objective perspective to your monetary goals.

2. Complete a Feasibility Study Prior to Your Campaign

What is a feasibility study? It’s determining whether you can meet your campaign mission and revenue goals through a systematic sampling of those people with the potential to make significant gifts and/or be influential to others.

Since a campaign’s failure can leave a major stain on the nonprofit’s leadership and cast the viability of the nonprofit’s mission in doubt, testing the waters, with a feasibility study is essential to see if you have a compelling case for a campaign.

Oftentimes organizations opt for a capital campaign consultant to perform a feasibility study because they can offer a veneer of impartiality when approaching potential major funders and influencers. However, others choose to take a more DIY approach that can be handled with proper planning and resources.

3. Build and Train Your Capital Campaign Fundraising Team

Campaigns are great on-the-job professional development opportunities for nonprofit staff and volunteers. They stretch job descriptions and allow for tons of new experiences. However, providing education and training will make everyone’s life much easier by providing an idea of what to expect and how various efforts are supposed to coordinate.

If you can find staff who have campaign experience—all the better. If you can’t (which is often the case) look for staff who can work well in a daily-changing environment and are constantly seeking new challenges.

For volunteers, you’ll need some of the most networked people in your community—whether you define community as a geographic area or a discipline. Your volunteers are essential in identifying potential donors who have a strong interest in your mission with the means to make a difference.

Then, be sure to provide campaign staff and volunteers with the resources they need to begin their outreach!

4. Set a Lofty Yet Reasonable Fundraising Goal

Have you heard the phrase “stretch goals”? You will if you’re involved in a campaign. First, you’ll hear it about your overall campaign goal, but it might also be applied to an individual donor’s gift.

A major purpose of any campaign is to get everyone—donors and community members alike—to expect more from the nonprofit and themselves. This is why campaigns are more than just funding your mission objectives. They’re are about setting new standards for programs and giving and building your nonprofit’s reputation.

For example, campaigns are great ways to change a donor’s “philanthropic setpoint.” It turns out that once a person makes an initial gift, they tend to stay with that amount until something causes a change. Let’s say you graduate college and send $25.00 to your alma mater. Ten years later you still send $25 even though you could afford $100, and that $25 may only be worth $10 in today’s today’s power.

Capital campaigns are a great way to change setpoints through the urgency of the need. Once somebody increases their gift in response to a campaign, you have a much better chance of them continuing at a higher level for their subsequent gifts.

So how do you set your goal? Take a look at previous fundraising data. How much did your organization’s last campaign bring in? How much do you think your donors can give? Answer those questions carefully, and then stretch the numbers a bit and you have your answer.

5. Leverage Strategic Prospect Research

Every charitable gift occurs because of a confluence of three important factors: C, I, and A. By ensuring that your donor prospects have the following characteristics, you increase the likelihood of reaching your campaign goals:

  • Capacity to make the gift that’s requested
  • Interest in your mission
  • Access to the person making the gift

Prospect research, especially for major donors, qualifies a potential giver’s CIA.

While today getting information on someone is easier—and faster—than ever before, the best prospect research starts and ends with personal interaction with the potential funder. Nothing is better than an informal sit-down with a prospect, so you can get to learn what concerns them and excites them, and determine what your nonprofit offers that interest them.

The bottom line? Don’t skimp on (or be afraid of) prospect research. There are ethical standards to follow, as well as a ton of free and paid sources that can help you know whether you’re spending your time with the right people who can make a difference to your cause. After all, you don’t want to waste hours of your team’s time attempting to procure a major gift from someone who simply can’t fulfill the ask!

6. Craft a Powerful Case for Support

Perhaps the most important document you’ll create for your campaign is your case for support. This case encompasses how your mission is essential to your community and why you are the best organization to carry out that mission. It details who you impact, how, and what you need in terms of the program, physical material, and money to be the best.

Very few people but internal staff, board members, and key prospective donors may ever see the internal case. The external case, on the other hand, is a summary document of the internal case, usually dressed up in the form of a brochure, pamphlet, or web page.

A comprehensive campaign may even have different case documents for each constituency or project. These are drawn from the information in the internal case and serve as the fodder for all of your publicity materials.

Capital Campaign Strategies That Work

We mentioned previously that capital campaigns themselves don’t raise money—it’s the strategies within that bring in the funding. Here are a few of our favorite tactics for increasing fundraising revenue through a capital campaign:

1. Multi-Year Pledge Campaigns

The pledge is probably the most used campaign tool available to a nonprofit. In fact, every gift to a nonprofit is a pledge—it’s just that some are paid immediately (such as a check written today that you deposit tonight), while others are paid over longer periods of time.

Pledges that are made and paid in small parts over time—typically once a year for a period of several years—provide a major psychological advantage to your fundraising efforts. It allows the donors to feel like they are doing something significant for your mission.

It’s the same reason that buying on credit allows you to buy that television today that you’d need to otherwise save over time. You get the satisfaction and enjoyment of seeing that TV in your living room today and pay for it each month. A donor gets the satisfaction of being a donor now and paying for that feeling over time.

