Capital Campaign Fatigue – Real or Imaginary

Category: Capital Campaigns

“Enough. Enough already!” said the capital campaign donor when the performing arts center came back for the third campaign in less than five years.

More and more nonprofit organizations are joining the capital campaign bandwagon. Once the purview primarily of educational institutions and hospitals, capital campaigns are spreading to organizations of all sizes and shapes and in all nonprofit fields. Some organizations, particularly the larger ones, seem to be continuously in capital campaign mode—either preparing for one, in the campaign, or coming off the last campaign and getting ready for the next one.

What is the effect of these campaigns on the donors, volunteers and staff members involved? On the organizations themselves? On our local communities? I believe the effect is significant on all levels and nonprofit organizations are in danger of over-using—perhaps even abusing—a traditionally effective fundraising strategy.

Capital Campaigns Today

“I see a wide tide of organizations that view the capital campaign as a tactic cobbled together by a variety of staff members rather than a compelling idea that grew out of a consensus of stakeholders.Laura MacDonald, Benefactor Group.

A capital campaign is an intense effort on the part of a nonprofit organization to raise significant dollars in a specified amount of time, traditionally for the purpose of acquiring, constructing, or renovating a building. The emphasis commonly is on current multi-year pledges and the funds are usually received within the three- to five-year pledge period, according to Stanley Weinstein in Capital Campaigns from the Ground Up (Wiley, 2003). Often, an endowment drive is attached to the capital campaign, since money must be available in the future for programming and upkeep of the new facilities.

Capital campaigns are no longer focused solely on bricks and mortar projects. In recent years, capital campaigns have been used to fund a wide variety of special projects that will, presumably, permit the organization to serve more people and have greater impact on the community. Many campaigns combine annual funds, major gift and special project solicitations, and planned giving programs to raise funds concurrently for research projects, scholarships, staff continuing education, professorships, community outreach programs, building endowments, and so forth.

Capital campaigns represent authentic and extraordinary opportunities—the big ideas— that require board members, donors, and other constituents to step up to the challenge.They give the institution something concrete to talk about with prospective donors. At their best, they create a new sense of excitement and enthusiasm for major gifts. Capital campaigns give structure, a more focused approach to planning and fundraising, and a system to secure and augment relationships with donors. They permit donors to make lasting, legacy gifts to produce outcomes that help people, both now and in the future.

Or at least that’s what they used to be. Today, many organizations have patched together an amalgam of projects under the umbrella of a capital campaign, hoping that a laundry list of unfunded programs will receive support in a specific timeframe. The campaign purposes often seem artificial and contrived rather than genuine. “Endowment campaigns often emerge from fiscal pressure rather than from institutional vision,” says Tracy Savage at Marts & Lundy, Inc.

Even compelling capital campaigns based on well conceived long-term goals can be risky. The organization may become so focused on achieving the campaign goal that it ignores the donor’s priorities, timetables, and circumstances—and thus misses significant and long-term gifts. Failure to reach the campaign’s financial goal can damage the organization’s reputation in the community and its momentum to move toward the future. A local campaign that does not have a clear vision, appropriate infrastructure, or a well-organized strategy can leave donors with negative experiences that spill over to other legitimate campaigns.

Capital Campaigns in Large Organizations

“As with most universities, there are several capital and special campaigns in progress all the time for particular programs.Shari M. Fox, Director of Gift Planning for the University of Cincinnati

In the university setting, most comprehensive capital campaigns are two to three years in the planning stage and four to five years in the public phase, according to Joseph Bull, formerly at The Ohio State University. Once the goal has been reached and the campaign wrapped up, universities generally take a break from a formal campaign for a few years and begin to plan for the next campaign. “Capital campaigns are important to keep the momentum going,” said Chris Yates, director of Stanford’s Office of Planned Giving.

However, in most large institutions, smaller and special fundraising efforts for particular programs are active even in between the comprehensive campaigns. A local hospital, for example, may not be in a formal campaign, but it is still raising major gifts for a new children’s wing, or an oncology laboratory, or an addiction prevention program, or all three.

Comprehensive campaigns work best when they fold the institution’s highest priorities into one major effort (rather than to approach donors in piece-meal fashion for a new facility, then landscaping for the building, then programs to be housed in the building, and then an endowment to support the programs and the building in the future).

