ARE YOU READY FOR A CAPITAL CAMPAIGN?
Air Date: February 6th, 2019
Determine your organization’s campaign readiness and fundraising potential. Kyle Queal, Vice President of Mission Advancement Partners presents a best-practice framework for campaign planning and execution, including practical guidance on what to do and what NOT to do in determining feasibility, goals, and engagement of key leadership.
HOST: Hey, good afternoon. This is Jay Frost, speaking to you from the lovely Hilton Garden Inn in State College, Pennsylvania. I had to put in that plug because they are letting me use their boardroom. So, if you ever come to visit Penn State University, stay here. It’s a nice place with nice folks. I’m so glad to welcome you to another in a series of Flash Classes brought to you of course by DonorSearch. And if you’ve been here before, welcome back. If you haven’t, you’ll know that we’re not going to be talking about DonorSearch today. So if you’d like to learn more about it, I’d encourage you to go and look at donorsearch.net. Uh, you can learn all about the company there. What we’re doing today and every day with all the flash class is to provide a platform for top speakers and presenters in the field of philanthropy and fundraising to talk with you about the things that mattered to them matter to you as well.
And so that’s exactly what we’re doing today. And, of course, all of this is managed, not just in background but in all the communications to you by Hannah Krobock, which is why she’s pictured there in that a great little animated Gif, platform we’re using today. I want to tell you just about that a little bit before we introduce our presenter. That’s both to make sure you know how to get the content, engage with a presenter, and so you have a moment to gather your troops around your favorite electronic device, get something nice to drink and make yourselves comfortable for a great presentation. We’ll begin with, of course, how to get this content after the fact. You’ll be able to get it in two separate ways. The first is the slide deck, which will be sent to you by email.
So be on the lookout for that. If you don’t see it, it’ll come to you in the next couple of days. Do check your spam folder. Also, the recording that will be posted right at the DonorSearch site, which is located at donorsearch.net. If you’d go there, you’d look at a page very much like this one on the screen. The resources tab has a bunch of different times and areas of content, but the one that’s most important to this discussion is, of course, the Flash Class Library. If you were to click on that, you’ll find that you can search all the previously recorded videos, all the flash classes going back to mid 2016. There are plenty of these now—it’s over 160. We’ve lost count, most of the content areas that are really critical to us in the world of fundraising and philanthropy. This session will be posted there in just the next couple of days.
HOST: So if you have a colleague who can’t be with you today, do go and share this link to to this content with them and they’ll be able to enjoy it as well. Now in terms of the session itself, of course, we want to give you the opportunity to ask your questions, make your comments, and we don’t want you to wait to do that. We’d like you to go ahead and post those throughout, although probably all those questions and comments will be taken at the conclusion of presentation. Unless there’s something really a burning question, we’ll be on the lookout for that. Otherwise, again, we’ll save them all up and share them with our presenter so he can address them in turn. And to do that, simply go to the GoToWebinar control panel. And where you see that Arrow bouncing is the questions tab.
So go ahead, take a look for that now, and then during the presentation, go ahead and post any question or any comment at any time. And again, we will share those with the presenter at the conclusion of the session. And of course, you know why you’re here. And that’s because you’re probably getting ready for a capital campaign. And that’s the preparation for that as probably many of you already know is a long curve and very important to make sure that things go well. We have a perfect person to talk with you about how to get to that point where you can raise anywhere from a million to 50 million or more with all those basic building blocks for success, and that is Kyle Queal, Vice President of Mission Advancement Partners (MAP).
If you don’t know the firm, you’ll know a little bit more about it today and you can look for more information on an online. There’ll be a link at the conclusion of his presentation. Kyle is definitely an enthusiastic and creative strategist who’s spent most of his professional career in the nonprofit world. A member of the MAP leadership team, Kyle directs the team of DFW or Dallas Fort Worth based consultants serving clients from Tyler to Lubbock and throughout the Dallas/Fort Worth area, which is a pretty plentiful area for philanthropy. Prior to joining MAP in 2016, he served as VP at Responsive Education Solutions, Head Master at the Covenant School of Dallas, also the head of the upper school, I believe, before that, and Director of Business Development at the Barrington group as well as even before that, the Director of the 20 plus Community at Park City’s Presbyterian. So a long history that he brings to his work here. And with that it’s such a pleasure to welcome Kyle Queal to the Flash Class stage.
KYLE QUEAL: Well Jay, thanks so much for that introduction. I appreciate that and want to thank Hannah as well and DonorSearch for this platform to be with you all today. As we discussed today, what is the most exciting and challenging things in the world of philanthropy and that is planning for and executing a successful capital campaign. I know, from having looked at the registration list a bit, that we have people from all over the country and all sorts of different organizations. I suspect that many of you have a lot of experience when it comes to major gift fundraising and capital campaigns. And I suspect that some of you might be very new to this and perhaps there are others that are somewhere in between. But my hope, more than anything, as we get into this webinar today, is that there’s going to be something for everyone.
KYLE QUEAL: And so, without further ado, let’s jump right in. Are you and your organization ready for a capital campaign? Or, when it comes to this question, what I want to do is really kind of put it in the structure of the major elements of what we see as critical for campaign readiness. And we really see six things. I’m going to put a couple of them together, but we’re going to focus on these six things and we’re going to drill down on a few of them a little more than we will on others.
The first–and I would say the most important–element of a campaign and being ready for a campaign and asking yourself if you’re ready, is, in essence, a compelling and urgent need must exist. There must be ‘assignment.’ Cynics would say the ‘Why’. There must be some reason that you would be so audacious to go about the difficult, disciplined marathon work of a campaign.
So let’s ask this question: What makes a case compelling? It’s a basic question, but I think it’s one that too often organizations don’t really spend enough time asking themselves before jumping in to the hard, long work of a campaign. Some thoughts–well, one–you’ve got to answer the question: How will we change lives for the good?
