Capital Campaign Impact On Annual Giving

By: Jerry W. Henry, Partner

“How will our proposed capital campaign impact our annual giving?”

The question came up in a Board meeting just the other day. (I knew it would!)

The organization has been around for a number of years; but, until two years ago, it had seen quite a bit of staff turnover, had struggled with financial challenges coming out of the Great Recession, and had lost members/donors for a few years in a row.  Finally, things appear to have turned around and the numbers are all looking better.

Through strategic planning, the Board has a vision for a major capital project.  Wisely so, given the internal challenges they had weathered, a few Board members began asking some very good questions such as the one about the impact of a capital campaign on annual giving.

We all know the last thing that you want for your organization is to merely shift donated dollars from one fund (annual giving) to another (capital campaign).  How many of us have heard donors say, “Just take the amount I’m giving you now and divide it between the annual fund and the capital campaign.”  No!!  Don’t do that!!!

Well, then, how do you manage a successful annual giving campaign as you move into a capital campaign?

The response to that question can vary based on a number of factors, but here are a few thoughts to consider – and they all relate to donor communication:

  • Start now communicating clearly the role of annual gifts within your organization. Explain in direct terms what their donated dollars fund and how annual giving serves as the “lifeblood” of your organization.
  • As you begin planning for the capital campaign, communicate clearly the importance of both annual and capital gifts toward accomplishing the mission of your organization. Explain how both must be strong efforts. And as long as you’re in education-mode, be sure to explain the factors that distinguish a capital campaign from annual giving: that a capital campaign seeks larger gifts over a defined period of time usually 3 – 5 years; that the capital campaign supports a special project, construction, renovation or equipment; etc.
  • In many cases – especially with many of your major donors – you’ll want to make a “double ask.” This involves asking for the donor’s annual support as well as a specific commitment to the capital project. Just make sure that you lead with the ask for the annual support!

And where should this communication begin?  It should begin with the Board members themselves, who must lead by example in giving annually and to the capital campaign that they have developed through their strategic planning process.

I’m not sure where this particular organization and its Board will end up in their campaign planning process or what they might decide to do.