Are You Ready For A Capital Campaign?

On August 7th, Linda Lysakowski joined us for a webinar entitled “Are You Ready for a Capital Campaign?” Linda shared an overview of when a campaign is most appropriate, and how to ensure that it is successful. In case you missed it, you can watch a replay here:

Full Transcript:

Steven: Well, Linda and Jay, I have 1:00 on my computer. Are you ready
to get started?

Linda: Yes, I am.

Jay: Looking forward to it, Steve.

Steven: Great. Well, thanks everyone for joining us today. Good
afternoon if you’re on the East Coast and good morning if you’re on the
West Coast. Great to be here. We’re excited to present today’s webinar.
It’s titled ‘Are You Ready for a Capital Campaign?’ My name is Steven
Shattuck and I’m the VP of marketing here at Bloomerang and I’ll be
moderating today’s discussion. And today I’m joined by two leaders in the
non-profit sector. The first is my new friend, Linda Lysakowski. Hey there,
Linda.

Linda: Hi. How are you?

Steven: Thanks for being here. For those of you who don’t know Linda,
she’s one of the foremost authorities on capital campaigns. She’s actually
one of a hundred people worldwide who has ever held the distinction of
Advanced Certified Fundraising Executive. And she’s been in the sector for
20 years. She’s served as a philanthropic consultant. She’s managed several
capital campaigns. She’s helped hundreds of non-profits achieve their
development goals. And she’s been involved in training. She’s trained over
25,000 development professionals in multiple countries and every state of
the union here. So, it’s just a great honor to have her join us. So, thanks
again, Linda.

Linda: Thank you.

Steven: And also joining us is my colleague here at Bloomerang, Jay
Love. He’s the founder and CEO here. Hey there, Jay.

Jay: Hi there.

Steven: Good for you to be here. Thanks for being here again, as
always. Some of you may recognize Jay. He’s the original co-founder of
eTapestry. He’s also currently a Senior Vice President over at Avectra in
addition to his duties here at Bloomerang. So, thanks again for being here,
Jay. This should be a very interesting conversation.

Jay: Yes. I’m very much looking forward to it because of the fact that I
had the pleasure of presenting in person with Linda just a few weeks ago
out in Las Vegas. Everybody’s in for a treat today.

Steven: Yeah, definitely. So, what’s going to happen today is Linda is
going to get our conversation started. She’s going to share her thoughts
and her strategies on capital campaigns. And then she’s going to hand it
off to Jay, who’s going to talk about some donor retention strategies after
someone has actually committed to supporting that campaign. And what we do
at the end of all of our webinars is I’ll open it up for questions at the
end of Jay’s presentation. So, if you hear anything or maybe something
piques your interest and you’d like to have that explained by either Linda
or Jay, please feel free to send those questions over via the chat
functionality right there on your webinar screen. I’ll see those questions
and I’ll field those to Jay and Linda and we’ll try to answer as many as we
can before the 2:00 eastern hour. I will be sending out the slides
following the presentation as well as a video recording. So, if you miss
something, don’t fret too much. You’ll be able to get those resources here
later this afternoon.

So, without any further ado, Linda, why don’t you get us started?

Linda: Sure. It’s great to be here. As Jay said, we presented together
in person a couple of weeks ago and it’s great to be back with Jay even
though we’re thousands of miles away this time. He’s in Indianapolis I
think and I’m in Boulder City, Nevada. It’s good to be here. I’m really
excited to talk to you today about capital campaigns because it is one of
my favorite topics.

A lot of people aren’t quite sure what a capital campaign even is.
So, I’m going to start by giving you a little bit of an overview of what a
capital campaign is. But sometimes our boards or our CEOs may come to us
and say, ‘Let’s run a capital campaign. That’s a good way to raise a lot of
money.’ But they don’t realize what’s involved in a capital campaign. So,
those are some of the things that we’re going to talk about today.

Just on the side of trends that I’ve been seeing the last couple of
years, especially here in Nevada, our economy was pretty hard hit. And lots
of organizations put off capital campaigns because they were waiting for
the right time. Sometimes you just can’t wait for the right time. Sometimes
there maybe seems like there’s never going to be a right time to do this,
but it has to be done. So, it’s when you have a need and a case that’s
really strong, that’s the time to do a capital campaign.

What I think is exciting about capital campaigns is that not only
does running a campaign allow you to build a building or raise the money
for whatever project you’re doing, but it also helps strengthen your
organization as you go forward. What I’ve seen in almost every single case
is once you run a successful capital campaign, your annual giving program
becomes much stronger going forward. It lays a seed for major gifts and
planned gifts. So, a capital campaign has a lot of side benefits in
addition to the ultimate and immediate goal of raising money for your
capital campaign.

But a simple definition of what a capital campaign is, that it’s
typically a very significant fundraising effort for major institutional
needs, be they buildings, endowment or programs. Now, when I say
significant, that could be different for every one of you. We may have some
people on the line who are considering campaigns in the millions or even
billions, certainly many of the universities are running multi-billion
dollar campaigns. Or for your organization, maybe a significant fundraising
effort is a million dollars or a half a million dollars. It depends a lot
on what your organization’s needs are.

But typically, when we talk about a capital campaign, we’re usually
talking about a building or some type of a capital need. In the case of a
hospital, it could be a major piece of equipment that costs millions of
dollars. But for most agencies, it might be that you need to build a new
building, you need to renovate an existing building, you need to move into
another building and renovate it-some combination of those things.

For many organizations, they also need to build their endowment
funds. And so, lot’s of times an organization will run an endowment
campaign, which is very similar to a capital campaign in that you’re trying
to raise a large amount of money in a given amount of time. But that money,
instead of being used to fund capital needs, will go into an endowment to
fund future program needs. And sometimes an organization does all three,
they’re trying to raise money for a building, endowment and maybe their
ongoing program at the same time. We typically call that a ‘comprehensive
campaign.’

