Sources for this module: Capital Campaigns from the Ground Up , Stanley Weinstein, ACFRE, EMBA

1. Capital Campaigns are intensive fund raising efforts designed to raise a specified sum of money within a defined time period to meet the varied asset-building needs of an organization • Construction of new buildings” • Renovation or enlargement of existing buildings • Endowment creation or addition Used to be the “once in a lifetime campaign… • Now orgs host every 5 -10 years • Don’t rely on outside counsel • However, are much more intense than the regular annual fund campaign of organizations, hence a module dedicated solely to the topic

2. Sources for this module: • Capital Campaigns from the Ground Up, Stanley Weinstein, ACFRE, EMBA • My Experience; ASRI & Butler Hospital • CFRE Review Course – Faculty Manual • Text – Achieving Excellence in Fund Raising, Hank Rosso Inspiration for this module: • Non-profits of all sizes are facing budgetary constraints that prohibit strategic thinking and acting; • Revenue obtained via philanthropy is the catalyst • Now more than ever DOs must know the financial benefits

3. Example of Financial Benefit - Project: $15 Million Building Scenario #1Finance (Debt): $10 Million Equity: $5 Million New Revenue (from new building): $65,000/month Monthly Debt (including interest) = $63,206/month Net Income from operations: $1,795/month Scenario #2Finance (Debt): $5 Million Equity: $5 Million Fund Raising: $5 Million New Revenue (from new building): $65,000/month Monthly Debt (including interest) = $31,603/month Net Income from operations: $33,397/month

4. Myth: non-profits can’t make a profit (i.e. a margin) Run, don’t walk if you sit on this board! (remember –board members are morally, legally and financially responsible) • Non-profits are financially responsible for advancing their mission • Sound fiscal policies are necessary for that advancement • Important to take lessons from the corporate community • Reserves and endowments help in planning for expansion and supplementing specific/operating costs • Non-profits that practice this way attract more donor-investor types

5. Prerequisites for Capital Fund Raising Success • The non-profit must have a positive image • The need for the capital project must be well articulated • The organization must have identified and nurtured positive relationships with potential donors who have the capability and willingness to support the campaign at pacesetting levels • The nonprofit must attract strong volunteer leadership • The philanthropic environment and timing must be right • The campaign must be well organized and staffed with individuals capable of undertaking and supporting a major project initiative and fundraising campaign • The board of directors must have a sufficient number of members who are influential in the community Source: Capital Campaigns from the Ground Up, Weinstein, 2004

6. What to know from the “Get Go” • Your organization has many building and planning options • Capital Campaigns need pacesetting lead gifts to success • Multi-year pledges • Never seek the “average gift” • Well executed capital campaigns don’t diminish ongoing support • Include endowment goals • Those closest to the organization must set the pace • Two early steps (1) ballpark estimate of expenses (2) identify prospects • The case for support = people (not organizational needs) Source: Capital Campaigns from the Ground Up, Weinstein, 2004

7. Capital Campaign Phases • Preparation Phase (6 months to 3+ years) Purpose: devoted to project planning and strengthening the organization’s fund raising capacity Success is determined by: (1) how well the project meets the needs of external constituencies (2) how well the organization has identified and cultivated relationships with top donors (3) how well the organization has understood and reconciled project costs with fund raising potential • Prospect identification and cultivation (early and ongoing) Not a real phase; but an important exercise Success is determined by: (1) the quality of prospects identified (2) the thoughtfulness in designing meaningful cultivation activities (3) the organization’s ability to nurture genuine and warm relationships with potential major donors Source: Capital Campaigns from the Ground Up, Weinstein, 2004

8. Capital Campaign Phases (continued) • Pre-campaign Planning Study Phase (3 to 6 months) Purpose: devoted to selecting the fund raising consulting firm (if using one), developing a test case for support, securing appointments with potential top donors, conducting confidential interviews (by fund raising consultant) and delivering the feasibility report of those interviews Success is determined by: (1) the choice of firm (2) the quality and objectivity of the study (3) the quality of the interviewee list (4) the board’s response to study recommendations (5) develop a gift-range table Source: Capital Campaigns from the Ground Up, Weinstein, 2004

