← The Fundraising Masterminds Podcast
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- [00:00]
A
You're listening to the number one podcast for nonprofit leaders, getting your nonprofit fully funded. This is the Fundraising Masterminds podcast.
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He said, we really felt like we were doing a good job of communicating with our partners. The feasibility study revealed that we were doing a terrible job. I remember the shock and surprise of the organization when I came back and said, no, your organization is not prepared to do this.
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A
Well, hey there. Welcome back to another episode of the Fundraising Masterminds Podcast. We are so excited that you have chosen to join us today. Well, my name is Jason Galasinski, and with me, my co host, Jim Dempsey.
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B
Hi, Jason.
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A
And together we have over 60 years of development experience combined with nonprofit leadership working with non profits all over the country and all over the world. Jim, you actually work for one of the world's largest nonprofits, Campus Crusade for Christ.
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B
Yes.
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A
You're the chief development officer at crew. And, Jim, today's episode is going to be called how to Run a Successful Capital Campaign.
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B
Right.
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A
And, you know, I think what qualifies you to talk about this is that you actually just finished a capital campaign for crew. It was a fairly large one. Right?
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B
Well, and I've had the privilege of helping a lot of organizations over the last 40 years, churches, Christian schools perform capital campaigns and finish them, too.
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A
What would you say is the largest capital campaign you've ever done?
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B
Well, I would have to say probably a $150 million capital campaign. That's probably one of the largest that I was ever part of.
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A
Wow. Okay. Well, let's not waste any time. I want to get into the different phases of a capital campaign, because you can't just decide one day that you're going to do a capital campaign and wake up and just do it. This isn't like. This isn't like a do it yourself kind of thing. You need to get highly skilled consultants in here. You need to get. There's. There's whole industries that help you with capital campaigns.
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B
Yeah, it's. It's important, Jason. I mean, certainly there's a lot of individuals who can. And organizations who have done capital campaigns without the help of consultants. And of course, there's individuals who also can change their oil and can replace their windows in their house. But if you happen to be like me in that area, I am not mechanically inclined. I do have trouble replacing different elements on my car and could not replace my windows. So I think you really need to look and see. What are your limitations. If you are someone who is gifted in major donor relationships and building structures of challengers and Giver individuals who are going to challenge people, then this may be for you. But what we're going to give you today is not a step by step everything you ever needed to know about it, but we're giving you a framework so that you can determine, you know, how am I equipped to be able to do a capital campaign? What's involved, what's involved. And if a consultant comes in, you'll at least know whether they're legitimate or not and whether they can do the job for you based on the information we give you today.
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A
Yeah, I think the goal of this podcast episode is really just to give you the framework for this is how successful capital campaigns are done.
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B
Right.
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A
Anyone who is worth its grain and salt should be following this framework.
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B
Right, Right.
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A
So you want to protect yourself from scammers or people who, you know, will say, well, I can do it for you and just give me a percentage of whatever and I'll, I'll do it. And then they, you know, scam you out of, you know, money or something like that, or, or just incompetent people.
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B
Well, maybe there are people who think they're gifted in how to run a capital campaign. I mean, I've had individuals who have contacted me, consultants, and say, jim, I'm about ready to meet with someone about doing a capital campaign in two hours. Can you tell me all I need to know about doing a capital campaign? Wow. I legitimately have had those kinds of calls before and I've thought, oh my goodness, what is this poor organization going to experience?
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A
Yeah. So you want to stay away from people who, you know, really have no idea what they're doing and they're just kind of winging it. So there's really five phases of a capital campaign. So let's just list off what they are. So the first phase is a feasibility study.
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B
That's right.
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A
So phase two is the leadership awareness, which is really a private phase.
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B
That's right.
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A
And then phase three and four.
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B
Well, three and four are what we would call the public campaign. Phase three really deals mostly with marketing and management. And phase four is more the bringing people together to celebrate and put your commitments publicly before the Lord.
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A
Okay.
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B
And then lastly, phase five is our follow up phase.
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A
Okay. Well, those are the five key phases. And again.
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B
Right.
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A
Anyone who is doing a capital campaign should be doing this. Now, the purpose of this video is not to give you a step by step walkthrough. We're not going to tell you exactly how to do a capital campaign, but we do hope that this is Helpful from a research perspective. Maybe you're someone who needs to do a building expansion or you need to raise some serious capital for your organization and you have been wondering, well, how do I do a capital campaign? Well, this video should give you a really good overview of what's involved in a capital campaign. That's really what we want to cover. Right? So, Jim, why don't we get into digging in and unpacking each one of these phases. Let's do it. Let's talk about phase one.