In most cases, even if you think your only immediate needs are a
building, in most cases you’re really wise to also at the time raise some
money for endowment and programs. Typically, if you’re going to be building
a new building, it’s because you have more needs for, guess what? Programs.
Maybe you need a larger facility. Maybe you need to move into a different
community because there’s another population that’s not being served in
your community. But in almost every case, moving to a new building means
that you’re going to have probably a need for programs. You may need to
hire additional staff. You might need more equipment. You might be
expanding your hours. So, in almost every case, you’re going to need more
money to operate that building.

So, you have to think ahead and say, ‘Are we going to be able to
operate this once it’s up and running?’ And I’ve seen some organizations
run campaigns that didn’t plan ahead and low and behold they built a great
new building but they didn’t have money to operate their program. So, you
really need to think about this and decide up front if you’re going to be
raising money for just buildings or do you want to also at the same time
raise money for endowments and programs.

Right now, I’m working with a client who is raising money to build a
new facility. But in the meantime, they also have to operate their current
facility. They’re going to have two facilities when they’re finished. So,
they’re raising money not only for the building needs, but also to operate
the program in both facilities for the first year. So, that’s, I think, a
really wise decision. And I congratulate their board for having the
foresight to do that.

So, now that you kind of understand what a capital campaign is,
what’s involved in it? Sometimes people shy away from campaigns because
they hear that it’s a lot of work. Actually, there’s a lot of emphasis on
the ‘pain’ part of ‘capital campaign.’ So, what I’m trying to do is get rid
of some of that pain for you and have you just kind of take it piece by
piece. When you break it down and really take it in manageable-sized
chunks, I think any organization can successfully run a capital campaign.

So, typically what’s involved is some sound research. First of all,
you need to research the need in your community. Does your community need
this building? Does it need newer programs? Not so much what you need, but
what your community needs. And that’s, I think, really important. You want
to have a long-range strategic plan for your organization overall so that
you know where your organization is going and what your community needs
are.

Usually a capital campaign also involves some persuasive campaign
literature. But I always like to caution people, don’t spend so much time
thinking about how you’re going to present this campaign to the public.
I’ve seen a lot of organizations that spend hours and hours and dollars and
dollars and hire marketing companies to help them put together great
looking, fancy brochures and a brand new website. But they don’t spend any
time identifying, cultivating and soliciting donors. And the campaign
literature is going to help your campaign, but it’s not going to make you
succeed.

So, don’t spend too much time and money on campaign literature and
neglect the other things that are important, such as an effective
organization. You need to have a campaign plan. An organizational structure
that shows how this money’s going to be raised, who’s going to be involved
in helping you raise it, what’s the budget for the campaign? So, I want to
talk about a few of those things in the short amount of time that we have
here.

The application of proven procedures. Every organization says to me
when I first go talk to them, ‘Well, you know, we’re different. We’re very
different. We can’t run a traditional capital campaign.’ And I always tell
them, ‘Yes, I understand that you’re different and you’re unique and every
organization has its own unique qualities.’ But there are certain proven
procedures that always work in a capital campaign, no matter who your
organization is, no matter how much money you’re trying to raise or what
the purpose is.

Some of those proven procedures are that a campaign is always
successful when it’s worked from the top down and the inside out. And what
I mean by that is working from the top down means that you have to look for
those leadership gifts first. The small gifts will come at the end. They’re
easy to raise. But you’ve got to focus your energy on getting the
leadership gifts first. And working from the inside out means the use of
family of your organization. Go first to your board, your staff, your
campaign cabinet, your volunteers. The people that are really close to your
organization. And you raise the money first from the family of your
organization and then you go out to the community.

It also involves careful scheduling and publicity. One of the things
that you don’t want to do is announce your campaign prematurely. Sometimes
I’ve seen an organization that is so eager to get their campaign going they
say, ‘Well, once people know about this they’re all going to give us
money.’ So, they announce the campaign when they’ve only raised a very
small portion of the funds. And you want to be able to have, probably
somewhere between 70% – 80% of your money raised before you kick this off
publicly.

The thing that makes a capital campaign different than any other
fundraising that you do, like your annual campaign, your grant writing,
your events. Those are things that you do year after year. A capital
campaign runs within a specified time period. And that’s one of the most
important things about your campaign planning is ‘How long is this campaign
going to run?’ If you have a campaign that runs for ten years, people are
going to get real tired of it. I can tell you that. If you have a campaign
that doesn’t have enough time, you won’t have sufficient time to do all the
cultivation and identification that you need to do.

So, you really need to look at the specific time period. In most
cases, unless it’s a very large campaign, most campaigns maybe run
eighteen to two to three years. Sometimes with a very large, multi-billion
dollar campaign, you might go for a longer time period. But you need to
look at what’s appropriate for your organization.

You also need to have a budget for this campaign. Now, some
organizations are very fortunate in that they’ve budgeted sufficient money
in their operating cost that they can put the campaign cost into their
operating budget. But for many organizations, probably most organizations,
wrap their campaign cost into the overall goal of their campaign. So, it is
important to realize that this is going to cost you some money going into
it. I think it’s real important to think about that.

So, what are some of the typical things that you need to have in
place? Well, first of all, you really need to have a solid foundation for
this campaign. You need to have an infrastructure in place, such as ethical
standards. You obviously need to have good donor software. I’m not going to
spend much time on that because Jay’s going to talk to you about how that
works.

Jay: We appreciate the mention, Linda. Thank you.

