How NOT to Run a Capital Campaign

From time-to-time, I will invite an outstanding, published book author to write a guest post. If you’d like to learn about how to be a guest blogger, click on the “Authors” tab above.

This week, I have invited Linda Lysakowski, ACFRE, author of Capital Campaigns: Everything You NEED to Know. Linda is a friend, and I have joked with her that she is the Stephen King of the fundraising world. I tease her about this, not because she writes horror stories, but because she is nearly as prolific as King. She has at least eight titles to her name!

I know, from personal experience, that writing a book requires a great deal of time and effort. Linda has long been willing to do what it takes to share her wisdom. Her books are always practical, accessible, and full of useful tips culled from her decades of experience.

Capital Campaigns is her latest book. The official description of her book says, “Do you work for or serve on the board of a nonprofit that is thinking about or ready to launch a capital campaign? Capital Campaigns: Everything You NEED to Know will equip you to determine your organization’s readiness for a campaign; help you decide if and when you need a planning study; show you how to allocate your human and financial resources effectively; guide you in creating a compelling case statement; provide you with the tools to evaluate your chances for success; give you how-to advice to plan every aspect of your campaign; and put at your fingertips ample examples of sample forms and charts.” Like I said, Linda always offers practical advice in her books.

For her article here, I played on my Stephen King joke and asked Linda to share some capital campaign horror stories and to let us know what we should NOT do in our capital campaigns. Here’s a chance to learn from the mistakes of others:

 

I’m an eternal optimist. So, I generally focus on the best ways to do things. But, for this article, I decided I would look at capital campaigns from a different perspective. I thought about some of the campaign mistakes I’ve seen organizations make over the years and realized I had, unfortunately, a lot of negative experiences from which I’ve learned. As I share some of the mistakes I’ve encountered, I hope you will learn from them, too. So, here is my list of things you should not do in a capital campaign:

Don’t underestimate the value of volunteer leadership in your campaign. If you asked me to list the most successful campaigns I’ve been involved with to the least successful and then asked me to list the best volunteer campaign leaders to the worst, guess what? The list would be just about identical. In other words, the campaigns that have the best volunteer leaders are the most successful ones.

I’ll share another story with you that proves my point in a positive way. Another organization sought out a top community leader to serve as honorary chair of its campaign. Although this community leader did not have a real strong tie to the organization, he was very persuasive in making the case. The “honorary chair” not only agreed to serve, but attended and led every meeting, made a significant gift to the campaign, and his leadership was enough to convince the presidents of four local banks and other top community leaders to get involved. This campaign went over goal in the time allotted.

Don’t just choose a leader because they love your organization or because they are a “big name in town.” Despite my positive story above, I’ve seen both of these cases and they are often disastrous. One organization chose a campaign chair because she was influential in the community but guess what—she missed meetings, arrived late and left early, didn’t make her own commitment because she had “other charities she was committed to,” and on and on. How successful was this campaign?

After about 12 years, the organization is still floundering. Another organization chose to appoint its board chair as the campaign chair because he was very committed to the organization. But, he had very little community influence and was reluctant to ask anyone for money. This campaign fell far short of its goal. Carefully selecting campaign leadership is critically important.

Don’t overestimate the use of printed and electronic campaign materials. One organization was convinced by a marketing firm with whom they worked that they needed to produce a glossy brochure and a video so they could “sell their story” to people. Although the consultants tried their best to get the organization to understand that they first needed to “test their case” by doing a planning study and from that study to identify and cultivate potential leadership donors, rather than presenting the campaign as a “done deal, so early in the game,” the marketing firm nevertheless convinced them to create an expensive video and elaborate brochure.

Unfortunately, none of their board members were comfortable identifying major donor prospects or even asking them during a study how likely they were to support this campaign. Needless to say, the organization “put the cart before the horse.” The study was suspended, the board started distributing the brochures and showing the video, thinking these marketing tools alone would persuade donors to give. Several years have gone by and the $7,000,000 piece of land that had been donated is still a vacant lot.

Don’t announce your campaign too soon. One small organization that was in the midst of a $1.5 million dollar campaign had planned a kickoff event to announce their campaign early on in an attempt to gain wide-spread community support in their small town. The campaign was not well organized and had not raised much money, but the event was scheduled to coincide with a milestone in the organization’s history so they decided to proceed with the kickoff event.

The evening of the event they announced that they had raised — Are you ready for this? Drum roll, please! — $16,000. The audience was astounded. How did this organization ever think it could raise $1.5 million? This event not only ruined the chances for success for this organization, but a year or so later, another organization in this community backed off from even attempting a $1.5 million campaign because of the memory of this disaster.

Don’t try to proceed with a campaign without a well-crafted case for support. An arts organization that owned a beautiful historic building in which they held classes, had exhibits, and hosted concerts decided to launch a campaign to renovate their building and bring it up to code. However, the person who prepared their case for support did not have fundraising experience. He produced an attractive piece with some great photos, but once the reader began to peruse the literature, it presented a “poor, needy nonprofit” approach. It even went as far as talking about the historic building being “termite-infested,” and stated that the main support beam was in danger of collapsing.

Hmm, I don’t think I would want to send my kids for an after-school art class in this building. Would you? Long story short, once they brought in a consultant who knew how to write a case, they had to throw away a lot of expensive printed material and start over again.