You know, there’s some great cases out there for nonprofit organizations that work across all sorts of different spaces. But the bottom line thing that I think tethers so much of us together is how we’re seeking to change, improve and transform the lives of others, to make things better for other people that we’re serving in, and through our nonprofit organizations. If you can’t answer this question in some basic way as to why this campaign is so compelling—because of how it will enable you to change more lives for good–then I would suspect you’re not quite ready for a capital campaign.
But let’s start out with that question. But there’s more to it than simply this. It really comes down to, I think, stepping back. What I would like to do today is have you think about your organization and think about the campaign within your organization as part of a larger story. Think in terms of narrative, think in terms of how the campaign you’re considering fits into the overarching ‘us story’ of your organization from past, present to desired future. So, when it comes to telling the campaign story in some ways the story yet to be told. I think about the elements of a of a good story. We all remembered this from middle school English of course. For a good story, you’ve got to have in setting. You’ve got to have identified characters—protagonists, antagonists, supporting characters. You’ve got to have a plot of course, where the story is headed, how these things unfold, which is, of course, integral as we all know, integral to any good story.
And I think sometimes often overlooked in nonprofit settings when it comes to thinking about capital campaigns is conflict. Conflict is part of any good and memorable story. And I think it’s often overlooked that, in essence, conflict is a different way to, if I can put it this way, package the case you might have for a capital campaign. In other words, your organization is facing a conflict: You want to do something and you can’t do it because you don’t have the funds currently to do so.
KYLE QUEAL: But, because you can’t do whatever that is, you’re facing this conflict and, as a result, your mission is not being advanced. More people are not being served, more lives are not being transformed. That conflict is key. And then, of course, the resolution. How can you think of your organization in terms of this overarching story—past, present, desired future—facing these conflicts that need to be overcome?
In essence, your donors become heroes and heroines to help you resolve the conflict and bring the desired future of your organization into reality. So when it comes to telling the conflict, let’s dig into this a little more. Where is the conflict in your story? Again, back to the why—Why is it that you need to raise funds? Well, let me say—off to the side—some LESS THAN compelling reasons as to why you would raise funds for a capital campaign are things like burning down some debt, raising money in a capital campaign for paying off debts and very steep bill for applying why? Well, let’s face it, in essence, you’re asking donors to pay for a decision already made, a decision that they themselves had no part in making. You’re asking them to fill a hole that’s already been dug and, in essence, to fix a problem from the past.
Of course, another very difficult, but sometimes successful case for support is in the area of endowment ‘raising up’. But, more often than not, it’s the strategic, significant expansion of programs, or, of course more common than that brick and mortar/construction. But there’s this question of why do you need to raise funds? And then there’s this question of, okay, you’ve answered the why. What are you able to articulate how it is that this project is critical to your mission? So often nonprofit organizations seem to experience some kind of mission creep and sometimes that can manifest itself in a certain capital campaign that may actually seem to have little to do with the core mission of the organization. A question you really have to ask yourself is, does this capital campaign under consideration seek to fund a project that’s actually essential to advancing our core mission?
A couple of other questions to ask yourself are: What is urgent about this project? We all know the difference between important and urgent, but there has to be some sense of time sensitivity to this particular case. There has to be some reason why we need to move. We need to get going. We have to build in 24-36 months, we have to break ground because, if we don’t, here are the dire things were going to face. Here are the people that aren’t going to be served. And then, of course, you have to ask yourself, how will a donor’s gift impact the project? Can a donor see themselves as having such a transformational impact in this campaign that they actually could be a hero or heroine in helping bring this conflict to some resolution.
And then finally, put negatively, as you consider your desired future and you consider the urgent and compelling case you have to move forward. What happens if you don’t move forward? What happens if you don’t build that building? What happens if those children aren’t served through a new early childhood education program and building?
KYLE QUEAL: What happens if the homeless shelter doesn’t double in size to meet the growing demand of homeless men, women, and children in your city? What happens if those women transitioning out of incarceration don’t have a place to live as part of a program helping them assimilate back to some semblance of life? Putting, in essence, the negative before a donor and telling your story, it can be a very compelling way to share the urgency of your particular situation. So we’ve talked about where is there conflict in your story? That’s really part of this first element. A compelling and urgent need must exist. There must be some conflict that you aren’t overcoming.
Well, let’s go to number two: Solid board support. And this is a Freebie. Let me just say it and I’ll say it rather bluntly. If you want a recipe for a failed capital campaign, let me tell you how to do it. And this is free of charge. The way they do it is this: rally all your troops at the executive staff level to move forward on a capital campaign, get lip service from your board to support that effort, and begin the planning and organization and hard work of the campaign—only to realize, months later, perhaps, that your board really never supported the vision to begin with. If the board is not fully engaged in supporting the vision of this capital campaign on every front, it simply will not succeed. Boards are that important to the health of a nonprofit organization.
So let’s just ask the question. It seems silly, but it’s really quite profound:
Is your board on board? What does that mean? Well, first and foremost, there has to be agreement at the board level—with the need under consideration—that would warrant the difficult and extraordinary work of a capital campaign. And again, I know I’m talking to a lot of people across the country who have a lot of experience in capital campaigns and you know, that capital campaigns are wonderful experiences, but they’re difficult. They’re challenging. They’re worth it when done well, but they’re not for the faint at heart. If they were easy, everyone would be in a campaign all the time. They’re not sprints, they’re marathons, and the board has to agree with the need and with the vision to pursue that need for success over the long haul. But it’s more than just that they’ve got to agree with the plan. They’ve got to support the case and the need for this extraordinary effort and they’ve got to agree with the plan that a plan has to be put in place to pursue fulfilling this need with success.
