This is the first of a two-part series on nonprofit fundraising in a recessionary period. The first article describes the techniques that ensured the success of one nonprofit's capital campaign. The second article, Fundraising In The Teeth Of The Recession: Learn What Our Clients Have To Say, is based on interviews with staff at 18 past and present client organizations and focuses on how a range of nonprofits have coped in this extraordinarily challenging time.
By Bob Zimmerman (ZimNotes Vol 13 #3 May 2010)
If your nonprofit has been considering launching a capital campaign but you've convinced yourself this is not the right time, think again! The United States is awash in philanthropic contributions even in a recession, and capital campaigns are particularly attractive to many prospective donors. As this case study reveals, a campaign that combines sound planning with enthusiastic volunteers and staff will succeed. The lessons learned in the campaign described here also apply to annual fund and endowment campaigns in tough times.
Zimmerman Lehman readily acknowledges that the recession brings certain challenges with it, but these are not enough to derail your campaign. The most important issue is time: in a difficult period, prospective donors may be reluctant to make commitments immediately. They may prefer to defer their gifts until the following year or to make pledges which ease their immediate financial burden. Thus your campaign will succeed, but it may take longer than originally anticipated.
Study: Davis Street Family Resource Center Capital Campaign
In 2007, the staff and board of directors at Davis Street decided that it was costly and inefficient to continue to pay rent at its headquarters building. It was costing Davis Street $250,000 a year to rent its site. If they could purchase the building, the organization could reduce its monthly overhead and the savings would go directly to expanding services to clients. The building owners were supportive of Davis Street's thinking and their intention to purchase.
In 2008, Davis Street initiated a $3.5 million capital campaign with $2.5 million for the purchase of the land and structure, and $1 million for capital improvements plus a reserve for deferred maintenance.
The committee was ably staffed by the Director of Development, who kept the committee apprised of recent donations and grants, prepared proposals to prospective grantors, and took care of the details of campaign special events.
The campaign was aimed at solicitation of grants and contributions from both private and public sources. While diversification of funding sources is always a good idea, it was vitally important to the Davis Street campaign in a recessionary period. Zimmerman Lehman and the Davis Street Development Director unearthed a wealth of potential donors, including current and lapsed donors, foundations, corporations and small businesses, and friends and colleagues of capital campaign committee members.
1) First and foremost, the campaign benefited from the complementary activities of board members, other volunteers, staff and counsel. Board members and other volunteers stood ready to ask for donations and spread the word about the Davis Street campaign in and around San Leandro. The volunteers depended on staff and counsel to provide them with the written materials and training to ensure their ability to ask for gifts with confidence.
By the same token, the Executive Director and the Director of Development understood Davis Street's mission and programs, as well as the importance of the capital campaign to ensuring the best in service for clients. What they lacked was connections to folks in the community who had the ability to make substantial donations. They therefore depended on the board and other volunteers for those connections, and on counsel to make sure that the campaign "covered the waterfront" and that every prospective donor or grantor was approached in a timely and effective manner. Even those prospects who were unwilling to make commitments immediately asked to be kept "in the loop" with campaign developments.
2) Second, everyone involved with the Davis Street campaign believed that it would be successful. This might seem obvious and a "given," but trust us-it is not. In a recession, many nonprofits fall victim to the mistaken belief that it's impossible to succeed with fundraising because (a) there isn't a great deal of philanthropic money available and (b) we shouldn't "bother" people during a difficult economic time. We believe both that there is a great deal of money available and that, recession or no, people continue to want to make a difference in their communities by supporting organizations that are doing important work.
the "players" in the Davis Street campaign were steadfast in their belief
that there were individuals and businesses in the San Leandro area that
wanted Davis Street to succeed and were therefore willing to pony up the
funds necessary to ensure that the campaign reached its goal. Zimmerman
Lehman built on this confidence by teaching committee members how to ask
for gifts and by supplying them with case statements and other "tools
of the trade," but the confidence came first.
3) Third, Davis Street board and staff members understood that, far from impeding the organization's annual fund efforts, the capital campaign actually enhanced Davis Street's ability to solicit operating and program funds. Many nonprofits worry that capital campaigns will make it difficult or impossible for them to raise money for particular projects and general operations. What Davis Street found was that certain donors and grantors preferred not to make capital gifts, but were happy to make annual fund contributions. The money raised for the capital campaign, then, was augmented by annual fund gifts that were made in lieu of capital campaign contributions. In fundraising, one hand does indeed wash the other.
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