Capital Campaigns: A Guide to Raise More for Your Nonprofit
Capital campaigns are springboards to increase the impact of your nonprofit. They raise money to move your organization from business as usual to doing more good for more people.
They increase your capacity to make a difference in the world by providing special funds to increase your capacity; perhaps with a new building, renovations, or funds to start new programs.
But what are these campaigns really?
What are capital campaigns?
A capital campaign, by definition, is an intense effort on the part of a nonprofit organization to raise significant dollars in a specific period of time.
Capital campaigns are not broad-based campaigns; they rely on a few large gifts in order to reach a goal that funds a specific-large scale project.
Because of this nature of capital campaigns, a failed campaign can be absolutely detrimental to your nonprofit. If one of your major donors provides a large chunk of change to make an impact on a project that never comes to fruition, you’re likely to lose that donor altogether.
This guide is designed to walk you through the details of a capital campaign, helping your organization decide if you need to launch one of these large-scale campaigns to achieve your goals, the risks associated, and generally what a capital campaign looks like for nonprofits.
Specifically, we’ll cover:
- Reasons to Launch a Capital Campaign
- Assembling Your Capital Campaign Team
- The Timeline of a Capital Campaign
- Your Capital Campaign Feasibility Study
- The Capital Campaign Quiet Phase
- The Capital Campaign Public Phase
- The Aftermath of a Capital Campaign
Ready to dive a little deeper into capital campaigns? Let’s get started.
1. Reasons to Launch a Capital Campaign
Capital campaigns are a push by a nonprofit to raise a significant amount of money over a period of time in order to complete a specific goal.
To each nonprofit, this “significant” amount of money might mean different things. To some, it might mean raising half a million, while for others it might be multi-million or even billion-dollar fundraising campaigns. There are certainly some educational institutions that are raising these funds in the billions.
Typically, when we discuss capital campaigns, it’s in terms of raising money for a capital need. These capital needs are immediate and strong. For instance, you might be raising money to:
- Build a new building
- Renovate current buildings
- Purchase land
- Create an endowment
- Purchase a major piece of equipment
Sometimes, nonprofits even launch campaigns to achieve multiple goals at once. For instance, a hospital might be building a new wing, expanding endowment funds, and purchasing a major piece of equipment all at once. We would call this campaign a comprehensive campaign.
This is more common than you’d expect because in most cases, although you’re raising money for your immediate needs, you also need money for programming. If you’re building a new building or buying more land, it’s usually to create room for expanding programming.
As you raise money for your capital campaign and your immediate need, remember the other, less-frequently-considered aspects of the campaign. Many times, these are incredibly positive considerations! For instance, after a successful capital campaign, organizations frequently see:
- Strengthened annual giving programs
- Seeds planted for major and planned gifts
- The opportunity to make a bigger difference
The primary reason to launch a capital campaign is your immediate capital need. However, you should also consider the other benefits that could come about if your organization is successful!
2. Assembling Your Capital Campaign Team
Your capital campaign team is one of the most vital aspects that could determine the success of (or lack thereof) your campaign. A good team can lead you to accomplish your goals, while an ineffective team can hold your campaign back.
There are a few different parties that will get involved with your campaign and are considered an important part of your team. All of these parties should be completely committed to the success of your nonprofit capital campaign.
By completely committed, we mean that these members should be financially and emotionally invested and willing to spend their valuable time working to make the campaign a success.
Some of the parties who will make up your team include your board members, volunteers, and staff committees.
Fundraising expert, Linda Lysakowski, explains that capital campaigns are worked from the top-down and inside-out.
Working from the top-down means that you need to reach out to your major donors first (we’ll cover that in more detail later). Meanwhile, working from the inside-out means that those working closest to your organization (your board members) should be some of the first to commit to the campaign.
Your board members should be some of your strongest supporters in the campaign. They should be some of the first to:
- Donate to the campaign
- Volunteer for campaign leadership positions
- Help your organization with fundraising activities
If your board members aren’t fully invested in the capital campaign, it could be detrimental to your nonprofit’s chances of success.
Highly invested volunteers are the most likely to join committees such as your planning committee and your steering committee.
