1. Capital Campaigns in
Really Tough Times
March 17, 2009
By
Abbie J. von Schlegell, CFRE
Principal
228 main street, suite 272 williamstown, ma 01267 410-908-9068 abbievonschlegell.com
2. So why are you here?
• Are you planning a campaign? In nucleus
phase? In the middle?
• Lean year campaigns offer lessons
• Maybe you are in one?
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3. Where do you want to go?
Success in the campaign?
Re-think the
campaign strategy?
Engage new prospects?
Stop the campaign altogether?
5. What is a Capital
Campaign?
An intensive, organized
fundraising effort to secure
philanthropic gifts for specific
capital needs or projects,
executed within a specific time
period, usually for one year or
more.
7. Capital Campaign
Characteristics
• Intensive, special appeal
• Meets an extraordinary need
• Capital: building new facilities,
renovations, equipment
– Relatively low cost for
fundraising & administration
– Specific, “stretch” financial goal
8. Who makes
charitable contributions?
2007: $306 billion given to
nonprofit organizations
– Individuals:
$ 229 billion
+ $23 billion bequests
– Foundations:
$38 billion
Individuals Corporations
– Corporations:
Foundations $16 billion
Source: Giving USA 2008
10. Giving is resilient
• Total giving up in current dollars every
year but one since 1967
• Decline in 1987 due to change in tax law
• Total giving declined just twice when
adjusted for inflation
1974 (Oil Crisis)
2001 (failure to ask – not failure to give)
12. Giving
weathers economic storms
• Giving grows 2.7% per year (average)
• Giving grows more slowly during
slowdowns and recessions
• Fewer than half of all charities
experience declines in giving,
even during tough times
14. Nobody Knows Anything!
•=mc Global Fundraising •Guidestar Survey
Study
•Causes most effected by
•Causes least effected by the economic climate:
the economic climate: –Disease-related groups
–Children’s causes –Mental health
–International relief –Faith-based groups
–Medical research
–Faith-based causes
17. Why do people give?
• Shared values
• Personal relationship
• Involvement with
organization’s mission
• Image and appeal of
organization
• Recognition, tax
deduction, parties
18. Some current realities
•Mortgage and housing crisis ≠ charitable giving sector
•Though overall charitable giving in 2007 increased by
3.9%, the number of donors declined
• AFP 2007 study ranked the economy #1 concern among
charities surveyed
• Fundraising revenues and donor counts both down
for the first quarter of 2008 compared to the same
time last year [Target Analytics Index of National Fundraising Performance]
19. How is the economy affecting
the sector?
• Report of both fundraising revenues and
numbers of donors down in early 2008
• Small charities affected more than larger
• Level of optimism for near future very low
• Increased (and funding) need for services
for charities serving low income
families (food pantries, shelters, job
banks)
20. Economy’s effect on sector:
public comments
• “The latest victims of the sagging economy: charities.”
• “Our most optimistic forecast is now $1.5 million,
compared with $2 million raised last year. The
downturn in the economy has played a big part”
• “It makes a hell of a lot of difference …You have a
person who’s worth $5 billion, and the next morning
they’re worth a billion.”
• “It looks like 2008 could be one of the most
challenging years charities have seen in some time.”
21. Campaigns Lasting Longer*
*CASE 9.08 Study
• Median 6.25 years
• Median quiet phase 33 to 40 months
• Median goal $50,000,000
• Alumni largest source but less than 33%
of total (Educational institutions only)
22. Board Members Feel Unprepared
**The Chronicle of Higher Education
• 15% considered themselves “very well prepared”
• 40% described themselves as “slightly prepared”
or “not at all prepared”
• More likely to feel unfulfilled and less valued
• Less likely to have a good relationship with CEO
• More likely to be somewhat newer or younger
23. Fashions in Fundraising
• The old way to campaign
– Find a project
desire
need
desperation
• Make the case
“this will allow us to…
“All the others are…
“If we don’t do this, we will…
24. Fashions in Fundraising, TODAY
• NOW:
– “Donor-Centric”
• Identify his or her values, background, “hot
buttons”
• Discover his or her financial issues
• Find possible solutions to issues
• Make donor feel as if goals are being met
– Match the gift design with something in the
campaign
25. The “new” thing: strategic
fundraising or campaigns
• Bringing things into alignment
– Remember first things come first!
– Value donors who can meet the first needs
– Make case for crucial needs
• Build program to make this happen: be
strategic!
– Design the case for support
– Design the pool of potential donors
26. Trends in Philanthropy
• Trends are based
– on what we know
about the past
– on assumptions about
the future
• Let’s look at what has
been happening
27. Changes in Society/Culture
• Less and less support from Washington, DC to
meet the needs of society
• Less and less support from the states for
education and basic human needs
• Gradual shift back to non-profit sector to carry
the load (# non-profits to increase)
• People living longer and longer (fear of outliving
resources)
• Younger generations less philanthropic than their
parents
28. So what do you do?
First, know that it is
very, very hard!
