Tag: capital campaign

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Positioning your organization for campaign success

Much about a fundraising campaign cannot be predicted or controlled. Will a life-changing event change the anticipated gift of your major donor? Will the actual cost of your new building exceed earlier projections? Will an unexpected, unrestricted estate gift become available? Will a newspaper article about a disgruntled employee give your organization unfavorable publicity in the local community? Surprises such as these–some positive and others concerning–affect most every campaign.

There are some elements of the campaign that remain firmly under your control, however. Using these “best practices” as building blocks will pay dividends, whatever surprises may occur.

Pick the right campaign chair. Doing your homework and then inviting the right person to chair the campaign is a key decision. While a current board or staff member might fit this role, Advancement Associates strongly recommends choosing a volunteer–a friend who is a willing advocate for your organization, mission and program. As the “face” of the campaign, a volunteer chair is in the strongest position to encourage other stakeholders to support the project at hand.

An effective campaign chair:

  • believes in the mission of your organization and has supported it over many years;
  • is well known and highly respected within the community;
  • can effectively lead and inspire others;
  • is a skilled communicator;
  • has the potential to make a sizable campaign gift; and
  • is highly regarded by your key stakeholders.

A beginning list of potential campaign chairs can first be identified during the campaign feasibility study. As the campaign begins, then, board members, senior executives, major donors, and other friends can help qualify these names.

Create a campaign organizational chart. Campaigns require extraordinary efforts from an organization’s board members, executive staff, and volunteers. Each of these groups have other daily demands on their time, and campaign efforts often represent “over and above” duties and activities. The right organizational chart and accompanying job descriptions will help ensure coordination and cohesion among campaign leaders.

Here is an example of a campaign organizational chart:

 As mentioned, a specific list of campaign roles and responsibilities should be created for each person and group that appears on the organizational chart.

Build a realistic gift table. No table can precisely model all of the gifts needed for campaign success. But, it is also true that campaigns often resemble others of similar size–whatever the specific project at hand might be. This happens because most campaigns reflect the Pareto Principle, known as the the “law of the vital few:” While all gifts are valued and needed, most of money you raise will be given by a relatively small number of donors.

Just as a realistic gift table can help test potential support for a campaign during the feasibility study, it can also guide individual gift solicitation visits, measure progress being made once the actual campaign commences, and provide a means to evaluate campaign success.

Unless your own records and data suggest otherwise, here are some assumptions your campaign gift table should include:

  • A lead (top) gift that represents 20 percent of the total campaign goal;
  • Large gifts from 10 – 20 percent of the donors that equal 90 – 80  percent of your campaign goal;
  • Small gifts from the hundreds of remaining donors that will bring your campaign to a successful conclusion.

Freshen the case summary. In a typical feasibility study, representative stakeholders respond to the organization’s plans for a campaign as described in a brief, well-written case summary.

The case summary continues to play an important role once the campaign has begun–but first it should be revised to reflect important learning from the feasibility study. For example, perhaps the statement should reference the extensive planning process that produced campaign priorities. Or, it may be important to point out that estate gifts, as well as cash gifts, are acceptable.

Once these edits have been made, the case summary will help keep campaign messages consistent; guide individual gift solicitation visits; and provide an on-going reminder to all of the primary purpose of your campaign: to strengthen mission.

An apt metaphor for a fundraising campaign is a roller coaster ride, complete with ups and downs, thrills and chills. But these four “best practices” will help keep your campaign on track, all the way to the end!

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Transformation through teamwork

Throughout its history, Mennonite Home Communities of Ohio (MHCO) has demonstrated an ability to adapt to change, to anticipate elder’s needs, and to implement innovative programs that enhance its mission. Now, as the largest senior living provider in Allen County, this Bluffton continuing care retirement community is transforming its skilled nursing care with the Green House® model of care.

Since being introduced in 2003, the Green House model has spread to over 40 campuses in 29 states. MHCO’s long-term goal is to build six Green House homes on its newest campus, Willow Ridge; they will be the first such homes in Ohio.

MHCO’s capital campaign for the Green House Project has seen more than its share of challenges. But with patience, hard work and excellent leadership, MHCO is anticipating the completion of its first two homes, for which a ground blessing was held in October.

As Advancement Associates’ communications associate, I (Sherilyn Ortman) recently asked CEO Laura Voth and Doug Luginbill, development officer, to reflect on getting to this point. As they shared their journey, I was struck by the spirit of teamwork that pervades their interaction and guides their efforts. So that you, the reader, can see it too, allow me to step out of the interview at this point. Aside from occasional comments to provide context (in italics), I invite you to simply “listen in” as Laura and Doug share their story from the beginning.