Linda: Well, it’s really critical. I can’t tell you how critical it
is. When I see organizations trying to do a campaign without having the
proper tools to manage it, they’re never successful with it. So, that’s a
really important piece of your infrastructure.

Annual giving history is important. Although, I must say that I have
run campaigns for organizations that have never raised a dime before they
did this capital campaign. But it’s because they had some of the other
pillars of success in place that I’m going to talk about for a minute. But
if you have an annual giving history, you’re way ahead of the game because
you have already identified donors. You have some methods. You probably
have the donor software and some of these other things in place.

You do need to have gift acceptance policies. Sometimes even if you
do have an annual giving program in place, you might not have thought about
things like, ‘What kind of gift do we want to accept and from who do we
want to accept gifts? What do we do with those gifts? How do we recognize
those gifts?’ All of those things need to be in written policies. One of
the reasons that’s especially important you really need to have that in
place for any fundraising, but it’s especially important in a capital
campaign because you’re probably going to be involving a lot of volunteers
and you don’t ever want a volunteer to go out and contact someone and
receive a gift and come back to you all excited because they got a gift and
you say, ‘We can’t take that gift.’

I’ve had people in capital campaigns, that, just for some examples,
one client of mine was offered a gift of land. This client was in Las Vegas
when land was selling for about $1.5 million an acre. Now, you can probably
buy it for about $10 an acre. But at that time, land was very expensive.
And they were all excited about this gift of land until they found out that
it needed to have rail [sounds like 17:27] remediation that was going to
cost them a half million dollars. Needless to say, that gift of land had to
be turned down. I’ve had clients that were offered gifts from companies or
individuals that they didn’t want to accept the gift from for one reason or
another. So, all of those things are going to be important in your gift
acceptance policy.

You definitely need to have staff support. It’s very, very
challenging to run a campaign without adequate staff support. So, we’re
going to talk a little bit more about that. And then in most states, in the
United States, and I’m not sure if we have any Canadians on board here or
any other countries, but in the United States, almost every state requires
you to be registered to do fundraising. So, if this is a whole new venture
for you and you’re not registered or you’re maybe raising money in states
where you’re required to be registered. So, that’s something that you need
to look into.

So, those are all things that I consider part of the infrastructure.
As important as they are, there are a couple of items that I think are
really critical and they’re what I call ‘The Pillars of Success.’ And
without these, you absolutely cannot run a capital campaign. You can buy
donor software. You can develop gift acceptance policies. You can make sure
you’re registered. Those things are fairly easy to do. But these are the
essential ingredients of a successful campaign. One of them is that your
board is fully committed to this. When I say ‘committed,’ I mean
financially, emotionally, spiritually, in every way. They have to be
committed to make this campaign successful.

You need to have a compelling case for support. And I could talk for
hours just about developing your case for support. But I’ll leave it with
the fact that a case for support to be compelling needs to have both an
emotional and a rational appeal. The emotion is usually what draws people
in. If you’re raising money to build a kennel for little puppies, that’s a
real emotional draw. If you’re raising money for kids, that’s a really
emotional draw. But let’s say you’re a university and you might not think
so much of emotion, but you’re drawing on the alumni emotion, the
attachment that they have for your school.

So, every organization has some way to emotionally appeal to its
donors. But before somebody gets out the checkbook and writes the check,
the emotion only goes so far. You also have to have a rational appeal that
says, ‘Yes, we believe we can raise this money and here’s why we believe we
can raise the money. We believe we can deliver these programs and here’s
why we believe. We’re financially stable and here’s the proof of that. Our
board is committed to this.’ People ask those rational questions. They
think with both their left brain and their right brain when they’re making
a gift. So, you have to be able to appeal to both of them. The key to a
compelling case is that it appeals to both the emotional and the rational
side.

Now, you obviously need prospective donors if you’re going to raise
money in a campaign. So, if you already have that annual giving history,
you probably have a pool of donors. If not, your campaign might take a
little bit longer because you’re going to need to identify and perhaps
cultivate those prospective donors.

You also need to have effective volunteer leadership for the
campaign. To me, this is probably the most critical aspect of a successful
campaign. I’ve run campaigns, as I said, for organizations that have never
raised a dime, had absolutely no infrastructure in place until we started
working on their campaign. But they were successful because they had some
key community volunteers who said, ‘I believe in this organization and I
believe in this campaign and I’m going to step up and chair the campaign or
work on the campaign cabinet.’ And that effective volunteer leadership, to
me, is one of the most critical parts of your campaign.

Now, there was a little handout that I believe Steven put up on the
chat box. If you haven’t had a chance to download this, I’ll just briefly
mention it here. But I would urge you to download this. It might be a form
that you might want to take to your next board meeting or your next
campaign cabinet meeting if you’re that far along in your campaign that you
already have a cabinet in place. This is a simple quiz that’s one page, 20
questions of ‘Are you ready for a capital campaign.’ Of course, there’s a
lot more that goes into it. But I think this questionnaire will give you a
good feel for how prepared your organization is to do a campaign.

So, let’s say you have the infrastructure in place but maybe your
board’s not willing. Maybe you have the board willing and raring to go, but
maybe you don’t have all the pieces in place that you need to do. So, these
20 questions are all ranked from zero to five. After you complete this
questionnaire, if you rank about 85-100, you’re probably ready to launch a
campaign immediately. If you’re somewhere between 70-84, you’re probably
going to need to make some improvements. If you’re somewhere between 55-69,
there’s probably going to be some expensive preparation needed. And if
you’re 0-54, your agency probably needs some serious reorganization before
you can even think about a capital campaign.

So, I’m urging you to kind of take that brief quiz. I’m going to talk
a little bit later about my book called ‘Are You Ready for a Capital
Campaign?’ That will give you an even more detailed way to assess your
readiness for a campaign. But I want to kind of go on so that we have
plenty of time for Jay to talk about how to use your software.