When the campaign continues with a series of mini projects after victory has been declared, donors sometimes feel they were misled or promises (implied or literal) were not taken seriously, according to Jim Gillespie, president of CommonWealth.

Capital Campaigns in Small and Mid-Sized Organizations

“There are lots of organizations doing capital campaigns but for every organization that moves forward with a campaign there are two that decide they are not yet ready.” AJ Casey, Hodge Cramer & Associates .

Small organizations often want to “do” a traditional capital campaign, either for new or renovated facilities or for endowment. Many, however, do not have the infrastructure (donor base, board and staff, long range vision, campaign planning, budget preparation, project identification, cost analysis) in place to take on the task. Such organizations are more likely to be successful if they take the time to prepare fully before launching the campaign or limit the scope of their efforts to a specific project with substantial existing support.

Often, smaller and mid-sized organizations raise funds for special programs or projects but purposely do not call the fundraising efforts “capital campaigns” to avoid scaring the staff or frightening board members. Instead, the organizations might talk about creating a new scholarship fund; or providing support for new books at the library; or funding a new program to reach out to underserved youth; or even building a child and family center. By not identifying the effort as a “capital campaign,” the organization can avoid naming a specific dollar goal or a date for completion. Success can be guaranteed by establishing public benchmarks at a later date and measuring gifts as they are received. Additionally, many small and mid-sized organizations simply do not have the pool of prospective donors nor the staff to run campaigns back-to-back. Some organizations establish a stretch goal internally (for example, $1,000,000) and yet go public with a smaller goal (perhaps $750,000) in order to assure that the goal is attained and surpassed.

Effect on Donors

“I can’t believe they are coming back to us when my wife and I have just paid off the biggest gift we have ever given.Capital campaign donor to consultant conducting a feasibility study.

Organizations run the risk of going back to the same well, without taking the time to cultivate new donors. Donors rebel at being approached over and over again for major gifts by the same organization—even those in which the donors are intimately involved. Donors give to the campaigns that will really make a difference to the causes and organizations they believe in. “Donors continue to do what they want to do,” says Doug Allinger of Allinger & Associates. “They eagerly support compelling visions presented by well-prepared organizations for causes they, the donors, value.” However, some donors feel overwhelmed by the volume and size of requests and some are disappointed by the cavalier attitude of entitlement and lack of vision expressed by the leadership of the organizations.

“In recent years, we are seeing more unprepared organizations seeking funding for ill- conceived capital campaigns.” Community relations director for a Fortune 500 company. Foundations and corporate giving programs have become very savvy and can spot a trumped up capital campaign a mile away. Community relations staff members are wary and weary of pre-campaign studies. They increasingly expect legitimate and compelling reasons for the campaign and articulated measurable outcomes.

We fundraisers must engage our individual and business donors so we fully understand the intent, affiliation, and passion for causes that motivate individuals and groups to embrace our organizations and philanthropy. And we need to respond to the multiple interests of our donors by helping them accomplish their multiple philanthropic goals.

Effect on Staff (Both Paid and Volunteer)

“I instinctively worry about exhaustion at the staff level but I haven’t seen it in reality. Stanford’s capital campaigns force people to sit down every five years and strategically think about the future—and that seems to give the staff and volunteers added energy.” Chris Yates, Director of Planned Giving, Stanford University.

The anticipation of a capital campaign can be motivational and exhilarating for the staff. However, unless additional experienced people are hired, the campaign can be exhausting and discouraging to existing staff members who are expected to continue current assignments (designing and producing direct mail, writing proposals, coordinating volunteers, staging special events, and much more) while taking on the responsibility of overseeing the capital campaign.

The intensity of a campaign or quasi campaign can wear out staff and volunteers. Those most involved in the campaign at organizations that run consecutive capital campaigns can become jaded and complacent if the campaigns are not fresh, challenging, and meaningful. Although the organization may experience a short-term bounce from a newly announced campaign, it may not hold lasting value if it is not genuine and generated by a wellspring of ideas from board and staff members and other volunteers.

For some development officers, involvement in a capital campaign can be a career training ground. One friend who headed up a $4.5 million capital campaign for a Girl Scout council said, “When the campaign was successfully completed, I thought, ‘what’s next?’ I didn’t want to go back to writing annual fund letters.” Frequently, staff members leave after a capital campaign because of burn-out, boredom, recruitment by another organization, or desire to apply knowledge in another setting.

