Sometimes, a regular fundraising campaign isn’t enough to support your organizational growth or fund long-term projects. For example, a peer-to-peer fundraising campaign may be a great way to increase giving for an awareness day related to your cause, but it likely won’t raise enough funds to help your organization develop a new building.
That’s where capital campaigns come in. Capital campaigns help nonprofits raise money for larger projects and initiatives, allowing them to engage donors and raise more funds over time.
In this guide, we’ll dive deeper into what a capital campaign is, give examples of situations in which nonprofits launch them, and explore the benefits.
What is a Capital Campaign?
Donorly defines a capital campaign as a “highly strategic fundraising effort that aims to raise a large amount of money over a set period of time.” Capital campaigns typically take place over multiple years and help you grow your organization’s fundraising capacity so you can continue upholding your mission.
There are four main phases of a capital campaign, followed by a few tasks to wrap things up. Let’s explore each of these phases below.
Planning Phase
Start your campaign on the right foot by strategically planning your efforts. AsLike with any fundraising campaign, you’ll develop your goal, create a timeline, and assemble your fundraising team.
What’s unique about the planning phase for a capital campaign is that you’ll dedicate a large amount of time and resources to researching your prospects in advance. Since your campaign will rely heavily on the contributions of major donors, you’ll need to identify prospects and develop plans to cultivate them. That way, you can be confident you’ll reach your fundraising goal.
During this phase, you’ll also discuss your campaign with your board, create a gift pyramid that illustrates the donations you need to reach your goal, and draft a case explaining why donors should support the campaign.
Quiet Phase
Just as the name suggests, the quiet phase occurs “quietly,” meaning before the general public knows about your capital campaign. In this phase, you’ll begin major gift solicitation, building a solid foundation for the rest of your campaign.
While you’ll solicit major gifts throughout your capital campaign, the quiet phase allows you to hone in on prospect research, cultivation, and solicitation so you can secure larger gifts before taking your campaign public.
Kick-Off Phase
As part of the kick-off phase, you’ll host an event that introduces your campaign to the public and generates excitement amongst your supporters.
Your kick-off event may look like anything from a virtual meeting to a formal gala. Regardless of the format, the goal is to provide a smooth transition from the quiet phase to the public phase and answer any questions supporters may have.
Public Phase
With the majority of your major gifts already secured, your team can move on to soliciting small and mid-sized donations during the public phase. This phase essentially acts as a typical fundraising campaign within your broader capital campaign, allowing you to raise funds as you normally would.
For instance, you may host fundraising events, launch a campaign marketing strategy, and update your supporters about your fundraising progress via social media and email.
Completion and Follow-Up
While this isn’t an official phase, you’ll need to wrap up your campaign after you reach your fundraising goal. Demonstrate that you’re following through on the promises you made during your campaign by sending your supporters updates on how you’re using their funds.
It’s also important to thank your donors and the staff, board members, and volunteers involved in the campaign process. eCardWidget’s donor thank-you email guide recommends personalizing your messages and emphasizing stakeholder impact to demonstrate your gratitude. This is especially important for the major donors who contributed.
Why do nonprofits launch capital campaigns?
With a better understanding of capital campaigns, you may be wondering whether it’s time for your nonprofit to launch one of its own. To help you make your decision, we’ll explore common reasons why organizations choose to run capital campaigns:
- To build a new facility. A nonprofit may launch a capital campaign to build, renovate, or expand a building, such as a community center, school, health clinic, homeless shelter, or cultural institution.
- To purchase expensive equipment. Equipment funded through a capital campaign may include medical devices for a hospital, computers and tablets for an educational center, or kitchen appliances for a food bank.
- To establish an endowment fund. An endowment fund allows you to generate sustainable, long-term funding for your nonprofit by investing donors’ contributions. A capital campaign presents the perfect opportunity to establish an endowment fund since you’ll need a large principal investment.
- To expand programming. If you want to reach more beneficiaries by building on existing programming or developing new initiatives, a capital campaign may be the way to go. For instance, a health clinic looking to offer mental health services for the first time would likely benefit from launching a capital campaign.
- To grow your staff. One of the top ways to increase your nonprofit’s capacity is to hire more staff members who can take on the mission-critical work your organization needs to grow. A capital campaign can help you fund the hiring process and adequately compensate new employees.
These examples represent just a few of the many reasons why a nonprofit may launch a capital campaign—but be mindful that you may not need a capital campaign for all of these initiatives. If you’re unsure whether your project requires this type of campaign or not, consider setting up a consultation and hiring a capital campaign consultant who can provide an unbiased perspective on your organization’s needs and lend their expertise.
What are the benefits of capital campaigns?
Besides funding the project or initiative tied to your fundraising goal, capital campaigns provide several benefits for growing nonprofits, including:
- Fortifying internal processes. Since capital campaigns encompass a variety of internal operations, such as goal-setting, marketing, and stewardship strategy, they provide an opportunity to strengthen your nonprofit’s approach to these areas. For instance, through your capital campaign, you may learn how to craft a donation request that inspires action from your specific donor base and apply your findings to future fundraising efforts.
- Engaging the community. A capital campaign allows community members along with stakeholders such as staff, board members, and volunteers to get more involved in your organization and make a larger impact. As a result, they may feel more committed to your nonprofit and motivated to continue giving back to their community.
- Raising awareness of your organization. Chances are, your capital campaign will reach many people, even if they decide not to contribute right away. This type of large-scale fundraising project allows you to spread the word about your cause and expand your supporter base. Use storytelling techniques to appeal to the public’s emotions and inspire them to get involved.
At the end of your capital campaign, you can be proud of the huge undertaking you’ve accomplished and how it has improved your organization’s operations and relationships with your community.
While capital campaigns may seem intimidating, they’re entirely possible for small and mid-sized organizations to take on. Remember to lean on your nonprofit’s full team of staff, board members, and volunteers and to follow capital campaign best practices to set your organization up for success.
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