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What is a Capital Campaign - A Definitive Guide for Nonprofits

By Whit Hunter on

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If you've ever looked at your nonprofit's ambitious goals and wondered how to make them happen, you're not alone. Big dreams need big plans; that’s where something like a capital campaign comes in.

In this guide, we’ll explain what a capital campaign is, why it matters, and how your nonprofit can use one to reach those big milestones. If you’re new to the idea or want a clearer understanding, we’re here to help make sense of it all. 

Let’s get started.

What Is a Capital Campaign?

A capital campaign is a focused, time-limited effort to raise a significant amount of money for a specific purpose. Nonprofits often launch these campaigns to fund major projects like building renovations, new facilities, or acquiring essential equipment. 

Unlike typical fundraising, a capital campaign isn’t about the everyday needs of your organization. It’s about reaching a significant milestone that will have a lasting impact on your mission.

If you've heard about building a new community center or expanding a local church, there's a good chance a capital campaign funded it. The process involves setting a sizeable financial goal, organizing a timeline, and rallying supporters behind a clear vision.

Key Players of a Capital Campaign

Running a successful capital campaign means bringing together a dedicated team. Here are the people who play vital roles:

  • Capital Campaign Consultant: Often hired to provide expertise and guidance, the consultant helps develop the campaign strategy, train staff, and keep everything on track. They bring experience and an outside perspective to ensure success.
  • Campaign Chair(s): The person (or people) leading the charge, often with strong ties to the community. They’re the face of the campaign, making speeches, attending events, and rallying donors.
  • Planning Committee: This group is responsible for laying the groundwork. Before the campaign officially begins, they help establish its goals, timeline, and overall strategy.
  • Steering Committee: A smaller group of key individuals who oversee the campaign as it progresses. They make important decisions, keep everything on track, and ensure the campaign meets its goals.
  • Board Members: Essential for securing initial gifts and encouraging others to contribute. They often set the tone by making significant donations and using their networks to gain support.
  • Staff: The nonprofit’s staff, including the Development Director, are crucial in managing the campaign's day-to-day activities. They coordinate efforts, track progress, and keep communication flowing smoothly.
  • Volunteers: They help with event coordination, phone calls, and outreach. They are vital in keeping everything running smoothly during a capital campaign.

Why Are Capital Campaigns Important for Nonprofits?

Capital campaigns are important because they help nonprofits achieve big, impactful goals that regular fundraising cannot cover. For many nonprofits, it's not just about getting by day to day; it's about making a leap forward. 

As mentioned earlier, a capital campaign makes it possible to buy new buildings, expand services, or invest in critical infrastructure that will serve the community for years to come.

These campaigns also unite people in a way that regular fundraising doesn’t. When donors see a clear, ambitious goal—they often feel more motivated to contribute. Capital campaigns for nonprofits help attract significant donors who want to make a visible impact.

It’s about creating something people can see and feel proud to be part of.

Besides, a successful capital campaign can elevate your organization’s reputation. It shows that your nonprofit has a clear vision and can achieve major projects. This visibility can lead to more partnerships, increased donor trust, and more significant community support in the long run.

Things Your Nonprofit Must Know Before Starting a Capital Campaign 

Before starting a capital campaign, it's essential to have a clear understanding of what lies ahead. 

Here are some key things your nonprofit should know:

  • Time and Effort: A capital campaign is a big commitment. It will require a lot of time and effort from your board members, staff, and volunteers. Capital campaigns will most likely be the focus of your nonprofit’s fundraising activities for a considerable period.
  • Hiring a Consultant: Many nonprofits hire consultants who work solely on capital campaigns to help stretch their reach and support their teams. Consultants bring experience and can guide your organization through each step of the campaign process, ensuring you're on the right track.
  • Budgeting for the Campaign: An effective capital campaign costs money, usually around 10% of the total fundraising goal. Board members and campaign leaders need to agree on this early.  The costs are often folded into the fundraising goal so the campaign can ultimately pay for itself.
  • Specific Objectives: Capital campaigns are not meant for general operating costs or unrestricted funds. Instead, they should be treated as special events, with fundraising focused on specific goals to enhance your organization’s ability to create impact.
  • Nonprofit Size Doesn’t Matter: Nonprofits of all sizes can successfully conduct capital campaigns. Smaller organizations might have smaller goals, but they can still reach—and even exceed—them by focusing on strong donor relationships and actively involving board members.

Questions To Ask Before Planning a Capital Campaign

Before you jump in, there are some important questions to consider. These will help you determine if your nonprofit is ready to take on a capital campaign:

  1. Have we made a long-term strategic plan, with the capital campaign playing a key role?
  2. Are our systems ready to handle large data loads?
  3. Does our organization have a solid reputation within the community?
  4. Do we have enough staff to manage the extra tasks this campaign will bring?
  5. Is our organization financially secure?
  6. Is everyone on the board and staff ready to commit time and money to support the campaign?
  7. Was our last fundraising campaign successful?
  8. Do we have the necessary funds to cover the initial costs of preparing for the campaign?

If you can't answer "yes" to all of these questions, you need to do more planning before starting your campaign.