But these are, from my perception, and Jay can certainly add to this,
the reasons I think it’s important to have a software system for a capital
campaign.

First of all, you’re going to have different divisions in this
capital campaign. For example, there’s probably going to be a group of
people who are contacting the board. And depending on the size of your
staff, maybe it’s a whole group of people contacting the staff members to
ask for their gifts. You might have a group that’s going to volunteer. If
you’re an alumni group, and we all basically have alumni of some way, shape
or form. I did a campaign once for a dog rescue group and our alumni were
people who adopted a dog in a certain year and they were called by other
people who adopted a dog in that same year and asked to support the
campaign. So, you don’t have to be a university or a school to have alumni.
Most of us have some form of alumni.

You’ll always want to have a leadership gift division that’s looking
at the major gifts. You might have regional divisions depending if you’re a
national or regional organization. You might have a small business
division. I’m working with a health-related group. So, they have a division
that’s talking to professionals, doctors and dentists and groups like that.

So, you want to be able to code all of those divisions so you
contract each division’s goal because each division is going to have a
dollar goal that they’re trying to raise. You also want to be able to code
in your database your solicitors. Because you want to know which solicitors
are completing their calls on time, which ones might need a little help-
maybe they need some extra training-which ones are doing a really great job
and maybe they can help some of the others who aren’t doing such a good
job.

You obviously need to be able to do things like mail merges so you
can send out personalized appeals. I am a firm believer that in any kind of
fundraising, there’s absolutely no reason on Earth anymore to send out a
‘Dear friend’ letter with a label slapped on the outside. You really need
to make this a personal approach. You obviously need to send out pledge
reminders and acknowledgements.

And if you’ve never done a capital campaign, this may be the first
time you’ve ever actually had to track pledges because maybe all your gifts
are things that can mean you get a grant and it’s recorded-you’ve got this
grant, you’ve got a check in the mail, you’ve got something that comes into
you-a gift of stock, a gift of cash, a gift in time. Maybe you’ve never had
to record multi-year pledges. And that’s going to be really critical. I
can’t tell you how many campaigns I’ve seen suffer because they don’t track
their pledges. And I remember once making a gift to a campaign, and this
group apparently didn’t have a good system in place because they never
reminded me of my pledge payment. So, guess what? I never finished paying
the pledge because I didn’t know how much I owed them and I didn’t think it
was my responsibility to call them. So, those things are really important
that you have that in place.

You also are going to have to do reports from your donor system so
that your board, your campaign cabinet, maybe your bank if you’re going to
be going for a construction loan, will want to see those reports. So, those
things are critical.

I want to just slip back a minute to gift acceptance policies. I’ve
pretty much talked about that. But I think it’s important that you do have
these written policies in place about what types of gifts you’re going to
accept. How are you going to dispose of those gifts? If you’re a local art
museum and someone wants to give you a Picasso painting, that’s probably
wonderful, if it fits your collection that is. But if you’re the local
homeless shelter, what are you going to do with a gift of a Picasso
painting? You might have to have a policy that, ‘We’re going to have this
appraised and we’re going to sell it at an auction, whatever we’re going to
do with it.’ And how you’re going to manage your investment portfolio, all
of those things are going to be important.

And in capital campaigns, you also need to have recognition policies
in place. So, if you’re running a $10 million campaign, you’re probably not
going to name the building after somebody who gives you a $50,000 gift. But
you might want to name it after someone who gives you an $8 million or $5
million gift. So, those things you really need to have written down before
you get started.

I want to kind of talk a little bit about board responsibilities.
I’ve mentioned that it’s really important for the board to be fully
committed to this campaign. It’s great if you have some board members with
the capability and the affluence part of it that can give at a meaningful
level and will have access to other potential donors. But every board
member, no matter what their capability is, should be able to promote your
organization and your campaign into the community. And every board member
has a sphere of influence. So, don’t think because you don’t have a strong
board that you can’t run a successful capital campaign because you can.
I’ve seen it happen time after time. It’s just that every board member
needs to really make that commitment. And you also should have some board
members willing to serve in campaign leadership roles because they’re going
to be important as well.

I know we’re getting a lot of questions in and we are going to
address those at the end and I’ll take a look at all those. But I want to
get through this material quickly so that we can move on and have Jay talk
to you more about the software.

I do want to mention the campaign staff functions during a capital
campaign though, because there’s a lot of work involved in a capital
campaign. I won’t deny that. And sometimes organizations have their staff
pulled in so many different directions. I’ve worked with organizations that
are running 14 special events a year and I’ve told them they’re crazy for
doing it. But sometimes staff gets pulled between writing grants and
running events and, ‘How are we going to have time to run a capital
campaign?’

So, you need to think about this going into it and decide, do you
need to hire extra staff? Are some of these things that a consultant can do
for you? How are you going to handle the staff functions such as
coordinating all the meetings and events? Because this is going to be
volunteer-driven. You’re going to need support for those volunteers. You’re
going to need somebody that can prepare those reports for the board and the
CEO and the cabinet. You’re going to need people to handle internal
communications with the rest of the staff, external communication,
newsletters, websites, all those kinds of things, press releases. And then
just the day-to-day clerical type support. So, you need to think about,
going into this, whether your staff has the time and the expertise to do
all of this.

I want to spend a few minutes talking about campaign volunteers
because this is, as I said, the most important critical thing to me. And
I’ve kind of outlined already who is typically on a campaign cabinet
usually are the chairs of different committees like your different
divisions. And the divisions are all people who are involved in actually
soliciting gifts. Leadership, small business, major gifts, whatever
categories you might have. But there are also some people that you’ll have
on your committees that maybe aren’t involved so much in direct
solicitation, but they’re people who help you plan events, such as the
kickoff and the dedication and recognition events. A capital campaign
usually doesn’t raise money through events. But there are some events that
help publicize the campaign. And those things need to have someone in
charge of them.

