The subject of capital campaign policies used to make me shudder. They seemed dry and boring in comparison to the excitement of creating a grand vision and building deep relationships with big donors.
But I’ve learned that if you don’t spell out key policies and practices early in your campaign, you’ll find yourself embarrassed when a board member, or (worse yet) a big donor asks you questions you can’t answer because you haven’t thought them through and you don’t have a clear policy.
The Capital Campaign and Your Annual Fund
Your campaign policies will clarify many things, but by far, the most confusing topic that people ask about is the relationship of your annual fund and your capital campaign.
Believe me, it won’t be very long before an anxious board member says to you, “I’m afraid that the capital campaign is going to undermine our annual fund.” Or someone might ask, “Can I count my annual gift toward the campaign?”
You’ve got to have good, well-thought through answers!
So with this post, I’ll explain two important things — the relationship between your annual giving and the capital campaign, and how to communicate with your donors about the fact that you have two fundraising initiatives going at the same time.
How Do Your Annual Fund and Campaign Fit Together? Or Do They?
You’ve got two choices. You can wrap both annual fund and capital campaign into one big hairy goal. Or you can keep them quite separate.
Option A: One big hairy goal that combines annual and capital
In campaign lingo, a campaign that wraps all of your fundraising together is called a “comprehensive campaign.” These are common among colleges and universities. And some consultants advocate them for all organizations. I, however, find them to be more confusing than helpful.
In this kind of campaign, you include your projected annual support revenue for the years of your campaign and your raise your campaign goal by that amount.
Here’s an example.
If your capital campaign has a three year pledge period and you raise approximately $500,000/year in renewable (annual) support. You may decide to increase your campaign goal by $1,500,000 and simply wrap all of your annual support into your campaign.
In actuality, you’d probably estimate an increase in your annual fund each year, so you’d raise your goal by more than $1,500,000. If you project that in year one you’ll raised $500,000, in year two you’ll raise $600,000 and in year three you’ll raise $750,000, you’d increase your campaign goal by $1,850,000.
To finish out the example, let’s imagine that you are planning to raise $8,000,000 for your new building and a host of other items identified for your campaign. If you are planning to count your annual fund into your campaign, your big hairy comprehensive campaign goal will be $9,850,000.
Option B: Two goals, separate campaigns
In this model, you keep the annual support goal separate and distinct from the capital campaign goal. Gifts made to the capital campaign are over and above gifts made to the annual fund.
You’ll ask donors to make special gifts to the campaign. And you will make a clear distinction between funds that pay for ongoing operations and capital funds that will help move the organization to a new level of operation.
I find this to be a simpler model that donors understand more easily. In my experience, donors appreciate the clear distinction between recurring gifts that they intend to give year after year and extraordinary gifts that they make every once in a while to help build something special.
Communicating Clearly with Your Donors
Whether you combine goals or keep them separate, your annual fund should run like clockwork, year in, year out. Don’t change the pattern of your annual appeals because you are in a capital campaign.
Your best donors get used to giving to you every year and you don’t want to interrupt that pattern.
That said, you don’t want to surprise your donors with a second ask in the same year. We’ve got a simple solution.
Double Mention, Double Ask
In a year when you know you will be approaching your donors with a special campaign appeal, be sure you mention that when you ask them for their annual gift. That’s the first mention and the first ask.
Then, when you ask them for their capital campaign commitment, mention their annual gift. That’s the second mention and the second ask.
Of course, the order may be different. You may ask for the capital gift first and mention the annual request and then reference the capital gift later when you discuss the annual request. But the principle is the same.
In a year when you will be asking for both a capital gift and an annual gift, never surprise your donors!
You might decide that in the campaign year, you’ll combine the asks and in one solicitation, you’ll tie down both annual fund and capital campaign. This approach works well, especially when your donor makes a large annual gift.
And, if you have decided that you will include the amount of your annual fund in your campaign goal (option 1 above), discussing both gifts at the very same time makes great sense.
Here’s a Cardinal Rule!
No matter which approach you take, never, ever cannibalize your annual fund for a capital campaign! Your annual fund is the gas in your tank, the honey in your pot, the food on your plate. If the renewable gifts you raise every year take a nose dive, your organization will have to cut program and fire staff members.
You don’t want that to happen! Not now, not ever.
NOTE: To see how campaign policies fit into your overall campaign planning, take a look at this campaign planning check list.