How to Navigate the Start of a Nonprofit Capital Campaign
There are times when nonprofits need to do something. Big. Transformative. And often that requires additional funds raised beyond what is typically brought in each year.
So what to do?
Often the answer for nonprofits – and nonprofit boards - is to launch a capital campaign.
And sometimes, there is an urgency to get the capital campaign moving quickly without a thoughtful planning process completed first.
While it may be exciting to announce what you wish to do for your nonprofit, let’s navigate the four components that should not be skipped in order for the campaign to be a success.
(Check out the whole process in this blog post from February 2023).
1) Clarity Around Your NORTH Star - WHY is the Nonprofit Doing the Capital Campaign
There always needs to be a why (check out this video where I talk more about this).
So let’s start with why are you doing this capital campaign and equally as important – why now?
Why does it matter to your stakeholders and beneficiaries to embark on a new project, build a unit, or strengthen your staff with new equipment?
Be really specific about what that money is for. If you’re about to ask your donors to give beyond what they typically contribute (and sometimes at significantly higher amounts), then you need to be really clear on this answer of why you’re doing this.
And it can’t just be because you want/need more money (check out my thoughts on this subject here).
2) Don’t Go SOUTH - Make Sure Your Leadership is Committed
There needs to be a serious commitment made by the leadership of the organization to make it a success. This includes all of the following individuals and groups.
Executive Director / CEO role MUST ensure they make the capital campaign a priority of their time. Sometimes that could even look like 50-75% of their time dedicated to it. If this person does not demonstrate that the capital campaign is a top organizational priority, then no one else will.
The Board of Directors MUST (again I say that word) be committed to and prioritize the campaign. This means all members should make some type of financial commitment (unless there are special circumstances). Beyond the financial commitment, members should be available to attend additional meetings, provide additional guidance and introductions to people in their network and even attend donor meetings (if they are not already). Other donors will look to the board to see what they are doing first, with an expectation that the board leads by example.
Other Department Leads (like marketing, HR, accounting, programs, database, etc.) should also be thinking about how they can help to achieve the financial goals of the capital campaigns. Could that be developing new branding for the campaign? Could that be budgeting for additional administrative support? Could that be tracking campaign data in a new way in the database? The rest of their teams will only prioritize the capital campaign if their boss does.
3) Prevent a Wild WEST of Receiving Gifts - Enact A Gift Acceptance Policy
Have you ever been in the role of receiving a large new gift to your nonprofit but you have some questions about whether or not to accept the gift? Maybe it comes with a lot of strings attached. Or it is a tangible asset that will be hard to sell immediately. Or the donor has some controversy attached to their name and you’re not sure it is a good idea to have their name listed prominently on your donor lists.
This is why you need a gift acceptance policy. This is a document that outlines what types of gifts the nonprofit will accept and what kinds they won’t.
Perhaps this provides limits on restricted gifts.
Perhaps this outlines naming rights guidelines.
Perhaps this outlines what type of tangible assets are accepted.
While all scenarios cannot be covered in a policy (especially when starting from scratch), outlining guidelines, who are the decision-makers and advisors, and outlining the process will make your future decisions much easier for all parties involved and help the nonprofit for long-term financial success.
4) Last But Not LEAST - A Feasibility Study is Done
A feasibility study is when a nonprofit organization performs a set of organized conversations with donors, potential donors, and key stakeholders to discuss:
what the capital campaign will be for,
what the person thinks of the plan,
if the person wants to be involved (and what the financial level they would consider),
and asks who else to speak with about the campaign.
What makes the feasibility study so critical for success of achieving the financial goals, is that it provides real data to help guide the campaign’s next steps. If the people spoken to provide support and optimism for the campaign and indicate they want to move forward, then the nonprofit would be much more confident about their plans. Alternatively, if there is a lot of pushback and hesitancy, then this might mean the goal is too ambitious or doesn’t have enough clarity about a path to success.
And don’t you want to know that before you start so you can make changes and not when you’re a couple years in?
Need help on these components to make your capital campaign a success?