9. Capital Campaign Phases (continued) • Quiet Phase (6 to 12 months) Purpose: devoted to recruiting campaign leaders and soliciting their commitments campaign leaders rate the giving capacity of their prospects and match that capacity to naming opportunities; obtain pacesetting lead gifts Success is determined by: (1) the appropriate volunteer and staff person to dialogue with the prospective donor (2) 100% of board giving is achieved Source: Capital Campaigns from the Ground Up, Weinstein, 2004

10. Capital Campaign Phases (continued) • Intermediate Phase (3 to 6 months) Purpose: devoted to follow-up visits and conversations with lead gift and major gift prospects who have not yet made their commitments. Success is determined by: (1) quality of volunteer training (2) continued cultivation activities (3) peer relations established with top prospects (4) achieving 50% of fund raising goal • Public Phase (6 to 12 months) Purpose: introduce the effort to the public and announce over 50% of the fund raising goal has been achieved; invite broader audiences to support however still using personal contacts. Later in this phase, introduce phone and mail appeals Success is determined by: (1) completed the campaign in the specified time frame • Victory Celebration Purpose: validate donor support (reduce buyer remorse) Source: Capital Campaigns from the Ground Up, Weinstein, 2004

11. Capital Campaign Phases (continued) • Conclusion and Pledge Payout Pledges are often made over a five-year period, keep these donors engaged • Make pledge payment reminders a source of inspiration and information • Invite donors to grand opening, tours of new building • Inform donors about staff working on the new building/project • Provide a separate “annual report” on the progress of the new project with numbers of people served, innovative programs, how the project has alleviated community stresses, etc. • Recognize donors (e.g. the Donor Wall) – celebrate and publicize that fixture You will not get 100% of your pledges, so you need to do everything possible to TRY to recruit as much as possible Source: Capital Campaigns from the Ground Up, Weinstein, 2004

12. Source: The Fund Raising School, 2002. CAMPAIGN PHASES

13. The importance of a Feasibility Study Tells organizational leadership: • How much money can be raised through philanthropy • How long it will take to meet this goal • How your constituents feel about the effort • How community members feel about the effort • How your effort aligns with community needs • Other fund raising campaigns that are occurring at the same time • Potentials for campaign leaders/leadership gifts • Steps that could be taken to strengthen capacity • Resources necessary (personnel, expertise) Objectivity is the most important aspect of your feasibility study (use unaffiliated outside counsel with experience) 1150 Douglas Pike∙ Smithfield ∙ RI ∙ 02917 ∙401.232.6200 ∙ edc.bryant.edu

14. Marketing Materials: Another big (but necessary) expense “I didn’t have to read your materials. As soon as I saw it was from your organization, that was as much as I needed to know. If you say the organization needs $3 million, I know you do need it” Mr. Unique Philanthropist • Campaign Collateral provides information to those that don’t fully know about the organization • Market research (done in prep of collateral) flushes out potential objections • Empowers campaign volunteers; Signifies to the prospect and the community that the fund raising effort is legitimate • A Cohesive look/brand signifies an organization and purpose 1150 Douglas Pike∙ Smithfield ∙ RI ∙ 02917 ∙401.232.6200 ∙ edc.bryant.edu

15. Marketing Materials (continued) • During the campaign concentrates PR, Marketing, and communications programs into five key messages: • The organization’s position statement • The organization's achievements and reputation • The organization’s vision • The organization’s invitation to participate • The organization’s campaign theme • Components (physical evidence) • brochure/folder that outlines the case • video • fact sheets, floor plans with naming opportunities, campaign stationary, commitment cards 1150 Douglas Pike∙ Smithfield ∙ RI ∙ 02917 ∙401.232.6200 ∙ edc.bryant.edu

16. The Capital Campaign Committee Source: The Fund Raising School, 2002. CAMPAIGN PHASES

17. The Capital Campaign Committee • Outline the various committees necessary and the number of people that should be on those committees along with the talents necessary to best serve those positions; job descriptions are helpful • Some Board Members should sit on the Campaign Committee, however, it should not be a board driven activity; goal is to engage volunteers outside of the Board of Director’s circle • Campaign Chair(s) – should be people of influence and affluence in order to recruit other volunteer and donors; does not have to be a board member • Need to be able to sustain regular operations while leading a successful campaign • Examples provided in the handouts section

18. Prospect Identification The Board and other organizational leadership will look to seven main groups: • Individuals • Businesses/Corporations • Foundations • Government Agencies • Associations (professional associations and unions) • Service clubs (e.g. Rotary, Kiwanis, Lions, etc.) • Churches and synagogues However, do they have a link to your organization? Are they donors? The CDO must steer the committee to look within.