Thirdly, a board, collectively, and board members individually, have to be willing to give. From our view, it’s really important that board members of any nonprofit are financially invested in the nonprofit organization where they serve as a board member. Now, this does not mean that all board members have to be of significant financial capacity. I would simply say that board members should make their nonprofit organization a philanthropic priority.
KYLE QUEAL: This is true with respect to their annual giving, but this is particularly true with respect to special campaigns like a capital campaign relative to their wealth—relative to the resources board members must be willing to give at a transformational level, at a significant level. Your organization should be one of the top organizations they support in their philanthropic portfolio. This is not a transactional gift. This is not a pass-the-hat and gift. This is not a go away [gift]. Get the board to demonstrate their commitment to the vision for your organization’s capital campaign by making an extraordinary gift.
Also, there also needs to be stability and strong leadership among your board. The board should see themselves as governing in a strategic sense, preparing for the future fiduciary of the nonprofit organization responsible at a high level, not managerial, not operational. There must be stability.
And I would just say this as well. In addition to the board, there obviously needs to be stability on the staff front. Trying to launch into a capital campaign successfully without solid staff leadership at the executive level is like building a house on a mud slide. So the board must be on board.
But let me combine these next two points and elements of campaign readiness, evidence of interest and contributable dollars. These are distinct, but, in our experience, they really do often go hand in hand.
When you think of interest, and when you think of those to whom this case might resonate, those who might make an extraordinary gift to this need—obviously, campaign prospects are those to whom you tell your story, those to whom you present the conflict. So let’s talk for a few minutes about prioritizing your audience–prospective donors, those to whom you would tell your story.
They’re really three to four ways we would like to break this down. And let me just kind of start out with capacity and go through each of these. There’s the question initially of how much could a person give? Now let me just say this, it’s not how much somebody would give TODAY, but how much they COULD give—to run the risk of sounding trite or overly simplistic. In a lot of ways, the hard work of a capital campaign is closing the gap between would and could. Somebody could give $1 million if they made this campaign for your organization a priority, but would they give $1 million today?
Perhaps not. Perhaps they’d give 50 or maybe 100,000. So what would it take to deepen that donor’s relationship with your organization and this mission and this urgent need and this conflict so that they could see—in time—the opportunity to truly make a transformational difference in giving that million dollar gift. So capacity is key. How much could they give?
KYLE QUEAL: Access. We could talk all we want about Oprah or Bill Gates or a Warren Buffet. But is there a real connection? We must live in reality with respect to a capital campaign. And with that, let me just suggest this: it’s very unlikely. There always are exceptions, but in terms of best practices and experience, it’s very unlikely that someone who’s never given before to your organization is going to give a transformational level for the first time in a capital campaign. Put another way, your capital campaign donors, your lead donors are almost certainly going to come from your existing donor base. There has to be access to these individuals. There has to be an existing relationship with your organization.
But let’s go further—relevance. You could know somebody who has access, who has capacity, but do they care about this project? I’ve got a colleague who worked for nearly 20 years at a local university in development and strategic planning. You could have, as you all well know, someone who is a graduate of said university who has significant capacity, who has a particular heart for the business school.
And if the law school is seeking to build a new building, he’s not going to give a dime. Clearly there’s got to be a particular care and passion about this particular project for the donor under consideration. And then lastly, I’ll throw this out: Sometimes this is overlooked and sometimes it can come back to bite you if you don’t take this into account on the front end.
Is the donor and a good place? In other words, are they warm to your organization? As we all know, as we’re all human beings, sometimes our relationships can take a turn for the worse. Sometimes they can lapse. Sometimes they can turn, in some ways, outright hostile. The last thing you want to do is to try to cultivate a donor who is not in a good place with your organization prematurely. Now, having said that, I will say this, and then we’ll move on: Capital campaigns can be actually really healing experiences. We’ve seen it before: Campaigns can provide an opportunity to reach out to those who for whatever reason, have had their feelings hurt, who have been hurt by the organization or perhaps just neglected, and there can be healing and reconciliation where they can be brought back in to the fold.
Well, let’s unpack this a little further and connect this to a hypothetical financial model.
So, we’ve talked about possible prospects, but what does this look like in terms of contributable dollars that you’ll need for success? Now, I hope you can see this. Okay, this is going to be a lot on this one slide, but what we would like to propose, and you’ve all seen some version of this, but it is building a financial model, a hypothetical pathway to success.
Let me kind of go through these breakdowns and then I’ll show you what this looks like. You know, as is common today, you know, 20 years ago it was more like 10% but we’re seeing, increasingly, top gifts in campaigns at 20 to 25%. What we would say then, it’s the next 10 gifts, including that top gift should constitute 60 to 75% of your total need. And then lastly, the top 30 including your top gift and the top 10 should cover 85 to 95% of your need.
KYLE QUEAL: That’s significant, but we are seeing, increasingly, fewer doing more. So what does that look like in a $5 million financial model? Well, we won’t go into the weeds of this, but you see the breakdown. We’re assuming a 20% lead gift at $1 million of a $5 million financial model. Now notice on the right here it says top 10 gifts. A little over 3.1 million constitutes about 63% of a $5 million need that if you look at the next 20 guests that ranged from 50 to 75,000 that’s another 25% 1.25. So altogether, the top 30 gifts including the top gift, the next 10 and the next 20 they make up around 88% almost 90% of a $5 million need.
Going deeper with fewer is what we’re seeing when it comes to truly transformational relationship-based, mission driven fundraising. So evidence of interest contributable dollars. Let’s spend a little time on leadership and then we’ll transition to our final element.
