Capital Campaigns: The Complete Nonprofit Guide

Whether you’re trying to construct a new building, complete upgrades, or expand your organization, a successful capital campaign may be a good way to raise the funds you need. But what does it take to run an effective capital campaign that reaches your goal?

Capital campaigns are typically made up of several stages. Most have at least two phases: the “silent” phase and the public phase. A “silent phase” will emphasize private fundraising conversations with your major donors and corporate sponsors. Later, the public phase will focus on raising money from individual donors. 

Let’s take a closer look at how to plan and execute a capital campaign for your organization.

What Is a Capital Campaign? 

Capital campaigns focus on raising large amounts of money for a specific project over a set period. Some capital campaigns may run for a few months, and others may run for years!

If you’re thinking, “That just sounds like fundraising,” the differentiator is its intensity and specific goal. A capital campaign is an aggressive funding push to support a large, expensive project.

You’ll typically see capital campaigns used for one of the six reasons below.

6 Common Purposes for a Capital Campaign

Commercial Real Estate	This is the major goal that drives most capital campaigns. Nonprofit organizations require facilities for various reasons, and they raise funds specifically to purchase them. While this is particularly prevalent in historical or arts nonprofits, you’ll see it in almost every sector.
Equipment and Technology	Organizations periodically need to purchase new equipment and resources. This might include state-of-the-art machinery, computers, software, or other tools designed to improve operations and further the cause.
Endowments	Endowment fund capital campaigns are designed to grow the organization’s long-term investment fund so it can support ongoing activities. This approach enables programs to sustain themselves using interest earned by the campaign’s donations rather than relying solely on them for programming and other expenses.
Research and Development	Research and development initiatives are particularly popular in science or public health-based nonprofits. This might include funding scientific research, medical advancements, technology innovations, or any other emerging solutions tied to your organization’s cause.
Program Expansion	Nonprofits that wish to expand their services or outreach efforts may hold a capital campaign to support those new initiatives. You might see these in educational or family-focused nonprofits as they expand their services to help people in need.
Debt Reduction	In this case, the capital campaign is designed to pay off the organization’s financial obligations. Unfortunately, it can be hard to garner support for debt reduction because people may have difficulty seeing how it ties directly to the cause they care about. In a debt reduction capital campaign, your silent phase will be vital for meeting your goals.

Beyond helping organizations achieve major fundraising goals, capital campaigns have many other significant benefits, including:

• Engaging stakeholders: Since board members, major donors, and other valuable supporters are involved, capital campaigns can encourage them to play an active role in fundraising and deepen their connection to the mission.

• Increasing visibility: A capital campaign is an opportunity to spread awareness for your cause and highlight your impact, which can make your nonprofit more visible and attract new supporters.

• Secure long-term stability: The financial results of a capital campaign can have a lasting positive impact that strengthens your organization’s capabilities for years to come.

Now that we’ve covered what you can use a capital campaign to accomplish, let’s dive into how to make the campaign happen. The funding for any of your projects will come from a two-pronged strategy that includes both a silent fundraising phase and a public one. But, before you can move into either of those, you need to lay out your pre-campaign plan.

Stage 1: Pre-Planning Your Capital Campaign to Gauge Interest

During pre-campaign planning—which starts anywhere from three to 12 months before the campaign itself—you’ll establish your strategies for both your silent phase and your public phase. You will also want to determine if your idea is viable at all!

One major part of pre-campaign planning is your feasibility study. The feasibility study is designed to gauge interest early on so you can determine if the plan is worth the effort. It will also help you identify potential problems so you can address them before the campaign.

How to Conduct a Feasibility Study

A feasibility study is all about early due diligence. It’s a structured and collaborative process where you investigate your plan’s strengths and weaknesses.

For example, say you wanted to run a capital campaign to buy a new building for your literacy organization. Your feasibility study process might look like this:

• Define your goal: Your project aims to raise $300,000 to purchase a new building to hold a library. 

• Assign a responsible party: In many cases, getting a third party to do your feasibility study is a good way to eliminate the risk of bias. That’s not always possible, though. Let’s assume, in this case, that you decide to do it internally.

• Develop the study plan: At this point, you’ll outline the timeline, methodology, and target participants in the study. Target participants will be individuals who are typically involved in the silent phase, like your major donors, board members, and community leaders.

• Conduct interviews: You would then complete one-on-one interviews with some of your identified stakeholders to gather information about their support for the project. You would want to ask them the same questions about their perception of your organization and their opinion on the proposed new building. You would collect all this information into a survey or report to compare later.

• Review the data: Once you’ve completed your interviews, you’ll want to look at trends. For example, you may notice that several individuals interviewed expressed concerns over high real estate prices in the area. Those individuals also suggested an alternative area where prices are a bit more stable.

• Complete your report: At this point, you would compile all that information into a report you present to your board of directors and key stakeholders. They will discuss the findings and address any concerns or questions. 

• Adjust your campaign strategy: After reviewing all of the findings from your feasibility study, your organization decided to reduce the goal to $200,000 with a plan to purchase a less expensive property.

Completing a feasibility study helps iron out your plan. It’s also good for warming up your donors and strengthening those connections! Research by Capital Campaign Pro found that 94% of organizations that conducted a feasibility study strengthened their relationships with major donors and ultimately raised 115% of their goal.

