Four signs your nonprofit is ready to run a capital campaign

Capital campaigns are major undertakings that can dramatically expand your nonprofit’s operational capacity and ability to fulfill its mission. However, while you might be eager to get started, launching a capital campaign before you’re ready can hurt your nonprofit in the long run.

Capital campaigns require asking supporters to make a major investment in your nonprofit, and a failed campaign can damage these valuable relationships. This is why nonprofits take precautions to ensure they are ready for a capital campaign before launching one.

To check your nonprofit’s readiness, explore these four signs your nonprofit is in a good place to launch a successful capital campaign.

1. You have a concrete project

Nonprofits should only launch a capital campaign if they have a defined vision that necessitates one. For example, you may aim to construct a new building, launch a new program or expand your operational capacity.

To launch a capital campaign, however, you’ll need to drill down into the details—specifically, ensure you can answer these questions about your project:

• How much do we need to raise? In the early stages of a capital campaign, you should have a defined goal range to support your project. This will likely require working with external professionals to get cost estimates on land purchases, construction costs, renovation estimates, and other expenses related to your project. An audit of your nonprofit’s finances can help determine how much you should raise in addition to using internal reserves or financing some of the project costs. As campaign planning progresses, your goal will likely crystallize from a range to a firm number.
• What is this project’s timeline? To the best of your ability, estimate timelines for both your capital campaign and the project you’re intending to fund. For reference, capital campaigns can easily span multiple years, with just the pre-planning phase potentially taking up to 12 months.
• Why would donors care about this project? While your project might seem essential to people intimately familiar with your nonprofit, external stakeholders might not share your vision. Make sure you can explain in plain language why your project is essential to your nonprofit’s success and why now is the right time to launch it.

As you solidify your goal, you should also be able to determine what resources, training, and staff time you’ll need for your campaign. For example, you might realize you need to modernize your software, hire more fundraising professionals or standardize your major donor cultivation process.

2. Your board is aligned and committed

A supportive board is a great asset during a capital campaign. Board members who are dedicated to your campaign can bring in major donors, lend your fundraiser credibility and even make major contributions themselves.

As part of your planning process, outline clear ways board members can get involved with your capital campaign. This might involve putting together a case for support that they can present to their networks to bring in major donors or asking them to participate in various campaign committees.

You’ll likely have stronger buy-in if you create engagement opportunities that align with various board members’ strengths. For example, one board member might have an extensive network and be able to facilitate introductions to major donors, whereas another might be a great speaker and can participate in fundraising pitches.

Additionally, keep motivation high by continually appreciating board members for their efforts, listening to their feedback and checking in with them to ensure everyone is on the same page about your campaign’s current priorities.

3. You have a strong and engaged donor base

Nonprofits of all sizes can and have run capital campaigns. However, the key to these organizations’ success is having a reliable, engaged donor base with a history of major giving.

Assess your donor base by:

• Analyzing past fundraising results: Capital campaigns have two solicitation stages: the quiet phase in which you engage major donors, and the public phase in which you open donations up to the rest of your supporters. Look at past fundraising data in your CRM, including wealth screening data, to determine if your base has the potential to provide the support you need.
• Identifying lead donors: Lead donors are the supporters willing to make the biggest contributions to your campaign. For example, a lead donor might pledge to fund 20 percent of your total goal by themselves. If you have solid prospects in mind for your lead donors, your nonprofit is likely in a good place to launch a capital campaign.
• Completing a preliminary major gift chart: A major gift range chart breaks down your fundraising goal into specific gift amounts and the number of gifts you’ll need at each level. This will give you a visual roadmap to what your campaign will require. If the larger gift amounts seem outside the history and capacity of your closest supporters, you may not be ready for a campaign. Eventually, you’ll create a depth chart, which puts prospect names to specific gift amounts.

Major donors give for all sorts of reasons and in a variety of ways, ranging from donations of stocks, donor-advised funds, cryptocurrency and in-kind gifts. If you have donors who you know may want to give in unorthodox ways, do your best to translate their contributions to a cash value so you can factor them into your gift range chart.

4. You’re interested in a feasibility study

The ultimate indicator of whether your capital campaign will be successful is a feasibility study. A feasibility study is essentially a series of interviews with stakeholders—including donors, community partners and nonprofit staff—that assess what you can realistically expect to raise philanthropically. While technically optional, skipping this crucial step could result in moving forward with a goal that is not attainable.

Most capital campaign consultants offer both capital campaign advice and feasibility study services. Nonprofits have two choices for how to conduct a feasibility study:

1. Outsource the interviews. Some capital campaign consultants will insist on interviewing your donors for you. However, outsourcing this step of the process might distance your nonprofit from the data; plus actively participating in early donor conversations can help generate excitement.
2. Conduct interviews internally, with support. “Guided” feasibility studies involve working hand-in-hand with a consultant to design your study, who then trains you to conduct the interviews. This approach provides your nonprofit with the best of both worlds, allowing you to participate in stakeholder interviews and have professionals provide direction.

Take the results of your feasibility study seriously. Often, even positive feasibility studies reveal opportunities for improvement. After conducting your study, set aside the time to reinvest in getting your nonprofit ready so your eventual campaign is a success.

Capital campaigns have many moving parts, from key components like reliable major donors to often overlooked elements like proper financial security and protections. To assess your readiness, focus on the essentials: project direction, community support and operational capacity. If you feel your nonprofit can check off all these core elements, conduct a feasibility study as a final confirmation of your preparations.