De-Mystifying Capital Campaigns – Spring 2023
By Sharon Danosky, President

Probably nothing entices or scares boards more than the thought of a capital campaign. They are enticing because of the potential inflow of capital. They are frightening because they are unlike other fundraising efforts and require a structure and methodology that are unfamiliar to most boards. It also can be daunting because most development professionals, as skilled and accomplished as they may be, have never undertaken a capital campaign. So it may seem a little like steering a ship without a rudder…but, first things first.

Why do a capital campaign? Capital campaigns are undertaken when there is an urgent compelling need to raise significant funds for a specific purpose:

• Urgent compelling need: leadership of the organization needs to identify and address one or more critical aspects of their organization in order to continue providing vital services aligned with its mission. This does not mean building reserves for operations or trying to make up for a budget deficit that has occurred over one or many years. It is a need that is forward-looking and visionary.
   
• Significant funds: the organization needs to raise money above and beyond its annual operating revenue or budgeted revenue
  
• Specific purpose: the organization needs to have a compelling purpose for which it is raising these additional funds and a thorough explanation for why it is necessary. This means having a clear vision, something you want to aspire to. In capital campaigns, we often speak in terms of donors giving to lofty visions, not needy organizations.  

How to begin a campaign?

To start a campaign you need to be able to articulate why you are raising funds and how they will be used. That is pulled together in something called a Case for Support (which we will review in an upcoming newsletter). Then you need to perform in-depth donor research and develop a strong prospect pool to support your initiative. 

Selected donors will be interviewed to gauge their interest and provide feedback about the reason you are raising additional money. They will also be asked whether they would be willing to support this campaign and the range of support they might provide, should you move forward. That interview process is called a pre-campaign study or feasibility study.

A feasibility study is usually performed by an independent consultant because of the objectivity it affords and does four things:

1. Evaluates your organization’s internal readiness to take on a campaign
2. Tests your case for support and your funding priorities – will donors support it?
3. Assesses the funding potential – how much money can you raise?
4. Engages your key donors early in the process.

There is an old adage in fundraising: “If you ask for money you get advise; if you ask for advice you get money”.”  A feasibility study is the ultimate advice-asking methodology.

If the feasibility study goes well – what next?

If the feasibility study demonstrates that you have sufficient support for your initiatives, then the campaign can move forward. The first order of business is to establish a campaign infrastructure which includes setting up a Campaign Cabinet, training your volunteers how to raise funds, drafting gift policies, creating naming opportunities if applicable, developing prospect lists, preparing pledge forms and donor tracking sheets, and solidifying board pledges. You will also want to do some kind of notification to your donors who participated in the feasibility study — they will be your first donors to the campaign. Danosky & Associates prefers to do this with a reception for the feasibility participants either in person or via zoom.

With the above in place – you are ready to enter the Quiet Phase of the campaign where over 60% or more of your funds are raised. This is the quiet, one-on-one solicitation of your donors. No publicity, no fanfare – just personal meetings asking your donors to support your initiative. The quiet phase may last 6-24 months, depending on how many donors there are to solicit.

The public phase is the last phase of the campaign – and some campaigns never go to a public phase because the funds are raised in the quiet phase – which, to me, is a wonderful thing! A public phase is right for a number of organizations, but not for all. At the end of the day – a campaign is about raising significant funds, not about generating publicity. And you don’t need publicity to raise money from your most generous donors – you really just need a compelling vision.

Should We or Shouldn’t We?

The decision to enter into a campaign is really dependent on whether there is an urgent, compelling need. There is no right or wrong time to enter a campaign. In 2008, many campaigns were shut down out of fear of not being able to raise funds. Those that did not shut their campaigns down did very well – a very valuable lesson learned – especially for those who delayed their campaigns. The same fear occurred during the pandemic, but that time most consultants advised against closing down campaigns and pivoted. I launched several campaigns during the pandemic – and all performed beautifully in a virtual kind of way. It really comes down to whether it is the right time for your organization.

One last thought – campaigns require an organization’s full focus. They are time-consuming and intense. They are also exhilarating and can transform an organization in a significant way and build lasting relationships with your donors that can impact your organization for years to come. 

If you are considering entering into a capital campaign, please call Danosky & Associates for a complimentary consultation.