(Part 1 of 2)
Is your nonprofit feeling cramped at your current location? Are you spending too much money on rent? Are you refusing service to potential clients because you don't have the physical space to accommodate them? If you answer "yes" to any or all of these questions, it's time to begin thinking seriously about mounting a capital campaign.
the thought of raising a lot of money in a relatively short time for capital
improvements gives you pause, here's a word of encouragement: it is easier
to raise money for capital campaigns than for annual funds. That's right:
bricks and mortar campaigns are "money magnets!" Why? First,
capital improvements are tangible: imagine a major donor marveling at
the beautiful lobby of your brand new building and thinking to herself:
"My $100,000 helped pay for this!" It's easier for a donor to
get his or her mind around a capital gift than an unrestricted gift.
1: Make the case for capital improvements.
Step 3: Determine the financial and organizational feasibility of proceeding with the campaignYou are now ready to conduct a feasibility study to determine whether to go forward with the campaign. Nonprofits usually hire consulting firms to conduct feasibility studies, though there are certainly instances in which the study has been done by a staff person (usually the director of development). The principal value of hiring a firm is that the folks who are interviewed for the study will often be more comfortable and forthright in talking with an "objective third party" than with a staff member.
The typical feasibility study involves 30 to 40 interviews of current and past board members, current and past staff, donors, volunteers, clients and other "organizational intimates." The person leading the study will also conduct formal research on those grantors (foundations, corporations, religious grantors and government agencies) that are the "best bets" to make grants to the campaign.
The purpose of the interviews is five-fold:
A feasibility study "passing grade" means that your community appreciates the work of your nonprofit, understands the value of the proposed capital improvements, and has the financial resources to put the campaign over the top, and that your organizational infrastructure is sufficient to handle the rigors of a capital campaign. E.g. - "In preparing the feasibility study for the proposed new children's wing of the Happy Valley Library, Zimmerman Lehman interviewed 38 men and women, including past and present board and staff members as well as current donors to the library. We also identified eleven foundations that we believe would be interested in making grants to the library campaign. It is our considered opinion that the Happy Library can indeed raise the $3.5 million that it will require to build the children's wing through individual donations and grants."
4: Assemble a capital campaign committee.
If your campaign is to succeed, you must prepare a handsome document that communicates the case for the campaign. The case statement contains four elements:
One of the most noxious myths in the nonprofit world is "If our written materials look too good, donors will think we're spending too much money on these materials and not enough on programs." If you are to make headway with your capital campaign, you must convince donors and grantors that your organization is a serious "player." Nothing communicates this seriousness like a case statement on high-quality paper that boasts attractive photographs and imaginative design. Scrimping on the case statement is a classic case of "penny-wise, pound-foolish."
regard to recognition opportunities, capital campaigns provide a marvelous
opportunity to honor donors by naming buildings, wings, rooms, etc.
Do not take this lightly: some donors will be at least as interested
in having their name emblazoned in your atrium as they will be in supporting
your worthy cause. Give donor recognition the time and imagination it
The "engine" of most capital campaigns is major individual gifts. Capital campaigns should be "front-loaded;" that is, you will succeed if you get an impressive number of large donations early in the campaign. Foundation and corporate grantors almost never make grants at the beginning of capital campaigns. They insist on evidence of community support before they're ready to commit. Nothing says "community support" like significant individual donations. Also, more modest individual donors-solicited by mail or e-mail-will make contributions once they see that their "big brothers and sisters" have made large gifts.The capital campaign committee must therefore hold a brainstorming session to locate those men and women who might make major gifts. Categories of prospective donors include:
A note about this last category: major donor solicitation only rarely involves strangers. It is much more important to solicit "known quantities"-folks who have made donations to your organization, are "intimates" of committee members, or do business with your nonprofit. Focus on these categories before approaching strangers.
Remember: "Charity begins at home." Prior to soliciting major individual gifts, each member of the capital campaign committee must make a capacity gift. Obviously, "capacity" means different things to different people: for some folks, $250 is a stretch, while others can comfortably give $500,000. The chair of the committee must visit or telephone each committee member and ask for a donation. Capital gifts are "one time only" contributions that should be significantly larger than committee members' previous gifts to your organization's annual fund (if they have in fact made such gifts). The more the committee gives, the easier it will be to convince other donors and grantors to make sizeable contributions. A corollary: be sure to recruit people to the capital campaign committee who have the wherewithal to make significant gifts. We don't expect that everyone on the committee will be wealthy, but the more money that can be generated by the committee itself the better.
Zimmerman Lehman cannot emphasize too strongly the importance of training committee members in the art and science of major gift solicitation. It would be foolhardy simply to send committee members out on major gift "asks" without training them first. When we conduct full-day trainings for capital campaign committee members, we focus on four things:
the training is over, committee members must get on the phone or on e-mail
to schedule meetings with prospective donors. The committee chair has
an important role in "nudging" committee members to make these
Once your committee has had some success with major individual donors, it's time to submit letters of intent and full proposals to grantors. A staff person or consultant is responsible for doing the research to determine your "best bets" among grantors. In Zimmerman Lehman's experience, most grantors are not interested in capital campaigns, but those that are interested often have the ability to make large donations. It is imperative that the grantor have a history of giving both to organizations in your subject area and to capital campaigns.
We do not recommend that volunteers who serve on the capital campaign committee conduct research or draft letters and proposals. Where these committee members can be helpful is in (a) contacting people they know at grantor agencies in the effort to move your letter to the top of the pile; and (b) meeting with grantor program officers who have expressed interest in your campaign.
preparing letters and proposals to prospective grantors, keep in mind
that these grantors often have vast experience with capital campaigns
and therefore will ask you hard questions. For example, you may be quizzed
on your plans for funding building operations once the bricks and mortar
improvements are complete. One of Zimmerman Lehman's "15 Rules of
Fundraising" is "Specificity is next to godliness." Vague
promises to raise money for building operations will not suffice. Grantors
will expect that you have given a great deal of thought to raising these
funds and that you have specific kinds of campaigns in mind.
Once you've raised approximately 50% of your capital campaign goal, it's time to move from "the quiet phase" to "the public phase." Zimmerman Lehman recommends that you hold a splashy kick-off event to announce to the world that you have exciting plans to erect a new building or renovate an existing one. You may wish to have the event at the building site; the upside is that prospective donors and grantors, as well as members of the press and members of your community, can see exactly what you have in mind. If, however, the site is too dirty, dangerous or otherwise undesirable, there is nothing wrong with holding the event at a local restaurant, community center, or even at the home of a board member or major donor.
The reason to hold a kick-off event is not to raise money on the spot, but to give your campaign a public profile. It is therefore imperative that you invite members of the print and electronic press. Draft a press release and have copies of your case statement handy. You certainly should have a formal program, but keep it short. Likely presenters include your board president, executive director and architect. Make sure, too, that you display architectural plans, as well as a drawing and three-dimensional model of the completed facility.
the event, begin to solicit modest individual gifts via direct mail, e-mail
or telephone. While these gifts will not be large, they have great advertising
value. Major donors and grantors are impressed when they see that community
members of relatively limited means have "stepped up" and made
contributions to your campaign. This will smooth the way in securing those
final major gifts and grants.
you've successfully completed your campaign-on time and in full, we assume!-bring
capital campaign committee members, donors, grantors and other "organizational
intimates" together at the site to party the night away. Be sure
to have a short formal program in which you thank everyone who was instrumental
to the campaign's success. Remember: today's capital campaign donor is
tomorrow's annual fund supporter, so view this as a link in a long chain.
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