19. Your Best Prospects: • share your organization’s values • are philanthropic • have the capacity to provide support at generous levels • have some identifiable reasons to support your organization Turn to: • Constituents – E.g. patients at a Hospital, Alumni from a University, subscribers for Symphonies, etc. • Current and Former Board Members • Key Volunteers • Staff • Current Donors • Lapsed Donors (LYBUNT, SYBUNT) • Vendors Source: Capital Campaigns from the Ground Up; Weinstein, 2004

20. Those who give generously to similar organizations • Start collecting lists, e.g.: symphony program books, hospital annual reports, university publications, nonprofit newsletters, donor walls • Engage campaign committee in identifying those with whom they have personal connections • Affluent individuals with whom someone in your organization has a peer relationship • Everyone knows that Bill Gates and Warren Buffett are (1) rich and (2) philanthropic; but unless your organization has a connection, the chances are low that you’ll get a gift from them • The key is peer-to-peer relationships; The CDO does not have peer-to-peer relationships with people of affluence Source: Capital Campaigns from the Ground Up; Weinstein, 2004

21. Four Key Areas of Prospect Research: • The prospective supporter’s relationship to your organization • The prospect’s interests and hobbies, especially as they relate to your organization • Networking (who in your organization is close to the prospect) • Capability (net worth, capacity to donate, and challenging contribution amounts to request) • Identify as many prospects as possible to create the largest prospect pool • Its worth while to gather more information about people with lead/major gift capacity (since the top select donors make up the lion’s share of the goal) • Your Gift-Range Table created in the planning phase will provide direction on the gift levels you’ll need to obtain to meet the campaign’s goal Source: Capital Campaigns from the Ground Up; Weinstein, 2004

22. Prospect Rating and Evaluations (a.k.a. rating sessions): The tried and trusted method to identify connections to prospects while also identifying capacity and possible linkages Step 1. – Create a Cover Page, Key Page, and Prospect Rating Form (examples available in the handouts section) Step 2. – Fill in the names of 300 – 400 individuals, foundations, and corporations likely to be prime prospects Step 3. – Take the list to your Board of Directors (and/or special rating committee comprised of bankers, real estate brokers, insurance agents, stock brokers, attorneys, i.e. the “movers and shakers”) • Volunteer’s name is important as is “willingness to visit” – remember, people give to people Step 4. – Development staff then create a Compiled Prospect Rating form (see example in handouts section) Source: Capital Campaigns from the Ground Up; Weinstein, 2004

23. Rating sessions (continued) Step 5. – Campaign leadership can then approach the appropriate volunteer as the Compiled Prospect Rating form outlines “Who knows who” Supplemental Information: Development staff can supplement the information by conducting various searches using on-line resources. “Wealth Screening” is a popular tactic where computer programs look at various databases simultaneously to get an overall propensity to give along with influence and inclination.

24. Capacity to Give: • The personal connection might get your organization and appointment, but it does not guarantee that you’ll get a gift • The ask amount is very important; potential to offend • Too high, may get a “no” • Too low, may be “leaving money on the table” General Rules of Thumb: • Close relationship to the organization, go with maximum capacity • Not close, but has the potential, wait on the ask; if pressing deadline then ask two levels below the donor’s capacity • Foundation – upper end of the gift range • Peer relationship – ask them to “think big”

25. Solicitor Training (or “orientation”) Hint: adopt an organizational policy requiring that every staff member and campaign volunteer must attend at least one campaign orientation and training session. Four Main Parts: • Institution and project overview • Instruction concerning securing appointments • How to ask for a capital campaign commitment • Follow-up and campaign procedures