When it comes to leadership, the secret to successful leadership is the manner in which it is built. But let me throw this out as well. Do not underestimate the power of impassioned volunteers. There is a role that leaders can play who are impassioned, unpaid volunteers that we simply cannot play. Certainly as counsel or you, I would suggest, as hired employees, no matter your leadership role of a nonprofit organization, there is a powerful persuasive opportunity that impassioned volunteer has to come alongside another donor and say to that donor a prospect: ‘You need to know that I am so committed to this effort. I’m making the biggest capital campaign pledge that I’ve ever made to this cause.’ And I want you to consider doing the same when it comes to your leadership team. It’s key that you spend sufficient time carefully, weighing who it is you invite to serve in such a critical role.
So let’s spend a few minutes now talking about building an effective campaign leadership team. Now, in our view, when it comes to identifying candidates, I would simply encourage you to consider this: I think things are changing, not always, but I think there’s a trend, a trajectory, where things are changing from kind of the large cabinet leadership team where you have a lot of people being cultivated and being asked to serve in a leadership role, who quite frankly are in that role nominally. They don’t have much responsibility, and you have often a kind of unwieldy and somewhat flabby leadership team. And too often there’s an executive committee within that team that does all the work. What we’re suggesting is this: Consider it to be a lean and not to mean team of people who were actually going to do the work, who are going to roll up their sleeves and be involved in helping strategically cultivate your top leadership donors to make this campaign a success.
Perhaps there’s one chair or they’re two co-chairs that you can identify to really spearhead this effort. What do those people look like? Some considerations in terms of attributes: These obviously need to be people who have demonstrated their commitment to your organization through their volunteer service already and through their commitment financially already.
KYLE QUEAL: You do not want to invite someone to be the leadership of your campaign as a step in bringing them in for the first time to your organization or cultivating them to become first time donors. They should have demonstrated themselves already. You want someone who has the respect and credibility to galvanize the support of others. You want someone in that role who people think: If they’re leading this charge, then I know it’s going to be successful. If they’re behind this, then I’m going to think twice and I’m really going to be careful about my investment as well because I know this must really mean something.
I’m not going to be scared away. I’m not going to think twice in that way. I’m going to, I’m going to think very carefully about making this a priority and making this a significant investment and when it comes to other members. You know, in our view, in essence, campaign leadership teams are often smaller than sometimes they are elsewhere in the past. They don’t need to be large. You can have a chair, a couple of co-chairs, your executive director, CEO, your CDO or Director of Advancement and perhaps one or two other volunteer members, but they’re only as big as they need to be before or beyond. Just kind of identifying these prospective leaders there needs to be a very thoughtful enlistment plan. There needs to be consideration given as to who it is you’re going to ask to serve in this critical role and how you’re going to go about asking them.
I’ll come to a slide in just a minute to give you an idea of the timing that you might consider for such a plan. And then there needs to be appropriate training and orientation. Individuals who step into this role, they need to know what it is they’re getting into. They needed to have job descriptions. They need to be equipped to carry out this role effectively: to lead meetings, to carry a portfolio, to be committed to the time and intensity that’s going to be required for a successful campaign. Often, we’re seeing, minimally 18 to 24 months. So building an effective campaign leadership team is essential to having campaign success. And related to that is if you can’t think at this point of people who might surface to the top, who could help as volunteers, as impassioned volunteers, lead a campaign for your organization, then you might not yet be ready. Do not jump into a campaign unless you feel like you’ve got at least multiple candidates lead the cause as impassioned volunteers.
Okay. Sixthly–and finally–let’s spend a little time talking about time. As has been said, time and money solve most of the world’s problems. Not all, but certainly a good number. And if anything, one of the most common mistakes we see with organizations, going into capital campaigns, is that they do so prematurely. They do so without appropriate planning. And they think that once they jump into them, they can complete them much sooner than is realistic. And so from what we’re seeing working capital campaigns across the country for many, many years is this: In this scenario, uh, you see a planning study or what some call a feasibility study, uh, in the first three to five months.
KYLE QUEAL: Now we’ll come back to the issue of a planning study. And whether or not that’s something you should consider, but let’s just assume in this timeline that you are going to do a planning study. If you do a planning study. Typically, we’re saying and seeing that that takes three to five months. As you transition to that, you’ll need another three to five months to prepare for the campaign, to lay the foundation and campaign organization. This is where you really do a lot of internal work. This is not where there’s cultivation. This is not where they’re significant asks being made. This is where you focus on that case for support. This is where you focus on identifying and enlisting and training leadership. This is where you spend time really digging down into your donor history and, and looking at who’s in relationship to your organization, who’s given significantly, who has the capacity to give, who, who might have a particular heart for the project under consideration.
This is where all the elements of campaign organization are put in place. The foundation must be established upon which to then construct a successful campaign. Once that’s in place, after three to five months, you begin to transition into–what you’ve heard before–is the silent phase. Or sometimes people call it the quiet phase. Let’s be honest, the silent or quiet phase is neither all that silent nor quiet, but what it is really more accurately, is a leadership phase. This is the critical time of your campaign. Where, over 10 to 15, 16 months, you are implementing strategy to cultivate and to solicit your top donors. This is where the board, or the sometimes called, the Family Group of the nonprofit are brought in early. They set the tone with a hundred percent participation of giving at a transformational level. And this is where the next 10, the top 10 and the next 20 prospects are identified and cultivated.
Ideally, and this I realize is high, but ideally we would love to see you get to 85, 95% of your need. We’ll come back to that word ‘need’ during this time. This is also a critical time because this is where you’ve not announced, publicly, a number for your goal, but this is where the need you have can be kind of assessed and evaluated. And then the goal for realistic, uh, campaign success can be determined. Once you have that number in place, you can go public, and you are within striking distance of the public size of goal, which may or may not be your need a, but in the public phase, you have another 40 to 50 plus sources identified and you hit and surpass that goal.