LV: In 2004 we were working with an architect and drawing up a whole new building based on “neighborhood” living. We had had a very positive experience with nine- and ten-person dementia units based on that concept. Our CEO at the time was also hearing about this new “Green House” style of care. In April 2004 a group of us went to Tupelo, Mississippi, where the first Green House homes had just been built. We returned home convinced that this was a better model of care and the house itself was a necessary tool. By Oct. 2004 the board of directors had signed on.

We made two trips (once in 2005 and again in 2007) to the Ohio Department of Health because we knew they had to be on board to proceed. Initially, their response was “proceed with caution.” By now, the Ohio Department of Health and the Centers for Medicaid and Medicare are familiar with the Green House model of care and are strong supporters. We still had to obtain a “Certificate of Need,” which was a very extensive process that took about six months to complete.

In 2005, MHCO hired Advancement Associates (AAI) to conduct a feasibility study for the construction of two Green House homes. That study showed sufficient stakeholder support for the proposed $2 million project. A capital campaign was launched later that year but soon encountered some unforeseen obstacles, which slowed its progress for the next several months.

LV: Part of problem was that we didn’t have a final plan when we started the campaign. There were things we didn’t have in place . . . like a strategic expansion plan. We originally had a plan for 10 new houses and then, for a long time, six. But we were thinking in terms of our current campus (actually two campuses about one mile apart from each other). We realized that if we really wanted to replace all 92 beds of skilled nursing care, we didn’t want to do a few here and a few there and maintain that divided campus. In 2007 we bought 15 acres of land across from our Maple Crest campus. That completely changed the picture.

The campaign worked through eight or nine financial pro formas. Though stakeholder support was strong, we had to consider how much debt the organization was willing to take on for additional homes. In hindsight we see that we needed that financial picture and strategic plan in place earlier. And in the midst of figuring all that out, 2008 happened and the economy tanked. Our CEO also resigned that year to follow a different career path. People were getting nervous because, by then, we’d already been talking about our plans for awhile. The board hired an interim CEO with the directive, “No matter what else you do, advance this Green House project.”

But the campaign continued to lose steam amidst multiple transitions; among other factors, MHCO’s contract with AAI also ended in 2008. About one year ago, MHCO received a large trust, which it eventually designated for the campaign. Leadership settled on a revised goal of $2.1 million—the additional $100,000 will be used to renovate several existing rooms into a new rehabilitation unit—and entered a new contract with AAI. Clarifying the scope of the campaign was a crucial turning point that allowed it to regain momentum, according to Doug, who was new to the job.

LV: You know how I got Doug’s name? When I became CEO in February 2009, we had one person doing both marketing and fund development. I was looking to divide the responsibilities. A former fund developer for Bluffton University was on our campaign committee. I asked his advice. That conversation turned to criteria for a good development officer and he commented, “What you really need is a pastoral type.” As he left, he turned around in the doorway and said, “You know, Doug Luginbill is coming back.” I knew Doug from when he had been [pastor] at First Mennonite Church here in Bluffton. So I called him.

DL: I had concluded a pastorate in Wichita, Kansas and moved back to Bluffton for a one-year interim position at Salem Mennonite Church. I happened to be visiting a member of the congregation at another nursing home when Laura left a message on my cell phone. I didn’t know what the conversation would be about. I figured maybe the chaplain was leaving.

Though he had no idea that fund development was on the horizon when he left Kansas, Doug had some experience with nonprofit fundraising, having served six years as executive director of a church-related camp. He met with Laura and assumed his current role with MHCO in January 2010.

DL: Pastoral ministry was a wonderful training ground for this position. You use a lot of the same skills in both kinds of work, particularly one-on-one contact. It’s very natural for me to go into the place people call home and have conversations.

I will say that coming into this position during a campaign was kind of scary. At the same time, I’ve been in a lot of nursing homes visiting people over the years, and I knew there had to be a better way to do skilled nursing care. Laura talked so passionately about the Green House homes that I kind of picked up her passion as well. And I could tell that most of the leadership staff was committed to the project.

LV: But I would say that some staff were getting discouraged. They had been dreaming a long time already and kind of had the attitude, “I’ll believe it when I see it.” As far as the community goes, by the time Doug arrived, we were finishing some of the first pledges and still nothing had happened. Some donors were saying “What’s taking so long?” One even asked [our former director of fund development], “Well, if you don’t do it, am I going to get my money back?” There was a general sense of whether or not we were ever going to pull it off.

DL: To follow someone, I need to believe in their integrity and capabilities. Laura demonstrated that through her long history here.

LV: I’ve been here 29 years. I began as a social worker for Mennonite Memorial Home [a predecessor to the organization], then moved to admissions and then became administrator of the nursing home in 2001.