Want to maximize your year-end fundraising efforts? Check out our guide, The Comprehensive Guide to Year-End Giving for Nonprofits, for practical tips and strategies.

Critical Components of a Capital Campaign

A successful capital campaign has several key components. Each is important for ensuring smooth operation and the achievement of the campaign's goals.

1. Pre-Planning

Pre-planning is where your capital campaign begins to take shape. It might feel like a lot of prep work, but getting this stage right makes everything else smoother. 

Start by clearly defining your objectives. What are you hoping to achieve with this capital campaign? Whether constructing a new community center or expanding existing facilities, knowing the goal gives everyone involved a clear target.

Next, set a realistic financial goal. It’s essential to be ambitious and grounded in what your organization and donor base can achieve. Think about what’s possible based on your nonprofit's history and the community's capacity to give.

After that, draft an initial case for support. People want to know what they're contributing to and why it’s worth it. Explain the project clearly and share its impact on your community.

Finally, before reaching out to the wider community, secure support from leaders and key stakeholders.  Ensure your organization’s board members, major donors, and other influential supporters fully support your vision. 

2. Feasibility Study

A feasibility study helps you understand if your capital campaign has a good chance of success. 

Start by conducting interviews with key stakeholders and major donors. These one-on-one conversations can give you insights into the support you can expect and whether your goals are realistic.

It’s also essential to assess the campaign's goals and potential. Are your financial targets in line with what your community can achieve? Understanding what is possible can help you avoid setting goals that are too high or too low.

Use the feedback you gather to adjust your goals and strategies. If major donors suggest that the fundraising target is too ambitious, consider scaling back or coming up with creative ways to expand your donor base. 

The feasibility study isn’t just about gathering information—it's also about refining your approach to ensure the success of your fundraising capital campaign.

3. Campaign Planning

Now that you’ve got a sense of what’s possible, it’s time to dig into the details with campaign planning. 

The first step is forming committees. You’ll need teams to handle different aspects of the campaign, such as fundraising, events, and outreach. Dedicated committees help ensure that no one is overwhelmed and that every part of the campaign gets the attention it deserves.

Next, set a detailed budget and timeline for the campaign. Knowing how much money you’ll need for marketing, events, and other costs will help you stay on track. 

A realistic timeline keeps everyone focused and ensures you’re making progress without feeling rushed. A timeline is crucial, especially for those new to capital campaigns for nonprofits.

Finally, develop a gift range chart. This chart is a tool for estimating the number of gifts you’ll need at different levels to reach your goal. 

It’s a practical way to see where your donations might come from and helps guide conversations with potential donors. It can make a huge difference in making your capital campaign as effective as possible.

4. Prospect Research and Donor Cultivation

Prospect research is about figuring out who can support your capital campaign and then working to build those relationships. 

Start by identifying major donors early in the process. These people can make a significant impact, so engaging them from the start is vital. Personal outreach and keeping them informed can go a long way in securing their support.

Another great strategy is building relationships with corporate partners. Companies can offer sponsorships or matching gifts, making your campaign even more successful. 

Reaching out to local businesses or larger corporations helps bring in funds and connects your nonprofit to the community.

Remember to recognize your donors. Planning how to thank them is just as important as asking for support. Whether it’s a public acknowledgment or a special event, having donor recognition strategies in place can motivate large gifts and help maintain lasting relationships. 

5. Quiet Phase

In the quiet phase, your capital campaign starts gaining traction behind the scenes. 

Industry experts suggest you aim to raise about 75% of your ultimate goal during this initial period. This phase involves focusing on major gifts from key donors. 

Reaching out to individuals or organizations who can contribute significantly is crucial for building momentum.

During this time, refine your case for support. You’ll likely receive feedback from those early donors, which can help you hone your message. The more compelling your case, the easier it will be to inspire others to join the cause. 

This phase is also a great time to build relationships through one-on-one conversations. It’s not just about asking for donations; it’s about making connections and understanding what motivates your donors. 

Whether it’s a fundraising capital campaign for a community project or a new facility, these personal interactions lay the foundation for a successful campaign.

6. Campaign Kick-Off

The campaign kick-off is a critical milestone in your capital campaign. This stage is about making a big splash to inform everyone that your campaign is ready to go public. 

By now, you should have already raised 65-75% of your goal through the quiet phase, and the campaign kick-off is the perfect time to celebrate that success.

During the kick-off, the focus is on generating excitement and enthusiasm. Hosting a special event is a great way to get your message out. Depending on the nature of your campaign, this event could be an open house, a community gathering, or even a press conference. 

At this point, it’s also important to reassess your campaign goals if necessary. Maybe you exceeded expectations in the quiet phase or faced some unexpected challenges. Either way, making adjustments now ensures that the campaign remains achievable and everyone is on the same page.

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7. Public Phase

In the public phase, you take your fundraising capital campaign to the broader community. 

Now that the foundation has been laid, it's time to invite everyone to join the journey. Engaging the community means making them feel like they’re part of something bigger—something that will benefit everyone.

Use events and digital outreach to bring in smaller donations. Think about hosting community events, reaching out through social media, or organizing a fun run. These activities help raise funds and create a sense of involvement. 

