Still Confused by “Capital” Campaign?

Arrows on a chalk board, representing capital campaign questions and confusion

Still Confused by “Capital” Campaign?

When you hear the term capital campaign, you may immediately think of architecture drawings, design plans, and contractor bids. Not so!

While they originated as a brick-and-mortar fundraising method, capital campaigns now serve every facet of the nonprofit sector and refer instead to a multi-year, large-scale funding effort. Anything from programmatic expansions to long-term operating costs, scholarships and endowments, new initiatives, and even technology can be funded through a capital campaign. Research shows that capital campaign fundraising is the most affordable and effective method of funding for a nonprofit organization. However, before launching into a capital campaign, it is essential to determine whether or not your organization is ready.

The Missing Link: Asking Rights

So why do some nonprofits succeed in their capital campaign efforts while others fall short? This is the question Tom Ralser set out to answer in his book Asking Rights™: Why Some Nonprofits Get Funded (and others don’t). Tom explored how some nonprofit organizations have not yet earned the right to ask for substantial investments, and thus lack what we call “Asking Rights.”

Through his experience raising an estimated $1.6 billion over the past 25 years from nonprofits in all sectors including economic development, arts and culture, human services, animal welfare, and more, Tom narrowed down three components a nonprofit must have to possess Asking Rights: credibility, fundraising skills, and outcomes. After mastering these characteristics, a nonprofit can successfully fund its organization through a large-scale capital campaign.

Credibility and Capital Campaigns

Capital campaigns are about earning sizable and, hopefully, recurring investments. Nonprofits who rely on small, one-time donations often have to deal with constant financial insecurity that can stand in the way of achieving their mission. After all, it can be challenging to work towards bettering your community while also having to constantly fundraise for new donations, encourage your board to participate in funding, and guide stewardship of current donors.

This can create a fundraising paradox, as your organization will need to communicate effective credibility before succeeding in a capital campaign but you may not have the time or expertise you need to lay this foundation. Its importance cannot be overstated as it gives you the opportunity to develop relationships with investors versus donors.

Think of it this way—donors might not think twice about smaller donations. They will often write a check at a gala or donate once without asking any hard questions. On the other hand, when an individual or a business is investing five, six, or even seven figures into a cause, they want to ensure that their investment will have a return in their community. Large-scale investors will do careful research into the credibility and outcomes (more on those later) of your organization. So, before launching your capital campaign, you will need to ensure that your nonprofit has fostered credibility within your community, communicating messages crafted to highlight your outcomes and your mission appropriately. Convergent’s Credibility Launchpad helps organizations build this messaging and take the time to connect with targeted current and prospective donors. Our board development services ensure that your board of directors understands and is capable of fulfilling their fiduciary responsibilities as well.

Fundraising Skills for Nonprofits

How skilled and experienced is your staff at fundraising? To have Asking Rights and reach large fundraising goals, your organization will need to forge new funding channels, create and foster a community of supporters, and learn the art of asking for sizable investments. This is in addition to your primary focus areas of responsibility.

If you’re a nonprofit leader or board member, you wear many hats. Overseeing a major fundraising effort should be a priority. In many cases, this is where hiring a consultant may be the right choice for your organization. The return on this investment—having a development expert solely focused on the success of your capital campaign fundraising effort—will be seen in the results of your campaign. If you’re unsure if you have the right people or the right skills to ask for major investments in your organization, Convergent can conduct an in-depth development audit to assess your organization’s current capacity. 

Outcomes and Capital Campaigns

To gain the trust of potential investors and convey your credibility, your nonprofit must first learn how to quantify and communicate your outcomes. Outcomes are the impact that your organization has on the community and/or the constituents you serve. While many organizations focus on outputs—intermediate measures of activity within your nonprofit (i.e. beds filled, meals served, students graduated, etc.)—outcomes can be more challenging to quantify. 

When preparing to hand over large sums of money, investors want to see a proven and clearly defined track record of progress. Convergent often assists organizations through a workshop format on developing investable outcomes and crafting a solid prospectus or case for support to communicate these outcomes in the most effective way possible.

Test Your Capital Campaign Readiness

Wondering if your nonprofit is ready to launch a capital campaign? You can assess your organization’s Asking Rights™ easily in just a few moments through our Fundraising Reality Check. Take the quiz here to get started today or feel free to click here and contact me to talk about your funding goals.

Test Your Campaign Readiness Here

About the author

Amanda Hodge

Amanda brings an extensive sales background and experience in brand development to the Convergent Asking Rights team. Her strategic focus and expertise allow her to provide our clients with in-depth situational analysis and thoughtful recommendations. She offers strategic development and funding expertise for clients and potential clients in Convergent’s Asking Rights pre-campaign services division.