26. Solicitor Training (continued) • Institution and project overview (inspirational) • Organizational History, Current Challenges and Solution to those challenges (i.e. the reason for the capital campaign) • Presented by CEO, Campaign Chair, other visionaries • Instruction concerning securing appointments (informational, confidence building, strategies for success) • Importance of “in-person” visits • “what and how to” advice; don’t slip into a solicitation… • Staff support for the appointment and solicitation process • Volunteers schedule visits “on behalf of the Campaign Chair” • CEO/CDO schedule visit for the Campaign Chair using his/her name • Volunteer schedules call while together with the CDO – “why don’t you call prospect X now”, or “Let’s get together with your prospect list on Tuesday morning and see how many appointments we can get.” Source: Capital Campaigns from the Ground Up; Weinstein, 2004

27. Solicitor Training (continued) • The Solicitation Process (empowering, informational) • Build Rapport; two ears one mouth, use them proportionally • State the case for support • Encourage involvement – ask questions that solicit the prospects feelings toward the overarching challenge; evoke feelings of “I can fix this problem” or “I want to be a part of the solution” • Handling Objections – Don’t argue or persuade; substitute “and” for “but”; use “feel, felt, found” approach • Feel – indicates the listener understands the prospect’s concerns • Felt – indicates the prospect is not alone in their viewpoint • Found – offers the nonprofit representative an opportunity to supply new information • An example of the Feel Felt Found approach is on the next slide Source: Capital Campaigns from the Ground Up; Weinstein, 2004

28. How it works - the Feel, Felt, Found Approach: • Upon hearing a new and upsetting objection, admit that you have not heard it before and that the situation sounds serious • State that you are going to look into the matter and report the concern to the organization’s board and management team. • Assure the prospect that the administration is working to make the organization as strong as possible. • Let the prospect know that you speak to many people who believe in the organization’s “bottom line” (i.e.: the institution’s strongest and shortest rationale for support). • Conclude by citing the bottom line as the reason that everyone will work to overcome the problem and do everything possible to strengthen the organization – including support for the capital project Source: Capital Campaigns from the Ground Up; Weinstein, 2004

29. Solicitor Training (continued) • The Solicitation Process (continued) • Seeking Advice • About the Campaign: “Is there something our organization should be doing that we’re not doing”, “when speaking to other community leaders about our campaign, what points would you stress?”” • About their Commitment: “Might you consider a personal commitment in addition to the corporate pledge?”, “What is the best way to approach your company?”, • The Closing • Be aware of words and body language • Various closings: • Use the naming opportunities page – “where do you see yourself participating” • “Your leadership gift is important to this project, I hope you are in a position to consider a pledge of $30,000 or more to help us.” Source: Capital Campaigns from the Ground Up; Weinstein, 2004

30. Solicitor Training (continued) • The Closing (continued) • Employ the two “Os” – Offer, Opportunities - “We would like to offer you an opportunity to make a significant investment in….Your pledge of $xxx,xxx will allow us to…” • After the close, silence! (wait for the response…which will be one of three answers: yes, no or maybe) • A “No” rarely means never; determine the true meaning of the “No”; usually timing or amount • If prospect is solidly leaning toward a No, then ask them not to make a decision now. • “Please don’t decide not to support the campaign today. Let me get more information and I’ll contact you in six month…” • “Maybes” – set appointments with both spouses or all the decision makers • Predominately “Yes” Responses = asking too little Source: Capital Campaigns from the Ground Up; Weinstein, 2004

31. The Commitment Card(a.k.a. pledge card) “Just leave me the pledge card and I’ll fill something in” Famous last words, Prospect • If you get a favorable response to your request, have the prospect sign the pledge card and fill in the agreed upon terms, payment dates, naming opportunities, etc. • For accounting purposes – a signed multi-year pledge is 100% recognized in the year of the commitment • For the “Maybes” – discuss some conditions and what you need to do to get to yes, but don’t leave the pledge card • Getting a signature in person: • Illustrates that you feel the prospect’s/donor’s gift is very important • Shows respect for the donor/prospect • Strengthens the relationship between the donor and the organization