So, if you can get volunteers to do those kinds of things, that’s
helpful. A public relations committee to handle some of the publicity
aspects, a finance committee, now, you may have a finance committee when
your board is going to handle this and you might not need it on your
campaign cabinet. Every campaign is structured slightly different.
Obviously, if you’re running an endowment campaign, you don’t need a
building committee or if you have a facilities department within your
organization, you might not need one either. But those are typically some
of the volunteers that are involved.

And I’m going to wrap up just briefly talking to you about the
benefits of doing a planning study. Most capital campaigns, before they’re
ready to be launched, really benefit by doing a planning study, or some
people call it a feasibility study, for several reasons. It helps you kind
of pre-sell the campaign and attract key leadership. People love giving
advice. You know the old saying, ‘If you ask for money you get advice and
if you ask for advice you get money.’

That’s kind of what the planning study does. It’s where you engage a
consultant to go out and interview people in your community, whatever your
community is, whether it’s national or regional or local, and find our
whether your case is strong. Do you have a compelling case for support? And
are people going to really get behind this? We’re asking people during this
study whether they would, first of all, give to this, whether they would
get involved as a volunteer, whether they know other folks who we should be
talking to.

So, the planning study, to me, in almost every case, can really
benefit your campaign. Now, I’ve run some campaigns without the benefit of
a planning study, but usually only when there’s a very compelling reason. I
once did a $7 million capital campaign and we had three people who were
chairing it and they had all agreed to give at least a million dollars
before we started. So, we had half the money in our pocket before we even
started recruiting people to serve on the campaign cabinet. So, sometimes
you don’t need it. But for most organizations, the planning study is really
another essential component.

So, I’m going to turn it over to Jay. In the meantime, I’ll look
through the questions that people have so far for me so that when we get to
Q&A, I’ll be ready to answer them. So Jay, it’s all yours.

Jay: Well, thank you, Linda. We’ll get to those questions with no problem
at all.

When you talk about a capital campaign, the tools that really help,
and Linda alluded to this a little bit earlier, the effective use of a
donor database really makes the campaign goal-achievable because it’s going
to give you your game plan or your project map that will take you to that
ultimate goal. And when I talk about an effective use of a donor database,
what I’m really referring to there is simply everyone using it daily to
build relationships.

We so often think about a donor database as being just these record
keeping tools. But in this day in age, particularly with some of the larger
campaigns that people are involved in, it really has to be more of what we
refer to as a constituent relationship management or a CRM, where it will
manage and let you track all the communication that’s going on between your
constituents and yourself and your staff and your volunteers. And, what has
happened in each of those relationship building steps that come into play.

I think the best way for me to share that is to share a little story
of myself here because I have been involved in many campaigns from the
technology standpoint. I’ve also been involved on many boards that were in
campaigns. But I had the opportunity about four years ago to chair a
capital campaign with my wife. And this was quite the learning experience
because it was building a new facility for one of the branches of the
Indianapolis YMCA. Little did I know that this $4 million campaign was
going to be such a heavy lift. As I researched a little bit, I still took
it on because I thought, ‘This is going to be a perfect case study for me
to talk about later.’ And it really did truly end up being that.

They had no prior records of the people that had donated to actually
build the building when it was first created about ten years earlier. So,
that pointed out that we were going out after first gifts, rather than
taking people that had a tradition of giving and upgrading those folks and
moving them up into higher levels in one way or another.

It also meant that we did not have any record of the communications
and how the relationship had been built. So, the key thing we did not have,
we did not know who the connectors were. Who were the human beings that had
brought them in to begin with? Who had been communicating with them?

And Linda, I’ve got to tell you, your slides are right on. If it had
not been for the volunteers that stepped up, this campaign goal would have
never been reached because we did not have all of the appropriate tools to
make it come to life. But the volunteers, and I’ll have to congratulate my
wife very strongly on this too, they, literally by brute force and effort,
made this come to life and made this happen for us. And it was a really
good ending to the story. But it was not without its hardships along the
way.

So, let’s talk a little bit further about these capital campaign
tools. And I mentioned something that everybody can use. And the keys to
that is it has to be something so intuitive that if your volunteers are
involved or even more so your executives are involved and maybe members of
your board, they’re not going to go through days and days of training to
make something like that come to life. If it’s not where they can just sit
down and start using it and using it on different types of devices, that’s
not going to happen.

You also need a tool that helps bring best practices to life. So, you
can see what would be the appropriate steps in building a relationship and
what are some of the ways as far as communicating with people and doing it
like Linda alluded to. Making sure that everything is personalized to the
n’th degree. And truly, once it’s in place, that it’s a tool that all of
the executives and fundraisers feel like they could not live without. They
really could not do their day-to-day job without that tool in place.

Once that tool is in place, I really believe the lynchpin is the
engagement. And those of you that are not old enough to realize what a
lynchpin is, it’s used figuratively to mean someone or something that holds
the various elements of a complicated structure together. And I really
think as you’re talking to people about capital campaign gifts and major
gifts in general that the amount of engagement that you have with those
people is the lynchpin. Because without high levels of engagement, you are
not going to reach success in those areas.

Engagement tracking is knowing the level and progression of an
engagement for any prospect relationship is key. One of the questions I
pose in sort of a rhetorical manner is, ‘How do you go about doing that?’ I
ask that question a lot myself to people like Linda and truly involved two
very well-known experts in that arena. Dr. Adrian Sargeant is our Chief
Scientist here at Bloomerang and talking about what you do as far as donor
engagement and donor loyalty and getting people in the proper perspective
for making a capital campaign or a major gift come to life. And then more
importantly, having them stay in the fold and being retained by your
organization year after year for that.