- Planning committees consist of about 10 to 15 members, including both volunteers and staff who will work together to help plan a capital campaign.
- Steering committees help a capital campaign run smoothly after it’s been launched.
Great organization volunteers are those who have shown to be deeply committed and involved with your mission in the past. They believe in you and your organization. They’ll also likely have contact information of other helpful people to get involved in the campaign.
There’s a lot of work that goes into a capital campaign. Be careful not to overwork your staff. While committed staff members are likely to be willing to put in some extra work to help your campaign succeed, capital campaigns are long-lasting, and working that hard for too long will burn out some of your staff members.
Consider, when you launch your capital campaign, hiring additional staff members to take on some of the extra workload. You may hire supplementary people (or ask volunteers!) to do nonprofit campaign activities such as:
- Coordinating meetings and events
- Handling internal and external communications
- Maintaining the website
- Writing your regular newsletter
- Crafting press releases
Your staff members are busy writing grants, conducting usual fundraising, running organization programs, and more. Without additional hands on deck, they’d have trouble adding a capital campaign to their to-do list.
3. The Timeline of a Capital Campaign
There are three major stages of your capital campaign: The planning phase, implementation phase, and the aftermath of the campaign.
Each stage requires a slightly different mindset. We’ll provide a brief overview of the different aspects of each phase of your nonprofit’s capital campaign.
The Planning Phase
Gather a team
We’ve touched on this a bit already. One of the first things you’ll need to do when you decide to launch a capital campaign is to collect a team of highly motivated and committed individuals to work on the campaign together.
Write a case for support
Write a case for support that is both emotionally and rationally compelling. You want to pull at your supporters’ heartstrings while showing them that you will use their contributions responsibly. Show them you’re compassionate and have a plan.
Finalize capital campaign details
Finalize details like your capital campaign goal and your prospective timeframe. Clearly defined goals and deadlines will motivate your staff members and supporters to reach each benchmark along the way to your final campaign conclusion.
Set a campaign budget
You will spend money on your capital campaign. Create an honest and realistic budget in order to raise what you need without overspending and counteracting all of your hard work.
Conduct a feasibility study
Feasibility studies review your past fundraising campaigns, your historic successes and failures, and your objectives for the upcoming campaign to see if you’ll be able to reach your intended goals. Feasibility studies also have the added benefit of informing your top stakeholders of the capital campaign and asking them for input and support in the effort.
Create a gift range chart
Gift range charts break down your overall fundraising goal into the gift ranges you need to reach that goal. For instance, a large organization may be looking for one $1,000,000 donation, two $500,000 donations, five $100,000 donations, and ten $50,000 donations to reach a goal of $3,000,000. This will guide the fundraising asks your organization makes to ensure you reach your goal.
Create a contingency plan
A failed capital campaign can be detrimental for your nonprofit. That’s why it’s so important to prepare for this possibility. While you hope to never use it, a contingency plan will help your organization feel more secure in the capital campaign.
The Implementation Phase
The quiet phase
The quiet phase of your capital campaign implementation plan is when you ask key supporters for contributions, but don’t publicly market the campaign yet. Generally, the bulk of your capital campaign fundraising happens during this phase.
The public phase
The public phase of your nonprofit capital campaign is when you turn your fundraising to the masses. Don’t do this too early. The public phase should be the final push for additional donations in order to reach your overall goal.
Complete intended project
After you’ve raised the funding through your capital campaign, it’s time for the fun part: completing your project. If you’re expanding your center, start building! If you’re purchasing land, get to buying! Use the money for its intended purpose and get to work.
The whole purpose of your capital campaign is to expand your services or create more programming. While you were raising money for the project, you should’ve also been raising money to complete this programming expansion. This way, you can make the most of your capital campaign funds and their purpose.
Thank your supporters
Don’t forget to thank your donors for coming out and supporting your campaign. After all, without them, your success wouldn’t have been possible. Tell them about the incredible impact they’ve had for your organization and the greater impact this will have on your community.
Focus on retention
If new supporters came out for your campaign, reach out to them and get them involved with your other activities. Retention of these donors will help strengthen your annual fundraising campaign and grow your organization as a whole.