There’s another reason you want pledges, too, beyond making your donor feel good. Pledges are usually made for more money than a donor would have contributed if they had given one gift at a time over the same period.

For example, someone who makes a $10 gift annually may like the idea of being a $100 donor to your campaign—and will increase their gift to $20 per year to do it. They’ve doubled their gift and get the recognition ten times more. Recognition is cheap—and both they and your mission will win.

2. Major Gift Solicitation

Regardless of how you define a major gift (as described in-depth here in our blog post on major gifts), these significant contributions are the key to a successful campaign.

Think of your campaign like a barrel. The faster you fill the barrel, the faster you can deliver your programs. Next to the barrel, you have bowling balls, bocce balls, and marbles. While you could pour all your marbles into the barrel first, and they’re lighter and easier to pick up than bowling balls, you don’t have near enough to fill your barrel. You have a lot of bocce balls, too, but still not enough to fill the barrel.

To successfully fill your barrel (i.e. complete your campaign) you need to start with the heavy-lifting first—your bowling balls, otherwise known as major gifts. Then you fill in with bocce balls where you can, followed by marbles taking up every gap. You might even have lots of tiny ball bearings to really make it stuffed to overflow!

What does this mean for capital campaigns? Start with the major gifts and work your way downward—and stuff your campaign with the smallest gifts at the end.

Tip: focus on building personal relationships with major funders. They want to feel like an invaluable part of the team (which they are!).

3. Capital Campaign Fundraising Events

There are three kinds of fundraising events popular alongside capital campaigns.

The first kind is your smaller, more personal events that occur to educate major contributors on the objectives of the campaign, and sometimes even to get their formal pledges then and there. Think of a dinner party or reception where the president or board chair makes the case and asks for a commitment. These are typically held even before a formal campaign announcement has been made.

The next kind, ironically, is the campaign kickoff. Why the irony? Because at the “kickoff,” you usually announce that you’ve already raised as much as 60% of the goal. Really, this is the start of the public phase, and the kickoff event aims to raise visibility and enthusiasm for the effort and give a push to the final 40-or-so-percent.

The last type of event is the campaign completion celebration. It’s time to announce that you’ve reached your goal and encourage anyone who hasn’t already to come aboard.

As far as the actual event planning goes, all of these events can be formal or informal, big or small. You can charge an admission fee for tickets or use them to leverage individual, personal asks later. Either way, hosting engaging fundraising events is a great way to drive donations and turn attendees into life-long supporters of your work.

4. Matching Gifts Drives

Everyone loves a bargain, right? Well, welcome to the world of matching gifts.

Match gifts campaigns—usually sub-campaigns targeted to a specific group as part of your larger overall campaign—are great ways to build good-natured enthusiasm for your cause and raise more money because of it. Matching gift efforts help people who are on the fence decide to make their gift and accelerate giving among those who are afraid that they’ll miss the bargain.

Match gift campaigns 0ften start by getting someone to issue a challenge. For example, a major donor might say, “I’ll give you $X if you raise $Z by this date.” The concept will generate excitement among your targeted constituency and lead to increased giving by supporters.

Even better? Many of your donors likely work for companies that have existing corporate matching gift programs in place. This means that when an individual makes a gift to your nonprofit, they can then request a matching gift from their employer. Once the employer confirms the initial gift with your organization, they’ll send in their own donation as well.

5. Online Donation Appeals

More and more, capital campaigns are turning to online appeals for their final, public phase of campaign fundraising. Often known as the “cleanup” phase (not a derisive term—it comes from the cleanup hitter as the best position in a baseball batting lineup) it’s an opportunity to gather everyone’s support, especially those who you couldn’t ask in person.

And that’s important. After the campaign is over, you never want to hear “I wasn’t asked.” Everyone’s gifts are important—and online appeals let you ask just about everyone, easily and efficiently.

6. Capital Campaign Fundraising Letters

A more traditional and sometimes even more lucrative method of campaign cleanup is the campaign fundraising letter. When you consider that your email inbox or social media feed gets dozens, if not hundreds of messages daily, a physical letter in a mailbox could be a much more effective tactic for grabbing your supporters’ attention.

Postal mail also better appeals to certain demographics, and, regardless of the demographic, when combined with online appeals, is proven more effective overall.

For best results, send your cleanup solicitations to everyone, including past campaign donors and non-donors alike. A lot of them will even make a second, bonus gift!

Capital campaigns can make or break your nonprofit’s fundraising, and as a result, its mission. They’re not something to enter in lightly, and should never be used to “kick-start” or otherwise begin a fundraising program where there was none before.

A well-planned campaign will boost your nonprofit in funds, and more important in your ability to carry out your mission. And with both, your successful campaign will lift your nonprofit’s reputation as an organization on the move, and your staff and volunteers with it.

To learn more about strategic fundraising efforts and optimizing your nonprofit training, be sure to check out our other educational resources:

Train your team in running effective capital campaigns and other fundraising efforts with Nonprofit Courses.

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Published by

Matt Hugg

Matt Hugg is the president of Nonprofit.Courses.

See his bio here.

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