How Do I Know if I am Ready for Capital?

Amy Schiffman
November 9, 2017

In a perfect world I would have written this post BEFORE my series on feasibility studies, because if we are going to undertake a serious, detailed conversation about capital campaign planning over the next several weeks, we will most certainly need to swing back to speaking about feasibility. Ah well -- let’s begin. 

The timing on this conversation is interesting. My firm is fielding more calls about capital and comprehensive campaigns (one that includes capital, endowment and annual needs) than we have in many years. Nonprofits seem finally to be trusting in the markets, giving trends, and their donors’ willingness to support this type of effort. In other words, “they’re back” – and willing to risk embarking upon a major investment in their future.

Wondering if you understand what defines a capital campaign?

A capital campaign is an intense effort on behalf of an organization to raise significant dollars to fund a one-time project (or series of projects) during a defined time frame. It typically involves the purchase, building or renovation of a facility or piece of property. A nonprofit can also conduct a capital campaign to purchase or improve equipment, technology and/or furniture and fixtures.

Your project warrants a campaign separate and apart from annual fundraising activities if annual campaign efforts (or the annual budget) cannot support such a project. Most cannot. During this series I will break down the capital campaign process as follows:

  1. Campaign readiness
  2. How does one determine and test an appropriate campaign goal
  3. How do we recruit and train a leadership team? What types of individuals are necessary to support this process?
  4. The board’s role in a capital campaign
  5. Creating supporting materials
  6. Developing and researching your prospect list
  7. Developing a donor stewardship and recognition plan
  8. Best practices in donor cultivation
  9. Preparing for the quiet phase of the campaign
  10. Preparing for the community phase of the campaign
  11. Community celebrations, communications and grand openings

Let’s start with campaign readiness. We typically think in terms of four key areas when assessing campaign readiness:

  1. Leadership
  2. Engagement and Stewardship
  3. Annual Campaign
  4. Development Staff and Infrastructure

Think “LEAD”. First, Leadership:

  1. Is your board working from a strategic plan? Is the capital project an outcome of the plan? You’ll quickly find that a campaign that is not the result of a longer term strategic growth plan will have a difficult time gaining support from organizational stakeholders. Capital campaigns typically come out of a strategic planning process and therefore enjoy the support of internal and external leadership. The development of a strategic plan may be your first step toward a capital project.
  2. Next – does your board have active standing committees? Do they meet regularly? Is their work driven by the organization’s strategic plan? Is the work focused on capacity building? Does each committee have a recently updated committee charge or charter? Is each committee setting annual goals? If the answer to these questions is no, you may have work to do on the establishment of your lay leadership structure before you begin capital campaign planning.
  3. Last, consider your board’s giving and getting expectations. In other words, is the board’s role in fundraising clearly defined? If not, you’ll likely run into problems during the community phase of the campaign (or maybe earlier). All board members should be clear about an expectation around 100% participation in the campaign (making their own capacity gifts) as well as any expectations around their roles as solicitors, cultivators and/or stewards.

Next:  Engagement and Stewardship:

Are you in touch with donors between solicitations? This is most commonly achieved via newsletters, e-blasts, postcards, donor recognition receptions, site visits, parlor meetings, phone calls, in-person meetings and webinars. You may also want to consider donor listings on your website and in newsletters, annual donor recognition signage (these should be easy to swap out each year), “swag” and thank-a-thons. A comprehensive donor recognition program is sign you are ready to ask your donor base to support an additional campaign project.

Then – Annual Campaign:

Is your annual campaign successful? I.e., does it generally meet its goals each year? Do you involve your board in annual fundraising efforts and do they help you engage new donors by accessing their network on behalf of the nonprofit? Do you prioritize the major gifts effort and communicate gift impact to your stakeholders? Last – is your campaign data driven?  Are you analyzing results each year and defining new goals based on this information? If you are unable to answer these questions (or answer mostly “no”), you likely have work to do on your annual campaign efforts BEFORE you embark upon a capital campaign.

Last – Development staffing and infrastructure:

Does your development team:

  • Understand major gift fundraising?
  • Have experience coaching volunteer fundraisers?
  • Feel comfortable making integrated asks (annual + capital)?
  • Have a database management skillset?

Is your executive director:

  • Comfortable with major gift fundraising?
  • In communication with top donors?
  • Able to articulate a vision?

Do you have policies and systems in place such as a:

  • Gift acceptance policy?
  • Working database?
  • Communication between accounting and development?

If not, take a few steps back - develop your staffing structure and internal systems so that they are ready to support the capital campaign effort. If you skip these steps you will find the project becomes disorganized, unprofessional, complicated, frustrating and under-resourced. Trust me – we have been there! My team and I are happy to help walk you through the development of these systems and structures. As you consider your next steps, I also encourage you to check out this week's freebie - a capital campaign readiness checklist. We look forward to your questions and to next week’s discussion on setting and testing your campaign goal.