Several conversations I’ve had lately have revolved around Capital Campaigns. Since they seem to be a hot topic, I wanted to discuss Capital Campaigns from the standpoint of grants.
While grants are often thought to be ancillary to capital campaigns, they can actually be a huge part, so are worth a look when trying to raise the money to fund a capital project.
First, let’s define what a Capital Campaign is.
The Gilchrist Foundation out of Sioux City, Iowa defines a Capital Campaign as making “a significant contribution to worthy renovation or expansion projects that will enhance the mission of the recipient charity.”
Note their use of the words “significant” and “worthy.”
A campaign that makes a “significant contribution to worthy … projects” is one that is transformational for the nonprofit. Through such a campaign, the organization is put on a different trajectory, one that redefines what is possible for them to accomplish; t will “enhance its mission.” The project being supported by the Capital Campaign is deemed “worthy” by not only the nonprofit, but by its community as well.
While the Gilchrist Foundation’s definition doesn’t get too specific in terms of timing or how and how quickly the money for the project is raised, there is some urgency as pertains to capital campaigns. The National Center for Family Philanthropy puts it best, saying that “a capital campaign is an intensive fundraising effort organized to meet a specific financial goal within a specified period of time.”
The time-bound nature of a capital campaign is important to note. These campaigns can take years. The more you wish to raise, it’s likely the longer your campaign will need to be.
Putting a deadline to it does a couple of things:
1) generates a sense of urgency and excitement among your potential donors; and
2) caps the drain on the rest of your fundraising initiatives (since donors may not want to be approached for multiple asks).
There are strategic phases to a Capital Campaign. Fundraising best practices tell us that, after Pre-Planning to establish its preliminary framework, the rules of the road for Campaign phases basically are:
Phase One: The Feasibility Study Phase
when it is (confidentially) uncovered whether there is ample financial support for the campaign to succeed. Most often led by an outside firm, rather than done internally.
Phase Two: The Quiet Phase
when the Campaign officially launches, and lead and other major gifts and/or pledges are (quietly) garnered for the bulk of the goal amount.
Phase Three: The Public Phase
when the project goes public and the community at large is approached for the last +/- 10-20%.
First there’s Phase #1, followed by Phase #2, and finally Phase #3. In that order.
There may be some overlap (when success in the current phase is nearly achieved, a move to the following phase is considered fine), but leapfrogging and hopscotching from phase to phase (and skipping important phases) is not fine.
Examples of capital expenses that such a campaign would seek to raise are:
- construction of a facility, or a major renovation project on a current facility
- purchase of (very expensive) equipment, and
- endowment support (best to consult with experts, such as Benefactor Group).
Grants and the Capital Campaign
Since a Capital Campaign may have a years-long timeline, and because grants are, by their very nature, fairly private/quiet, then going out for grants for Capital projects makes a lot of sense. The important caveat here is TIMING.
As we’ve discussed in previous blogs such as “5 Factors Affecting Your Fundraising Strategy“, grants can have a long arc, and lots of lead time will have to be factored in. Here’s some reasons why:
- You may have to do some prospect research, since a foundation that’s interested in funding Capital may not have been in your searches up to now. Devoting time to look for funders that are OK with that support strategy needs to be built into your contribution to the campaign.
- You have to account for funder deadlines. If it’s December and a great funder match has an annual November deadline, then you need to wait 11 months to apply.
- Funders have notification schedules that could take months. Especially if they are a large foundation, with lots of layers and admins and bureaucracy around their decision-making, you may need to add several months until you are notified of an award.
- You may have to build a relationship, which takes time. If a funder has never heard of your nonprofit, is unfamiliar with your work, and has a policy about not funding first-time applicants, you may need to apply in several cycles before you can be considered.
- Foundations that fund capital necessarily are handing out huge chunks of dough. They may be committed for years to other campaigns, which means you would have to wait your turn. This is a huge argument for relationship-building with your funders. Pick up the phone and have that conversation, and you may turn up very helpful intel!
If you as the agency grant professional are brought in on the Capital Campaign conversations early enough to account for all the limitations and landmines you could potentially encounter, then grants can be a great contributor to the Capital Campaign. Make sure your nonprofit’s leadership and Board knows that you can confidentially work behind-the-scenes to assess what grants could contribute to the goal. This work could be an important asset to the Feasibility Study Phase’s findings.
Above and beyond the cash they could bring in, grants could be part of a donor’s challenge match, or the agency portion of asks to donors or funders. Pending asks could be used to qualify to submit for grants to funders with the requirement of a certain percentage already being raised.
And as a key part of your agency’s writing talent, you could contribute to the all-important Case for Support that is built to inspire donors and explain what campaign success will mean for your community.
So yes, grants can be an enormous boost for any Capital Campaign — if you’re brought in early enough. If there’s rumblings at your organization that a Capital Campaign might be in the wind, definitely get grants included in those conversations, because grants should play a part.
Sooner rather than later. For grant seeking to be effective, you will need even a couple of years head start to be successful.
