What Is a Capital Campaign?
If you’ve spent any time in the fundraising world, you’ve probably heard the phrase “capital campaign” before. But you may not be familiar with exactly what that means or how to go about creating one. This guide will introduce you to the concept and walk you through the process of planning and executing your own capital campaign. So let’s start with the basics: what is a capital campaign?
At its heart, a capital campaign is a targeted fundraising effort that aims to raise large amounts of funds for a specific project or purpose. You set a period of time, a goal amount, and a purpose for the fundraiser. It’s incredibly common to use a capital campaign for physical spaces, whether that’s building a new building or renovating an old one, but you can also use them for equipment, starting up a new program, or to meet any one-time need in your organization. Generally you’ll be running your campaign for somewhere between six months and a year to raise the funds you need.
Unlike many fundraising projects, a capital campaign is unique because it cuts across departments and areas: you’ll want to put together a committee of people who are expressly committed to working on the campaign. It will include staff members, board members, and ideally some excited volunteers who will help make calls to prospective donors. You may also hire a consultant.
Benefits of Capital Campaigns
With all that in mind, what’s the benefit of a capital campaign? Why would you want to set aside a long chunk of time to fundraise in a way that’s outside of your typical structures? The main reason to use a capital campaign is if you have a specific need for a large amount of income in a specific time. It’s often the only way you can do something like purchase a new building or expand your organization in an important way.
Of course there are other benefits to running a capital campaign: you’re likely to get many new donors and new major donors. People are likely to give more than usual because they can see exactly where their gift is going and feel a tangible impact. You’re also likely to get increased volunteer involvement: a capital campaign is a time specific ask with clear roles for volunteers. That’s a great way to get new people involved more deeply with your organization.
So now that you’re on board to run a capital campaign, how do you actually do it?
Steps to Running a Capital Campaign
As with most fundraising, the first step of any capital campaign is the planning stage. Depending on how in-depth you want to get at this point, it can include any or all of the following:
- Select a goal and timeline: think about the specific project you want to fund and select the amount you need to raise based on that project
- Create your specific budget, including expenses and different gift tiers
- Write a list of potential donors, especially major donors
- Put together your campaign committee
- Write a communications plan and draft language that you’ll use in your outreach
- Connect with your board and educate them on their role in the campaign
- Build a donor recognition plan
Once you have the basic plan in place, it’s time to conduct what’s called a feasibility study or assessment. This is where things start to get real: your feasibility study is where you find out if your organization is ready to run this campaign and if you have the support to be successful. You’ll want to put together a list of questions to help you determine if your community is on board, and then interview all the stakeholders. That includes:
- Board members
- Community leaders
- Staff members
- Major gift donors
So what kind of questions do you ask these stakeholders to figure out if this capital campaign thing is right for you? Here are some examples to get you started, but any questions that ask about your organization’s reputation, the specific project you’re looking to fund, and how the community will respond to the project are good.
- What is your relationship with our organization?
- Are you interested in getting involved in the project?
- What is our organization’s reputation in the community?
- Do you support the project?
- Are there any concerns or questions you have about the project?
- Are you excited for this campaign?
- How do you think our community will respond to this campaign?
- Do you think our goal and timeline are reasonable?
- Do you think there are other projects that we should be spending this money on?
Once you’ve finished your feasibility study, you may end up adjusting your plans slightly. Maybe you want to decrease or increase your goal, change your timeline, or spruce up your communications. And then it’s time for the scary part: actually doing the dang thing!
Generally a capital campaign happens in two parts: a silent phase and a public phase. Let’s take a look at each one.
The Silent Phase of Your Capital Campaign
The first portion of your capital campaign is what’s called the Silent Phase or the Quiet Phase. This is where you spend your time raising funds through major gifts: you won’t be sending out solicitations to your larger donor lists. Instead, you’re going to focus on finding the right people who can make significant donations. What you might not expect about this phase is that it’s actually going to bring in the majority of the money: you’re looking to raise somewhere between 50 and 70% of your total goal.
A lot of the work here will be in personalized phone calls and meetings with people you identified early in the process. These are people who care about your organization and who have the ability to make a major gift. One of your best bets is to target people who have made major gifts before. Of course not all of this work happens offline: there are still some great ways to make use of your online platforms. Setting up a beautiful donation page, a strong “About” section on your website, and an easy to complete donation form will not only help with your major donors, it will also serve you well when you move into the more public phase of your campaign.
What qualifies a good major donor? For starters, it’s someone who is already giving to you. This shows that they believe in what you’re doing and think it’s worth their money. Another good major donor qualification is that they’re willing to sit down and discuss going above and beyond their current gift level. Again, if they’re giving you their time and attention, you mean something to them.
It’s good to remember that most prospects know that when you call for a meeting, that it’s likely about money. If it’s on your radar, it may be on theirs as well.
Other ways to qualify a major donor include:
- Understanding how long they’ve been associated with your cause, and in what capacity they’ve shown support
- Looking at a wealth screening that touches on real estate, job position, family composition, and other philanthropic efforts
- The length of time since they made a gift
- The amount of their last gift
Whatever you do, don’t assume that someone who gives to other organizations or who has the financial capacity is automatically going to throw you $10,000. Major donor cultivation requires a relationship built over time.
