To Dig or not to Dig
Non-profit organizations face many questions as they consider major capital projects. Recognizing a strategic need is sometimes the easiest step. Expansion projects are often funded through a variety of financial avenues: bond financing, government funds, foundation grants and private fundraising. Many organizations such as hospitals and universities must integrate large construction projects into their campuses without interrupting normal operations. Decisions about fundraising hiring, community relations, lobbying—all can be affected by the timing of a capital project.
When private fundraising is part of the equation, the public’s perception of the organization and the project must weigh heavily in the timing of the groundbreaking decision. Organizations must, at the very least, be aware of these complex emotions in the minds of their prospective donors and the general public. In the best case scenario, non-profits will create excitement and momentum by coordinating construction and fundraising in a synergistic manner. If potential supporters feel that the project is a ‘winner’ and that their support is critical, they will offer higher and higher levels of support.
The timing of various elements of the project can have a huge impact on the level of fundraising success. Like a symphony, a good fundraising campaign should build to a crescendo, at which point everyone in the audience realizes they are witnessing a masterpiece. Every movement of the symphony has its proper time and place, in order to achieve the greatest possible result. For a fundraising campaign, the crescendo is the point at which the campaign is announced publicly. With most of the money raised, the organization’s fundraising success is shared with the community at large, and everyone feels optimistic and energized.
For the overall capital project itself, the crescendo might be the groundbreaking, the point at which the capital improvements begin to take shape. Once the bulldozers appear and the hard hats come out, the project begins to develop a sense of inevitability. While this should be a joyous occasion, it can have a deleterious effect on any ongoing fundraising. That very sense of inevitability that raises everyone’s spirits about the project can dampen the further progress of the private fundraising being conducted in support of the construction. The key milestones for the construction should coordinate with the fundraising timeline, in the same way that orchestral instruments work together to bolster each other.
The basic question at play is how an organization views its fundraising efforts. Is fundraising simply viewed as one more source for paying the bills, or is it an opportunity to create stakeholders and offer donors a sense of ownership in the mission? The preferred answer is clearly the latter, and that attitude makes it easier to see how conducting the bulk of the fundraising before construction starts can yield greater results. Once the steel starts to go up, people who are approached for a gift feel that they are being asked to pay for construction that is going to happen regardless of their commitment. That provides them a ready excuse for not contributing, and it devalues their support.
Conversely, meeting with potential leadership donors while the project is still in the design phase can offer tremendous ‘ownership’ opportunities for those individuals. Sometimes, in fact, the more conceptual the plans are, at the time of the first discussions with the potential donor, the better the impression created. A strong solicitation will be more than just a request for a gift. It will be a conversation between the organization and the individual about how the project should proceed. The ability to incorporate a prospect’s thoughts and ideas into the plans can be a tremendous motivating factor. This does not mean that a committee of 20 leadership donors should design the new building. Simply listening and responding to a prospect’s thoughts can garner their support. By consulting with a prospect during the Campaign Feasibility and Planning Study, before architectural plans are complete, your organization can communicate to a prospect, “We’re coming to you before we finalize things. We want your perspective and input.” Who would not feel flattered by such an approach?
In order to reach that ‘crescendo,’ consider holding a ground-breaking at the same time as the public announcement of the campaign. For example, if a hospital plans to add a new building using $25 million of bond financing and $10 million of private fundraising, time all of these efforts so that the financing is secure, the architectural plans have been developed, and $7 million of the private money has been raised. You can almost hear the cymbals crash and the trumpets blare just thinking about it!
It is critical that non-profits make fundraising a central component of any capital projects, and that any donors to such a campaign be given an ownership stake in the result. To do anything less is short-sighted and will ultimately restrict the success of the project and the maturity of the organization’s development operation.