Now, like the silent phase, the public phase isn’t necessarily all that public. Best-case scenario? You don’t even need a public phase, right? Who wouldn’t want to raise all the money you need for a campaign in that silent quiet leadership phase? That would be ideal. When that happens, you transition to a quote/unquote “public phase”, and it really becomes a PR opportunity to celebrate the great success of your organization, to share the story of your campaign and the project moving forward with the larger community, to show and tell how it’s going to help you advance your mission.
KYLE QUEAL: Of course, there’s going to be some additional support that comes in at that time, but that can be icing on the cake. And then of course you get to that point. Once you have raised the final 15 20% where you can break ground. Of course, that might happen earlier. Some organizations are poised to break ground at around 80 plus percent, but what we’re seeing is with any construction in particular that’s minimally a 12 plus month project of course could be longer relative to your situation.
But step back for a second and just look at this timeline. As you all add this up, you can see how this easily takes a good 24 to potentially 36 months to do it well and to maximize the opportunity you have to raise significant funds within your community. Well let’s, let’s even take a different look at this and don’t worry, I’m not going to go down line by line and you’ll have this in the slides we send out and so feel free to use this as you see fit. But this is kind of our approach when we come alongside a nonprofit organization going into a capital campaign and, it’s a Gantt chart that kind of shows again, from a different angle, how campaign organization, leadership enlistment, case development, uh, unfold.
Now let’s just assume for the sake of this example that we’re all going to start a campaign today, in February. We jump immediately into campaign organization and spend a few months on that. We transition after about a month or so to leadership enlistment. But notice we don’t enlist leaders in March or April. We might, not enlist the leader if we started a campaign this month until May or June. It’s critical that you get the right leaders in place. It’s very difficult if you put the wrong leaders in place prematurely. As we all know, it’s very difficult to fire volunteers.
Of course working on the case development, doing what we call resource mapping, which is a just an effort in confidential human intelligence gathering to get a better idea of prospective donors. And then other, uh, obviously activities that when all tied together help, uh, a successful leadership phase come together. That transitions into a public phase. And then at the bottom of course you see foundation work, which really begins early in the campaign and can happen throughout, often particularly towards the back half and then eventual celebration.
So there’s a lot going on, but it’s key that when you consider a campaign, you give yourself ample time. Don’t shortcut yourself here and [make sure] that you have a structure and a strategy and the support necessary to execute with accountability over this period of time.
So we talked briefly earlier about leadership enlistment. And I think I mentioned that I’d come back to this. This is just an idea of the, the two plus months that you want to consider profiling the kind of leaders you want for this campaign. Going through the process with input from others, of identifying them, really discerning and thoughtfully talking through who you want to invite and inviting them to consider this commitment. It’s a significant commitment as you can well imagine. And it should not be approached lightly.
KYLE QUEAL: It should be approached with a, a potential campaign leader, much like you would approach someone making a six or seven figure dollar gift. And then obviously enlistment, for the team, and the meeting itself, decision and training as all that happens. So that’s leadership enlistment.
Okay. So what I want to do is this, in the next seven or so minutes, until we get to be about 45 after the hour, I want to spend some time in planning studies. What will a study accomplish? Well, first let’s ask that question, then we’ll talk about what it won’t accomplish. Study objectives are these: it gives you a chance to assess the climate and environment for giving. It gives you a chance to build a compelling case. You know: Is there interest out there? Are people ready to give at an extraordinary level? What do people think about the case under consideration? Now, sometimes we see nonprofits at that aren’t exactly sure what they’re going to do.
Maybe they’re one or two or three different versions of what they think should happen. You don’t want to have too many [cooks] in the kitchen or too many different directions and be confusing to prospective donors. But maybe there’s one or two different scenarios and, and you really want the strategic input of a prospective donor that can happen in a planning study. It’s a great opportunity, we think, to truly have a strategic conversation. What you don’t want is somebody just going in with a clipboard asking questions and checking boxes. You need to have a strategic conversation or have an outside party have a strategic conversation with your prospective donors to help get that input and help build that compelling case. This obviously helps you create a comprehensive campaign plan. After a study, you’re going to have a pretty good sense of what might be doable within a certain range within your base of support.
It builds ownership among participants. They feel like they’ve really invested some input. You all know the saying: You want, counsel ask for money, you want money, ask for advice. This is a great chance not to ask people for money, but ask for their advice, ask for their input, help them realize that they’re going to play an invested role in the success of this campaign. And as I mentioned before, campaigns also—and this can happen with a planning study—they provide a great opportunity to reach out to that lapsed donor that maybe hasn’t been talked to in a couple of years, that maybe that’s in a place that just needs to be warmed up. To invite them into this kind of discussion can be very powerful in moving that relationship into a positive direction. This also can help identify many resources. Now notice we don’t say all resources. But it can help us identify what a person might be potentially willing to give, and who else they might know who could give of some significance to the cause.
KYLE QUEAL: And then lastly, in terms of a study objective, it can help protect you from a negative experience. It can help mitigate risk up to a point. The last thing you want to do—trust me on this—as a nonprofit organization, is to jump prematurely into a campaign that is a big fat failure. It would be better to wait and to do the hard work of waiting and, and putting in place the needed infrastructure and foundation to have a successful campaign in the future. Than to jump into something now and run the risk of failure. A failed capital campaign as a terribly negative and demoralizing experience for a nonprofit both for its volunteer leaders and certainly for its staff.
Now: What will this study not accomplish? A study will not do this. As I said, it will not identify all of the money. There is an art and a science to fundraising, as you all know, and there’s an art and a science to a planning study, but it is not magic.
