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Capital Campaign FAQs

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General Capital Campaign Questions

What is a capital campaign?

A capital campaign is an intensive fundraising effort designed to raise a specific sum of money within a defined time to increase the capacity of an organization to carry out its mission. You can use a capital campaign to raise money for projects that require an infusion of capital. These might include brick-and-mortar projects, equipment, new project startup funds, capacity-building projects (to increase efficiency), and sometimes endowment investments. Learn more in our ultimate guide to capital campaigns.

What is included in a capital campaign?

A capital campaign can raise money for:

  • land acquisition
  • new buildings
  • renovation
  • new project start-up
  • endowment

Additionally, the cost of the campaign itself is typically included.

What is a capital campaign used for?

A capital campaign is used to raise money to increase the capacity of a nonprofit to carry out its mission. Capital campaigns usually have large goals, often 10 times or more of the funds raised annually by the nonprofit. They are carried out over a period of 2 to 3 years or more.

What is a comprehensive capital campaign?

A comprehensive campaign combines all of an organization’s fundraising over a set number of years. These overarching campaigns include capital projects, other capacity-building projects, annual fund revenue, and endowment.

What is a successful capital campaign?

A successful campaign is one that raises all the money possible for a specific project or cluster of projects over a particular period. Successful campaigns strengthen donor relations, springboard the organization to a new level of operation, and increase the organization’s focus on major gifts.

How do capital campaigns work?

Successful capital campaigns raise money by approaching donors who are committed to the organization’s mission for large gifts that will be invested in the organization’s growth. Capital campaigns occur only once every 10 or 15 years when an organization is ready to invest to reach the next level of operation.

How do you run a capital campaign?

Most campaigns grow out of a long-range or strategic plan that outlines a plan for the future of the organization. A successful campaign requires careful planning and execution. Most campaigns take between 3 and 5 years to complete and require an intense focus on identifying, cultivating, and soliciting the donors who can give the largest gifts.

How much should a capital campaign cost?

Capital campaigns will cost between 5% and 10% of the campaign goal, depending on the size of the campaign goal. Because many campaign expenses are fixed, the smaller the goal, the higher the campaign costs will be when represented as a percent of the goal.

How often are capital campaigns done?

Most organizations launch a capital campaign every 10 to 15 years. That timeline provides enough time to complete the project funded by the earlier campaign, enable donors to pay off their multi-year pledges, and begin planning for the next 5 or 10 years.

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Capital Campaign Timeline

How long should a capital campaign last?

Most campaigns take between 3 and 5 years from pre-campaign planning through the final wrap-up. However, the duration depends on the size of the campaign and the readiness of the organization to undertake a campaign.

What are the phases of a capital campaign?

Capital campaigns are divided into 7 distinct phases:

  1. Pre-Campaign Planning
  2. Feasibility Study
  3. Campaign Planning
  4. Quiet Phase
  5. Kick-Off
  6. Public Phase
  7. Follow-Through

How do you start a capital campaign?

All campaigns start with clarifying a set of objectives for which the money will be raised and developing a cost for each of them. That process leads to a working goal that will structure the campaign.

How do you plan a capital campaign?

Because most organizations only conduct campaigns every 10 or 15 years, on-site staff seldom has the expertise necessary to guide the campaign planning process. As a result, many organizations hire expert advisors to help them develop a campaign plan.

How do you announce a capital campaign?

Once a campaign has raised at least 60% of the goal (and often as much as 70% or 80%, the organization plans an event to announce or “kick off” the campaign. That event recognizes the success of the campaign to that point and lays out the plan for getting all the way to the campaign goal. Kick-off events can be big and complex or simple depending on the size and culture of the organization.

How do you promote a capital campaign?

Campaigns are only promoted publicly after the campaign kick-off. The publicity and promotion are geared to expand the broad base of donors for the campaign. The promotional strategies will vary with the culture of the organization, but many organizations will print material and swag (t-shirts, hats, buttons, etc.) to increase visibility.

What is the quiet phase of a capital campaign?

The so-called “quiet phase” of a capital campaign is that period that follows the feasibility study and campaign planning phases. During this phase, the donors who can make the largest gifts and those closest to the organization are solicited for the campaign. Well over half of the total goal is raised during this phase of the campaign. It is called the quiet phase because the official campaign goal has not yet been announced publicly.

How do you close a capital campaign?

At the conclusion of the public phase of the campaign and after the goal is reached, organizations conduct a celebration event to mark the success and the close of the campaign. While the concluding celebration is publicly seen as the close of the campaign, much work remains to be done to complete the campaign.

How do you complete a capital campaign?

A campaign is completed when all of the donors and volunteers have been thanked, the pledges have been received, and the campaign has been analyzed and documented for the board and the files. An analysis of the campaign and accurate records of the campaign will be a helpful guide for the next campaign.

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Capital Campaign Fundraising

What is capital campaign fundraising?

A capital campaign is an intensive fundraising effort designed to raise a specific sum of money within a defined time to increase the capacity of an organization to carry out its mission. You can use a capital campaign to raise money for projects that require an infusion of capital. They might include:

  • brick-and-mortar projects
  • equipment
  • new project startup funds
  • capacity-building projects to increase efficiency
  • and sometimes endowment investments

What are capital donations?