4. Your Capital Campaign Feasibility Study
Your capital campaign feasibility study is one of the most important aspects of the planning phase.
During your feasibility study, you’ll discover if there’s enough interest in your project and the right people willing to give in order to reach your goal.
During this process, you’ll examine your organization’s fundraising history and current support base. You’ll interview 20-40 community members in order to reveal information such as:
- Potential candidates for capital campaign leadership positions
- How effective your case for support is
- Prospects for campaign contributions
Due to the importance of capital campaigns and their potential to make or break an organization, nonprofits frequently prefer having an expert on their side during the planning phase. Traditionally, it’s been recommended that your nonprofit hires a fundraising consultant to help conduct the feasibility study. This is because:
- Consultants bring a level of expertise to the table and can best determine the outcome of the study.
- Fundraising consultants provide an unbiased opinion and encourage truthful answers during stakeholder interviews.
- Consultants have seen it all before! They can walk you through the more difficult aspects of your study.
While other tools, such as the Capital Campaign Toolkit, have been developed and allow for a more self-sufficient approach to your feasibility study and campaign, that doesn’t mean fundraising consultants are obsolete.
Your organization will have tradeoffs no matter which route you choose.
Fundraising consultants tend to be a little more expensive, making them great choices for larger organizations with a lot of moving parts. However, smaller organizations may find that it’s difficult to afford a consultant or find that the cost is not worth the input they can provide.
Fundraising consultants can be well worth their cost for many organizations given their objective viewpoint and expertise in the field. Organizations that opt against hiring a consultant may find that they have more difficulty with transparency or objectivity from leaders given their close emotional proximity to the organization’s mission. Plus, they’d be opting out of having an additional expert on board with the organization.
Carefully consider all of the benefits and drawbacks of hiring a consultant or conducting the feasibility study (and campaign) on your own. If you do hire, peruse your consultant options carefully and choose one who will work best with your nonprofit.
Bonus! To learn more about expert nonprofit consultants and choose one who might help your organization’s feasibility study, check out Boomerang’s list of recommended consultants.
5. The Capital Campaign Quiet Phase
The quiet phase of your nonprofit capital campaign is almost like the soft opening at a restaurant. A capital campaign quiet phase is the stage prior to the public rollout. Nonprofits typically raise 50-70% of their overall goal during this time.
These donations typically come from major donations, government agencies, and corporations. In order to obtain these donations, your organization should make sure you are leveraging the data you found in your feasibility study. After all, those you interviewed during this phase are likely to help make your campaign possible.
Some best practices for your capital campaign quiet phase include: purposefully selecting and asking prospects, polishing your case for support, and closing with a strong kickoff event.
Purposefully select and ask prospects.
You probably know the importance of prospect research while looking for major prospects for your capital campaign. As you conduct wealth screening and estimate asks for your major donors, make sure to follow the guidelines of your gift range chart.
A gift range chart (such as the one below) shows how many donors you need at each giving level to reach your overall goal. This will help you stay on track when it comes to asking for major donations during the quiet phase of your capital campaign.
Examine your donor database and look for those with high generosity and engagement scores to start. This is much easier when your donor database integrates with prospect research and wealth screening technology.
On the corporate level, you may ask local companies who have previously sponsored your events or have participated in activities related to your mission in the past.
Just remember — You want a purposeful and deliberate approach to finding prospects, but that doesn’t mean your search has to be narrow. Aim for a happy medium that makes the most effective use of your team’s time during this pivotal phase.
Polish your case for support.
Your case for support is one of the most important documents you’ll create during your capital campaign. It’s the backbone of the rest of your future marketing materials.
This document should be between one and two pages and clearly formatted for easy reading. Your capital campaign case for support should include information such as:
- An introduction to who your organization is and your mission
- The purpose of your capital campaign and the impact of the proposed project
- A persuasive statement as to why prospects should show their support
- Statistics and rational reasoning behind the campaign and proposed project
- Your financial plan for the campaign, project, and future programming
Your case for support should adhere to both the rational and emotional sides of your supporters’ minds. Make sure it’s persuasive, honest, and descriptive to best reach your supporters.