The more people feel connected to the cause, the more likely they are to contribute.

Set deadlines and create a sense of urgency to keep the energy high. You could run short-term campaigns with specific goals or use countdowns to show how close you are to reaching your target.

This phase is where the excitement builds, and everyone gets a chance to contribute to achieving the final goal of the capital campaigns for nonprofits.

8. Post-Campaign

The work doesn’t stop once you hit your fundraising goal.

Make sure every donor and volunteer know just how much their support means. Sending thank-you notes and/or hosting an appreciation event can go a long way in showing your gratitude.

Next, pledges are fulfilled, and a report on the impact of the fundraising capital campaign is made. Let your supporters see how their contributions have made a difference. Share stories, photos, and updates on the project's progress. 

This update is crucial for explaining what a capital campaign is and showing its real-world benefits.

Finally, keep the relationships going. Just because the campaign is over doesn’t mean your connection to supporters should end. Keep them updated on the project and continue engaging with them. 

Common Challenges in Capital Campaigns (and How to Overcome Them)

Capital campaigns can be a fantastic way to raise funds for your nonprofit's big goals, but they come with their own set of challenges. Let's look at some of the common hurdles and how you can get past them.

1. Struggling to Get Donors on Board

It can be challenging to get people to support your campaign if they don't understand its purpose. 

To overcome this, focus on educating potential donors. Make it clear what a capital campaign is and why it matters to your organization. Share specific goals, explain how their contributions will make a difference, and keep them updated with progress.

2. Maintaining Momentum Over Time

A fundraising capital campaign isn’t a quick sprint—it’s more of a marathon. Keeping the excitement alive throughout can be a challenge. 

One way to maintain interest is to set smaller milestones along the way. Celebrate each one as you reach it, and share those moments with your supporters to keep them excited and engaged.

3. Lack of Experience

Capital campaigns for nonprofits are often a new experience, especially for smaller organizations. 

If your team is unfamiliar with managing a large campaign, consider reaching out for help. Hiring a consultant or even talking to other nonprofits who have done it before can provide valuable insights and make the process less overwhelming.

4. Setting Unrealistic Goals

Sometimes, nonprofits set goals that are either too high or need to be clearly defined. 

Make sure your goals are ambitious and realistic. Start by assessing your current donor base and past fundraising efforts. This will help you clearly understand what you can achieve and set goals that make sense for your organization.

5. Balancing Day-to-Day Needs with Campaign Efforts

Running a capital campaign while managing regular operations can be overwhelming. 

To address this, delegate tasks and assign specific roles to team members. Dedicated people for the campaign allow others to focus on day-to-day activities and keep everything running smoothly.

FAQs 

1. What is the difference between a capital campaign and an annual fund campaign?

A capital campaign focuses on raising funds for long-term needs like building renovations or endowment funds, with a specific goal and time frame. An annual fund campaign raises money yearly for day-to-day operations like salaries and program costs. 

Capital campaigns are for one-time expenses, while annual campaigns cover ongoing needs.

2. Should you hire a capital campaign consultant?

Yes, especially for larger campaigns. A consultant can help manage complex fundraising efforts, conduct feasibility studies, and guide strategy to ensure success.

3. What should the budget be for a capital campaign?

The budget depends on the campaign size. Smaller campaigns may spend around 15% of the goal, while larger ones usually allocate 4-5% to costs like staff, consultants, and marketing.

4. How long does a capital campaign typically last?

Capital campaigns usually last between one to five years, depending on the goal and complexity.

5. When is the right time for a nonprofit to start a capital campaign?

Start when you have a clearly defined, large-scale need and a strong base of major donors. A feasibility study can also help ensure your readiness.

6. How do you keep donors engaged during a long fundraising capital campaign?

Provide regular progress updates, celebrate milestones, and show donors the impact of their contributions. Use newsletters, social media, and events to maintain excitement.

Reach Your Capital Campaign Goals Faster With BetterWorld

Reaching your capital campaign goals can be easy. 

With BetterWorld, you can join over 100,000 nonprofits, organizations, and fundraisers already making a difference. Setting up a fundraising capital campaign is quick—you can start raising money in as little as five minutes!

BetterWorld offers Free Nonprofit Fundraising Software that's perfect for capital campaigns for nonprofits of all sizes. Whether you're interested in auctions, ticketing, giveaways, impact giving, or crowdfunding, you can choose and customize the method that best fits your organization.

Our Online Fundraising and Donation Software makes collecting donations easy. 97% of people who used BetterWorld say they'll use it again!

And the best part? It's all free. We offer these tools at no cost because we care about the good you're doing in the world. So why wait? 

Sign up today and reach your capital campaign goals faster with BetterWorld.

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Whit Hunter
AUTHOR

About Whit Hunter

Whit Hunter is the co-founder of BetterWorld, the free, easy-to-use online fundraising platform. His passion for empowering nonprofits and tech expertise have shaped BetterWorld’s mission to make fundraising more accessible and efficient.

Whit's innovative vision has helped countless organizations raise more funds and reach their goals, driving BetterWorld’s ongoing success.

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