Capital and endowment campaigns operate from the same fundamentals as any well-done fundraising campaign: they have financial goals for which a gift range chart and a timeline have been developed to ensure that the organization meets the goal, and they have a committee of volunteer solicitors, a list of qualified prospects, and creative materials that describe the campaign and its benefits. Because of the size of capital and endowment campaigns, some organizations seek further assurance by commissioning a feasibility study that helps determine what the goal of the campaign should reasonably be, whether your donors have the ability and willingness to access assets, and sometimes even indicates whether to commit to the campaign at all (see Chapter Twenty-Eight for a discussion of feasibility studies).

The difference between a campaign and an ongoing program is simply that a campaign begins and ends. A major gifts program goes on all year long; but during the year, you may focus attention on major gifts using the vehicle of a time-limited campaign. A capital campaign for a building or some other large cost will not be an ongoing need, so it is always done in a campaign format. An endowment can simply be opened and you can focus attention on it all year round, or it can be started or expanded by a campaign. Unlike a capital campaign, major gifts and endowment programs never really end, although campaigns relating to them will.

The following are the main steps in every campaign and the steps you will follow if you decide to do a major gifts campaign. In the chapters that follow I discuss further some of the differences between capital and endowment campaigns.

STEP 1: SET A GOAL AND CREATE A GIFT RANGE CHART

By now you may be tired of reading that having a goal is imperative, so I will merely remind you of that fact. Having a goal enables you to construct a Gift Range Chart, which is essential for a campaign. For an annual major donor campaign, the lead gift in the Gift Range Chart is figured at 10 percent of the goal, whereas for capital and endowment campaigns, the lead gift should equal 20 percent of the goal.

A chart for a campaign with a goal of $1 million is shown here. The chart calls for one gift equal to 20 percent of the goal (as in a capital or endowment campaign), two gifts that equal 10 percent of the goal, and three to five gifts that make up the next 10 percent of the goal. Five to ten donors, then, contribute about one-third of the total goal.

In general, gifts of less than $1,000 are not sought (although all gifts are gratefully accepted). For all gifts, donors may pledge a total and pay off that pledge over a period of a few years if they like. This enables people to make larger gifts over time than they may be able to do at one time. Because donors have several years to complete their gifts, a pledge of $1,000 may be affordable even for lower-income people, who could pledge $27 per month for three years to reach their $1,000 total.

STEP 2: CREATE THE TIMELINE

The timeline for a big campaign is usually not less than two years and definitely not more than five years. The timeline does not include the discussion involved in deciding to do a campaign or the time to carry out the feasibility study, but it does include the preparation time in terms of researching prospects and developing materials. It usually takes the best part of a year just to create appropriate materials and to solicit the lead gifts (because many of the lead donors will have to be talked with several times), and it may take another year to solicit all the other gifts. Three years allows for the unforeseen to be dealt with and the maximum number of donors to be solicited. Five years is the outside maximum amount of time an organization can sustain interest and passion for a campaign while maintaining annual fundraising. Usually, two to three years is the ideal amount of time to conduct a campaign. A fourth year can be used as a “wind-down” period, and pledges can be paid over five or more years, even if the solicitation phase of the campaign is completed in two years.

STEP 3: FORM A SOLICITATION TEAM

In forming a committee, you are looking for people who are comfortable asking donors for assets; usually, these are people who have made an asset gift themselves. The people on the solicitation team include members of the board and people who, once asked, have made large gifts to the campaign. The role of volunteers in these campaigns cannot be overstated. Staff can ask, and they do, but to do so credibly, even a staff person will need to have made a campaign gift in addition to an annual gift.

To form the solicitation team, first identify the people closest to your organization who believe in the goal of the campaign and can make the largest gifts. A team consisting of a board member and a staff member asks each of these potential solicitors for a gift, then asks them all to be on the solicitation team. Some members of the solicitation team are usually identified during the discussion about whether to conduct a capital or endowment campaign, or they may be surfaced during the feasibility study. They are the ones who argue in favor of it and say that they will give to such a campaign.

Conventional financial planning dictates that one should “never touch principal.” Yet principal is what you are asking for. In a sense, you are asking people to transfer some of their capital to your capital needs or to your endowment. This process requires thought, commitment, and careful consideration on the part of the donor. People will make these kinds of gifts only a few times in their lifetimes. All the solicitors must be people whom the donors trust to have gone through this process themselves. Moreover, there is something very convincing when a person can say, “My husband and I have accumulated a nest egg of $1,000,000 over many years of saving. It is for our retirement and for emergencies. But the threat to the environment (or our children, or world peace) is bigger than our need for a nest egg. We want to make sure that Important Group is able to do its work well into the future and maintain its economic stability. So we are giving 10 percent of what we have invested in our nest egg—$100,000—to the endowment as our investment in our community’s future.”

Even someone with no real assets can make a good solicitor, as long as he or she has given a significant gift. In one organization, a board member postponed buying a new car. He described his gift this way: “My old car can be coaxed into a couple more years of use. In the meantime, I am going to give the equivalent of a car payment on a new car for two years to the capital campaign. That will bring my gift to $5,000. I don’t have any real assets, but I can give by postponing acquiring an asset, and my gift will have far more permanence than a new car.” In another instance, a solicitor described her gift this way: “I put some money aside every month, and once a year I use it to go away for two weeks. This year, I vacationed at home. I saw friends, I planted a garden, I read books, I went to free events at my library, and I gave the money I saved to our campaign. I had a great time, and although my gift was a significant amount for me, it was not painful.”

The solicitation team can be formed slowly. It can start with two or three donors and, as more donations are received, new donors can be asked to join the team.

