Pros and Cons: Capital Campaigns

Nonprofits use capital campaigns to raise money for large capital projects (construction of a new facility, renovation of existing facilities, purchase of equipment, furnishings, etc.) They use endowment campaigns to build an endowment fund (a reserve fund to take care of emergencies and assure the organization's survival). An organization need not be large to conduct a capital or endowment campaign, but it does need to be well established and financially healthy.

PROS

  • They can raise impressively large amounts of money.
  • They bring new supporters.
  • They can add to your visibility and reputation.
  • They open doors to additional assets and corporate support.
  • They bring together board, staff, and community workers in commitment to a shared goal.
  • Because they have a specific purpose and timeline, such campaigns are intense and exciting.

CONS

  • They are extremely time-consuming for staff.
  • They require computer systems sophisticated enough to keep track of mountains of information.
  • You should not even think about such campaigns until you have worked through all the steps in this guide. For a campaign to be successful, the organization must have a strong financial base, a clear direction, high visibility, donor support, committed leadership, and a team of informed, motivated volunteers.
  • If this is your first campaign, you will probably need to hire a consultant.
  • You can use the funds you raise only for capital or endowment purposes, not operational purposes.

TIPS TO REMEMBER

  • Plan well in advance. Two years before you hold your campaign, begin researching your constituents to determine the feasibility of a campaign.
  • You need a well-thought-out case statement before you begin your campaign. (Refer to the exercises you completed in step 7.)
  • Your organization's image is crucial to campaign success. Step up your public relations efforts.
  • Board members play a big role in a capital or endowment campaign. They must be willing to donate major gifts themselves and spur others to give. If you completed exercises 2 and 3 of step 4, you will have no trouble gaining such support from your board.

QUESTIONS TO ASK BEFORE LAUNCHING A CAMPAIGN *

  1. Do we have enough staff to take on the extra work?
  2. Are our computer, recordkeeping, and pledge tracking systems sophisticated enough to handle large quantities of data?
  3. Is every board and staff member enthusiastically committed and ready to donate time and money to the campaign?
  4. Was our last fundraising effort successful? Were funds raised from a variety of different sources?
  5. Do we have enough money to fund the up-front costs of preparing for the campaign?
  6. Have we developed a long-range strategic plan, with our capital campaign as a key element of that plan?
  7. Does our organization have a strong reputation in the community?
  8. Is our organization financially stable? 

If you can't answer "yes" to everyone of these questions, you need to do some more planning before you start your campaign. 

* Adapted from "Are You Ready for a Capital Campaign?" by Jodi Bender, Nonprofit World.



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