It is not able to, with exactitude, identify where every dollar is going to come from. That’s needed for a successful campaign. But it should give you a pretty good idea, a pretty safe bet, of a range if and when it’s done correctly. It can’t predict the future course. We don’t know what the future holds. We don’t know what could happen in terms of wars, economic downturns, recessions, what have you. It can’t predict the future. But it can help you prepare for the future. It can’t take away all the risk of campaigning. Campaigning is a wonderfully difficult challenge that has significant return and benefit. But it is hard work. It’s like climbing a very steep mountain. And campaigns can be at times risky. That’s why you have to take your time and you have to make sure you’ve got the right equipment and all the tools and support necessary for success.
So when it comes to a timeline, a planning study timeline, what, what might it look like? Well, again—and this is just a hypothetical timeline I’m showing you–we’re looking at about five months where you have the first month committed to study organization and some initial case development, not the kind of case development you’d really do with a greater effort in the full-fledged campaign organization period. But there needs to be some basic case development this year with interviewees.
Obviously, the people interviewed need to be identified, and those interviews need to be conducted. And let me just say this, we believe it’s less about a quantity of interviews. It’s really more about quality. You could have 80 to a hundred interviews with all sorts of different people connected to your organization, but if they’re not the right people, that planning study’s value is going to be compromised. It’s better to have 30 to 40 of the right interviews with the right population and diversity of constituents, interviewed.
KYLE QUEAL: Then you just have a bunch of different people interviewed. That’s a very important point that I think, a lot of times, nonprofits are not sensitive to. You conduct the interviews over a couple of months’ time. You put together a report and discernment and in making that presentation and nonprofit leadership. And then the leadership of that nonprofit taking under consideration, the planning study report and recommendations decides to launch into a campaign. For those planning studies that we’ve conducted many over the years—typically–we find that a nonprofit organization is ready to go into some campaign, but there have been occasions where we would actually recommend—and have—that they not.
So mistakes to avoid. And we’ll wrap it up with this and transition to some Q. And. A. If any of you have questions you’d like to share some mistakes, to avoid major campaign mistakes to avoid.
I mentioned this earlier, but let’s talk about this for just a little more. Setting your campaign goal based on your project need. Two very important words that are different: goal and need. Let me give you an example. If you’ve got a project goal of $10 million or rather if you’ve got a project need $10 million, let’s say you need to build a new academic wing to your school, and it’s going to cost $10 million and that’s the full kit and caboodle, that’s bells and whistles. That’s your need, but you don’t know whether a goal of 10 million at this point is realistic. And so let’s say that you go through a planning study and the recommendation from the planning study is that you might be able to raise between six and 8 million. Okay? That’s less than your need. As you go into the quiet or leadership phase of your campaign based on the kind of leadership gifts you get, you realize that $10 million is likely not achievable.
If you don’t have a 20% lead gift from a $10 million need, which puts out about 2 million, then you’re not likely going to hit that need. And so you might have to adjust your goal as you go through the early stages and silent phase of a campaign. The point is this, once you go public, you want to have a goal for your campaign that’s achievable. You have to be prepared to adjust your plans for the project to work with whatever money you can raise in this first phase. So that’s one thing to avoid. Don’t confuse goal and need, and don’t talk about a need—or goal, rather—prematurely to the broader audience. I hope that makes sense. I know I was getting a little tripped up there, but very important not to confuse those two words.
Here’s another mistake that you want to avoid–waiting for architectural renderings before starting. It’s very unlikely that you’re going to have the architectural renderings for your project in place before you begin your capital campaign. Before you’re going to want to be, again, as you are investing significant money and putting those plans in place.
But think of this as two parallel tracks that’s going to have a one side of the tracks. The other side is the campaign organization. You’re going to be much to hammer out both and they can work together before which time they kind of begin to dovetail. Early prospects to leadership. Donors need to have a general idea of the plan. They need to have a general sense of kind of early conceptual designs and potential, early architectural renderings. But things don’t have to be buttoned up perfectly. Don’t wait. If you’re going to do a campaign, don’t wait until all of that is in place before you begin your campaign, organization.
Enlisting campaign leadership before retaining counsel. Listen, if you’re at all considering retaining any counsel–and there’s some great firms all over the country that support nonprofit organizations in capital campaigns–here’s my encouragement to you. Please be careful with respect to enlisting leadership prematurely. It’s very difficult. Again, if you have brought on for good reasons, with good intention, certain people to lead a campaign that in fact are really not the best people to lead that campaign, it’s very difficult to fire volunteers. I would just strongly encourage you to hold off until you get some input from others as to the kind of profile and the kind of person or persons you need to be in a leadership role. So don’t jump the gun. As tempting as it may be.
Don’t solicit the board before retaining counsel. The board plays a key role in your campaign success as we’ve said, and it’s critical that board members be approached as our other top leadership donors to your effort.
It’s a critical that they be cultivated. You don’t need as much time doing this, but there needs to be a personalized approach for each and every board member. Why? Well one, it shows them how it needs to be done with other donors. So they need to see from experience what it is you want to do with other donors. But two, it respects them and gives them a chance to be considered as to how they would, or their family could be involved in this effort at a very personal level.
Think of it this way: When you do a capital campaign and you’re talking about a board and you’re talking about top 10 next 20 donors, you’re talking about maybe 30 40 people that are gonna make this thing happen. When you do a capital campaign, you’re really doing 30 to 40 individual capital campaigns. There’s not one capital campaign. There is, but it’s executed at a very highly personal level.
So don’t solicit the board before retaining counsel and don’t accept campaign gets too early. You know, sometimes people get wind that you’re doing a campaign and sometimes there’s a temptation for them to drop off at the office—a check. This can be very difficult, and I realize I’m painting with a broad brush here, but let me just say this: If someone you know who’s a donor in good relationship with your organization happens to get wind of a campaign. And let’s say you know, you know they’re a top 10 or possibly high next 20 prospect and you know, you’re looking from them, uh, for them for a six, seven figure gift and they’re tempted to drop off a $50,000 gift at your office saying, “I heard you were having a campaign, and I just want to, I want to give you my gift personally.”