Capital donations are gifts made to a nonprofit from a donor’s assets. They might be gifts of cash, securities, real estate, or other assets.

How do campaigns raise money?

Money is raised for capital campaigns through one-on-one individual solicitation of large gifts from individual donors, foundations, and other sources. Though most campaigns end with broad-base fundraising, most of the money given to a campaign comes from large gifts solicited through an individualized approach.

How does a nonprofit raise money for a building project?

Money for a building project often comes from varied sources. Many nonprofits combine several funding streams to cover the cost of a building project. Those might include:

  • cash reserves
  • loans
  • revenue from the sale of the current property
  • government grants
  • foundation grants
  • and revenue raised through a capital campaign

Where does money raised for campaigns go?

All campaigns should have a set of specific campaign objectives included in the campaign plan that is approved by the board. Money raised through the campaign should be designated to the objectives spelled out in the campaign plan.

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Capital Campaign Components

What is a capital campaign plan?

A capital campaign plan is a written document, approved by the board of directors, that spells out the various aspects of the campaign, including:

  • campaign objectives
  • dollar goals
  • policies
  • donor recognition plan
  • campaign timeline
  • communications
  • staffing

How do you determine a capital campaign goal?

Most capital campaigns raise money for a combination of specific objectives. Those often include a building project, new program startup funds, board-restricted reserves (quasi-endowment), and costs of the capital campaign fundraising effort.

How do you write a capital campaign case for support?

A case for support is a document that literally makes the case for why a donor should support your capital campaign.

To write a case for support, begin with a simple outline that states why raising the money will matter for the community you serve, the specific objectives of your campaign — what you are going to spend the money on, the background of your organization, and why it is well-positioned to do the project, why the project is important now, and a call to action.

Once you have an outline, you can create a draft of your case for support. Be sure to get feedback on your draft case from leaders in your organization and revise until you have a draft everyone is pleased with.

What information should you include on a campaign pledge form?

A campaign pledge form should include space for the following information:

  • Name(s) of the donor(s)
  • Address
  • Email address and phone number
  • Amount of the commitment
  • Payment plan (Number of years or quarters)
  • Other instructions for pledge reminders

What does a capital campaign consultant do?

Capital campaign consultants provide advice and guidance to nonprofits as they plan and execute a capital campaign. Because campaigns occur infrequently, many development staff need expert guidance when planning a campaign. Experienced consultants work with staff and volunteer leadership to shape every aspect of a campaign to increase the likelihood of success.

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Feasibility Studies

What is a capital campaign feasibility study?

A campaign feasibility study is actually a planning tool. It seldom determines the actual feasibility of a project, but rather indicates the level of support you might expect from a campaign to raise money for a specific project or set of projects.

Feasibility studies are based on a set of interviews with potential lead donors and opinion setters that discuss a specific project and campaign plan. The interviews are used to assess the donors’ interest and potential commitment to the project. Interviews are conducted either by an outside consultant or by the organization’s leaders.

What is a Guided Feasibility Study?

A Guided Feasibility Study is a new model developed by Capital Campaign Toolkit. In this new model, experienced campaign advisors guide the organization but leaders from the organization conduct the interviews. This new model provides transparency and clarity that makes the process more effective.

How do you conduct a feasibility study for a capital campaign?

Though you can do leadership-led interviews on your own without the aid of an expert consultant or advisor, a feasibility study requires an outside expert to plan the process, assess the information gathered, and develop recommendations. Working with an outside expert ensures that the process is conducted properly and that the recommendations will be credible.

Can you run a capital campaign without a feasibility study?

If you already have enough lead gifts committed that you are quite certain of how you can get to your goal, then you can run a capital campaign without a feasibility study. If, however, you are unsure of where your lead gifts are and whether you will be able to secure them, then it is wise to conduct a study.

In most cases, a feasibility study is a good idea because it will not only give you important information on the potential of your campaign, but because it will engage the donors who are likely to make the largest gifts to your campaign.

How much does a capital campaign feasibility study cost?

The cost of a feasibility study varies widely depending on the kind of firm you hire, the number of people you interview, the location of the people who will be interviewed, and the type of study you do. The Guided Feasibility Study model is usually less expensive than the traditional model.

How long does a feasibility study take?

A feasibility study can take between three and six months, depending on its size and the readiness of the organization.

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Nonprofit Endowments

What is an endowment?

An endowment is a term used to describe funds raised by nonprofits that are invested, and the interest generated by the invested funds may be used to support the organization’s operations.

Many organizations have what is called “quasi-endowments.” Those are funds that are restricted by the board and can be unrestricted by the board. A true endowment, however, is restricted by the donor giving the money. For those gifts, the organization must follow the instructions of the donor about how the funds are to be used.

What is an endowment fund?

An endowment fund is money that is invested with the intention of providing revenue for the organization. True endowed funds are set up by a donor with the express intent of being invested to provide income to the organization. In some cases, the donor restricts the purposes for which the income can be used.

A so-called “quasi-endowment” is money set aside by the organization’s board to act as endowed funds. The principle of those funds can only be accessed when approved by a vote of the board.

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