And then on the communications side, taking what Linda was talking
about and moving it up to the highest levels, is Mr. Tom Ahern. We work
very closely with him in talking about what type of, for instance, what
reading level should it be? And Steven, if we don’t get very many questions
at the end, store that one back and we’ll talk a little bit about what
reading level your communications should be at in your letters and your
acknowledgements and your thank you’s and your emails-what they should be
and how they should be positioned. Tom’s got some wonderful theories that
we built into the application in order to help you check those to make sure
you bring them to life.

But let’s drop back into engagement here and talk a little bit about,
‘How do we measure engagement? How do we know when someone has become more
engaged and a relationship is being built with them within our organization
and within all of our staff and our board for them?’ Now, you can certainly
point, as you see at the top here with some of the ones that we have here,
their recency and pattern of giving and whether or not they’re giving
outright or doing things in the way of pledges or recurring transactions.
But we also think it’s very important to see how many years in a row
someone’s been or how many years out of the last five or how many years out
of the last ten. Those are particular guideposts toward levels of
engagement, whether or not they’re upgrading or downgrading. Obviously, if
they lapse totally, then that’s going to move their engagement way down.

There are some factors that we can also track that are really good
indicators. Think about whether or not people attend your events or whether
they volunteer in some form or another. Those are strong indicators of
engagement. Some of the best capital campaign gifts and legacy gifts have
come from people that have been lifelong volunteers to organizations that
no one even realized they had the capacity to make that type of gift. And
then on the communications side, being able to track whether or not someone
is even opening any email that you send to them or whether they’re clicking
on the email or forwarding it to other people or unsubscribing. Those
factors all come into play to know whether or not they are engaged with our
organization.

Then this is one I just think is marvelous here and I’ll put my
little star there for it. The inbound interactions. Anybody that comes to
you that comes to your facility and would like to take a tour or places a
phone call or sends an email unsolicited to you. Those are people that are
searching out and wanting to find out more about your organization or have
a question answered. Those are golden opportunities for building the
relationships to the higher levels where this engagement can really happen.

We would define soft credits as stewardship. And this is a real
critical one too. I’ll put a big arrow there for it. What we’re talking
about are people that bring in matching gift employers, bring in funds from
family foundations or other foundations because of relationships there or
if they’re participating in an event with you, you get a good indication of
their level of engagement because they’re getting sponsors for themselves
or sponsors for your event. And all of those were people that are making an
outright donation. But it’s because of their help and their guidance in
making it happen. So, they’re getting the soft credit for that.

And then, obviously, social media. Just starting to see that come
into play. But people that like you on Facebook or say something about you
on Twitter or LinkedIn, etc. That can be meaningful in saying they have got
some sort of a relationship with you.

We make those all come to life. I wanted to just show a couple of
quick screens here in the Bloomerang package here. We make that come to
life here. You can see here that this particular person has an engagement
level. This is a foundation that’s at the cool level. But here’s an
individual that’s moved to a warm. And then as we see these factors coming
into play and all of our different activities, we can actually see people
move into the higher level of hot or on fire. And this is somebody, as you
can see from their giving here, we’ve got a nice change here and they’re
involvement with our organization is just moving upwards in many different
ways. If you looked at Mr. Signarelli’s record here, we can take a look at
that more and sort of a timeline view like you would see on Facebook. And
we can see that there’s a lot of involvement year after year and a lot of
different activities happening. And we highlight over in this square right
here, that I’m circling right now, the ability to see what are the most
significant factors that move that engagement needle back and forth. So, we
can see, in a particular year, these two factors are what move this
engagement needle to this higher level. So, that makes it very straight-
forward. And it’s doing this automatically in the background. As people do
their day-to-day work with the system, it’s moving these meters up and
down. And that’s the beautiful part of having a system that everybody uses,
not just a designated database administrator or a designated operator. It
can make such a difference for that and really make that come to life in a
much, much greater way because of that.

Now, Linda alluded to some different reports that come into play. One
of the ones that I think is very important is what we call the ‘Engagement-
Level Report’, being able to see what level of engagement that they are. We
can see that in this column here when I bring the actual report up here.
So, we’ve got the engagement level. And then our last couple of meetings or
transactions with them. Their lifetime giving and their most recent
transaction.

I would have begged, borrowed and stole to have that in place as I
was chairing this capital campaign and be able to look through and find out
how many different types of meetings have been had with this person in the
past, what type of relationship has been built and, more importantly, what
tradition of giving have they made to your organization. Those people, even
at the smallest level that have had a tradition of giving, will many times
rise to the occasion for the calling of the case statement for a capital
campaign. It can make all the difference in the world.

So, we roll all this up and the last screen I wanted to show you in
the application is what we call the ‘Donor Retention Screen,’ so that we
can see after people have been givers to the organization, how many of
those you retain from one year to the next. One of the beautiful parts of a
capital campaign is sometimes the outreach in the community to bring in new
individuals. It can be a very good acquisition if it’s parlayed in the
press and different types of communications are done properly. You can
bring a lot of individuals to the fold. One of the critical factors to the
success of the organization long-term is keeping those people in the fold
from one year to the next. I’m sure Linda’s got a comment or two on that
she’ll make here in just minute because we’ve both talked about that at one
time or another.

So, we try to bring all of these together in the Bloomerang database
so that it’s the next generation that combines both database and record-
keeping functions with CRM functions, it’s easy enough for people to use
and brings campaign best practices to life.

