What is a Capital Campaign?
A capital fundraising campaign was defined by Henry A. "Hank" Rosso, a leading figure in the development of the discipline of fundraising, as seeking: "to raise a specified sum of money within a defined time period to meet the varied asset-building needs of the organisation."
Traditionally viewed as an exercise to raise funds towards "bricks and mortar" type projects, capital fundraising campaigns are also used to raise funds to create endowments, launch or expand services, cover an organisation's shortfall in funding, etc. These campaigns can be stand-alone or integrated with a not-for-profits' annual fundraising calendar of activities.
A capital fundraising campaign is a major undertaking and when conducted carefully and strategically can profoundly influence a not-for-profit's financial status, scope of operations and future. As a major fundraising initiative, a capital fundraising campaign can and should have a transformational impact on an organisation, its culture and stakeholders. These campaigns can also be a very powerful change management tool when designed strategically to achieve organisational development objectives.
Prerequisites to a successful capital fundraising campaign
- A worthwhile and motivating cause
- A convincing and urgent need for funding
- A credible and trustworthy organisation
- Commitment of the CEO, executives and board
- A high profile respected community or business leader willing to lead the campaign
- Community and/or business leaders who are strong supporters of the cause.
Many fundraising text books will supply a much larger list of prerequisites for a successful capital fundraising campaign. However, the above lists what are essentially the mandatory requirements.
It is not necessarily true that an organisation must have existing supporters with capacity prior to the launch of a capital fundraising campaign, although this is certainly the ideal situation and helps to speed the process up. More important is having a mission and a campaign objective that positively resonates with philanthropists and a high profile and energetic leader willing to champion the cause.
The Capital Fundraising Campaign Organisational Structure
The traditional organisational structure for a capital fundraising campaign includes a chairman/president, patrons, ambassadors, chairs of gift-seeking committees, chairs of specific purpose committees (e.g. campaign planning, public relations, special events, etc) and committee members. Each position has a very specific role to play in the implementation of the fundraising campaign.
Whilst the basic pyramidal organisational structure of a capital fundraising campaign has been proven to work effectively, it is not a structure that is cast in stone. It is flexible and can be adapted to suit different objectives, geographic coverage and environmental conditions. Donorcentricity will propose a campaign organisational structure tailored to the specific opportunities and constraints placed on the fundraising task at hand.
Capital Fundraising Campaign Committees
There are internal and external committees that play essential roles in most capital campaigns. Indeed the strength of a major fundraising effort relies on the output of these committees, especially the gift-seeking committees.
The more committees there are, the less formidable the campaign fundraising target will be for individual committees. In the world of capital fundraising campaigns, committees are a good thing!
We work with our clients to set up committees as appropriate to achieve the campaign target efficiently. Donorcentricity will also support the committees by providing guidance to the chairs of committees, organising the preparation and distribution of agendas and minutes of meetings, etc.
The Campaign Planning Committee
This Committee is tasked with ensuring internal agreement about the main campaign strategy and approves campaign materials prior to publication. It will usually include the CEO, board representative(s), senior executives in marketing and service delivery sections of the organisation. The terms of reference for the Committee usually see it disbanded after the campaign materials for the campaign have been finalised.
The Campaign Leadership Committee (or 'Campaign Cabinet')
This Committee normally includes the top campaign leaders (e.g. President, Patrons, Treasurer, Chairs of gift-seeking committees, etc, as well as senior representatives from the organisation). The terms of reference for this committee include assisting with the identification of 'lead gifts', recruitment of campaign leaders and overview of the campaigns progress against fundraising targets.
Gift Seeking Committees
These volunteer committees are vitally important to the success of a capital fundraising campaign or any major fundraising effort that involves face-to-face asks. The number of gift-seeking committees will vary according to the campaign organisational chart, but are generally structured by gift range, geographical area and relevant target audiences. For example, a capital fundraising campaign for a university might include a leadership gifts committee (seeking gifts in the range of $500k - >$5 million), a major gifts committee ($50k to $500k) and a community gifts committee (< $50k). Separate committees might be set up to deal with corporate gifts or perhaps to pursue support from government or trusts and foundations.