Don’t think hiring a consultant is the “magic bullet” you need to succeed. The staff and board need to understand their roles in the campaign as well as the role of volunteers. In most cases, the consultant is not the person who will talk to your donors about making a gift. The consultant is there as a coach, trainer, planner and organizer. But the organization’s leadership and the volunteer leadership recruited to serve on the campaign cabinet is critical to success.

Avoid these capital campaign pitfalls, and you’ll be far better off than many nonprofit organizations.

That’s what Michael Rosen and Linda Lysakowski say… What do you say?

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17 Responses to “How NOT to Run a Capital Campaign”

  1. Linda,

    I came to Michael’s blog this week all pumped up with adrenalin, wearing 12-ounce gloves, and really itching for a fight with Michael. I read your guest column, heard some cautionary tales that mirrored my own experience, and got some good, sensible advice. Phooey! Nothing controversial, agitating, upsetting or inflammatory – nothing at all to argue or complain about (my avocation).

    Now I’ll have to settle for throwing sponge rubber bricks at the political pundits on TV.

    Jeff Steele

  2. Sponge rubber??? I think the political pundits deserve real bricks. Now, maybe one of those organizations that started their campaign with a “buy a brick campiagn,” thinking they can raise the money with gifts of $100 or $250 at a time, can lend us some bricks to throw since they will never get their building built with that appraoch.

    • True, Linda, they’ll never succeed with that approach, but maybe they can salvage the effort by building a donor pyramid. I’m pretty sure I heard somewhere that every organization needs one.

    • Jeff and Linda, what a terrific Friday discussion! :-) For the authorities out there, I just want to point out that these two fine citizens were talking about throwing bricks (sponge or otherwise) at the pundits on their televisions and NOT the pundits themselves. No actual violence has been advocated here.

  3. well……..do we really want to ruin a perfectly good TV? Hmmmm, need to think about that one.

  4. Linda and Michael,

    Thanks for sharing. This is all great practical info. I would add, “don’t proceed with campaign without buy-in from from all the key stake-holder groups within your organization.”

  5. This is great. I would add that there are three common mistakes that I see. The #1 mistake would be organizations skipping over the feasibility study, concerned about the expense. I was once in a room with 16 organizations that were creating a building that would house their own nonprofit as well as nonprofit tenants. Of the 16, 14 hadn’t done a feasilibity study. Not only does such a study tell you if you can make your goal, I think of it as a pre-call to warm up potential major donors and discuss their concerns. They’re more likely to give if they were part of the original conversations. But too many organizations don’t do this essential work.

    The second mistake I see are those organizations who haven’t built up their base of individual donors before doing a capital campaign. They raise money through events that don’t connect people to the cause, or memberships that come with benefits, but they haven’t sat down and asked people for money. They don’t even know their key supporters.

    The third problem would be people who think that the money will come from outside their organization. They’ll say, “But there are people who want their names on a building” or “I’m sure corporations and foundations will fund this!” I tell them “Inside out, top down” — ask your own people first, and ask the people who can give the most first. Only then do you ask outsiders and lower-dollar donors.

    I hope these comments spark some ideas for you. Good job on this blog!

    • Katherine, thank you for your terrific comments. The capital campaign mistakes you’ve pointed out are certainly dangerous ones. Interestingly, the three mistakes you’ve identified all involve relationships. The issue of the feasibility study touches on the idea of discovering what your organization’s relationships are and how strong those relationships are. The issue of having a base of loyal, true supporters is an obvious case of relationships. Without a base of committed supporters, no capital campaign can be successful. The issue of where the money will come from, inside v. outside, is another clear relationship issue. Those closest to the organization will usually be the most supportive. They’re certainly the people that should be approached first. Development in general, and capital campaigns specifically, are all about relationships. We can sometimes take that notion for granted or even lose sight of it as we focus on numbers and techniques. Thank you for underscoring that relationships are really the center of what we do.

  6. Katherine: you’re right on track. I always tell people if their budget is limited, spend the money on the study and a campaign plan, and then you’ll be on track to run a successful camapign. And also, look inside the organization for your donors, it takes a lot of time to cultivate major donors, they won’t come out of the woodwork to contribute to your capital campaign if you don’t have a relationship established.

  7. And although I’m posting two years’ later, may I also add: and Dear Nonprofits, if you spend the money on a feasibility study, please do not discard or ignore your consultant’s advice and recommendations.

    • Linda, thank you for your comment. Welcome to the party! You’ve made a perfect point. Assuming that the consultant has done a proper feasibility study and has not simply prepared an echo-report to support the view of the CEO, a nonprofit would be foolish to ignore it. Yet, I know it sometimes happens. Good grief!

  8. I’m the Executive Director of a nonprofit dog rescue outside of Atlanta, GA. We purchased 24 ac with the help of family and some grant money. Now we have to build…

    Do the rules vary at all for very small organizations?

    Our operating budget is approximately $100k/year. We are working hard to build a smart, simple facility with very little overhead to protect us financially moving forward, but we do need money to build it.

    • Kristie, thank you for your inquiry. Without knowing more about your specific situation, I’ll answer only generally. The rules (guidelines) for capital campaigns are the rules. They apply to organizations of every size and type. That’s not to say we need to slavishly follow those rules. However, if we’re going to deviate, we should do so consciously and with good reason.

      Linda’s book is a terrific resource. I also recommend Capital Campaigns: Strategies that Work by Andrea Kihlstedt.

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