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B
Yeah.
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A
The feasibility study.
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B
The feasibility study, Jason, I can tell you this. The most disrespected and most underutilized phases. Phase one. I oftentimes find nonprofit organizations go in with the decision already made. We want to, we need, we must have a capital campaign. So as a result, why do we even need to do a feasibility study? Why don't we just, it's expensive. Why don't we just jump into it and do it? And I can tell you this, these are things that I've found over the years. Is that, number one, remember, the feasibility study is dealing with your preparation, your preparedness for doing a campaign. Do you have the staff, do you have the software, do you have the management to pull off a full scale capital campaign which includes really tens, if not hundreds of volunteers? Secondly, do you have the interest and do you have the buy in from people to give to your capital campaign? Because a good feasibility study includes interviews with your current major donors, your partners, your members of your church, and you assess, do they really have an interest? Do they understand the need that's out there? Do they agree with the needs of the leadership and do they have the capability to give large gifts and are they willing to give those large gifts? And I can't tell you how important that is to this. Of all phases, almost is the one that you need outside advice and counsel more than anything. You really need an independent second opinion on this. Because when you're asking the questions of people who you know are your major donors, they're not going to be real with you. If you ask for an appointment to say we're thinking of doing a capital campaign, they'll feed back, they'll give you the feedback, they'll respond to you that if you think you need it, hey, I'm there, Jason, for you, I'll support you. But in reality, they might not believe in what you're doing and they might not want to give money, but they will be willing to give to a confidential independent second party. They'll tell the straight story of Those kind of things. I heard just recently from one of our organizations who's venturing into a capital campaign. Into a capital campaign. The executive director of the organization said that he got so much out of the independent feasibility study. He said, we really felt like we were doing a good job of communicating with our partners. The feasibility study revealed that we were doing a terrible job of communicating. We would not have done anything differently if it weren't for the insight of the consultants saying, this is what we're hearing from your partners. So you'll get so much valuable information from this feasibility study. And I can tell you this, Jason, I have done a feasibility study, and I remember the shock and surprise of the organization when I came back and said, no, your organization is not prepared to do this. Because I remember specifically the CFO thinking, well, this is just easy money for Jim and this organization. And that was not the case. I legitimately said, you're not prepared. I don't think you should go forward. And I think that built my esteem with him and respect, because I don't think he expected me to be really honest and truthful with them, and they weren't prepared. And I think he was really glad about that.
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A
Yeah, I think the goal of the feasibility study is really just to be counting the cost. I mean, Jesus often said, before you follow me, count the costs. And I think that principle applies, you know, when before you make a major decision, you know, you should count the cost of what is involved. And it might seem like a capital campaign is just easy money. Well, if I just get the right person in there and they just do their job, I'm going to make all the money I need and get my job done.
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B
Right.
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A
If you do your job, then we'll get the money.
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B
Right.
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A
But it doesn't quite work that way. It's not like you're coming in as an investor and you have all the money. You're just going to make it happen. Somehow we really are dependent on the relationships that you already have, right? So the feasibility study is really just asking those questions, you know, like, how do you. What kind of partners do you already have? What kind of relationships do you already have? You know, how do you communicate with these people? You know, because if you. I mean, if you only have a mailing list of 500 people, right. And your largest partner is a thousand dollars, right. You know, you can't go to these people and say, hey, we need you to write a check for a million dollars.
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B
Right.
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A
I mean, it just. You may not have those kinds of Connections.
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B
Yeah.
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A
So the feasibility study is really just that. Is it possible for you to even accomplish this capital campaign?
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B
Right. Well. And just because you have a need and you feel strongly about doing something, doesn't mean that your partners are going to be on the same page with you. I can still remember early on in the 1980s, a major ministry leader who believed firmly that God wanted them to purchase land and put a university on there. And that person was wholly fully committed, believed the Lord had him to do this, but the funding wasn't there. And it turns out that the government officials wouldn't allow them to purchase the land to put that on there. Every door was shut. And finally the ministry leader had to say, okay, the handwriting is on the wall. Maybe I misread what the Lord was saying in this case. And that that's not easy to do.
- [11:44]
A
Yeah. All right. So you might be tempted to skip the feasibility study, but don't do it. Anyone who you're bringing in to do a capital campaign, if a feasibility study isn't the first thing that they do, then I would seriously not use them.
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B
That's right.
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A
Because they're not doing their due diligence.
