Why Start a Capital Campaign in Uncertain Times?
It feels like economic uncertainty is all around us—in the news, chats with friends and family, and the price tags we see in stores. Everyone’s been thinking about the best ways to navigate turbulence, both for themselves and the organizations they’re part of.
If you’ve been considering a capital campaign for your nonprofit, you’ve undoubtedly been wondering if moving forward is still appropriate (or even feasible). There’s an underlying assumption that giving will become much more conservative when times are uncertain.
But don’t write off your plans entirely. Remember that campaigns are big, audacious projects with inherent risks even in the best economic booms.
In some ways, it’s never a good time and always a good time to launch a capital campaign. They’re challenging and often risky undertakings, yes, but risky times or not, the work of your organization is important! And no matter what the state of the economy, some people will give to you and others won’t.
In other words, there’s no perfect moment to launch a capital campaign. Rather, there’s only the right moment for your organization to drive its vision forward. Let’s take a closer look at how campaigns can play out during times of economic disruption so that you can better recognize this moment when it comes for your own organization.
Understanding Campaign Cycles
Nonprofits conduct capital campaigns roughly every 10 to 15 years. They’re designed to ratchet up the organization’s capacity through major investments in buildings, staff, equipment, endowment, and more. These investments take the organization to the next level of sustainable growth and allow it to expand programming and serve more constituents.
Let’s land in the middle of this range and say that an organization conducts a capital campaign every 12 years. The campaign usually lasts 3 to 5 years. On average, we experience a recessionary period once every 6 years.
This means that the organization is statistically likely to encounter 1 or even 2 recessions between those 12-year mile markers.
Your needs as an organization and the needs of the community you serve will always grow, and the demands of your organization to grow are often greatest during economic downturns. With this context, the decision to completely hold off on making meaningful investments in your mission so that you can avoid unavoidable economic turbulence seems ill-advised.
Striking the Right Balance
Of course, your job as a nonprofit leader is to balance risk and reward in order to pursue your mission and make a difference for constituents. Being a responsible steward of resources is part of that job.
That truly may mean holding off on launching a capital campaign if you don’t see a clear path to success. Or it may mean boldly moving forward, acknowledging some but not undue levels of risk. Our general position is that though you can always find an excuse to put off a campaign, you will miss amazing opportunities if you do so.
If you understand the inherent risks of these big projects, moving forward can be a good idea regardless of the state of the economy.
However, being a responsible steward requires that you plan carefully for any new initiative. If the economic projections seem shaky, you should take mitigating steps to build extra safety and flexibility into your campaign.
Recession-Proofing a Campaign: Essential Tips
What best practices should you pay extra attention to if you’re launching a capital campaign during times of economic uncertainty? We break them down into three core categories:
Planning
Planning is always important for capital campaigns, but it’s especially critical when you think that external forces may play a bigger-than-normal role. Planning allows you to lay out a more resilient and adaptable strategy for your campaign.
Every campaign should begin with a feasibility study that interviews key stakeholders. This study gathers input and tests the campaign’s initial plans, including its objective and working fundraising goal, in order to shape your next steps and ensure the greatest likelihood of success.
Feasibility studies are crucial because they gauge the opinions and begin securing early buy-in of the people who’ll ultimately drive the campaign to success. During times of economic uncertainty, this is an important opportunity to get on the same page. Will donors’ economic fears impact their giving? Are they perhaps less worried about the economy than your organization is? Can you lay out a case for support that rises above and assuages the anxiety? Your feasibility study is the time to answer these questions and tailor your approach accordingly.
Laying out smart campaign policies is another way to help buffer your campaign from external economic shocks during the planning phase.
For instance, if you were to run into a shortfall in the home stretch of the campaign, the right gift acceptance, campaign counting, and gift valuation policies could give you the flexibility to weather the issue and maintain momentum. We run through the different ways to approach this hypothetical campaign shortfall scenario on the Capital Campaign Pro blog.
Communication
Clear lines of communication internally and externally are always essential during a capital campaign.
But as we learned during the worst days of the pandemic, staying in touch with donors becomes especially important during times of crisis. If the economy takes a downturn during your campaign, don’t assume your donors won’t want to hear from you. This would actually be the time to double down on your relationship-building efforts. Ask about how they’re faring personally and professionally. Seek their continued input on the campaign. Be transparent about your progress.
Donors, especially those with whom you have long-standing relationships, know that you have a nonprofit to run and a mission to pursue. They won’t begrudge you continuing to do your job. What you can do is offer increased flexibility, for instance, if the timing of a donor’s gift or pledge payments is affected by external forces. The right plans and policies should help give you the breathing room to do this if necessary.
Adaptability
Adaptability is paramount with an undertaking as big a capital campaign, even in the best of times. The biggest example is your campaign’s goal. Move forward with a working goal that’s clear but not 100% set in stone up until the point that you’re confident in the total you’ll be able to raise and publicly announce.
Think back to the feasibility study in the early days of your campaign—it should have resulted in a reasonable working goal that you can be confident in. But there’s no reason why you can’t retain the flexibility to scale it down (or up!) depending on the circumstances that you encounter during the several years of your campaign.
The same is true of your campaign timeline. You should have the freedom to extend your campaign if there’s a clear roadmap for actually hitting your goals within that extension. However, you shouldn’t extend your campaign indefinitely with no clear end date.
Ultimately, it’s your capital campaign. No one will fault you for making adjustments in unusual times. What they’ll look for first and foremost is whether you’re making those strategic decisions confidently as an adaptable leader and steward of resources.
Key Takeaways
What are the essential takeaways to carry forward if you’re considering or are already planning a campaign and are worried about the economy?
Let your capital campaign be driven primarily by the needs of those you serve, not just by economic projections. That’s the kind of vision and drive that inspires donors and results in stretch gifts.
Capital campaigns in uncertain times can also bring an advantage. Even if we don’t like to think of nonprofits as in competition with one another, economic volatility can reduce campaign competition and increase your organization’s profile.
Flexible timelines and the natural cycles of campaigns and the economy mean you’ll always see ups and downs. Even if you’re planning a campaign during a period of turbulence, for instance, you may later do the bulk of your quiet phase fundraising amid greater stability.
Weigh your options, find the balance of risk you’re comfortable with, refine your vision, develop extensive plans and backup plans, and keep moving forward.
Pro Talks: Fundraising in Times of Crisis
Join Amy Eisenstein and Andrea Kihlstedt in real-time every Monday as they discuss how to move forward with your fundraising efforts during uncertain times. These talks are open to everyone. Sign up and join the conversation!
About the Author
Andrea Kihlstedt, Campaign Expert & Co-Founder
Andrea Kihlstedt is a Co-Founder of the Capital Campaign Pro. She is the author of Capital Campaigns: Strategies that Work, now in its 4th edition, as well as How to Raise $1 Million (or More) in 10 Bite Sized Steps, in addition to other books. Andrea has been leading successful capital campaigns for more than 30 years. To learn how Capital Campaign Pro can support you through a capital campaign, visit capitalcampaignpro.com.