Benefits & Best Practices of Capital Campaigns
Whether your nonprofit is preparing for their first capital campaign or if there’s a large fundraising project on the horizon, we’re here to give you the information you need on how to get started!
What is a Capital Campaign?
Capital campaigns are concentrated efforts undertaken by nonprofits to raise funds typically for a specific goal or variety of goals that are vital to advancing their mission. Essentially, they have the goal of raising significant amounts of money over a specific period of time. Projects can include the start of an endowment for a new wing at your healthcare institution or much-needed land acquisition.
While in the past capital campaigns have been reserved for brick and mortar projects, nonprofits from various industries are using capital campaigns to support a variety of projects. Capital campaigns permit the organization to serve more people and have a greater impact on the community. Many campaigns combine annual funds, major gifts, and special project solicitations, and planned giving programs to raise funds for research projects, scholarships, staff continuing education, professorships, community outreach programs, and building endowments. Simply put, capital campaigns can offer nonprofits the resources they need to achieve better results than ever before.
Beyond the obvious financial benefits, there are even more advantages to running a capital campaign at your organization.
Benefits to Capital Campaigns
- Increase Awareness – Launching a large capital campaign to further the aims of your organization is a great way to boost awareness of your organization’s mission.
- Corporate Partnership Potential – There are unlimited opportunities available from the business connections you make during a capital campaign. Corporate partners are great prospects for major gifts. Major gifts can inspire further engagement via those corporate partnerships. Many corporations earmark money in the budget to go towards corporate social responsibility initiatives.
- Strengthen Your Organization – Capital campaigns require an intense amount of time, effort, and coordination, as well as transparency, from of your organization. It is important for nonprofits to have the proper infrastructure in place to support campaign efforts. Capital campaigns can help your organization assess its institutional capacity (their needs and development areas).
- Better Your Board Engagement – Board members not only make thoughtful gifts but are necessary community ambassadors for your capital campaign. During your campaign, they can become re-energized and better motivated to serve. Inspiring one major gift donor often motivates similar support from others.
That being said, it is important for organizations to dedicate time and resources to developing a plan to ensure a successful capital campaign. When developing your plan for a successful campaign, nonprofits must keep in mind the three phases to capital campaigns: the planning phase, the quiet phase, and the public phase.
3 Phases of Capital Campaigns
Planning Phase – Due to the large fundraising goals and length of time it takes to raise this type of money, ensure your team has a well-thought-out, actionable plan.
- Hire a consultant – Because capital campaigns are such a massive undertaking for an organization, they can cause a real disruption to the daily operations of your nonprofit. Nonprofits can get help from a capital campaign consulting firm to assist. Consultants can provide guidance and direction on how to plan your capital campaign.
- Conduct a feasibility study – Through the use of surveys, nonprofits use feasibility studies to gauge whether or not they’ll be able to meet the goals they hope to accomplish with a potential capital campaign. Conduct interviews of 20-50 members of your community and board to evaluate their interest in participating in your capital campaign. Communicate to them your fundraising goal, the different giving levels you’ve identified, and keep them aware of any fundraising events you plan to host.
- Conduct prospect research – Develop a process of identifying promising leads for solicitation. During a capital campaign, your research should focus on donors with high giving capacity to help reach your campaign goal. It’s essential to identify multiple prospects for donation who you’ll need to approach at different levels of giving.
Quiet Phase – During the quiet phase, nonprofits aim to raise 50-70% of their fundraising goal through major gifts acquisition.
- Develop a compelling case for support – Constructing a compelling case statement for your capital campaign is crucial to donor solicitation. The concise statement details: what the campaign is for, the aim of raising the capital, and organizational successes and aims. Include your statement in your capital campaign brochures to leave with major gift prospects so that your campaign stays with them.
- Solicit prospects in unique ways – Major donors, individuals, and corporations receive many proposals. Make sure that yours stands out in a personal way.
Public Phase – Once the capital campaign goes public, the remaining fundraising goal is met by soliciting smaller gifts from a large pool of donors.
- Launch a kickoff event – This is an integral part of launching your campaign’s public phase. A successful kickoff event generates public excitement and gets the public phase off to the right start. Ensure your organization highlights its successes during the quiet phase to demonstrate the likelihood of overall campaign success.
- Social fundraising – Utilize new social fundraising technology to effectively handle the donation of small gifts. Social fundraising is a great way to leverage the networks of your existing supporters to your advantage.
With crowdfunding and peer-to-peer fundraising, nonprofits enable supporters to create pages that specifically raises money for your capital campaign. Donors and supporters are able to share this page across social media platforms in an effort to encourage their friends to give. You’re also expanding your donor base as your supporters share their campaign page to get the word out.