Why capital campaigns fail (and how to make sure you succeed!)

Why capital campaigns fail (and how to make sure you succeed!)

By Lindsay Jordan, MNM, CFRE

I cringe every time I hear a board member say “I think we’re just going to skip the feasibility study” or an executive director muse “We already know who is going to give to this campaign; we don’t need to go through all the steps in the planning phase.”

Why? Because chances are, these are the folks sitting in my office about 12 months later with heartbreaking stories about why their campaigns failed and what kind of losses - funding, donor relationships, staff - they have experienced in turn.

More than 50% of all first-time capital campaigns fail. And almost all of them fail for the same reason: a lack of planning. I know a lot of folks hear terms like “wealth screening” and “feasibility study” and immediately characterize these tools as unnecessary expenses for a nonprofit. That’s usually because they don’t understand the true purpose of these tools.

Yes, a wealth screening prioritizes donors with the greatest capacity to make a gift to your campaign. Yes, a feasibility study helps determine if a donor has the inclination to make a gift and identifies the potential amount of their[1]  gift. These are important bits of information to know. But beyond the textbook definitions of these and other planning phase tools, their true value is to help you get in front of the issues that can dismantle your campaign.

A failed capital campaign can mean a lot more than an undeveloped piece of land or continuing to run programs out of a dilapidated building. When trust is fractured between an organization and its donors, long-standing general operating gifts can suddenly be at risk. We are approached with about as many “damage control campaigns” to try to save or regain general operating awards after a failed capital campaign as we are brand-new capital campaigns.

A failed campaign can also be a huge blow to morale for the staff members involved. It’s hard to not imagine all of the mission work or other fundraising work you could have accomplished with the significant chunk of lost time that was devoted to the capital campaign. For some, this feels like a natural “ending” and an opportunity to look for the next chapter of their employment.

Here are a few of the reasons why capital campaigns fail:

1. People don’t know you (visibility). One of the most important areas of exploration in the feasibility study is thoroughly vetting your level of visibility in the community. People give to organizations they know, like, and trust, and who “play nice in the sandbox” with other community partners and key stakeholders. If people don’t recognize your brand, mission, and programming in the community, they are far less likely to support your campaign for growth.

2. People don’t trust you (leadership). If donors do not trust your executive leadership or board members, your campaign runs a higher risk of failure. Carefully crafted questions help determine the level of trust donors currently place in your organization, and if there is a lack of trust, the questions will help tease out why. Has the executive director offended a group of donors, or is she/he simply unknown to the donors you plan to approach in your campaign? Is your board not particularly visible in the community, or do donors think you simply need a few more “heavy hitters” involved to bolster the campaign’s credibility? Trust is key in fundraising, and you will not succeed without it.

3. People don’t get you (mission). In order for a campaign to reach its goal, most donors must already have a baseline understanding of your mission. If donors feel that your mission is poorly articulated, overly complicated, or that you are simply trying to do too many things at once (commonly referred to as “mission creep”), they are less likely to support your campaign.

4. People don’t get the project (campaign). Even before you begin the planning phase of your capital campaign, it is important to get community buy-in for your vision. Charting a path forward without consulting key stakeholders can result in donors feeling like you are out of touch with what the community perceives to be itsyour greatest needs. They may disagree with the language you have chosen to describe your campaign, or they may outright reject the entire plan. The old fundraising adage is still true today: if you want someone’s money, ask them for their opinion.

5. People think you came out swinging too early. Capital campaigns are full of energy and momentum, so it’s easy to get swept up in the excitement. However, naming your campaign chair before you’ve built out the critical infrastructure needed or announcing a goal before you’ve secured all of your leadership gifts are sure-fire ways to rain on your own parade.

6. You don’t have the donors to support the campaign. The large majority of capital campaigns leverage their existing donor programs to support the major gift asks of the campaign. Rarely is a donor’s first gift a capital campaign gift. Capital campaign gifts are, on the contrary, usually stretch gifts or legacy gifts; donations that reflect a donor’s deep commitment to the mission and willingness to stretch personally to help the organization realize its vision.

For this reason, organizations that do not already have a strong individual giving program tend to struggle when launching a capital campaign. We typically recommend that nonprofits with small (or no) individual giving programs take about three years to intentionally acquire new donors and increase giving levels before attempting a capital campaign (and we help build these programs).

People think your fundraising plan and/or goal is unrealistic. Perhaps the most valuable outcome of the feasibility study is donor feedback on both your fundraising goal and your plan to get there. This is where it’s handy to have an unbiased third party (consultant) representing you.

Donors like you. They want you to succeed. Many don’t want to give you bad news. They don’t care about us (consultants) though. Our feelings are not part of the philanthropic equation, which means that donors are more likely to tell us if they think your goal is out of reach for this community; if your timing is bad because of the number of similar campaigns in the market; if you have grossly overestimated the number of $1M gifts that would be available to you; or if the foundation support you are counting on would be more feasible if offset by higher individual giving.

Making assumptions about donors and their ability and/or interest in your campaign is, hands down, the #1 reason capital campaigns fail.

A capital campaign can be an exciting and rewarding “feather in the cap” of an organization ready to grow itstheir mission. Utilized every 10 years or so, these iconic campaigns are powerful fundraising tools that galvanize new donors and inspire a tremendous amount of pride and affinity in existing stakeholders.

They are also, however, a significant investment of time and resources on behalf of nonprofits and there is a great deal of risk to the organization if they fail. Understanding the most common barriers to success and leveraging the appropriate planning phase tools to mitigate risk will help set your campaign up to meet and exceed your fundraising goal.

If your organization is considering a capital campaign or if you have experienced any of these campaign barriers and need help recovering, we would be happy to chat to see if we can help. Email info@writeonfundraising.com or call 888-308-0087 to schedule a complimentary session with our team.