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B
Yeah.
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In the process. So feasibility study should be the first thing in a capital campaign. All right, let's talk about phase two.
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B
Phase two is the leadership awareness and planning phase. And when you mentioned earlier that it is a private phase, that is exactly what that is. We need to begin to, first of all, build our leadership structure. And the leadership structure involves two different things. Number one, you want to find a chair, you want to find co chairs, and you want to build a structure underneath that. What that means is you want to ask someone to take on a leadership role, and you want to ask them to be one of the cornerstone gifts to a category capital campaign. Now, typically, what we find is that the chair of the campaign typically is challenged to 10% of your total goal. So if you have a $2 million goal, you're going to want your chair to at least be willing to give a $200,000 gift. And then building under that, your leadership structure. Under that, you want to get at least 20% of your total goal through your leadership structure. So that would mean that your chair gives 200, and then leadership structure, you make up the next 200,000 so that you have at least 20% of your total goal within your key three to four leaders within that structure. So that's so important because you want to challenge those people privately. This is a face to face. So generally it's the Executive director alone or the development director with the executive director challenging the chair. And then once you have that chair, then the chair joins those two and goes in to challenge the other key people underneath there. And then you build a structure from there. The chair goes with that co chair and then challenges the next level of people for giving, and then that individual challenges the next person. So you're building this structure that starts with just a one or two people at the very beginning and then builds.
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A
Well, visually seems like a triangle type thing where you're starting with one guy at the top and you're. He's challenging, you know, three, and then they're challenging six, and then it kind of just builds out from there.
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B
That's right, right.
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A
And then building, as you, as you're going down and down and down and we get to the public phase, we're going to be reaching the masses.
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B
That's right. So that's exactly, yeah. And people will say, well, where do you stop? In a sense, you never stop, but from your leadership awareness phase and getting people involved, you want to go into your public phase with at least 40 to 60% of your commitments out there. And one of the things that we haven't talked about that we need to talk about is how long do you want your capital campaign to last? And it really varies greatly. I've been involved in capital campaigns that have lasted six months, a year, two years, three years. I've even had some that have gone out to five years. The typical capital campaign is going to be about three years. So that 200,000 would be accomplished over the length of the campaign. So saying the most popular is three years would be, we need 200,000 over the next three years. So that would be, that would determine your capital campaign from that standpoint. But you want anywhere between 40 to 60% of the commitments to come to, to be given before you move into your public phase.
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A
Right, right, right. Okay. So that's phase two. And I understand the basic idea there. Let's move into phase three. So you said this was more moving into the public phase of things. So at this point in time, we've got the feasibility study done, we've qualified, we've determined that it's, it's, it is possible to actually do this. Then we're moving into the leadership where we've gotten our key leaders are contributing 20% and ultimately building out that structure that leads to 40 to 60% of the overarching goal that's accomplished in phase two. Now we're moving into the public phase. Which is phase three.
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B
That's right.
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A
And phase three and four are kind of like linked together a little bit.
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B
They are.
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A
But describe to me the characteristics of what phase three would be made up of.
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B
Right, exactly. Well, phase one, you really are assuming that you've got buy in and that you know that people out there have the same beliefs, the same desires that something needs to be accomplished. Phase two, you really get confirmation based on their time commitment and their financial commitment that yeah, they're with you. Phase three really moves into, let's start to put that out there and build momentum. It's almost like pushing a rock up to the top of a cliff. And then once you push at the other end, the momentum starts to build greatly. Once you've pushed it over the top, that leadership phase is pushing that up to the top. By now you really need to build momentum. So what you're talking about in phase three is really building up your marketing component, your marketing machine. This is where it's no longer private. You're no longer keeping this as a closely held, closely guarded secret. This is when you roll it out and say, the leadership of our organization, leadership of the church has decided this. And it's not just the executive director and staff that have bought into this. It's not just the senior pastor and elders. But now we have the key leaders within the organization being the, our partners as well that you've got. At this point, anywhere between 20 and 50 people have bought in, made commitments and are willing to move forward. So now you're going out to the masses. Now, depending on your structure in the system, if you are a nonprofit organization who is local, then a lot of what you can do will be right there. A church, you are pretty much talking about the congregation. A local organization, you're building up within the people in your community. A nationwide organization would really include a lot of email and email marketing. So you've got direct mail and email marketing that's going out there to the masses. When you're talking about a large scale.
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A
Organization, with a large scale organization that's not focused on one particular state, or would you be doing like more like small dinner parties or, or just like gathering groups of people together to explain the vision in that phase. Or am I getting ahead of myself?