DL: So she knows this organization inside and out. Her vision and commitment to seeing the project through came through over and over again. When I started here Laura was still in her first year as CEO, having worked as a peer with many of those staff. It can take time for peers to become fully supportive, but, from what I gather, the staff has appreciated Laura’s more collaborative style. If I were to walk in doors now, I believe I would see a much more cohesive team.

LV: When I first talked with Doug, I really pushed hard on the development side of the job. But when our conversation was over, I realized we had just advanced our church relationships a hundred fold by having him as part of our team.

DL: My position is Director of Resource Development and Church Relations. I enjoy visiting with and encouraging pastors. The position gives me opportunities to be in churches, to share our vision at Mennonite Home Communities and even to preach on occasion.

LV: We are so much more connected to our churches now than we were two years ago. Becky [Drumm of Advancement Associates] keeps talking about how the success of this will depend on long-term relationship building; that’s what Doug has brought to our team.

DL: For me, one of the most gratifying parts of the campaign has been developing relationships with people in the community. When pastoring, I knew my own congregation well, but I was pretty narrowly-focused to the Mennonite Church. This has helped me broaden my understanding of the Bluffton community as a whole, and get to know people that I wouldn’t normally have any other reason to connect with. I’ve also been reminded that this work is a marathon, not a sprint!

LV: One thing I have observed about this campaign is that it’s a process of whittling away. We have a $2.1 million goal and we’re at $1.7. That’s incredible! Aside from a large trust, we haven’t gotten more than one $100,000 gift. But many people each doing a little makes a lot. That’s the way it is with volunteer hours, with money, with so many things. With hard work, it will come if you’re patient.

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Creating a campaign budget

What are some “best practices” for building an adequate, accurate campaign budget?

When creating a campaign budget, we first stress the importance of careful accounting for all true campaign expenses. Doing so will give your organization the best picture for your campaign’s return on investment and will also help you truthfully answer a question donors often raise.

Campaigns are very labor-intensive. As such, personnel costs are by far the item of greatest expense in a campaign—often more than half of total costs incurred.

Here are the general categories often used in preparing a campaign budget (reference: Indiana University Center on Philanthropy):

a. Personnel

  • Development director
  • CEO
  • Consultant
  • Support staff

b. Communications

  • Brochures
  • Videos
  • Website
  • Newsletters

c. Research

  • Outside firm for grant research, prospect research

d. Special events

  • Kick-off event
  • Fundraising events

e. Printing

  • Letterhead, envelopes
  • Invitations
  • Pledge cards

f. Donor stewardship, recognition

  • Plaques
  • Special events for major donors

g. Volunteer training and support

  • Hospitality
  • Recognition
  • Training materials

h. Contingency

As a rule of thumb, the smaller the campaign goal the higher the percentage required for campaign expenditures. That’s because every campaign has both fixed and variable expenses, and the fixed costs—for example, new software that may be needed—are not affected by the dollars to be raised. Total campaign expenses may range from four to 15 percent of the goal.

 

 

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Making the case

Any organization that has undertaken a capital campaign is familiar with the process of developing a case statement. Typically this statement includes a look at the organization’s history, mission, current needs and goals. The case is tested with constituents in a feasibility study and, assuming it is well received, it then provides guidance and focus for the campaign as it proceeds.

AAI believes there is merit in developing a case statement even apart from a capital campaign. Doing so can help focus annual fundraising strategies, whether they be fund letters or personal asks of major donors.

What is it?

Simply put, a case refers to the reasons an organization both needs and merits contributed support. This case is presented through a case statement—an outline of the organization’s programs, current needs and plans.

How do I develop it?

In order to draft a useful case statement an organization must possess a great deal of self-understanding.

• What cause(s) and interests do we serve?

• What effect does our work have?

• Why should people get involved with our work?

• Why should people give us money?

Questions like these force an organization to move beyond flowery speech and warm fuzzy feelings to the heart of its mission. In relation to a capital campaign, one consultant has said, “Donors will not be impressed by your proposed capital improvements unless you can demonstrate that your clients will benefit.” In more general terms, constituents will not be compelled to continue supporting you unless you can demonstrate that you continue to provide services worth supporting.

This dynamic is a sign of how much your supporters trust your organization. According to one online source, 82 percent of donors polled say trust in a charity influences their support. Eighty percent are influenced by witnessing a charity’s local impact. AAI Principal Rich Gerig lists several more donor motivations in What Motivates Donors?

This is not to say that one somehow manipulates the case statement to appeal to these motivations. Quite the opposite—the statement should reflect an organization’s integrity by being based on an honest look at its performance and impact. The case should speak for itself.