KYLE QUEAL: Can you do this–as hard as this is—can you say, “Thank you so much for going out of your way. I’m so glad that you heard about this. Let me ask you this–Can you do me a favor? Is there any way you wouldn’t mind holding onto that for now? Because here’s why: I think you’re going to be so excited about what we’re doing. You deserve a cup of coffee. I want to follow up with you and I want to share more about what it is we’re doing before you make your decision to invest in this project. Is that okay with you? Would you mind doing that?”
That’s one option. The other option would be–if you can’t do that—is to take the gift, but kind of what the qualification: “Can come back to you. Can I meet with you again to share more with you about this and see if there might be other ways you might consider being involved in this effort?” Just don’t accept campaign gets too early and–as it’s often said–leave money on the table.
A few other quick mistakes to avoid: Don’t launch the campaign at an event. The public campaign should not be launched prematurely at an event and certainly not the private campaign. That’s really what I mean by that. The private campaign–Don’t transition into the early, leadership stage of the campaign. At an event. There may be a place at an event and the public phase to kind of go public and to, you know, celebrate the great success and the, the, the final effort to reach the finish line, but don’t launch the campaign early on. At an event, don’t transition to the public phase too soon. Get 80 85 90% plus pledged up and given before you go public. Then know where the final 10 to 15% is going to come from so that you can be insured of success in reaching that goal.
Don’t do an expensive campaign video. What we’re seeing, quite frankly, all of us have smartphones. We’ve got a video of production studio in our pocket. You can do a powerful personal little video with your smartphone that’s effective and met for a particular donor and you might not need to do and expensive 20,25, 30 $35,000 fancy campaign video. I would just encourage you to think very carefully before investing a lot and that type of collateral as well as investing a lot in fancy brochures. Think of each top leadership donor as a campaign unto themselves.
Here’s another thing that that we just want to really encourage you to consider: If, the number one mistake in capital campaigns is not giving yourself enough time, which it is. The second most common mistake is cannibalizing your development work during the campaign. And what I mean by that is this: Don’t allow–as you go into a campaign–allow your annual operational effort to be compromised for sake of campaign success.
Make sure that you maintain a distinct focus on your annual operational giving. Let that move forward. Let your staff focus on that. Let your donors continue giving to that. This is why for a capital campaign you’ve really got to have a methodology in our view that focuses on your high capacity donors who, in addition to supporting the annual as they are, can give above and beyond.
KYLE QUEAL: But don’t tempt those donors who are stretching to support you annually to be distracted, to re deploy their annual support to a capital campaign that’s going to, that’s going to cripple your, your organization potentially. What we’ve seen positively is that as you are able to attend your annual while having a strategic methodology to uh, to, to pursue a capital campaign successful, like you can often see your annual giving increase. People see there’s viability. People see there’s a future.
So here we are. We’re done with the formal webinar at this point, and what I want to do is transition to a minute or two of discussion if we’ve got time for that. And I think I’ve got a slide here at the very end. Let me just put in a plug as we open it up and bring Jay back on for some discussion. We’ve got a lot of different resources online that are free recorded webinars like the ones, you might have access to via DonorSearch and other resources, uh, workshops that are free. So check that out on MissionAdvancement.com. We’ve got some books as well that might be interesting to you, including one on a campaign and then you can reach us at Facebook and Twitter also. So, I just want to let you know about that. Um, but let’s see if there are any questions that might be out there. Uh, for the final few minutes we got together.
HOST: Thank you so much. Then was jam packed with really, really actionable information. And everybody do take down that contact information for a, for MAP, you can find it right there on your screen. And by the way, that book is on my shelf. So, at least I find it immensely valuable, sort of like this presentation. So I would encourage people to take a look at the book as well. We do have a number of questions and I’ll just go ahead and, and uh, and take those in some kind of order. And the, and the first one started kind of midway through your presentation, we have a question from Bruce who was asking, and I don’t know if it’s a definitional question. He says: Can you say more about what you mean by foundations work?
KYLE QUEAL: Oh, great. So it may be a reference to that line, Jay, in that sample Gantt chart where we talk about foundations work. So not to be confused with kind of the campaign organizational phase is laying a solid foundation for your overall campaign. Of course when I talk about foundations, I’m talking about those organizations that are providing grants to nonprofit organizations. So there is, I think many of you would know, obviously hundreds and thousands of foundations across the country, that really delimit and make clear more often than not, both geographic areas where they give grants and also particular causes that they support. And so, I think with the capital campaign, you often have a great opportunity, –even if you don’t have a lot of connections to foundations, but especially if you do– to build those relationships and to inquire about whether there might be interest on their behalf, uh, for your organization had to submit a grant.
KYLE QUEAL: This is a rough kind of estimate and we certainly see exceptions to this. In fact, I’m in campaign right now where I’m seeing a significant exception because this organization had some wonderfully rich–pun intended–relationships with foundations, and got some early gifts at a seven-figure level. But more often than not, what we’ve seen is that foundations like to come in on the back end of a campaign. They like to kind of fill the final gap. They like to come in maybe on the backside of the leadership, phase or maybe even in the public phase. And, overall, we’re seeing typically an overall financial, a breakdown of about 10 15% of a campaign goal coming from foundation sources. And now sometimes you get more from family foundations, but traditional foundations are typically, in our experience, supplying about 10 to 15% of an overall campaign goal. Noting there are always exceptions. I hope that answers Bruce’s question or gives a little more color to it.
HOST: Yes. And these are kind of all over the lot, so I’ll just try to go through as many as we can. We have one: Kimberly asks: What would you recommend as points of consideration for the retained counsel and also to define what you mean by counsel?