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B
Well, not necessarily ahead of yourself. It may be, I think you really have to look at the. How realistic is that? If you've got a strong infrastructure out there of individuals who you feel comfortable you represent, it probably would be very important to look at where are people located in The United States, if you've got pockets, if you've got cities where there are major donors in those areas, you may look at doing either small dinner parties or large scale dinners in, let's just say Dallas, Los Angeles, Miami, Florida, Chicago, Minneapolis. Those may be cities that you would do those kinds of things as well, depending on how much staff, you know, the capacity of your staff, and depending on how, how deep you go, your roots in those particular communities. Yeah, okay, that's important.
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A
So then rolling into phase four, moving.
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B
To phase four, this is where we, especially when you're talking about a church or local organization, you can actually have a large scale dinner, large scale event where you market in phase three, you market. The opportunity exists out there, you market what's going to happen with that. You market to them. All that has taken place so far. And that here is what we need for you to consider. And then we're going to bring everyone together in a full scale event and we're going to give you the opportunity at that event to present that. So in other words, you would walk into that dinner, you would present that. Our overarching goal is $2 million, and we have already raised $1.3 million towards that goal. This event would put people over the top.
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A
Yeah.
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B
We found over the years that if you've done an event before, you may be equipped to be able to do that. But really, nothing really fits in as well as the Perfect Vision Dinner that Fundraising Masterminds does. And so this may be a really good opportunity for you to address our audience on that.
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A
So really what you're saying is by this time, by the time we get to phase four, right. We've already primed the pump. We've got 40 to 60% of our funding raised.
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B
Right.
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A
And we're really looking to just kind of put it off the top. Right?
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B
Over the top.
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A
The best way to put something over the top is with the Perfect Vision Dinner. Yes, the Perfect Vision Dinner, especially in a capital campaign. And if it's a larger organization, you might even be doing several Perfect Vision Dinners. Right?
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B
You know, you might, especially if you're talking about a national organization, you might.
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A
Be doing a series of Perfect Vision Dinners. You know, you might do one in, in California, one in Los Angeles, one in Chicago, one in New York, one in Florida, one in Texas. You know, just depending on how big your organization is and depending on where it's at, if it's local, you know, obviously you do a Perfect Vision Dinner in your local community.
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B
Right.
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A
But the goal of the Perfect Vision Dinner is to do exactly what we said, to put it over the top, to close the gap. Right. So if you've got a two million dollar capital campaign, you've got 1.6 already committed. We're looking to close that gap. We're going to be raising $400,000 at the Perfect Vision Dinner. And that is 100% possible.
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B
It is, especially with a capital campaign, is three years.
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A
Yeah. And we have seen Perfect Vision Dinners raise anywhere from 100,000 easy to 400, 500, 600,000. We've even raised a million dollars at a Perfect Vision Dinner. So we know that that kind of thing is possible.
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B
Right.
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A
And if you're interested in learning more about this Perfect Vision Dinner. And again, you know, we talk about Perfect Vision Dinner all the time. This is something that we do on an annual basis for a lot of nonprofits, but it's a tool in the tool belt in the context of a capital campaign.
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B
Right.
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A
But if you want to learn more about the Perfect Vision Dinner, some people call it a gala or a gala, but really it's a certain way to do a gala. Right. It's not just a gala, but it's the formula of it that we're kind of promoting here. That's right. And shameless plug, I guess. Check out our Perfect Vision Dinner mentorship program. You can click the link in the description or scan the QR code on the screen. But the Perfect Vision Dinner mentorship program is a 20 week step by step walkthrough of exactly how to do a Perfect Vision Dinner. And again, it's a perfect tool in the tool belt for a capital campaign, especially right at the very end of a capital campaign. So that's awesome. So I understand where we're at now. I understand how to close the gap. So at this point in time, we've really done phase one through phase four in about a six month to a year time frame.
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B
That's right.
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A
The first. It happens fairly quickly.
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B
It does. It moves quickly.
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A
Yeah. And our fifth phase is the follow up phase. So, Jim, would you mind telling me a little bit about the follow up phase?