A case statement can be written by an individual (i.e. by the development officer) or by a larger group that includes board, staff, donors, etc. While the second scenario implies greater input from a variety of people, it also assumes a longer process.

How do I use it?

Once written, the case statement guides all development-related activities. Its language permeates print materials (fund letters, annual report, newsletters, promotional materials); it serves as a starting point for grant applications; main talking points are reiterated by the CEO in various settings, including solicitation visits; the statement should also be familiar to any others—board, staff or alumni, for example—who are involved with development or who simply wish to be your advocates.

How often do I revise it?

AAI recommends that a case statement be prepared every year. That doesn’t mean an entirely new statement must be written; rather, the one used in the previous year should be carefully reviewed and edited as appropriate for the coming year. Completing this exercise annually helps the development function keep its focus on those fundraising priorities of most interest to donors.

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Resuming a capital campaign

Some organizations were in the middle of a campaign when recession hit and wonder, now what? How does one know if it’s time to re-engage and, if so, how does we one go about it?

Restarting a campaign in a good way assumes that an organization has done its homework—i.e. maintained open communication and strengthened relationships with current and prospective donors and volunteers—in the interim.

Even then, resuming the process isn’t simply a matter of picking up where one left off. Consider “patience” and “diligence” virtues. At the same time, assuming your case was strong at the outset, your needs cannot be put on hold indefinitely without, in some regard, compromising the service you’re able to offer.

Here are several steps we recommend:

1. Re-engage with those who have already contributed. Let them know the campaign is back on track. Invite and answer their questions. Use these visits to check the pulse of the constituency. Are your stakeholders still committed to the project?

2. Study the original campaign plan in the light of several important questions: Is the case still strong and accurate? Is the original campaign goal still realistic? Do we need an updated feasibility study? How many of our major gift prospects are dependent on the economy? Has there been turnover in key staff or board positions? If so, allow sufficient time to bring new members up to speed and gain their support.

3. Reassemble the campaign cabinet. Begin with the volunteers that were already in place, but respect that, in the meantime, other commitments will most likely have taken priority for some original members. Additional recruitment and training may be necessary; these steps will take time.

4. Adjust the process as necessary. Be creative in the types of gifts you allow donors to consider and respect their timeframe. Longer pledge periods may be helpful for some. Others may need to wait longer than desired before making an initial gift to allow assets that have depleted in value to recover.

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Congregational fundraising

When working with a congregation, AAI first provides an overview of the capital campaign and introduces key campaign principles in the context of fundraising as ministry. Next, we assess the congregation’s readiness for such a highly organized fundraising effort. Based on this assessment, AAI can enter the process at one of several points, described below.

Visioning. Often, AAI’s first official role is to engage leaders of the congregation in visioning. This kind of exercise typically takes place during a weekend retreat and asks participants to reflect on the following questions:

  1. In light of our mission, what are the opportunities and challenges presented by our surrounding environment?
  2. In light of our mission, opportunities and challenges
    • What program priorities should we establish and pursue at this time?
    • What priorities should we establish for our facilities?
    • What financial resources are required to meet our priorities for program and facilities?

Campaign feasibility study. A feasibility study helps determine the level of support for the goals identified during the visioning process and, therefore, the probability of success for a proposed capital campaign and building program. The feasibility study includes a series of both personal and mail interviews conducted by AAI staff; interviewees are shown a case summary of the project at hand and a gift table. AAI compiles results into a report and makes a recommendation regarding the campaign goal to congregational leaders and/or the congregation as a whole. A feasibility study takes approximately two months to complete.

Campaign. Congregations can also enlist AAI’s help with the campaign itself. Campaigns are typically completed within four months, during which campaign leaders receive regular consultation and unlimited access to the consultant(s). Depending on the needs and desires of the congregation, AAI’s involvement can also include:

  • creating an action plan that lists specific responsibilities for the various persons involved in campaign leadership; outlines how these persons report to and interact with one another; and sets a timeline for implementation of various campaign steps
  • developing any necessary communications materials
  • training of key personnel
  • attendance and leadership at campaign meetings

While many professional firms offer campaign services similar to the four just mentioned, AAI encourages five additional practices that distinguish our approach from others’:

  1. Our philosophy of “fundraising as ministry” seeks to incorporate the capital campaign into the life and worship of congregation.
  2. We provide actual templates of the communication materials the congregation will use during the campaign.
  3. We emphasize personal solicitation and direct requests for campaign commitments.
  4. We utilize mail and telephone solicitation for distant members and friends.
  5. Three-year pledge commitments give donors the flexibility they may need to make the most faithful gift possible.