Capital Campaigns: The Complete Nonprofit Guide

A capital campaign allows an organization to achieve ambitious goals. Whether you’re trying to construct a new building, complete upgrades, or expand your organization, a capital campaign will allow you to raise the funds to do that. Of course, that’s only if your capital campaign is successful! 

Capital campaigns are typically made up of several different stages. You’ll probably want to have at least two phases to your own campaign. A “silent phase” will emphasize private fundraising conversations with your major donors and corporate sponsors.  The later public phase will focus on raising money from smaller individual donors. 

Let’s take a closer look at how this can work for your organization.

What Is a Capital Campaign? 

Capital campaigns typically focus on raising large amounts of money for a specific project over a set period of time. Some capital campaigns may run for a few months, and others may run for years! . While you may be thinking, “That just sounds like fundraising,” what differentiates it is its intensity and specific goal. A capital campaign is an aggressive funding push to support a large, expensive project. You’ll typically see them used for one of six reasons …

Reasons for Leveraging 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 by utilizing interest earned by the campaign’s donations rather than relying solely on using the donated funds 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 the organization’s cause.
Program Expansion	Nonprofits that wish to expand their services or outreach efforts may hold a capital campaign to support these 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 constituents 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.

The funding for one of the above projects will come from a two-pronged strategy that includes both a silent fundraising phase and a public one. However, before you can move into either of those, you need to lay out your pre-campaign plan.

Pre-Campaign Planning 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 it. It will also help you identify potential problems so you can address them before the campaign.

Conducting a Feasibility Study 

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

1. Define your goal: Your project aims to raise $300,000 to purchase a new building to hold a library. 
2. 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.
3. 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.
4. Conduct interviews: You would then complete one-on-one interviews with some of your identified stakeholders to gather information about support for the cause. You would want to ask them the same questions about their perception of your organization and their opinion on the proposed project. You would collect all this information into a survey or report to compare later.
5. Review the data: Once your interviews are completed, 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.
6. Complete your report: At this point, you would compile all that information into a report that you present to your board of directors and key stakeholders. They will discuss the findings and address any concerns or questions. 
7. 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! 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.

Building a Base During the Silent Phase

If you’ve ever donated to a capital campaign before, you’ve probably noticed that the progress thermometer is rarely empty when it’s 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 $25,000 of a $50,000 goal has already been raised is more likely to view that campaign as successful and will participate in it themselves. Meanwhile, someone who sees $10 of a $50,000 goal has been raised 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 that will make your public phase more compelling. Specifically, your silent phase should be focused on six key groups. 

Silent Phase Target Donor Groups

Major Donors	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.
Institutional Givers	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 by utilizing interest earned by the campaign’s donations rather than relying solely on using the donated funds for programming and other expenses.
Board Members	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 the organization’s cause.
Program Expansion	Nonprofits that wish to expand their services or outreach efforts may hold a capital campaign to support these 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 constituents 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.

Your silent phase will be built on face-to-face interactions. Often, board members and your executive director will be involved in making these asks from your supporters directly. It’s also good to have someone that the target donor knows personally involved in the meeting. 

During the meeting, you should have a specific ask amount in mind. By reviewing the data in your donor management system, 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, see our resource “How to Practice & Prepare for Major Gift Solicitation.” 

Taking the 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 in this is to show progress and impact continuously. Your messaging should clearly communicate the goal of your capital campaign and how it will help further your organization’s overall mission. 

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. You know that 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 enthusiasm for the organization’s overall mission. It also leaves a field to add the supporter’s name so you can address them directly.

You’d also want to include something in that 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 or amounts they’ve donated. You might also suggest specific donation amounts based on how much they’ve given before. 

You can create different versions of your appeal that are 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 for the organization and create 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 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! Then, you would create several different letter templates and send them based on what group they fall 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 to in the silent phase while building a closer connection to donors as you take your project public.

Using Neon CRM for Capital Campaign Support 

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 CRM to create targeted appeals for different groups of donors and adapt your messaging to reach ambitious goals. 

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