- [24:03]
B
Yeah, I'd be happy to. Well, Jason, it's. It's always important to understand that what we're getting up to this point, for the most part, are commitments. We do get some individuals that say, I'm ready to give you some of that upfront front seed money right away, but a good majority of what you have are commitments. So bottom line is that we need to do everything we can over the next three years to Ensure that as many of those commitments are fulfilled. And sadly, I have just found that there are so many capital campaigns and even the fact that capital campaign consultants come in, you pay them the money over that six month period of time, they head out the door and say, be warm, be filled. We hope your commitments are filled and that only 40 to 60% of those commitments actually do get fulfilled. And so then the sad part to that, and this is where you really need to be careful about. If your capital campaign consultant company that help you are not going to stay with you for all three years, find another consulting firm. Because generally what they do is they get paid based on the number of commitments that they have. There's a basis behind that. And so if they don't help you ensure that you're getting a high percentage of commitments, you're. You're taking a hit.
- [25:25]
A
Yeah, that's a good word. Because the last thing you want is a consultant to come in, you pay them a lot of money for the first six months or a year and then they're at the door and you're left with, you know, holding the bag of all these promises.
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B
Right.
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A
But you really are going to need help to get those promises fulfilled.
- [25:43]
B
That's right.
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A
So a good, a good capital campaign manager or consultant should be helping you with phase five, right? Jim, maybe you could just quickly walk through the elements that should be involved in phase five.
- [25:55]
B
Well, a lot of the elements really have to do keeping the campaign before people remember out of sight, out of mind. And that happens so much with that. You need to keep regular communication. So there needs to be emails, there needs to be hard copy newsletters, something that is specifically dealing with the campaign. Oftentimes what we do is we actually have a theme for the campaign, you know, grow and build or the next step, something like that. That is your theme. That theme needs to stay consistent and separate itself from the other things that the organization is doing. So you're keeping people aware of where we're at with the goal, but you're also putting before testimonies of what will happen when we finish this campaign. So if you are building a building that's going to be a youth center, you know, get some interviews from moms who look forward to this youth center being open after school so their kids will have a place to play and to go. You may even interview some of those kids. I'm looking forward to being able to be part of this. You certainly want to have giving testimonies of individuals. That said, I am really glad I made a commitment my wife and I made a sacrificial gift we had been giving sporadically to this organization, but we felt now's the time to put all our chips in the middle of the table and give to something that's going to have a significant impact. And you want to continue to track with the individuals so that they know that there's success. They know that the goal is in sight. And the goal not just being we're going to raise $2 million, but the goal is here's the outcome with the $2 million. And that it sounds so common sense, but it's so important that you focus in on the outcome being what's going to happen when this center's built or we purchase this piece of equipment. That's the important thing, not the $2 million.
- [28:03]
A
Okay, well, a capital campaign is not an easy thing.
- [28:07]
B
It is not.
- [28:08]
A
It's not something that you can just do part time. It sounds like a full and you really got to count the costs you do before you jump into a capital campaign. But I hope this episode was a good, helpful, meaty overview of what's involved in a capital campaign. Certainly is going to get you thinking in the right direction. And certainly you can use this as a litmus test to know if you are working with a capital campaign consultant. Are they on the right, Are they on the right track? Are they telling you the right things? Are they taking you down the right processes? Because we found that these five phases need to be involved in every good above board capital campaign. So if you found this to be helpful, let us know in the comments below. We read every single comment. We'd love to hear from you just what spoke to you during this thing. If you had an aha moment or anything like that, let us know in the comments below. Give us a thumbs up. And make sure you subscribe to this podcast because every week we have episodes geared towards nonprofit leaders. So if you're an executive director, a board member, a development director, or involved in leadership in a nonprofit in any way, this podcast is for you. So hit that subscribe button. We don't want you to miss our future episodes. We got some great content coming your way. And again, if you're interested in learning more about what we offer at Fundraising Masterminds, we have a series of courses and training available to you. You can check that out@fundraisingmasterminds.net Jim, any final words about capital campaigns?
- [29:42]
B
Well, this is always an exciting time. If you are thinking about a capital campaign, I would just have to remind you, don't skip that feasibility study. Take that very seriously and seek outside counsel. Look for ways to get the best advice possible. This is not just a DIY effort. Do it yourself.
- [30:05]
A
Yeah.
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B
That's not what this is about.
- [30:07]
A
Yeah. Well, thanks, Jim. I appreciate your wisdom. And I know that you've got a lot of experience. You've done a lot of capital campaigns in the past. You've probably lost a lot of your hair because of the capital campaigns.
- [30:18]
B
That and a number of other things.
- [30:20]
A
Yes. And so appreciate your wisdom and your insight into this. And thank you again for joining us on this episode of the Fundraising Masterminds podcast. We will see you again next time.
- [30:31]
B
Take care.