One way to make this section of your campaign successful is to have a clear set of goals when you start: how many donations at each level do you need to reach your set amount? If you need 5 donations of $10,000, you can let your potential donors know that you’re asking for that amount because it’s a necessity. Asking for a specific amount is a great strategy: it lets the donor know what you need.
Another important thing to remember is that sometimes a past donor may be ready to increase their gift and start giving more. Take a look at the donor data you have and see who gives consistently or who has increased their donations over time. These mid-level donors may be ready for cultivation into a major donor.
Finally, this is a great stage to reach out to organizations who may be interested in supporting your capital campaign. You can take the strategies you’d use to solicit sponsors for an event and apply to them to your campaign. Don’t forget that their employees are a great resource as well, whether as a source of gifts, potential volunteers, or as a way to reach new companies.
During your planning, you’ll want to set a specific timeline for your silent phase, as well as a specific goal. Once you hit the end of it, it’s time to go public!
The Public Phase of Your Capital Campaign
The public phase of your capital campaign will be the portion that feels the most familiar: it will look a lot like any fundraising campaign that you share with your general donors and audience!
Now that you have a solid foundation for your campaign from the silent phase, you’ll start communicating with your whole community and reach your final goal. This can include quite a few different types of donations and fundraising, and you’ll want to think about each to decide what will work the best for your capital campaign:
- Crowdfunding: no matter what kind of capital campaign you’re running, it will include an element of crowdfunding. Crowdfunding is simply raising a large amount by asking many people for small donations. It’s at the heart of the public phase of your capital campaign, and is a large part of what differentiates this phase from the silent phase.
- Peer-to-Peer Fundraising: Peer-to-peer fundraising is any fundraising effort that relies on peers reaching out to each other on behalf of a cause. Your supporters fundraise on your behalf by reaching out into their social networks through personal and team pages. This is a great element to include in your capital campaign because it allows you to extend your reach exponentially.
- One-time donations: Obviously you’ll want a way for your donors to give on your website or a dedicated page for your capital campaign. That means you’ll want the best possible donation page. Keep in mind that in many cases you want an option for donors to give monthly, but when it comes to capital campaigns that may not be wise. Since this is a time-limited fundraiser, you want donors to make their gift now so that you can use it for your goal.
- Pledge donations: Although the public phase of your capital campaign is focused more on small to mid-level donors, you can still work to increase the size of those donations. One great way to do it is with a pledge donation feature. This function lets donors commit to a gift and pay it off in installments over time. Our data indicates that not only do donors prefer an installment option for donations, but this option would lead them to give larger gifts more frequently.
As you consider how you plan to share your capital campaign and what types of fundraising you’re going to use, it’s essential to choose a solid platform. You want to offer donors one central location they can learn more about your campaign, give a gift, or create a fundraising page if you are running a peer-to-peer campaign. CauseVox has all of these features as well as a pledge donation option, and the ability to add a donation form directly into your website.
Best Practices for Capital Campaigns
Now that you know the basic steps to run your capital campaign, it’s time to fine-tune. You’re a fundraiser and you know the best practices in your day to day life, but what are the tips and tricks that are specific to a capital campaign that can bring you big success? We have six major things to keep in mind when you’re running your capital campaign.
1. Hire a consultant.
While it’s certainly possible to run a capital campaign without hiring a consultant, there’s a reason they’re so popular. A capital campaign is a big undertaking and most organizations will not run them often. That means most of your staff don’t have any experience with this type of campaign. A consultant is someone who has run plenty of capital campaigns and can help guide you through the process
2. Use your board.
Your board is a strong resource during your capital campaign, and it’s a good idea to involve them early and keep them close to the process all the way through. Whether they get involved by donating, reaching out to their connections, or by volunteering, they can be a wonderful asset.
3. Focus on your story and case for support.
Capital campaigns are unique in that they have one specific project and all the funds you raise will go towards that project. When you build your communications, you want to center that project. You can start by creating a case for support. Generally this includes your organization’s history, mission, and vision as well as a description of the project and explanation of why the project is needed. From your case for support, you can build the stories that you’ll use in your communications. In addition to the nitty gritty information about the project, you want to center emotional and personal stories that show what the impact of the project will be.
4. Try a matching gift.
Did you know that 84% of potential donors are more willing to give if a match is being offered? That’s a serious improvement. Try announcing a matching gift during the public phase of your capital campaign to see a bigger response.
5. Create a specific campaign brand.
Since you’re going to be running this capital campaign for an extended period of time, you want it to be something that donors will recognize. But you also want to set it apart from your general donations so that your community knows it’s something special. Create a logo that incorporates or mirrors your general logo, or consider using your brand colors with a unique accent to create continuity between your larger brand and the campaign while still setting it apart.
6. Center donor stewardship.
We all know how important it is to thank donors and to ensure that they feel welcomed by your organization. But during a capital campaign that’s doubly important. Not only are you likely to be reaching many new donors (who you’d like to cultivate into returning donors), you’re going to be spending a lot of time working with major donors. Since they’re giving large amounts, you’ll want to spend more time ensuring that they receive personalized thank yous, updates about the impact of their gift, and continuing communication.
To learn more about how CauseVox can help give your capital campaign a digital home, schedule a demo.
