Capital Campaigns: Getting Ready to Get Ready

Our previous blog post on capital campaigns looked at the importance of volunteers and existing donors. This post looks at the critical preparation needed for success.

Capital Planning Process

The decision to enter a capital development process – and to continue with it – should be made with great care at every step.  Many nonprofits start with the vision for the project, hire an architect, figure out the price tag, then go raise the money.  But taking on a building project means added expense, work, etc. The nonprofit leadership needs to be absolutely sure that this is the best way to fulfil mission. Upon careful evaluation, the nonprofit finds that what they start hoping for is NOT what they end up doing, and that’s OK.  As Stephen Covey wrote in The Seven Habits of Highly Effective People, “Before you climb ladder, make sure it’s leaning against the right wall.”

Erik J. Daubert, MBA, ACFRE covered several stages that nonprofit leadership should follow to increase their likelihood for success in his training session recently here in Greenville.  Here are some key phases as they were outlined during our day together..

Education and Readiness. During this phase, the Board and staff leadership take a careful look at the need and whether it recommends the project and whether the organization is equipped to undertake it. Readiness assessments, such as this one by AFP, can help as a nonprofit makes this evaluation.

Adequate Fundraising Infrastructure, making sure you have sufficient staff and donor database

Community Needs Program/Project planning. Analyze community needs by looking at the “problem” the building will solve from all angles. For example, one nonprofit might say, “There aren’t enough after school programs,” when the problem is really that kids need a safe and productive place to be from 3 – 6 after school. Looking at it from the latter perspective can provoke different ideas for partnerships, space, and more.

Project Development. Buildings are just tools to do our work, and nonprofits need to consider the details of how the new facility will best enable them to fulfill their missions. Do a PROJECT feasibility study (not a fundraising study) and pro-forma operating budget to really dig into whether or not the project is truly feasible. The decisions should never be, “Hey, here’s a piece of land!” but a space chosen that best suits the work to be done.  The pro forma answers “if we build it, what’s it going to cost for us to run this?”  Then, the nonprofit should develop program planning and marketing plan – how will we use this space? How many people will be in it? How will people be served there?

Project Fundraising.  This is the part of “capital campaigns” that most organizations think about, but this phase will be completed with the most success if the previous steps have been completed thoroughly and thoughtfully..

Fundamental to capital fundraising is the development of a case for support. Developing your case for support is really a process – it is ongoing and changing as nonprofit leaders learn what will most resonate and motivate your community of donors.  The case expression is the product of this process that you can take to specific donors.

Having a gift chart, which breaks the goal down into blocks of gift amounts and the number of gifts needed at each block level, is a campaign planning document. This document highlights how important those top gifts are, because a $1 million gift at the top is equal to hundreds of gifts at the bottom end of the chart.  In fact, a $10 million campaign may mean 953 gifts and 3,812 prospects.  The Fundraising Effectiveness Project ( found that 4% of the donors to a nonprofit give 76% of the money. 89% of the money comes from 14% of the donors, 96% of the money comes from 33%.  So tapping into that small but significant group is essential.

Before beginning fundraising, it’s also critical to conduct a feasibility study to determine the potential fundraising goal.  The feasibility study, in which outside counsel sits down with your top 40 or so potential donors (the number of interviews depending on the scope and cost of your engagement with counsel), assesses the image of your nonprofit, evaluates your case for support, identifies issues that impact fundraising success, identifies potential major donors, identifies and assesses potential top campaign leadership, and recommends a plan of action and timeline.

Through this process, staff keep things moving when volunteers don’t, all while maintaining strong and well-founded fundraising techniques and strategies. Without volunteers, the campaign will not be nearly as successful as it could be. Volunteers must be engaged, give, get others engaged and get others to give.

Facility design.  Often, nonprofits make an error by obtaining full architectural drawings prior to beginning fundraising. Instead, before fundraising, the nonprofit’s leaders should obtain a project diagram, which is a very preliminary initial design.  These concept pictures are “all depends” ideas, because they are based on how fundraising goes and how other parts of the development process go as well..

Project implementation.  Once the fundraising is at a point where the nonprofit can consider it a near certainty to reach the goal, it’s time to begin implementing the project.  These steps include hiring an architect to turn the project diagram into design drawings, selecting a contractor, holding a groundbreaking ceremony, producing marketing materials to promote the project to the general public, preparing for the opening, and then holding a dedication.

Debt is another consideration for implementation. Many organizations use debt in their projects, but this should be done so responsibly.  Organizations should borrow based on what they can responsibly REPAY, not what they can borrow.  Leaders need to make proactive decisions as it relates to capital related project debt and not let what fundraising did or didn’t do affect what is borrowed.

Operational start up.  In the midst of the significant work of fundraising, it’s easy to forget to plan for the significant work of opening.  Leaders need to establish a written plan including tasks to be accomplished and who does what by when.  They should develop check lists for all aspects of administration, personnel and programming in addition to having adequate help and focus to open the facility successfully.

Project stewardship.  It is more important to learn how to say “thank you” than it is to say “please.” In fact, organizations should have a solid program of stewardship well before the capital campaign begins, because this results in more successful asks for the capital campaign. During and after the campaign, stewardship helps to assure pledge collection (the less firm the connection between the donor and the organization, the less likely pledge fulfillment is).

Stay tuned for the next blog on “the power of preliminary.”


More Articles