32. Role Playing • Good exercise for orientations (trainings); warning: people usually feel very uncomfortable do it • See “Advice to the Volunteers or Staff Solicitor” (Winstein, 2004) in handout section Team Solicitations: • More effective than one solicitor; don’t overwhelm (two solicitors for one prospect is ideal) • Board Chair (volunteer) with CEO (staff) is the most effective; however, there are other options that could be more appropriate due to the prospect – alignment is key here; trying to achieve a volunteer perspective and an internal perspective • Two sets of ears; two perspectives

33. After the Solicitation Meeting: • Report back to the Development Office • Staff will make the appropriate entries, notations into the database • Send a “thank-you” note • Handwritten note from the volunteer solicitor is the most effective • Can be generated from the Development Staff on organizational letter head (signed by the volunteer and staff solicitor) • Regardless of the outcome • Communicate and Recognize Successes • Send updates to entire Campaign Committee as each commitment card is signed • Reinforces the Campaign’s rationale among volunteers and donors • Fosters commitment to the challenging campaign timeline • Fosters a culture of a winning project (people want to support successful projects) • Whole is greater than the sum of the parts

34. Managing a Capital Campaign • Is a huge task; often difficult for the CDO as he/she needs to sustain regular operations of the fund raising program • Often Campaign Consultants are used: • Provide singly focused to meet the campaign goal • Expert direction of the Board and CEO (very good if new organization or and organization in transition (from non-fund raising to fund raising) • Has a lot of experience from other organizations’ campaigns • Knows how to motivate volunteers and staff • Is a contractual arrangement (creating another reason for motivating staff, particularly the ED/CEO) • Can provide education to the existing Development staff adding value in • There are various services Consultants will provide: • On-site management (e.g. acting as part of your staff; another CDO) • Off-site management with guidance and direction • Hybrid (two days per week on-site combined with access on off days)

35. Managing a Capital Campaign (continued) • If no outside consultant is brought in to manage the campaign, you should hire dedicated staff for the duration of the effort, E.g. • Campaign Director – An advanced professional who can make visits with volunteers and manage other campaign/development staff • Campaign Coordinator – manages logistics; provides administrative support • Campaign Assistant – Solely provides administrative support • Campaign Grant Writer, Communications Officer, Government Relationship Officer – dependent on the talent-gap in your Development office and target prospect pool for your campaign • Pre-fund raising (planning phase) ROI will be above the benchmarks for Development programs • ROI of the entire Development program (including all CC expenses) will then go far below benchmarks in fund raising mode ($.07 - $.15 to raise $1)

36. Design your Solicitation Matrix • Make is simple; in Excel (or table in Word) • Horizon headings: • Prospect’s Name • Volunteer Solicitor #1 • Volunteer Solicitor #2 • Staff Solicitor/Representative #1 • Staff Solicitor/Representative #2 • Ask Amount • P2G Rating (1,2,3) • Naming Opportunity • Prospect’s Contact Information (primarily phone #)s • Two Columns for dates • You can put as much information as you want in the matrix as long as it is useful

37. The Solicitation Matrix • Is a quick reference guide to who is doing what (i.e. what volunteer and staff member is assigned to a specific prospect) • Can provide a visual to promote “many hands make light work” and allow for the CDO to delegate • Helps Development staff in preparing the solicitation materials, i.e. Proposal, Letter of Intent (a.k.a. pledge card) • Does not replace your database; should be entered into the database first and exported into this format • Note: whenever there is manual duplication, there is chance for human error; it’s a good idea to minimize manual duplication to avoid costly/timely and embarrassing errors • If you have a very small shop, and do not have a sophisticated database/fund raising software, then this will be your database

38. Cultivating Campaign Prospects • Your campaign effort should be prepared to handle the “Nos” that are really “Not Yets” via cultivation • Have a “Plan B” set up in advance in order to respond effectively (main goal: address prospect’s concerns) • Requires the availability of organizational leadership (CEO, Board Chair, other key personnel or legacy leaders) • Requires excellent listening skills of the volunteer/staff solicitors • Requires excellent record keeping from Campaign Administrative staff in order to implement next steps • Suggested tactics: • Meeting with the CEO • Tour of facility; witness the “good being done” • Talk with a program head (these staff members are generally viewed as non-threatening; “servant leaders”) • Invite to public lectures or event where other donors will be present • Invite to a Board Committee meeting (if appropriate) • Send evidence of expertise/position (press articles, journal publications)