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29. Campaigns in Lean Times
• Campaign progress plateaus
– Asks get very old
– Prospects will not return calls
• Campaign leaders drop out
– Lose heart, question strategy
– Don’t make calls or even set meetings
• Donors can’t make pledge payments
• Leaders will not authorize campaigns
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30. Seven Strategies
for Lean Times
1. Revive volunteer
5. Lower/revise the
leadership
goal
2. Rethink prospect
6. Pause or halt the
strategies
campaign
3. Rethink the needs
7. Avoid this mess, if
and the case
possible!
4. Extend campaign
timeline
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32. Rethinking Prospect Strategies
• When economy changed, where did the
money go?
– 401ks, home prices, stock market
– Panic among general public
• Follow the money – people are still rich,
but perhaps not as much
• Reset gift table to meet revised/extended
goals
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33. Know your donors and friends!
Their interests
Their passion
Their concerns
Their motivations
34. Look after your donors
• Implement donor relationship
management strategy; accept it is not
cheap; staff properly
• Be rigorous about tactics – number of
mailings, length of letters etc.
• Accept fact, not prejudice or opinion
35.
36. Look after current donors
Thank Properly
Frequent Communications
T
Phone your top donors
Keep in touch mailings
37. Rethinking needs and case
• A new need can attract new interest
• Stronger or different rationale adds
urgency
– Hard economic times
– More tightly set budgets
Urgency and efficient use of funds
make campaign case succeed
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38. Extending the Timeline
• Longer pledge periods
• Donors take pauses in pledge schedules
• Waiting out the bad economic times
• BUT, very tough if you need the funds
now
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39. Lowering the Goal
• Can you succeed with less?
– Easier to sell if you have not gone public
– The virtues of a real quiet phase
• The risks of quitting early
• Resetting the Gift tables
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40. Pausing or Stopping
the Campaign
• If you cannot make the annual fund goal,
the campaign does not matter
• How urgent are the needs?
• If endowment, could likely wait
• Facilities can be urgent
• Difficult if you have announced
• Steward donors of record
• Shift to a project or major gifts strategy
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41. Campaign Planning
in Lean Times
• Needs justification must be tighter
– Real urgency
– Efficiency and ROI important
• Readiness is critical, even more so
– Especially prospect readiness and knowledge
• Leadership even more important
• A multi-stage quiet or nucleus phase
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43. Campaign Planning Studies
in these times
• Premature goal testing energy of staff,
volunteers, even prospects
• Instead: campaign readiness analysis and
work to get you started
• Whatever you decide, a detailed pre-
campaign strategy critical
quells dissent, calms worries
–
gives framework for analysis
–
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44. Let donors tell
their stories and help you!
• Best donors often best askers
• Invite top prior donors to share their
passion
• Ask your major donors for their advice,
introductions
• Engage your family
45. Readiness Evaluation
• Prospect base
– Size, evaluation, qualification
• Data and data systems
• Staffing
• Needs rationale and case for support
• Recognition and image
• Volunteer leadership willingness
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46. So the Campaign is on Hold…
• Endowment comes from planned giving
• Capital or Program campaign
– Becomes Major Gifts effort
• Always can develop more prospects and
relationships
– Always need to know more about people
– Always need more cultivation
• A strong annual fund means a stronger
campaign
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47. A Less Predictable
Environment
• Wither the estate tax?
• More extreme swings in US economy
• Global economy means less domestic
control
• Rapid wealth creation (and loss) from
enterprise
48. To campaign or not to campaign?
• No one has stopped or withdrawn if in the
nucleus or silent phase
• Those who are in campaigns: are
– Still getting meetings, still asking, still getting
gifts
• Budget volunteer time: maintain
momentum! Keep them focused
• Design flexible campaign timetable
49. When Times are Hard, It’s
• Old money
• Established donors
• Urgent and justified needs
• Leaders who believe
• Passion for the cause
• Persistent and patient who prevail!
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50. Conclusions:
How to thrive in tough times
• Keep asking
• Be invitational & understanding
• Remember the basics
• Nurture your leadership
• Renewal/recapture/acquire
• Stay on message
• Focus on the positives
• Don’t belabor financial circumstances
• Link to the greater good
51. Conclusions, more
• Don’t panic! Step back calmly and plan
• Engage your Board members and friends
• Assess your communications plan and
case for support
• Consider planned giving vehicles as
alternatives
• Extend pledge payment schedules
52. You Can Do This!
• Work Together!
• Plan for a brighter future – we have gone
through this before
• Be accountable to your donors, your
community, your friends
• Present your organization as lean, well
managed and sensitive
• Be nimble and ready to act!
53. A closing statement from
Bernard Ross
quot;Invest time, intelligence and money into
massively improving the donor
experience with the charity. Remind
donors they are wanted, needed and
appreciated”
From a study conducted by The Management Centre 2008
54. And, in closing….
“Twenty years from now, this reduced
giving will look like a blip, but…that
blip seems pretty important right
now.” (Paul LaGasse)
55. 228 main street, suite 272 williamstown, ma 01267 410-908-9068 abbievonschlegell.com
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