As nonprofit organizations grow to meet increased community needs, the leadership of these organizations must often decide whether or not to engage in a capital campaign to raise the necessary funds that growth requires. A capital campaign is characterized as a significant fundraising effort to provide for major institutional needs. Although nonprofit organizations most frequently launch capital campaigns to raise money to acquire, renovate, expand, or construct a building, they often engage in capital campaigns to fund their endowment, purchase needed equipment, or support current expenses. Most capital campaigns involve an intense effort to raise a specified amount of dollars over a specified period of time. Benefits of a capital campaign include funding a one-time need for the organization; strengthening the organization’s fundraising infrastructure; providing additional opportunities for volunteer involvement; and increasing public awareness about the mission and needs of the organization.
Currently in Sonoma Valley, some nonprofit organizations are at various stages of a capital campaign. Sonoma Jazz Plus kicked off its capital campaign in June, with a goal of raising $500,000 by mid-August. Hanna Boys Center is in its first year of a $15 million five-year capital campaign. WillMar Family Grief & Healing Center (formerly WillMar Center for Bereaved Children) launched its Wings of WillMar campaign in June, with a goal of raising $100,000 by the end of September to fund its expanded mission of providing grief support services for the entire family, in addition to serving children and teens. Other local nonprofit boards are in the process of conducting feasibility studies to determine if the time is right to begin a capital campaign.
Before an organization’s board of directors decides to embark on a capital campaign, it is wise for the organization to determine the feasibility of taking on such a large fundraising commitment. Part of a feasibility study includes having the organization identify its case – defining in writing what the organization needs and why it needs it. In addition, the organization’s leadership needs to take an honest look at itself to see if its internal operations are adequate to handle a capital campaign. Also, the organization should determine if there are sufficient individuals, businesses, foundations, and other grant-making entities willing to fund the case. This upfront research to determine a nonprofit’s readiness for a capital campaign will significantly reduce the time and resources required to complete the campaign.
“A capital campaign allows an organization to ‘strut their stuff’ by way of a feasibility study. A study is a perfect opportunity for the organization to gather information regarding their visibility in the community, feedback for support for the project, and affirmation of their ability to raise the funds. The answers to these questions will help the organization in the decision making process: proceed or delay the campaign,” said Madolyn Agrimonti, president of the board of the Sonoma Community Center and first vice chair of the Sonoma Valley Hospital Healthcare District board of directors.
For a nonprofit to conduct an internal assessment of its readiness for a capital campaign, its leadership needs to ask the following questions:
Do we have adequate staff, including support staff and personnel experienced in fund development, to handle a capital campaign?
Is our board strong enough and committed enough to support the campaign with their financial resources and their time to identify, cultivate, and solicit donors?
Does our organization have a positive public image in the community? Do we communicate regularly with our constituents so that they know what we do and how we do it?
Have we developed a strong group of volunteers through our annual fundraising efforts?
Can we identify our top 10 donors who will be leadership gift prospects and the top 100 donors who will be major gift prospects?
Is our Executive Director well-respected in our community and willing to invest 40-50 percent of his or her time to the campaign?
Do we have adequate technology to support a donor database; record multiple year pledges, planned gifts, and matching gifts; and generate reports?
Do we have a budget for donor recognition, communication, training, counsel, equipment, travel, and meals to spend on the capital campaign?
Barbara Cullen, executive director of WillMar Center, said, “Our agencytook time to put key elements into place before we launched our campaign, such as completing a full communications upgrade, including computer systems, customer relations, and database programming. With these tools in place, along with a committed staff, strong volunteer base, and the generous support from the community at large, I know we will reach our campaign goals.”
In determining external readiness for a capital campaign, a representative of the organization or an experienced consultant usually conducts approximately 40 confidential interviews with major prospects to determine the public awareness and the support that exists for the organization. During this external assessment, the organization’s leadership uncovers the answers to these questions:
What are the community’s perceptions of the organization?
How well are the staff and board members respected in the community?
Are the campaign goals clear and realistic?
Is the campaign dollar goal attainable in the specified timeframe?
To what extent are the people interviewed willing to contribute their time and money to the campaign?
The results of a capital campaign feasibility study will enable a nonprofit to clearly state its case for why it needs to raise funds; analyze its potential for fundraising success; establish a total fundraising goal; and develop a timetable and budget for the campaign. If the feasibility study uncovers that the organization will not be successful, then it would be unreasonable for the organization to embark on a capital campaign until changes are made to the organization’s infrastructure, public perception, and prospective donor commitment.
Dr. B.J. Bischoff is the owner of Bischoff Performance Improvement Consulting, a Sonoma firm specializing in building the capacity of nonprofit organizations and government agencies to better serve their stakeholders. She assists her clients with strategic planning, organizational and personnel performance improvement, fund development, and community relations. She is President of Impact100 Sonoma and can be contacted at bjbischoff@bjbischoff.com.
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