Nonprofit professionals are no strangers to the importance of fundraising. Like any business, a nonprofit needs funds to continue operating and fulfilling its mission. Capital campaigns are one way that nonprofits can get the necessary funds to reach their goals. This fundraising strategy is often implemented when nonprofits need significant cash flow for a big project.
In today’s blog, we will go over the basics of capital campaign planning for nonprofits. Read on to learn how to launch and execute a successful capital campaign.
What is a Capital Campaign?
According to Kindful, the definition of capital campaign is as follows:
a large-scale fundraising effort conducted by a nonprofit organization in order to bring in a large injection of capital investment.
Unlike other fundraising campaigns, capital campaigns prioritize major financial gifts. Fundraising tactics such as Giving Tuesday often involve smaller giving amounts than a capital campaign would. This is because the main goal of a capital campaign is to raise large amounts of money.
A nonprofit might start developing a capital campaign for many reasons. These could be:
- To increase the scope of their work
- To pay for necessary labor or infrastructure
- To purchase or relocate physical offices
- To fund an expensive project
A successful capital campaign will have a specific goal (or goals) along with a set timeframe for accomplishing these goals. Every successful capital campaign starts with SMART goals. It will also be separate from a nonprofit’s typical fundraising efforts throughout the year.
Since capital campaigns are focused on raising large sums of money, different strategies are required to succeed. Overall, these kinds of campaigns call for more intention, resources, and time than routine fundraising. Let’s get into the need-to-knows for capital campaign planning.
How to Plan a Capital Campaign
A good capital campaign requires a significant amount of planning before officially launching anything. Luckily, there’s a consensus on what needs to be mapped out ahead of starting a capital campaign. To-do’s that you’ll need to check off during your campaign’s planning phase include:
- Conduct a feasibility study. According to Investopedia, a feasibility study is “an assessment of the practicality of a proposed plan or project.” This is an important first step to take in a capital campaign because it’ll give you a good idea of whether the campaign will succeed or not. While it may seem pessimistic, it’s worthwhile to determine shortcomings that could result in failure – before you begin putting in the real work.
- Ensure that you have effective project management tools and guidelines in place. This includes deciding on your campaign’s budget, assigning specific tasks to specific people/teams, and arranging achievable deadlines for projects. Anything that is an essential aspect of project planning for your nonprofit needs to be applied to a capital campaign as well.
- Build up your team: for your capital campaign to succeed, you’ll need a strong, supportive, and collaborative team all invested in the success of the project. Essential team members for a capital campaign are:
- Board members
- Regular paid staff
- Volunteers
- With your team members, you will also need to designate campaign committees that focus on different tasks or goals within your campaign. This is why outlining your goals for the campaign must happen before you designate your committees. Examples of what these committees could focus on might be the planning process itself or completing the feasibility study.
- Figure out who you’ll target to receive donations. Hint: your capital campaign donors will likely be individuals or companies who have the money to spend. We recommend reaching out to potential donors who align with your nonprofit’s mission or could have an interest in supporting your goals.
- Ensure that your tools and assets are ready to go. Is your CRM up to the task at hand? Do you have the proper documentation needed to launch your campaign? When was the last time you updated your website? These are all great questions to consider before starting a capital campaign.
- Make connections with potential donors, community members, or external contractors that can help. With a large financial goal comes the need for more support than you might think. Don’t be afraid to network in your community and see who is willing to lend you a hand. And don’t be afraid to hire outside fundraising consultants – these experts could make a huge difference in your campaign’s success.
And finally, adjust your campaign as needed as you continue to plan – and plan for the unexpected. In a perfect world, all nonprofit work (especially fundraising efforts) would go smoothly. But this is seldom the case, so stay adaptable and don’t let inevitable hiccups wear you down.
The Four Phases of Capital Campaigns
Most capital campaigns can be divided into four distinct phases. These are the planning phase, the quiet phase, the kick-off, and the public phase. Let’s get into some more details on these phases.
- The planning phase involves a lot of the aforementioned elements of setting up your capital campaign and checking your nonprofit’s infrastructure. Diligence is crucial here to ensure success.
- The quiet phase is a fundraising strategy that’s often unique to capital campaigns. Due to the large-scale nature of capital campaign financial goals, it’s best to keep “quiet” until you have between 65-75% of the funds you need. That is, during this phase, you will essentially only work with those potential donors who can supply a majority of the funds you need. Once you secure the desired amount, you can then launch your campaign publicly. The quiet phase can last anywhere from as brief as six months up to a couple of years. Patience is key.
- Kick-off occurs once you’ve secured a majority of the funds you’re working toward and are ready to launch to the public. This will involve a substantial shift in fundraising strategy. To officially “kick-off” your campaign, you might host a large fundraising event to get people excited or do a press release to announce your goal.
- The final (and what should be the shortest) phase in a capital campaign is the public phase. After kick-off, your main focus will be to keep the momentum going and reach the campaign goal quickly. You might ramp up your social media efforts or reach out to past donors. Overall, you’ll work to involve the community at large to help push you over the edge and reach your goal.
Reaping the Benefits of Capital Campaigns
The great thing about capital campaigns is that they can benefit nonprofits in other ways aside from fundraising.
After an organization concludes a capital campaign, they’ve probably simultaneously improved their internal infrastructure out of necessity. This means smoother internal processes, excellent data for future fundraisers, and greater confidence within the development team. Not to mention improved partnerships and community connections. An effective capital campaign helps nonprofits develop long-term relationships with key people in their community that can help them succeed.
Overall, a capital campaign, though an admittedly large undertaking, can be highly rewarding in the end. We recommend mastering the basics before you start planning, and remaining adaptable as the campaign goes on. You and your team will thank yourselves for persevering when all is said and done!
At KSR, helping nonprofits succeed is one of our greatest joys. If you have questions about what we covered today, reach out! We’d love to talk with you.
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