In the silent phase of your campaign, you will approach those major donors and key stakeholders again. Through the feasibility study, you already know the best individuals to target.

Stage 2: Building a Base During the Silent Phase

If you’ve ever donated to a capital campaign, you’ve probably noticed that the progress thermometer is rarely empty when made known to the public.

By the time the organization reaches out to you, they’ve already raised much of their necessary funding. That’s intentional! People are more likely to give to a campaign if they believe their donation will help push the organization to its goal. 

Someone who sees that you’ve already raised $25,000 of a $50,000 goal is more likely to view that campaign as successful and will participate in it themselves. Meanwhile, someone who sees that you’ve raised $10 of a $50,000 will question why no one else is donating. They will be less likely to participate. 

This is why your silent phase is so critical. Before you go public, you should set a funding progress goal of 50% or more. By doing so, you don’t enter the public phase until you reach that initial milestone.

During the silent phase, you’ll approach major donors and insiders to your organization and build fundraising momentum to make your public phase more compelling. Specifically, your silent phase should be focused on six key groups.

Donor Groups to Target in the Silent Phase

A capital campaign’s silent phase is where you’ll lay the foundation for success. Targeting the right donors helps you secure early funding and establish the credibility you need to make your public phase compelling to other groups.

During the silent phase, you should focus on three key groups:

Major Donors	These individual supporters are capable of making large contributions. They’re often approached early on in a capital campaign, as their gifts are typically the largest the campaign will receive and will help establish the campaign’s momentum.
Institutional Givers	Support from foundations, corporations, and other organizations can signal credibility and inspire confidence among other donors later in the campaign. They provide significant funding through grants or sponsorships.
Board Members	Your nonprofit’s board members often set the stage for a capital campaign. They lead by example, donating to the campaign early on and tapping into their networks to help secure additional funding.

You’ll build your silent phase on face-to-face interactions. Often, board members and executive directors will make these asks from your supporters directly. It’s also good to have someone the target donor knows personally involved in the meeting.

During these meetings, you should have a specific ask amount in mind. By reviewing the data in your donor management software, you should be able to see a donor’s history and the amounts they’ve given in the past to give you an idea of how much to request. To learn more about how to solicit a major gift, check out this resource:

Stage 3: Taking Your Capital Campaign Public

Once you’ve raised about 50% of your target amount during your silent phase, you’ll be ready to move on to the public part of your campaign.

During this time, you’ll reach out to your broader base of donors through social media, email, websites, direct mail, and other fundraising avenues.

The public part of your capital campaign will be very similar to any other nonprofit fundraising campaign. The goal is to show continuous progress and impact. Your messaging should clearly communicate your capital campaign’s goal and how it will help further your overall mission. 

Example Capital Campaign Messaging

For example, let’s return to the literacy organization that wants to buy a building for a library. The organization would explain how building that library will support its overall cause. Their message might look like this:

Dear [Supporter Name], I hope you’re doing well! I wanted to share an incredible update with you: We’re on a mission to purchase a new building for a library in Lewiston. As you know, access to books and educational resources in Lewiston has been limited for far too long. In years past, you’ve been a huge part of making those much-needed resources available to our community. Now, I’d like to personally invite you to join us in creating a vibrant space that nurtures the love for reading and empowers our community. Our goal is to raise $200,000 to bring this vision to life. Will you support this work? With your generous donation, you’ll help build a dedicated library that will serve as a beacon of knowledge, inspiration, and growth in our community.

An email like this clearly outlines the goal while tying it to the donor’s past support and enthusiasm for the organization’s mission.

You’ll also want to include something in your email to show your progress toward your goal. A fundraising thermometer or progress meter is a popular asset for this type of campaign. Showing the donor that you’re already halfway to that $200,000 goal makes them feel like their contribution is more impactful.

If you’re using a CRM, you could easily adapt your messaging based on who you’re talking to and their history with your organization. Aside from addressing the donor by name, you might reference campaigns they’ve supported in the past or how much they’ve donated to you in the past. You might also suggest specific donation amounts based on how much they’ve given before. 

You can create different versions of your appeal based on what you know is important to that donor. For example, one message intended for parents whose children enjoy this organization’s programming might talk about how the building will provide a place for children to read.

Another version written for the organization’s most loyal donors might talk about how the purchase will be an investment in the organization that creates financial stability. 

Another appeal written to the organization’s historical literature club might talk about the historical value of the building and how preserving it is essential.

This example organization could do that by segmenting their donor database into different groups based on the types of campaigns they’ve responded to in the past. You can do the same for your own campaign! Create several letter templates and send them based on which group the donor falls into. This is a powerful way to personalize your campaign without writing every single message manually.

A CRM is critical in a capital campaign because of all the data and information you’ll need to run it successfully. It can help you find the right individuals to connect with in the silent phase while building a closer connection with donors as you take your project public.

Support Your Capital Campaign with a Powerful Nonprofit CRM

A capital campaign allows you to fund a major purchase for your organization’s growth. By breaking it into silent and public phases, you can establish a foundation at the start that you can build on for your final funding push. From there, you can use a nonprofit CRM to create targeted appeals for different groups of donors and adapt your messaging to reach your most ambitious goals.

Neon CRM can help support your capital campaign with adaptable messaging, unique insights, and robust reporting. To learn more about how our platform can support your goals, contact us!