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[ASK AN EXPERT] How To Frame And Record Combined Asks For Capital, Endowment, And Operations

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Our Ask An Expert series features real questions answered by Claire Axelrad, J.D., CFRE, our very own Fundraising Coach, also known as Charity Clairity.

Today’s question comes from a nonprofit employee who wants advice on how to record and frame a combined ask (operations, campaign or program funding, etc.) for a capital campaign. 

Dear Charity Clairity,

We are running a capital campaign to open a home, plus fundraising for operations. The ask has been commingled in some of our letters.

Must fundraising letters segregate the asks asking for operations separate from maternity home donations? Must gifts be recorded to show gifts for operations/general needs separately from funds designated to the maternity home?

— Conflicted and Conflated

Dear Conflicted and Conflated,

When donors designate a specific use for their donation, it is incumbent on the charity to spend that money according to the donor’s expressed intentions.

When such a designation happens, you must precisely record the gift in two places:

  1. Fundraising database
  2. Accounting database/ledger

As the fundraiser, your job is to reflect back to the donor, via thank you letter and subsequent reporting, how their money was spent to create the impact they envisioned. The database is your friend in this regard, as you can produce a letter based on how you input the data.

The finance office has a different job. They must track the money coming in and going out. It is imperative they know how much they have available to spend on capital expenditures vs. operating expenditures.

Which brings us to the question of: How do you know if the donor is expressly designating their gift for one purpose or the other?

As your question suggests, it’s largely based on how you frame your ask. A vague ask yields vague commitments, and confusion abounds.

Let’s take a look at common and best practices.

Many capital campaigns are “blended” in that they ask for money for brick and mortar today and operating expenses tomorrow. Sometimes the money for future operating expenses is swept into an ask to build an endowment for this purpose. I’m not sure if that’s what you’re doing, or if you’re doing one ask that seeks brick and mortar for the maternity home and a side-by-side ask for this year’s annual operating expense.

If the latter, the more you can clarify the choice, both for the donor and for your team, the better. For example:

  • Would you consider a combined gift for the home and operations of $30,000? [Problem: The donor doesn’t really know how much is going for which purpose].
  • BETTER: Would you consider a capital campaign gift of $25,000 and a repeat gift of $5,000 for this year’s annual campaign? [If the donor only wants to give for one part of this equation, they can. Whatever amount they decide upon, they’re likely to earmark between the two options so clarity is achieved].

It’s always ideal to know which part of the appeal truly resonated with the donor – so you learn what floats their boat, and can record the gift in your donor database in a manner that enables you to report back to the donor based on their interest and intent. Also, the finance department wants to know how much money they have available for either purpose.

If doing a blended ask, either just for brick and mortar plus operating endowment or for brick and mortar, operating endowment, and current operations, here are some additional appeal options:

  • This is a once in a generation opportunity to build for our future! Would you consider a combined gift to build the home and ensure future operations of $35,000? 15% of your gift will be invested in an endowment to assure the home can keep operating in perpetuity.
  • Would you consider a capital campaign gift of $25,000 to build the home, an operating endowment gift of 5,000 to be invested in perpetuity to sustain the home’s operations, and a gift of 5,000 for this year’s annual campaign? Your combined $35,000 investment will secure the future for people like Maria who rely on us, today and tomorrow.

There are pros and cons to blended asks vs. separate capital and annual campaign appeals. For major donors, they often like to know what the total ask amount for the year will be. A blended ask respects this, and you don’t end up being perceived as “nickel and diming” them through multiple appeals received after they made a significant commitment. Since most major gift appeals are made in person, it’s easy to clarify the ask. Start with the larger number; explain how you’ll allocate. Often the donor will simply say “Allocate where most needed.” You can then enter it into both development and finance databases according to your use preferences. But make sure you enter an annual campaign commitment so the donor gets credit when you run reports for donor listings. You definitely don’t want them showing up on a lapsed donor report!

If you do decide to separate capital and annual appeals with major donors, make sure you acknowledge their capital campaign commitment in their annual ask. For example:

  • Thank you so much for your capital campaign commitment of $10,000 to build a home – it means more than words can express! Until it gets built, people like Maria continue to rely on your generosity to survive and thrive during this critical time. Will you continue your annual commitment of $2,000?

For smaller to mid-size donors, separate capital and annual appeals make the most sense. Many are accustomed to the annual appeal, and it’s good to be consistent. If you ask them to be part of the capital campaign, a separate appeal that includes incentives to contribute (e.g., all donors will be invited to the groundbreaking ceremony, will be listed on the donor honor wall, and etc.) is a good idea.

In reducing conflict and conflation, clarity is your friend!

–Charity Clairity

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  • Clark A. Blasdell

    Hello Claire, I continue to enjoy the wide range of advice that both you as an individual and bloomerang as an organization continue to provide for the Greater San Franciso Bay Area community and communities. I have worked in the affordable real estate development and operations industry since 1978 when I was instrumental in organizing a Novato-based nonprofit organization named Novato Ecumenical Housing (NEH)/Northbay Family Homes (NFH), subsequently re-named several other names until it was recently closed and dissolved on December 3 1, 2020, with Suburban Alternatives Land Trust (SALT) agreeing to take on any remaining obligations and responsibilities entered into by NFH since 1978. I only recently "discovered" bloomerang ..and have found it to be an incredible new and comprehensive source to refer newly forming nonprofits to become aware of and connect with. I will continue to refer people to bloomerang as I continue as the Executive Director of SALT since being named to that position on July 1, 2021. Thanks, ~ Clark
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