KYLE QUEAL: Oh goodness. Yeah, great question. I’ll try to answer as quickly and objectively as I can. So really by that I simply mean I’m looking for outside help to provide some structure, strategy and support to execute a capital campaign. Let me say this, I’m going to just be frank. If you’re going to hire counsel and you’re not sure you can afford it for the whole way, um, typically what we see is this. The most critical work campaign council can, can help you do is on the front of a campaign as you’re doing either like a planning study or particularly in those first six months of campaign, organization leadership phase. In our experience—and I can just speak from our firm–we’re often working with a campaign client for the first 12 months. Sometimes we extend to begin to step down the next six months to a point where we want them to be able to move forward without us.
And so you don’t want to think of counsel as having to retain them indefinitely. You want to use them and you want to take from them a kind of transfer of knowledge, expertise, best practices help support, accountability to get the campaign up and running to have success. And then to let them, you know, go away. And so there are a bunch of different ways and shapes and forms that can take from working with a firm to working with, uh, a single shingle. Um, some people will hire somebody to be on staff to run a campaign. I guess it really depends on your situation and some people hire what’s called resident counsel, which seems less popular these days and is particularly expensive. But that’s what I mean by counsel. Uh, hope that answers Kimberly’s question.
HOST: One from Desiree–actually three from Desiree but I think you answered her third. So I’m going to give you her first two: How much of the campaign donors or how many of the campaign donors perhaps come from the current donor base, the general percentage of number of donors or the number of dollars? And then I’ll just go ahead and read the second one to you, which is: How does one determine the dollar goal for a campaign or does the planning study makes sense early on to identify the current basic donors and whether or not it’s enough for the capital?
QUEAL: Oh, great. Great questions, Desiree–big questions. Let me see if I can answer them very quickly. So I’ll restate it and I’m gonna risk overstating it for sake of emphasis when it comes to your leadership donors for capital campaign, I think you’ve got to think about those donors coming from your existing donor base. Um, you know, I, it’s just not reasonable and realistic to expect someone to give an extraordinary level for the first time to your organization. There are exceptions, but as a rule, look to your current donor base and look to those within your donor base who might have significant capacity to give a transformational gift in terms of how much a donor might be able to give.
Of course, they’re wonderful tools like DonorSearch and others that can help you do some research on that front. There are other ways that counsel affirm might be able to help you collect the human intelligence and gathering information about a donor’s capacity and whether now might be a good time for them to consider a significant gift. To Desiree’s question though. A planning study can be helpful in illuminating some of those same questions and answering them with some, some range of possibility in terms of how much a donor can give.
HOST: Maybe one last one and then we’ll take any questions that haven’t been answered and we’ll pass those to you. You can talk to people directly.
KYLE QUEAL: I’d be happy to.
HOST: Great. I do think this is a nice one to end on. It’s a question from Alex who says: ‘If a campaign meets its goal during the quiet phase, do you advise using the public phase primarily to raise awareness and increased engagement? Could a reasonable alternative be determining the amount needed to address additional needs, actual needs a leaders decided were secondary during earlier planning and increasing goal, accordingly to raise additional funds needed during the public phase. What are your feelings on that?
KYLE QUEAL: Yeah. Is that, that was from Alex, is that right Jay? I think Alex makes a great point. I think that’s worth everyone’s consideration. I mean best case scenario, let’s say you hit and exceed your goal and that quiet phase and you go public and don’t need to raise any additional funds to hit that goal there. There should be, as part of a kind of a larger master plan, some secondary objective in the eventuality that you could be in that spot so that you could roll over, Alex, to that phase two and go ahead and begin pursuing that. Or perhaps you want to transition some money to an endowment or to some other worthwhile cause. Maybe it’s financial assistance for tuition, or maybe it is paying down some debt, but there’s a great opportunity, maybe not in a public phase, but there is a great opportunity to adjust the message and to take full advantage of the momentum at that point to raise more money.
HOST: Thank you very much, and boy and that was done so quickly too. I want to thank you so much Kyle for this great presentation, great content. Everybody can, you’ll be receiving a copy of the slide deck, so be on the lookout for that. You can see that there are things in here you can put into practice right away. Plus of course you can always take a look at the uh, the Mission Advancement site there as well as follow on Twitter, um, for this kind of content. And then of course there’s the perfect campaign. If you’re interested in getting a copy of the recording of this session, do firstname.lastname@example.org under the resources tab where you’ll find the library of this session along with all the others. It will be posted in just the next couple of days. So it’s a great way to frame the discussion internally to make sure you’ve got the building blocks in place for success with your campaign. So again, our thanks very much for this great presentation today and uh, and we hope we can have you back to talk about these issues again in the near future. Kyle,
KYLE QUEAL: We’d love to, Hey Jay, thanks so much and Hannah, appreciate it. Ah, it’s been great to be with you all today.
HOST: And I want to tell everybody that, of course we have more sessions coming up. This was the one and only this week and what a one it was. So we know you have plenty to chew on for the days ahead, but we hope you’ll have an appetite to return next week. We have a session on using Change Management to ensure success in your technology initiative. That is a really big hot issue and that’s going to be led by Ralitza Zikatanova and Smita Vadakekalam who’s been here before and I will promise to do her name better justice when she returns. That’s on Wednesday, February 13th at 3:00 PM Eastern. So do be on the lookout for that session. If you’re not getting announcements about these, of course you can get them by signing up on donorsearch.net. DonorSearch of course provides the platform for these sessions. It’s just a kind of a labor of love. We’re really grateful for that and also grateful for all the work of Hannah Krobrock there in the background, making sure that you hear about these before they occur, that they are carried on well and that you get the copies of them afterwards. That’s all. To her credit. Thank you very much. This is Jay Frost speaking. It’s been a pleasure to have you. We’ll look forward to seeing you next time. Take care.