STEP 4: COMPILE AND ORGANIZE THE LIST OF PROSPECTS

In all campaigns, the rule of “top down, inside out” is the way to organize your prospects. Ben Franklin, who was one of America’s earliest and best fundraisers, advised: “Apply to all those whom you know will give something; next, to those whom you are uncertain whether they will give anything or not, and show them the list of those who have given; and lastly, do not neglect those who you are sure will give nothing, for in some of them you will be mistaken.”

Franklin’s advice is what we mean by “inside out.” Start with the people closest to the organization. Those will be board members (if they are not the closest people to the organization, then reconsider doing a capital or endowment campaign), other major donors, volunteers, former board members and volunteers (assuming no ill will accompanied their becoming “former”), staff, and so on. Then, start from the top of that list and work your way down. The first gift should be solicited from the person closest to the organization who can give the biggest gift. This may not be the biggest gift you need, but it should be the biggest one you can get right now.

Sometimes it is hard to figure out which of the people who are closest you should approach first. Think through who on the list can give the biggest gifts. This exercise should narrow your list somewhat. Now think about who is most excited about this campaign. Remember, there are going to be major donors who love your organization’s work but who are not going to support your campaign. This is particularly true with endowments because some otherwise very supportive donors simply may not agree that a grassroots organization should have an endowment. There will be some who have given to other endowments only to see the endowment funds spent on annual needs by a careless board. And there will be others who wish your endowment effort well but are only interested in funding more immediate needs. Finding donors who agree with all three premises of the case for an endowment—that the organization currently needs some financial stability, needs to exist indefinitely into the future, and is mature enough or sophisticated enough to handle this kind of money—and who also have the capacity to give is not simple. The argument for a capital campaign is usually more straightforward, but you can still run into disagreement. Perhaps your biggest donors think you should rent office space instead of buying a building, or they wonder whether your organization will be distracted from its mission by working on a capital campaign.

Use common sense in identifying these prospects. Think about what else you know about the people on your list. For example, a person giving $50 every quarter might be close to the group, but she is probably far from the biggest donor. However, if her $50 gifts are derived from income earned from investments, then she goes to the top of the list because perhaps she would give you the asset that is yielding that $50 each quarter. Someone who gave you $1,000 that he won in the lottery, whose gift prior to that was $25, and who actually ekes out a living as an artist, is not going to be high on the list, but he may be an excellent solicitor because he actually gave an asset that he could have used himself.

Many people will say that they have no idea what assets their donors have. If you really have no idea, then you are going to have to find out more about your donors before you begin asking them for gifts to your campaign. However, a general easy rule to follow in soliciting capital or endowment gifts is to ask for a gift that is ten times the amount of the donor’s annual gift. You want to make it clear that this gift is in addition to his or her annual gift—you don’t want your annual income to decline while you are doing the campaign. When you tell donors that you are asking everyone for the same thing—ten times their annual gifts—people are not offended, even if the size of the gift is absolutely out of their range. The real risk you take in following this formula without other knowledge is that you would ask someone for too little.

The final step in compiling a prospect list is to be sure you have enough prospects. A prospect for a capital or endowment gift is someone who has demonstrated a commitment to your nonprofit, usually by giving over several years and often by also being active beyond financial involvement; someone who has the money; and someone whom you know or you have access to.

As with capital campaigns, you need about three times as many prospects as the number of gifts you seek because 50 percent of your prospects will say no and 50 percent of the group that says yes will give you less than what you ask for. Thus, as you go down the chart, it is filled in by people who, for example, said they couldn’t give $25,000 but could give $10,000.

In our $1 million gift range chart shown earlier, you would need about 261 prospects (87 X 3) to be certain that you could meet this goal. You don’t need to have all the prospects right at the start, but you do need at least some of the prospects for the biggest gifts right from the beginning. You would be ill-advised to launch a million-dollar campaign with fewer than one hundred prospects for the gifts of $2,500 or more. Far worse than no campaign at all is a campaign that splutters and moves slowly. The energy of the campaign is part of what makes it successful or not. A report that “Our campaign is going so well” makes people want to give. The news that “Our campaign is getting off to a slow start” or “We asked a bunch of people who said no” is not as appealing.

STEP 5: SOLICIT THE GIFTS

For a full description of the process of soliciting large gifts, please see Chapters Eight, Ten, and Twenty-One on “Getting Comfortable with Asking,” “How to Ask,” and “Building Major Donor Programs.”

The primary difference between major gifts or capital campaigns and endowment campaigns is in the case. A person being asked for a major gift needs to be convinced that there is a pressing, immediate need that your organization can meet and that this need must be addressed with, among other things, some very large gifts. A capital campaign makes the case that the pressing needs of the organization cannot be met adequately in the facility you are in or with the equipment you currently have or without some other large investment. The case for the endowment goes one step further, explaining that the organization needs stability currently and into the future. It tells donors that their commitment to your current programs is so important that you hope they want to help make your work a permanent feature of your community.

Even the most progressive people can become fiscal conservatives when asked for capital or endowment gifts. They may well believe that your organization does wonderful things toward ending racism or providing creative learning opportunities for children with disabilities or advocating for more just tax policies. But do these same donors believe you will be good at managing a building or be able to manage investing large amounts of money? Donors will have these questions, and organizations must be able to respond to them. When an organization wants to start an endowment, there will be an added question that no one can really answer: “What will happen when everyone who is currently involved in this organization is gone?” Taking seriously the right (and indeed, the obligation) of donors to raise these questions and doubts and preparing thoughtful and reasonable answers are the marks of organizations ready for capital and endowment projects.