So, what I wanted to do right now, we’ve got about 15 minutes left,
Steve. Can we open it up for some questions for Linda and myself and see
where we want to go?

Steven: Yeah. It looks like we’ve got a few here in the chat rooms. We
can jump right into it. We’ve got a question from Skip, and maybe Linda can
speak to this since it concerns capital campaigns specifically. Skip was
wondering, ‘What’s an appropriate percentage of annual revenue for
marketing, fundraising and comprehensive campaigns?’ So, I think Skip is
wondering how you would delegate funds between everything else and the
capital campaign. What do you think about that, Linda?

Linda: Okay. That’s a great question. Unfortunately, I think it’s a
hard one to answer. The cost of fundraising has always been a real dilemma
because there are some kind of watchdog or guide dog organizations that
say, for example, I believe the Better Business Bureau says, ‘Your
fundraising cost shouldn’t be more than 35% of your revenue.’ But it’s hard
to put a dollar figure or even a percentage figure to what cost should be
because it depends so much on the organization.

For example, if you’re a university that has a built-in alumni base
and you’ve been raising money for a hundred years or fifty years, you don’t
have to really go out and find new donors. Your percentages to raise money
are probably going to be a lot lower than an organization that does not
have an alumni base to draw from. Let’s say you’re the local food pantry.
You probably aren’t going to be raising a ton of money from people who use
your services. So, your costs are going to be a little bit higher because
you’ve got to spend money identifying donors and starting from scratch.
Maybe you need to make that first initial investment in software and
website design and things like that. So, it’s kind of hard.

One thing that I can say is that it’s been a proven fact that
organizations who invest more into fundraising raise a lot more. A couple
of years ago, the California Community College Foundation did a study and
it’s probably available on their website. I don’t remember the exact
dollars, but I’m going to guess at it. They found that colleges that had
two or fewer employees in their development office were raising something
like $2 million a year per employee. But when they had seven or more
employees in development, they were raising $3 million to $4 million per
employee. So, obviously the more you invest in development, the more you’re
going to raise.

On the capital campaign side, many consultants will tell you that
your campaign budget should be somewhere between 10% and 15% of your
campaign goal. I’ve found that in my experience, a lot of times if it’s a
smaller, locally-based campaign, usually those costs are closer to 8% to
10% and sometimes even less than that.

So, I guess the answer really is that it depends. I know that doesn’t
really help a lot. And I’m going to give you my email address before we
finish this. So, if anyone wants to email me directly and just give me a
little more facts about their individual case, I can probably give you a
better answer on that.

Steven: Okay, great. Linda, one thing that really stuck out to me in
your slides was the importance of a volunteer in the capital campaign. A
good volunteer really can own things.

Jay: I will second that motion, Steven.

Steven: I’m sure, Jay, you’ve experienced that first-hand as well. So,
the question is, how do you energize that person? How do you ask them to be
involved? How do you ask them to really take the reins on that?

Linda: I think that’s a really good question. The way I think is the
best way to energize volunteers is first of all, make sure that they have
all the facts. Make sure you have a compelling case. Make sure that they
get accurate reports of what’s going on. The worst thing you can do to a
volunteer is send them out to see someone and not give them that donor
history that Jay was just showing. I love that chart that shows whether a
donor is on fire, hot, cold. I just think that is the greatest tool I’ve
ever seen in a software package. And that, to me, if I was a volunteer and
I get somebody who’s on fire, I’d be pretty excited about that. If I got
somebody who was a little cold, I’d have to think about, ‘What do I want to
say to this person?’

The other thing I think is really important is that volunteer
training is essential. And if you’re running this campaign by yourself
without a consultant, you might just consider bringing in a consultant to
do volunteer training. If you have a consultant engaged to help you with
the campaign, that will probably be part of the services that they would
provide for you. Most volunteers feel like they just need their confidence
built a little bit. If you can provide the training and all the tools they
need, they’re going to feel like they’re ready to do this.

Steven: What do you think of that, Jay? Was there a volunteer on that
YMCA capital campaign that maybe stuck out in your mind?

Jay: There were multiple ones that did that. First of all, they were
people that were early donors to the campaign themselves. So, you knew they
believed in that. They were just the type of people when they saw that
there was going to have to be further digging and additional work, they
just rolled up their sleeves and said, ‘We’re going to make it happen.’
They were not going to see that it be unsuccessful in any way, shape or
form. In every organization, that’s the backbone of that. They were
priceless. You couldn’t have paid them enough to do what they were doing.

Steven: Great. We’ve got an interesting question from Kathleen. She was
wondering, ‘What percentage of the campaign goal should be generated from
board gifts?’ What do you think about that, Linda?

Linda: I hate to sound like a broken record, but that’s another one
where I think that the answer is ‘It depends’. Some consultants will tell
you that the board should give one third of the goal. I can tell you that
I’ve probably never worked with a campaign, well maybe one, the one where
we had those three donors who were all committed to at least $1 million to
start with. It really depends on the size of your board, on the capability
of your board, on the size of the campaign.

So, again, I think it really has to be an individual thing. What I
would do is really make sure that you do a serious evaluation of your
board. Ask them to make a stretch gift. The most important part about board
giving, whether it’s annual, capital, planned giving, whatever-the most
important part about board giving is that you have a 100% commitment. I
would never, in a capital campaign, go out to anybody in public and ask for
a gift until we had a 100% giving from the board and that it’s at a
meaningful level. And the meaningful level could be very different.

I once worked on a campaign where one of the board members, it was a
small campaign of less than $1 million, but one of the board members made a
$25 gift. And I thought, ‘Surely, I must have missed a few zeros when I saw
the pledge card.’ I said to the board chair, ‘Do you think this is correct?
Should we call her?’ And he said, ‘Trust me right now, that’s a meaningful
gift for her. I don’t want to say anything more about it.’ So, other board
members were giving $50,000 and some were giving $25. But the point was we
had a hundred percent participation. Every board member gave what was
meaningful for them. So, I think that’s the two critical things.

