Published November 2005

Devising a game plan
for capital campaign

By Kimberly Hilden
SCBJ Assistant Editor

When Little Red School House Inc. wanted to expand its early-childhood development services, the nonprofit organization looked to the community it served, kicking off a $2.8 million capital campaign to create the Children’s Village in Everett.

When Cocoon House decided the time had come to develop two additional teen shelters, renovate existing facilities and upgrade technology systems, the group launched a Building Dreams capital campaign of more than $4 million.

And when the Positive Women’s Network determined its mission of connecting women and their families to health care and social service programs would be improved with a new Women’s Wellness Center, it, too, decided to embark on a capital campaign.

Often, the capital campaign is an integral part of a nonprofit organization’s evolution as it grows to serve the community’s needs, but launching a successful campaign is not a given.

Indeed, it takes strategic planning and relationship building, knowing the organization’s strengths as well as its weaknesses, and understanding the community’s needs, said Dixie Coggins, senior vice president of nonprofit management for Strategies 360, a Seattle-based consulting firm.

Speaking at a Washington State Housing Finance Commission conference earlier this year in Everett, Coggins offered her 20-plus years of expertise on the subject of raising funds in the nonprofit sector, starting with the foundation of every capital campaign: the strategic plan.

“The first step is to take a step backward and evaluate the organization,” Coggins said. The evaluation process should include key elements such as:

• Clarifying the organization’s mission.
• Setting the pace for recruitment of donors, board members and key volunteers.
• Increasing the ability of the organization to fulfill its mission.
• Assessing resource needs, both short- and long-term.

“It’s an opportunity to get everybody on the same page for your organization,” Coggins said of the strategic planning process.

Next comes the issue of finances, namely, the organization’s economic situation both in the present and the future. The nonprofit entity should have a balanced annual budget, clean audits, no accumulated deficit and a clear plan for sustainability, Coggins said.

“Funders look at those things,” she said. “They want to know you’ll be around in the next few years.”

Once an organization knows where it wants to go and can make a financial case for its ability to get there, it is time to frame the capital campaign project in relation to the community it will serve, Coggins said.

“When I position capital campaigns, I look at the community needs, being clear about how you impact that audience,” she said.

Up to this point, the capital campaign is merely a wisp of a proposal, an idea that has been mulled over as a way to better serve the community. And it is at this juncture that organizations must take a hard look at their mission and whether or not the proposed project is the right way to go about serving that mission, Coggins said.

“Bricks and mortar sometimes sells, but it is what you do inside (the building) that counts,” she said. “A capital campaign may not be the answer for your organization; be open to other solutions.”

If a nonprofit decides to proceed with a capital campaign, it is time to crunch the hard numbers and decide if, given the economic climate, the organization’s image within the community and any number of other factors, the campaign is a feasible one.

For starters, the organization should have a transition plan in place that includes a three- to five-year operating pro forma that takes into account how the project affects not just your income but your expenses, Coggins said.

The project budget itself should include construction, the cost of the bridge loan or other financing, the development budget and taxes, as well as include a generous contingency, she said.

Also to be factored into the project budget is the very real possibility that the organization’s annual fund raising could take a hit as donors who traditionally give annually divert their funds to the capital campaign, Coggins said.

With the numbers in hand, the organization needs to conduct a capital campaign feasibility study, which “tests perceptions and looks at other community priorities,” Coggins said. “How do you fit in the stack of capital campaigns already going on?”

Organizational leadership also should be analyzed, with the nonprofit’s board being “fully engaged,” she said, noting that 100 percent giving by the board, executive leadership and campaign committee is key — and must happen before the community is asked to give.

And when an organization does take its campaign to the community, that campaign should be clear and concise in detailing the compelling need for the project as well as a sense of urgency for its funding, Coggins said.

“Relationships are key to any campaign,” she added. “Your executive director is key in this process and can better position your organization ... than most people can.”

When it comes to asking for sizable donations, it is important that requests are made face-to-face with the right team and at the right place — preferably where there will be no interruptions, she said.

And organizations should be sure that when they are asking for a major contribution, there is at least one person on the donation team who has given at least at the level of the prospect, Coggins added.

But from beginning to end — from initiation of a strategic plan to the end goal of the project construction — it is important to keep in mind that a capital campaign that succeeds is the one that builds greater, long-term support for the nonprofit, she said.

“When you engage in a capital campaign, it’s not about money, it’s creating a much broader family of friends for your organization,” she said.

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