Close with a strong kickoff event.
As your quiet phase comes to a close, host a kickoff event to announce your capital campaign to the world. This helps bridge the gap between the quiet and public phases of your campaign.
While at the event, you should make sure to:
- Encourage your campaign leaders to mix and mingle with attendees. Face-to-face interactions not only help your campaign leaders explore additional prospects, but it also makes your attendees feel welcomed and integral to the process.
- Acknowledge those who have already given to your capital campaign. Thank your quiet-phase donors with short speeches at the campaign event.
- Keep looking forward. Keep in mind that this event is a kickoff. You want to inspire your attendees to give and support your campaign. Announce your timetable for the future and tell everyone about how they can get involved.
A smooth kickoff event brings your quiet phase to a close and launches the public phase on a high note.
6. The Capital Campaign Public Phase
Your capital campaign public phase is after you’ve announced your plans to the world. During this phase, you reach out to a broad audience to bring home the last 30-50% of fundraising and close out the campaign.
During this phase, you should still use donor levels to estimate and ask the right supporters. However, the levels might be smaller, for instance focusing on $500, $1,000, and $5,000 donations rather than the major gifts that you looked for during the quiet phase.
Some best practices for the public phase of your capital campaign include:
- Keep it short. Donors and campaign leaders tend to lose motivation quickly during the public phase if it’s dragged out too long. Try to keep it around or under six months.
- Practice smart marketing. Communicate your fundraising need with well-crafted emails, social media posts, phone calls, newsletters, and other materials. For a capital campaign, direct mail is one of the best ways to grab and retain your audience’s attention! We suggest designing and sending high-quality appeals through a dedicated fundraising platform like GivingMail.
- Incorporate matching gifts. Matching gifts from your supporters’ employers can make a big difference and help you reach your goal faster. Ask your supporters to check their eligibility.
During the quiet phase of your capital campaign, you want to secure enough funding that your supporters feel confident in your organization reaching your final goal. It builds trust with your supporters to come into the public phase with at least 50% of funds already raised.
7. The Aftermath of a Capital Campaign
Congratulations! Your capital campaign has ended. That’s a big achievement for your organization and you deserve to be proud. Now you get to jump into completing your project and expanding your programming.
But your work for the capital campaign isn’t quite over even after the money is raised. You still need to debrief, acknowledge your donors, thank them, and review the fundraising data from the campaign itself.
After your capital campaign is over, here are some steps your organization should be sure to do:
- Debrief with your leadership and staff. Discuss the different aspects of the capital campaign. What was effective? What was ineffective? What notes would you make for your next large-scale campaign?
- Remind donors about outstanding pledges. You’ll need to keep moving forward with expanding your planning and making the larger impact that your capital campaign is designed for. Therefore, keep reminding those who pledged to give to your campaign even after it ends.
- Focus on retention. After an intense campaign, you’re probably experiencing an increase in public awareness and media recognition from your donors and community. Reach out in appreciation and encourage further engagement to retain this support in the future.
In the aftermath of your organization’s capital campaigns, be sure to save relevant and important data to your organization’s CRM. Reach into donor data to retain them in the future. Also, save campaign data so that you can use it for future campaigns.
Be sure to take a minute and congratulate your team on this incredible accomplishment. They worked hard to help increase the impact of your work.
Your capital campaigns are more than an opportunity to raise a large amount of money for your nonprofit. It’s an opportunity to increase the overall impact your nonprofit has on your mission.
Now that you know the basics and key tips to earn more, you’re ready to get started. Start talking to leaders at your nonprofit. Ask them if they think your nonprofit needs a capital campaign. If you still want more information before jumping into the process, check out the additional resources below:
- Bloomerang’s List of Recommended Consultants. If you want a professional by your side throughout the capital campaign process, check out our favorite consultants for nonprofits.
- Capital Campaign Toolkit. The Capital Campaign Toolkit provides all of the resources your organization needs to plan and execute a capital campaign. It walks you through each step in the process.
- Major Gift Fundraising for Small Shops. If you’re a smaller organization worried about collecting major donations during your capital campaign, this eBook is for you. We discuss how anyone is capable of obtaining major gifts.