What is a Capital Campaign, and When Do You Need One?

Get a free demo of the Bloomerang software.

A capital campaign, by definition, is an intense effort on the part of a nonprofit organization to raise significant dollars in a specified period of time.

Fundraising EventUsually the money raised is to fund acquiring or renovating a building, but often the campaign’s focus is on building an endowment for the future.

In some cases, campaigns are initiated to fund extraordinary expenditures of a capital nature, such as an expensive piece of equipment for a hospital or a new fire truck for a fire company.

In cases where a capital campaign is for a new building or expansion of an existing facility, consideration should always be given to adding an endowment portion to the campaign goal.

Organizations need to remember that a larger facility will almost always involve increased operating expenses.

It is also important to remember that the focus of the campaign should not be on the building or amassing a large endowment fund, but on the benefits to the community that this facility or endowment will provide through expanded, increased or more efficient programming.

For many people, the emphasis in a capital campaign may be on the “pain.”  Campaigns do tend to disrupt the routine of the development office and the entire organization may feel the strain of the extra effort required for a year, two years or more, depending on the size of the campaign.

However campaigns have several great benefits, which for many organizations offset the work involved. Some of these benefits include:

  • Raising the money to fund a one-time need for the organization—in most cases having a building that meets the needs of the community served by the organization.
  • Strengthening the organization’s infrastructure—working on a campaign requires that the organization evaluate its readiness for a campaign, and subsequently build an infrastructure to run a campaign including staffing, board commitment, software to manage the campaign, gift acceptance polices, etc.  This stronger infrastructure will leave the organization in a much better position to do ongoing fundraising.
  • Volunteer involvement—most campaigns are very volunteer intensive often involving hundreds of volunteers in the organization’s vision. A good campaign organization will include a post-campaign plan for retaining the involvement of volunteers.
  • Increased public awareness—during a campaign, there will be great deal of publicity and cultivation efforts to help raise awareness of the organization in the community. These efforts, like the strengthened infrastructure, will help the organization’s future fundraising efforts.

The organization first needs to decide whether they need a campaign, how much money they need to raise, and whether or not they are ready for a campaign.

Any discussion of a capital campaign should start with the strategic planning process. The board and staff must together evaluate the organization’s needs for programs and services, and in the planning process should ask questions like:

  • What is the potential for growth in our organization?
  • How are the demographics of our constituents changing?
  • Are we prepared to meet the needs of our community?
  • Is our facility adequate to handle growing needs?
  • If not, what do they need to do to improve their facilities?

Many organizations will plan a daylong retreat with board and staff, facilitated by a capital campaign consultant to lead them through this process. At this point often an architect or construction manager will also be brought in to help the organization determine how its facilities need to change in order to fulfill its mission.

The finance committee then needs to look at how the organization can finance these needs:

  • Will the added programs bring in more revenue?
  • Is a short-term loan needed to fund the early stages of construction?
  • How much does the organization have in reserves that could be applied to construction costs?
  • How much do we think we can raise in the community in a capital campaign.

Once the organization reaches consensus that a campaign is in order, a Steering Committee is then appointed to take the organization to the next step. Members of this Steering Committee usually include someone with experience in construction, finance, and fundraising. Both board and staff members generally serve on the Steering Committee.


How do you approach the creation of a capital campaign? Let us know in the comments below.

Want to learn more about successfully carrying out a capital campaign? Brush up on your expertise with these helpful additional resources:

img via nwabr

This post is an excerpt from Linda’s book: Capital Campaigns: Everything You NEED to Know.

Get an inside look at the Bloomerang software.

Linda Lysakowski

Linda Lysakowski

Author, Editor, Consultant
Linda Lysakowski, ACFRE has authored more than a dozen books, including Fundraising for the GENIUS, now in its second edition, and serves as Acquisitions Editor for CharityChannel Press and For the GENIUS Press. She has over 20 years experience as a philanthropic consultant and is one of fewer than 100 professionals worldwide to hold the Advanced Certified Fund Raising Executive designation.
Linda Lysakowski
By |2019-08-21T14:21:57-04:00July 8th, 2013|Capital Campaigns|

5 Comments

  1. Donna Starr December 5, 2016 at 9:56 pm - Reply

    Hi Linda,

    How can I find a professional to discuss working for our non-profit. Our Board is talking about retaining a person to help us raise 10 million dollars for a coastal ecology center. Can you give me some direction?

    Thank you,

  2. Blake Conover January 10, 2017 at 4:19 pm - Reply

    Donna,

    There are many great choices. You will be best served by someone who is an Association of Fundraising Professional (AFP member). We sign an ethics oath, etc. Check out the directory here. http://fundraisingconsultantsandresourcedirectory.com/?navItemNumber=545

    It would be wise to complete a short RFP (Request for Proposal) so you get comparable responses back from the top 2 or 3 consultants you select. Sounds like a great project worthy of the time, energy, and resources. Good luck.

    P.S. Thanks Linda for a fine article.

  3. Balla March 27, 2017 at 7:19 am - Reply

    Hi Linda,
    Thanks for this your brilliant text! I am presiding an NGO in Mali. We aim at making better the living conditions of local communities here.
    We would like to get in touch with volunteers and any other people to help us fundraising for our capital campaign.
    Many thanks!

  4. Yuki July 25, 2018 at 6:01 pm - Reply

    Hello Linda:

    Our CPA had set a Capital Campaign chart of account for our church ,he said because the donation will be used for built church but our church never raise money,all of the donations are donated by the donors voluntary.So is that available for us to set up the chart of account of Capital Campaign.If not,how should we record it when we received the donations for built church?

  5. Taylor Bishop December 7, 2018 at 2:13 pm - Reply

    I wanted to thank you for helping me learn more about capital campaigns. It’s nice to know that a good campaign should include a plan for after the campaign for retaining volunteer involvement. This sounds very important especially if the volunteers were especially helpful.

Leave A Comment