39. Post-Commitment Campaign Tasks: • Enter the gift; verify the pledge card is complete: • Is it signed? • Is the pledge payment schedule clearly outlined with amounts and dates? • Is there a naming opportunity? • How does the donor want to be recognized (in the annual report, on the donor wall, on the naming opportunity)? • Have instructions been provided to donor for stock transfers? • Pledge Payment Reminders – an opportunity to (1) inform the donor of how their money is being used and (2) update on organizational accomplishments; update letters at same time every year (to avoid duplicate and stale messaging) • Stewardship – the campaign has (1) brought in new donors at major gift capacity and (2) moved loyal donors up the donor pyramid resulting in a larger number of donors would need more individual attention and engagement; the goal in the development process (regardless of gift level) is to renew current donors

40. Grants and Government Funding “When volunteer campaign leaders first contemplate the need for pacesetting leadership gifts, they often turn their, attention to corporate contributions, foundation grants and public funding” (Weinstein, 2004) • Per Weinstein 20% of Capital Campaign revenue is from Grants (foundations, corporations, public funding) • HOWEVER, some organizations rely more largely on funding from foundations and government funding • Fairly young Development Programs • Organizations with Boards and/or CEOs that don’t participate in fund raising • Perceivable “hard to fund” organizations that provide community benefit • Organizations with large capital needs (e.g.: hospitals/clinics, colleges/educational programs, large social service organizations)

41. Grants – Foundations/Corporations • Use the original Campaign Case Statement (printed on organizational letterhead, not the flashy marketing materials) • Try to request a meeting or site visits prior to the proposal submission to communicate the importance of foundation gifts (i.e. explain why individual giving will be low) • Align your request to the Foundation’s giving guidelines (see guidestar.org or Foundation Center Online – www.foundationcenter.org) • Need to have a measureable impact; highly quantifiable Government Funding (Federal or State Appropriations) • An appropriation is a line item in the state or federal budget designated to your organization for a specific purpose • Requires a legislator to champion your request; submit a bill to the legislature ultimately becoming law (i.e. an approved budget)

42. Government Funding (continued) • Frame for support - “is this a good use of tax payer dollars?”, i.e.: • Is this an innovative replicable program (in another county; in another state) • Does it address a crisis (e.g. healthcare)? • Is it easy to communicate (in 10 words or less)? • How will championship of this project impact your senators’ and representative’s professional image? • State Appropriations are specific to each state; contact your representative (generally some kind of application or form) • Federal Appropriations • Applications are due in February for the proceeding budget year (2011 funding requests were due in February of 2010) • Contact your Senators and your representative regarding your organization’s interest in a Federal Appropriation (suggested timing: late fall, two years prior to funding need; Fall of 2010 for 2012 funding)

43. Government Funding (continued) • Federal Appropriations • Develop relationships with the legislative staff at the State-based offices (go to them; ask them to visit your organization; communicate “the needs of the people your organization serves”) • Visit the DC offices; meeting with members of the Federal Delegation; communicate “the needs of the people your organization serves” as it relates to your Federal Appropriation request; offer to be the eyes and ears for this concern at the State level (stress partnership ) • Communicate regularly with State and DC based staff on updates of your project • Generally a two-year timeframe from intent to funding (example below): • September 2008 – idea conception; contact delegation re: appropriations • February 2009 – submit applications • April 2009 – DC visits; champion request; meet with federal delegation • Summer 2009 – committee meetings; mark-up posted • September – December 2009 – 2010 federal budget approved • April 2010 – Grants.gov application due

44. Final Thoughts on Capital Campaigns: • Marathon, not a sprint • Requires lots of planning, involving the entire organization, a diverse and large volunteer group • The CEO and the Board of Directors must be fully engaged (and available/accessible) • Additional staff in the Development Office are needed • Additional marketing resources are needed • Has more legs than the money being raised (great PR, community benefit, recruitment of other board members, volunteers and donors) • The best fund raising and management experience that any development professional or board member will ever get!