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Will Your Capital Campaign Cannibalize Your Annual Fund?

Bar chart with an arrow over it. The arrow begins by trending up, then goes downward sharply. The last bar in the graph is tilting as though it's going to fall.Let’s talk about the most common worry board members have when they are considering a capital campaign: that the capital campaign will cannibalize their fundraising for operations.

The success of the campaign is also a worry, of course. And whether they have any donors who will give the big gifts. Not to mention, they worry about how much they’ll be asked to give. All of those are reasonable concerns for board members, and there are many more.

But the worry that seems to override all of the others is the concern that the campaign will undermine the organization’s annual giving.

Are Comprehensive Campaigns a Better Way to Go?

Some organizations combine their capital campaigns with their annual fundraising in the hopes of heading that problem off at the pass. To execute, they increase the campaign goal by the amount of money they anticipate raising in their annual fundraising for the years of the campaign.

So, for example, if an organization raises $250,000 each year through its various annual appeals and its leaders anticipate that the campaign will extend three years, they will increase their campaign goal ($12 million) by $750,000. If they are thinking carefully, they may increase the campaign goal by $1,000,000 to account for an annual increase in their recurring fundraising each year.

Their campaign goal calculations might look something like this:

Then, aiming for a goal that accommodates both, they will ask every donor for one gift that combines both the donor’s capital gift and their annual fundraising.

These so-called comprehensive campaigns have gained popularity over the last few years, and I understand why. But no matter how hard we try, we don’t like them.

Here’s why …

Sometimes Donors Like the Chance to Make a Big Difference

Let’s look at it from the donor’s point of view.

Many donors give habitual amounts to organizations they support annually. They might give $100 or $500 or even $1,000 to an organization every year. They probably have several organizations they give to at that level.

But many of those donors have the capacity to give more, sometimes much more. So when a special opportunity comes along to give a larger gift that will boost their favorite organization to make a bigger difference, they may well make a one-time gift that is far greater than anything they’d give annually.

A donor who gives $500/year might be able to give $50,000 or even $500,000 when the expectation is that the gift will make an out-sized difference and they won’t make the larger gift year after year.

So, rather than combining annual and capital requests, I think there’s greater potential if you keep them distinct. That way, you can talk to your donors explicitly about the need for both annual and capital without causing confusion.

Let’s take it one step farther …

Here’s How to Protect Your Annual Fundraising from a Capital Campaign

You can protect your annual fundraising by establishing policies for your campaign that make the funding priorities clear. You can specify that campaign gifts are over and above annual support. If a donor elects to give only one gift, that gift will be apportioned first to the annual operating fund and then to the campaign.

Keeping your campaign goal separate from your annual fundraising goal makes it clear and easy to understand. And one way to make sure that happens is to use what is sometimes called “Double Mention, Double Ask.”

If you are in a capital campaign, when you ask your donors for their regular annual gifts, mention that you are in a capital campaign and will come to talk to them later about a special gift to the campaign. Then when you ask for the campaign gift, you should mention their on-going annual support.

You can make clear that you are raising $250,000 that year for annual support and are launching a special capital campaign to raise $12 million to boost the organization’s capacity and impact.

But What About … “Donor Fatigue”?

You probably worry about wearing your donors’ generosity thin. And you may well do that when you ask them again and again for money that goes to the same thing – annual appeals, galas, golf tournaments, auctions, walks, raffles, and more annual appeals. That kind of repeat asking does wear a donor out.

The truth is, your capital campaign might actually create donor excitement!

When you ask your donors for something special that will make a big, extraordinary difference in the lives of people you serve, you give them a chance to do something special and exciting.

Special campaigns to fund specific things have a remarkable way of engaging or reengaging your donors.

So stop wearing your donors out by nickeling-and-diming them. Instead, invite them to help your organization take a big leap forward and in doing so to make a bigger difference.

Ready to Excite *YOUR* Donors?

Want to find out how you can structure your capital campaign to create excitement rather than fatigue for your donors? Apply for a free capital campaign strategy session and talk it over with an expert.

Amy EisensteinAmy Eisenstein, ACFRE, is a well-respected author, trainer, speaker, and nonprofit coach. She wrote the book, Major Gifts for Small Shops, and developed Mastering Major Gifts and other online resources.

Andrea KihlstedtAndrea Kihlstedt is a campaign consultant of 30 years and one of the world’s leading capital campaign experts. She wrote THE book on campaigns—Capital Campaigns: Strategies That Work, now in its 4th edition—and is president of Capital Campaign Masters.

Topics: capital campaigns Annual Funds