Basic campaign strategy
For most major capital fundraising campaigns it is generally worthwhile conducting a feasibility study to help inform a realistic and achievable campaign plan. The study usually involves interviewing face-to-face internal and external people to inform the project with particular emphasis on interviewing individuals and organisations with the capacity of making major gifts. The feasibility study also serves the function of helping to cultivate relationships with key potential donors and supporters.
The beginning point for the feasibility study is a well-researched prospect list. The gift-seeking organisation's own database of donors is usually wealth-screened to identify individuals who are very high-net-worth. Internal supporters, e.g. board members and senior executives are also canvassed for their relationships with potential major donors and for their own philanthropic gifts. Additional research is commissioned to identify individuals with capacity and who have a potential philanthropic interest in the goals of the campaign.
Following the feasibility study a 'Case for Support' is completed which includes the rationale for supporting the campaign objectives (Click here to see a 'Case for Support Template'). This internal document also informs the content of campaign materials (e.g. a campaign brochure, a campaign video, etc).
A capital fundraising campaign follows a sequential and hierarchical gift seeking strategy, i.e. prospects with the ability to give the highest value gifts are approached first and smaller gifts are sought later. Major donations to the campaign are generally sought in personal meetings with a maximum of two gift-seekers involved. Having more than two people "making the ask" can be intimidating, although if the potential donor has their own people in the room then more than two gift-seekers can participate.
The gift-seekers are trained on how to make the ask and use the campaign materials to maximise the chances of a significant gift. A profile on the individual being approached is prepared for the gift-seekers prior to the meeting as are 'Approach Notes' which summarise the meeting objectives and strategy (Click here to see an 'Individual Profile Template' and an 'Approach Notes Template'). Gifts are generally sought as pledges over three to five years to provide tax advantages to the donor and encourage larger donations.
The terminology differs, but campaigns are often split into distinct phases, e.g. a 'Leadership Gifts and Recruitment Phase', a 'Major Gifts Phase' and a 'Community Gifts Phase'. Each phase often involves separate gift-seeking committees. Each committee will have its own fundraising target. This is derived from a realistic target which is set following the feasibility study and the range of gifts required to reach the target is determined by using a 'Gift Range Chart'. There is some debate about the accuracy of such charts, particularly at the top end with ultra-high-net-worth-individuals and multimillion dollar donations, where some fundraisers argue you need many more potential approaches than most charts allow. However, gift range charts remain an invaluable tool to assist with campaign planning and will hopefully be refined over time. See Blackbaud's gift range calculator for an example: https://blackbaud.com/company/resources/giftrange/giftcalc.aspx
The early stages of the campaign is called 'the quiet phase'. This is because it is widely acknowledged that it is unwise to make public the campaign target until at least 50% of the total has been achieved. Again, there is some debate about the validity of this fundraising wisdom and the precise percentage to be achieved. In our view it makes good sense because it allows the target to be tested in reality and adjusted if necessary, either upwards or downwards, without confusing the market. There are other reasons why keeping the target confidential early in the campaign appears sensible. For example, high profile community and business leaders generally like to feel confident a campaign will succeed before publicly associating their names with a project and achieving 50% of the target goes a long way to instil confidence.
A capital fundraising campaign normally takes around eighteen months to complete and will cost in the range of 7%-10% of the total campaign target to implement. This estimate can vary considerably, for example an organisation with a well cultivated pool of major donors can expect to invest less and complete the campaign in a shorter time than an organisation without a ready made list of potential supporters. Also, the percentage of the target to be invested and the duration of the campaign will vary depending on the size of the campaign target. For example, a university conducting a 'comprehensive campaign' (similar to a capital campaign but with multiple fundraising campaigns running under an umbrella theme) may be seeking to raise hundreds of millions or even billions of dollars. These campaigns can take many years to complete and because of economies of scale can require a lower percentage of the campaign target to be invested.
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