Ready for a Capital Campaign?

Determining if your organization is primed for success

CDS President David G. Phillips talks through deciding if your organization is ready for a capital campaign.

Does the community care enough to get it done?  Do they want this project or program to happen and are they eager to ‘roll up their sleeves’ and help? These are questions we can answer easily through a Capital Campaign Feasibility and Planning Study. 

The study process typically has a campaign director from our firm come into your community and spend 8 weeks interviewing 100 people personally and surveying a few thousand more with a direct mail survey, and possibly an online survey as well where discreet e-mail addresses are available to us. 

The cost of this study is usually between $35,000-$50,000 plus a few thousand for expenses.  Total cost to get it done: $50,000 or less.  It could cost more if your constituents are spread over a wide geographic range and it costs more to travel to see them, and it could cost less, especially if you are a smaller organization, with fewer potential leaders/donors and a smaller budget with which to work. We can tailor it to fit you and your organization—hence our name! Custom Development Solutions.

Whatever the cost, this is one of those steps that you cannot afford not to take. It would be like a tailor making a suit without taking your measurements. It just will not fit as well, and you will miss lots of data that could help you raise far more money. Sometimes we think to ourselves, I cannot afford to do this. A study is easy to see in that light. Significant upfront costs, without a clear and complete understanding of what we will get and where it will lead. What if the leaders and donors are not excited enough? Ironically, this is one of the best reasons why you cannot afford NOT to do a study. If conditions are not right, you have an opportunity to work to improve conditions and better prepare for the demands of a campaign.

You may have enough funding in ‘cash reserves’ to fund a study. But if not, it might be within reach from a handful of donors who want to help you advance the project. If you can raise that money from a nucleus of committed supporters, and you can envision 100 people who have influence, affluence, resources and interest in what you are doing, then it’s time to engage us to conduct a study.  Otherwise, you need to build community until you can see these things within your reach. 

When considering how to fund the study process, let’s assume you have $25,000 in the bank, yet you need another $25,000 to fund the study. If you like, we can give you some advice on how you might tactfully ask one or two people for the rest of the money needed. I have done this a few dozen times with potential clients, and it made successful campaigns possible when they were at an impasse. I have been able to talk people through it on the phone, and I have physically traveled to join them in asking the potential donor to help make the study possible and to help explain why it is so valuable. In almost every case, we have been able to help find ‘seed money’ with which to fund the campaign feasibility and planning study.

During the study process, if there is limited funding with which to begin the capital campaign, we can often find a willing donor to help provide the funding to begin the process simply by asking a few extra study questions when we realize we are in the presence of very supportive and generous people who get visibly excited as we discuss the project further. If it is appropriate, our campaign director might inquire: You seem very excited about this project, as though you want to see it happen! As I am sure you know, it is costly to begin a capital campaign because there are upfront costs we need to pay at the outset to create marketing materials, and for meeting expenses and travel and support services.

If the study proves fruitful and a recommendation is made to begin a capital campaign in the near term, we are going to need funding to begin. “You mentioned that you were planning to make a generous gift of $250,000 if we proceed. If the board were to determine to move forward, would you consider giving $100,000 at the outset, rather than paying in 5 installments to help provide ‘seed money’ to help make this campaign possible?” Often, that is all it takes to secure the funding to begin.

Questions to answer during a study

I can tell you this.  The money is in the community.  Without question, there are people who could give you many times what you are seeking. With the stock market indexes at their all-time highs, there are a lot of appreciated stocks (tax advantaged for giving low tax basis securities that have appreciated). The questions that arise are these:

  1. Do the people with this capacity to give know about your organization and its work? Do they respect the professional staff and your board leadership? Are your leaders connected to other influential and affluent leaders in your community? Will they introduce you to them?
  2. Do they understand what value your organization brings to the community? Do they really understand, or do they have only cursory knowledge?
  3. Do you have board members, supporters and advocates who are very well-respected who are excited about what you plan to do? Are they willing to support it with their own large gifts, and to help us make connections with others for support?
  4. Can we build a leadership team (which is influential, affluent and will attract the attention of other powerful leaders)? The right campaign leadership team is of the utmost importance. They must be people who will command attention from other leaders and inspire them to give because they are so well respected.

Assessing Campaign Readiness

When completing a campaign feasibility and planning study, we assess campaign readiness by looking for the following four elements which are part of the formula for any successful capital campaign:

  1. A strong and vibrant case for support—the purpose for which you are going to use the funds.
  2. Capable, committed and well-respected leaders who are willing to advocate for you.
  3. Prospective donors who have an interest in the community and better still in the case.
  4. An Effective Campaign Plan—a solid tactical plan based, which is easy to follow yet effective.

Most nonprofits have a strong case for support.  A community leader, though he/she knew little or nothing about the organization before being approached by a social or business peer, would be hard pressed to refuse support for this project because it is so good for the community and the economy.

There are many well-respected leaders and potential donors in your community (and every community), but the question is whether they will get excited and want to see this happen and happen now. 

At CDS, working with us means getting expert help implementing a plan that has proven effective in thousands of campaigns for every kind of organization you can imagine.  If you follow the plan, and you have an appealing case for support, prominent leaders who are admired in the community and capable and affluent prospects, you will succeed—100% of the time. 

As you consider whether to begin readying for a campaign, I would give extra weight to #2 (leaders) and #3 (prospects). If you have those two pillars upon which to build, it is clear that you must have an appealing case—so I would let the presence of having significant leaders and donors in place drive my decision as to when to move forward.  If you think people will get excited and rally to lead and give—you should begin forthwith.  If you don’t think they will care, then you have lots of work to do before you make this investment.

We can help you build a winner if these elements are present.  You have a better sense of that at this point than we do.  After we do a study, we will know within a very tight range what we feel it is possible for you to raise, how long it will take to conduct the campaign and how much it will cost.  At that point you should be poised to move forward expeditiously if things look promising, because the study, like a balance sheet in business, is only a reading at a particular point in time. The evaluation gets stale very quickly.

Is now the right time for you to explore a capital campaign feasibility and planning study? Only you can make that determination. Like many other major life decisions, such as when to begin a family (when we can afford it) it is hard to tell. Some say if you wait until you think you can afford children, you will never have them. Same with a weight loss plan. When is the time to begin? Are you ready; and how can you tell? What about making a job change; is now the right time, or would it be better to wait? The human psyche is pre-programmed to be cautious and not to proceed if there is a possibility of failure, or of financial loss. Yet, if we are too cautious, we will never get up on the high dive and take the plunge. And, if we never begin something ambitious, we never accomplish anything noteworthy or breathtaking.

If you need help jumping out of the plane, call a jump instructor at a flying school. If you need help preparing for an ambitious capital campaign, call us here at CDS. We will help you ensure your parachute is packed properly and that you will have an exhilarating campaign jump and a safe and successful landing. Good luck.

Give us a call at (843) 971-8801 today. We can share some concrete examples. Only you can tell whether you are prepared to make the investment in this very important research.