So, look at your board. Based on their annual giving and their
capability and the research that you do, find out what is a reasonable
stretch gift. Remember that they can make it over, usually it’s a three-
year pledge period, sometimes even longer. Focus on the hundred percent and
the meaningful level more than the dollar amount.

Steven: Jay, you served on boards. What do you think about that?

Jay: I’ll add to that. I think a where a good record keeping tool comes
into play. I’m sure it surprises everybody listening that I would say that.
It’s not so much the board gifts from themselves that I would say, but what
they’re responsible for and what their connections have led through. I’ve
usually seen that had been somewhere between one third and 50%, that their
direct connections or their tertiary connections, second and third
connections together come in to create 50% of the goal of the campaign.

What was interesting before we did this YMCA campaign, we did the
employee and staff campaign. I had one of the employees come in that was a
lower-level employee that pledged the equivalent of their entire year’s
salary to this campaign. That person told why to the board. Needless to
say, we had 100% participation at some pretty significant levels after that
presentation.

Steven: Wow.

Linda: It’s funny you said that because I had a client once that did
the same thing. It was a human service agency. It wasn’t one particular
client. But we did the board appeal and staff appeal pretty much
simultaneously. And when the staff report came in and they showed how much
they were raising from basically social workers, several of the board
members said, ‘I think I need to up my pledge. This is embarrassing.’

Jay: It certainly is. And no one meant it to be embarrassing. It just
really appealed to a different part of everyone’s heart and soul on making
that happen for that. There’s no tried and set rule. But I think those two
factors really come into play in making sure that the board is involved
with making those connections happen. Because as you can imagine in this
campaign that I was referring to, with no prior records, those connections
were our lifeblood.

Steven: Definitely. Well, we’ve got time for probably one more question
before we wrap things up. We want to be cognizant of people’s schedules
here as we go on into the afternoon. There’s one question here from Jean.
She asks, ‘How would a $500,000 campaign be treated differently than maybe
a larger goal?’ So, Linda, you kind of touched on levels of capital
campaigns and sort of the goals of those. What do you think of how you
would approach it based on the actual dollar amount goal.

Linda: Actually, the way I would approach it is not much differently
than I would a $500 million campaign because the same structure is going to
work that worked from the top-down to the inside out. The only difference
is that usually a $500,000 campaign can probably be completed probably, I’m
saying, not necessarily but be be completed in a shorter time period
because you’re not after the really, really big gifts. And your scale of
gifts will reflect that. Maybe a lead gift for a $500,000 campaign might be
$50,000-$100,000 as opposed to a campaign with a much larger goal of having
a lead gift of $1 million or more. So, actually, the same principles pretty
much hold true on a small campaign.

Steven: What do you think of that, Jay? Would you approach things
differently based on the actual goal amount?

Jay: Yeah. In fact, for something of that nature, you may not even have to
make it a public campaign. It could be for a very special purpose and see
if this capital campaign can be answered for that by a smaller group of
individuals and maybe save all of the extra effort and the PR work and all
for a larger campaign that you could do maybe in a shorter time period,
maybe just a couple or three years down the road after this one was
completed. This might be the foundation. That might be the organization’s
very first building or their very first service center or something of that
nature. And then you can build upon that a little bit later with a public
campaign.

Steven: Great. Great. Well, we are just about out of time. I want to
give Linda a few moments here. I know she has a special offer for folks who
tuned in today. So, Linda, what have you got for folks here?

Linda: I do. I have actually two books out. One is ‘Capital Campaigns:
Everything You Need to Know.’ And then I have the accompanying work book
that goes with that, ‘Are You Ready for a Capital Campaign?’ And I’m
offering a 10% discount. So, if anyone is interested, you can just email me
and I will make sure that you get the code to get that 10%. My email
address is just [email protected]. There are some other ways that
you can also get in touch with me. So, that’s the offer that I would like
to make.

I certainly want to wish everyone much success with their campaigns.
It’s been a real pleasure to be here with Jay again.

Steven: Yeah, it was great to have you. And Jay, I want to give you a
little bit of time. I know there were some Bloomerang-centric questions
there in the chat room. How can folks find out more about what we’ve got
going on?

Jay: Well, obviously, just go right to the Bloomerang website.
www.Bloomerang.co. Thanks to Steve and all of his wonderful efforts, there
are several outstanding pieces of information there that you can peruse
through. Some videos, etc. There’s a place there that if you’d like to have
someone contact you directly, just let us know and one of the members of
the follow-up team will get in touch with you and see if we can answer all
of your questions first-hand.

Steven: Great. And thanks again, Linda, for joining us. It was a really
great conversation. It was great to have you share all of your knowledge
with us. For those of you who enjoyed this webinar, we’d love for you to
join our next one. We actually have two webinars next week. The first is on
August 14. Fundly is going to join us. We’re going to talk about peer-to-
peer fundraising and crowd funding. It should be really interesting. The
next day, we’re actually going to be talking about non-profit branding and
social media. So, if you visit our webinars page right there on our
website, you can register for both of those. It’s totally free and totally
educational. So, we hope you’ll join us again.

Since it’s right around the 2:00 hour, we’ll end it there. So, I’ll
say a final thanks to Linda. Linda, thanks again for joining us.

Linda: Thank you.

Steven: And Jay, thanks again. And thank you to everyone else who
joined us on the call today. We certainly appreciate you taking time out of
your day. Have a great rest of your afternoon.

Jay: Thank you.

Linda: Bye.

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