October 25, 2020  
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Nonprofit Management


Effective Capital Campaigns

Are you in nonprofit fundraising mode? We provide some great ideas for capital campaigns that get results.

Normal fundraising efforts are hard enough, but sooner or later you will need to launch additional fundraising campaigns for capital expenditures like buildings and equipment.
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Your ability to run effective capital campaigns may determine the long-term survivability of your organization. But are there enough resources in the funding well to cover both operating expenses and capital expenditures?

Probably. The trick is learning how to tap into them, a task that can sometimes feel like drawing water from a rock. However, each year thousands of nonprofit organizations raise astronomical sums from individual donors for things like real estate, vehicles, and other capital items - in addition to the contributions needed to keep the lights on. Here's how they do it . . .

Lay the Groundwork

Planning is the most important part of a capital campaign fundraising. You can't just decide in May that you need $250,000 for renovations in June. It won't work.

Instead, you need to start talking about the need six months to a year in advance. Bring your funders up to speed on the reasoning behind the capital purchase as soon as the need arises. Maybe the addition of a new building wing would give the organization the ability to service clients that are currently being turned away. Or maybe the purchase of an updated computer system would streamline operations and reduce staff expenditures.

Whatever it is, make sure the funders realize the need for the capital purchase and the everyday impact of its acquisition.

Research Real World Costs

Do you know how much your capital expenditure will cost? If it's based on your best estimate, then you have some work to do before you present it to your contributors. It's a virtual guarantee that the project will cost more than you think it will, so do your homework. Get several estimates and add at least 10% for unexpected overruns.

Establish a Timeframe

A capital campaign that drags on and on is a recipe for organizational suicide. Presumably, the purchase of capital is essential to your organization's ability to accomplish its mission. The longer the capital campaign drags on, the less inclined funders are to believe in the capital purchase's "essential" nature. To avoid this trap, establish a timeline. If the campaign reaches its goal by the deadline, great. If not, have a Plan B ready and communicate it to your funders from the outset.

Solicit Pledges

Pledges are the payoff for planning. Suppose you need to raise $60,000 for building renovations. You could do that by asking 100 donors to write a check for $600. For most small nonprofits, that's a stretch. But if you started a year in advance, you could ask 100 donors to pledge $50 a month for the next twelve months. Sounds a little more doable, doesn't it? By leveraging the time factor, it is easier to attract to more donors for big ticket items.

Update Organizational & Individual Progress

You've laid the groundwork, researched the costs, established a timeframe, and solicited pledges. All that is left to do is to diligently communicate your progress.

Donors as a whole need to be kept in the loop about how close the organization is to reaching its capital goal and individual donors need to be appraised of the progress of their individual pledges. It's rare to receive the full amount pledged from every individual, but friendly reminders along the way will help keep the amount you actually receive close to the amount that was pledged.

Related Articles

Want to learn more about this topic? If so, you will enjoy these articles:

Finding Space for a Nonprofit
First Year Goals for Your Nonprofit
Rethinking the Annual Fund
Customer Service in Non-Profit Organizations
Nonprofit Versus For-Profit
Nonprofit Grants
Steps to Start a Non-for-Profit Organization

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