Where Are We Going To Find the Money? Researching for a Capital Campaign
What is a Capital Campaign?
A Capital Campaign usually involves large sums of money voluntarily contributed to enabling transformative quality of life investments in our society. It could be the construction of a new hospital wing, the purchase of environmentally sensitive land for a land trust, or the building of a new youth shelter.
Whatever the Capital project, the Campaign’s value is evaluated on its ability to create a transformative and life-changing improvement to a community. Depending on the scope of the project, a community can be defined as local, regional, national or international. This also means the prospect pool can be local, regional, national or international.
Capital Campaigns typically require an organization to raise funds in increments 10x to their annual fundraising efforts. Capital Campaigns aim to raise hundreds of thousands, millions, tens of millions, hundreds of millions and in some cases, billions.
That being said, Capital Campaign prospects are key.
Why Are Capital Campaigns Different Than Annual Fundraising?
I often compare Annual Fundraising to the circus act of spinning plates.
Why? Because a typical Annual Fundraising program requires you to conduct multiple fundraising activities at the same time and do them all well. Think individual major gifts, direct mail, online campaigns, peer to peer fundraising, estate gifts, events; third party and internal – the list goes on. That’s a lot of plates to manage.
Whereas in a Capital Campaign, you need to focus on two plates, and they are incredibly fragile and valuable – individual major gifts and estate giving.
In a Capital Campaign, we take these two plates and spin them at a rate far beyond ordinary.
If you want some more information about major gifts and estate gifts, have a look at this article.
The Focus on Individual Major Gifts and Estate Giving
We focus on individual major gifts for a few reasons:
To be blunt this is where the money is – individuals donate more than foundations and corporations.
Individuals donated $12.8 billion in 2014 according to the 2018 30 Years of Giving in Canada The Giving Behaviour of Canadians: Who gives, how, and why? and Statistics Canada’s 2013 Survey of Giving, Volunteering, and Participating (GVP)*.
According to Giving USA 2019, individuals make up 68% of all donations, donating a total of $292.1 billion dollars.
Also, individuals are often easier to access when compared to a multi-layered corporation. Corporations often have a management team, fundraising committee or a board of directors. Individuals have fewer constraints on their decision-making process; they don’t have shareholders or donation policy guidelines.
*The 2018 Survey of Giving, Volunteering, and Participating (GVP) by Statistics Canada has been delayed until 2020.
How Does the Uniqueness of Capital Campaigns Impact Prospect Research?
Capital Campaigns require an organization to raise significantly more money than they are used to. In a Campaign, this means all hands are on deck – staff, board members, volunteers, past board members, advisory committees – when it comes to fundraising.
From a research perspective, this means there are many personal networks available for research that likely have never been researched. Using relationship intelligence data from iWave Connections allows you to discover unknown connections.
When looking for Capital Campaign donors, I like to start with capacity. Why? Because it is likely going to be a few key donors who fund the majority of the Campaign.
To reinforce this in 2013, the top 10% of donors contributed $8.4 billion or 66% of all donations made during that year.
Additionally, Capital Campaigns typically work on a Tier Gift Chart; a few big gifts at the top, then a handful of medium-sized gifts and lots of smaller gifts at the bottom. Often one of the big gifts at the top of the pyramid can represent 10-50% of the total funds raised.
For more on the formula on how to build a Capital Campaign Gift Chart have a look at this calculator.
Since we are looking to raise a significant amount of funds from individuals and estate gifts, I like to focus on building our Campaign Prospect List by reviewing the organization’s internal data. From internal data, I will look at current individual major gifts with a focus on discovering if there is greater capacity beyond what they are currently giving to the organization.
I also like to look at the organization’s current and past donor data but in the lower gift levels. I have often found there are potential donors with significant capacity in these levels, and they have often gone unrecognized. You could do this step manually; however, I like to utilize iWave Screening to review high volumes of data.
I also like to utilize iWave Screening and review the organization’s non-donor datasets – Volunteers, Alumni, Past Board, Members, Patrons, etc. I will again use iWave Screening to conduct this review. For more information on how to utilize iWave Screening review this step by step article.
Estimated Capacity First, Then Affinity, and Propensity Last
As researchers we often utilize a 3-factor formula to evaluate the quality of prospects:
- Capacity – How much wealth can this person afford to donate?
- Affinity – Is this person passionate about your cause and nonprofit organization?
- Propensity – Has this person given to nonprofit causes before?
If you’re new to iWave or just learning prospect researching start with this quick article on Capacity, Affinity and Propensity.
In the context of Capital Campaigns, I recommend placing less weight on propensity. The single reason for this is campaign vision.
A Capital Campaign is a project that will allow an organization to take a significant step forward in its mission to positively change the world.
Why does this lower the weight we place on propensity? Because donors (current or potential) have often never been presented with an organizational vision, this is significant and impactful. The organizational vision should clearly state that the donor’s gift will significantly transform how the organization positively changes the world. As I detail below, Big Visions Get Bigs Gifts.
Capital Campaigns hinge on inspiration and a world-changing vision. And by sharing this campaign vision, we’ve seen countless examples of donors increase in their gifts 10, 100 and 1000 fold. I can think of one of our clients in particular where a donor moved from a $200 cumulative giving history to a single gift of over $200,000. This new donation was based on a single face to face conversation about campaign vision.
This is why I place less weighting on the traditional Prospect Evaluation Formula in a Capital Campaign Scenario.
Campaigns Are A Mountain Climb
As Capital Campaign consultants, we often use the metaphor, that Capital Campaigns are like a mountain climb, and we are your guide. The metaphor also extends to the duration of a Campaign, and they can take a while. The typical length for a Capital Campaign is 3-5 years, some are shorter, some are longer but 3-5 years is the normal range.
What this means for prospect researching is the research is ongoing. It is a continuous exercise to find different prospect cohorts (donors, past board members, volunteers, etc.) and find the best potential donors within that cohort.
I will often re-evaluate a previous dataset or pull a new version of the same report. Just as we focus on two critical areas of fundraising during a capital campaign, major gifts and planned giving, we also focus on finding new prospects for the Campaign.
About the author: Daniel Hussey is the Managing Partner of Wayne Hussey Consulting Inc. Wayne Hussey Consulting Inc. is a 2nd generation family-owned and operated firm with over 20 years of Fundraising Consulting experience. In those 20 years, Wayne Hussey Consulting Inc. has focused on uncovering the key principles that lead to successful fundraising. The discovery and utilization of these key fundraising principles have helped our clients raise over $3B. To learn more about WHCI, connect with Daniel on Linkedin or visit https://www.waynehussey.com/
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