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How To Make Your Capital Campaign Less Risky

Posted: 1/25/2022

Click here to read on NonProfitPRO.

By Amy Eisenstein

It's no secret that when you launch a capital campaign, you'll be trying to raise a great deal more money than you've ever raised before. It's not uncommon for an organization with an operating budget of $1 million to have a campaign goal of $10 million or even more.

Capital campaigns are high-stakes fundraising adventures. Their success is almost always based on raising money from a relatively small group of donors who give large gifts. In most campaigns, the top 10 gifts account for at least half of the campaign goal.

So if your campaign goal is $10 million, 10 donors will collectively give $5 million of that. And taking the example farther, chances are the top gift will be at least $2.5 million.

High stakes indeed. If one of those top 10 gifts doesn't come through, you won't be able to make up that amount in small gifts at the end of your campaign. You'll either have to find another donor to contribute that top gift, or you will have to lower your goal. But don't lose confidence in yourself or your campaign!

Here are two specific strategies can and should be baked into capital campaign methodology to lower the risk of failure and increase the chances of success.

1. Use a Prospect/Gift Multiplier

When planning your campaign, assume that only one in three prospects will give a gift at the level requested. Develop your plan accordingly.

If you know you will need one gift of $1 million for your campaign to be successful, make sure you have three prospects who are qualified to give at that level. For a prospect to be "qualified" you must have good reason to believe that those prospects meet these criteria:

  • They can give a gift at that level.
  • They have a strong belief in your mission.
  • They have a direct contact with your organization.

Create a chart that shows how many qualified prospects you have at each giving level and make sure that you have three times as many prospects as gifts for each gift needed.

Many donors will give less than they are asked for, but by using a multiplier of prospects to gifts needed, you can build reality into your plan and lower your risk of failure.

2. Start With a Working Goal

In the early stages of your campaign, while you are soliciting gifts from your top donors, you should hedge your bets by testing the waters with a preliminary goal that might be lowered or raised depending on the success of those initial solicitations.

Let your top donors know the goal you are working with but let them know that your final goal might vary depending on the results of the early phase of the campaign and other variables in your planning. This level of transparency in your stewardship and communications can instill greater trust among your most important donors.

Then, you can use this working goal for quite some time — until you publicly kick off your campaign. That way, if you are unable to secure the top gifts you were anticipating, you can lower the goal accordingly. And if you have been more successful in the lead gift solicitations, you can even raise the goal.

Putting these two strategies to work greatly reduces the risk of failure for your campaign. They are both standard practices in well-designed campaigns and should be part of your plans if there's a capital campaign on the horizon for your organization.

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