Capital campaigns can take a toll, especially on the CEO, who is expected to continue running the organization effectively, efficiently, and creatively while also spending a large portion of his or her time meeting with groups of constituents and with individual donors. Some institutions time the launch of capital campaigns to coincide with the hiring of a new president, or announce a relatively low campaign goal so it can be raised when the new CEO comes on board.

Effect on the Organization’s Fundraising Program

“Organizations focus on counting gifts rather than developing relationships based on ways in which the organization can help donors achieve their philanthropic goals. Planned gifts end up being ‘counted’ toward campaign goals instead of being ‘accounted for’ as a future interest of a present donor.Christine Isham, Lakeview Foundation

Capital campaigns used to depend heavily on focused volunteers to meet directly with prospective donors. Committed leaders got the job done. Today, the pool of volunteers is shallower and often younger, less experienced, and not as affluent. I fear many of the most influential volunteers are exhausted from too many campaigns and turned off by capital campaigns that are neither visionary nor compelling. “The day of the great single chair is over,” said George Brakeley, III, at Brakeley Briscoe, Inc. It is now necessary to spread the work and time among two or more campaign co-chairs.

When organizations realize traditional sources of income (governmental funds, foundation grants, corporate support, earned income, etc.) are drying up, they sometimes try to launch different kinds of development programs at once. They may move quickly from an annual operating campaign to special project fundraising, a capital campaign, endowment building, a membership program, and numerous special events. It is important that staff and prospective donors become invested in the organization through on-going annual giving programs, increased planned giving options, and carefully timed capital campaigns—and these efforts must be staged over months and years.

Capital campaigns require staff members to meet personally with donors—not simply through direct mail, email, or phone calls. Development professionals must schedule face-to-face visits with current donors, prospects, and allied professionals most of the day. Gift acknowledgements, prospect research, and administrative work must be done by trained assistants so the officers do not become tied down to their computers or offices.

Impact on Community at Large

As more and more nonprofit organizations launch back-to-back capital campaigns functioning in a continuous campaign mode, the community as a whole is affected. On the one hand, the physical facilities and programs of some organizations will be improved and sometimes even endowed for the future. Annual supporters of local social service and arts organizations may step up to become major multi-year donors for the first time. Traditional donors may become more focused and selective in their giving. Some will be inspired by the organization’s vision and the campaign’s structure to give at sacrificial levels. The quality of services may be improved in certain segments of the community, permitting governmental and private sector monies to be used for other intractable issues.

On the other hand, some donors may not react positively to the tight timelines, multi-year pledges, and competitive pitch of capital campaigns—particularly women and people from diverse ethnic and racial backgrounds. [Diana S. Newman, Opening Doors: Pathways to Diverse Donors] Prospective donors may become overwhelmed, confused, and turned off by the barrage of solicitations. Relationships between the donor and the organization can become strained as campaign deadlines seem to take precedence over the interests of the individual donors. Capital campaigns may lose their attraction, excitement, and mystique through saturation of nonprofit markets.

With increasing competition among organizations and inflated capital campaign goals, nonprofits run the risk of becoming solicitation vehicles, primarily, rather than service providers to people who need them. I do not mean to suggest organizations should wait for a window of opportunity to open up in their communities; that may never happen. Rather, organizations must be sure their case for support is genuine, engaging, and grounded in the organization’s vision of the future.

Summary

In his seminal book, The Raising of Money, Gregory Lord states emphatically: “institutions have no needs.” People have needs and challenges; organizations have solutions and answers. We must remember to focus on the people who are served and the solutions offered by our organizations.

I believe in a philosophy of abundance. The resources exist in the United States and the world to meet the needs of society and to take advantage of future opportunities. We who work and volunteer for nonprofit organizations have the privilege and obligation to clearly articulate our organizations’ visions and to position our organizations to receive support from informed donors. We enable donors to experience the satisfaction and meaning associated with the act of giving. And we have the responsibility to launch capital campaigns only when we can document that the needs of our constituents necessitate comprehensive major fundraising campaigns and that our organizations are ready and able to undertake the effort.
Diana S. Newman specializes in planned giving and endowment building and can be reached at [email protected]