At some point, every growing nonprofit hits a ceiling when they realize that their next big step requires a concerted effort to raise money for a large project. That’s where capital campaigns come in, a focused fundraising effort to raise a large amount of money for a specific initiative within a set period of time. Whether your organization is looking to make large renovations, purchase a new building, create an endowment, etc., launching a capital campaign is the right next step to reach the next level of growth.

This article will explain exactly what a capital campaign is, how it works, and the right steps to take to plan and execute one successfully.

What is a Capital Campaign?

Capital campaigns are time-limited, intensive fundraising efforts used by nonprofits to raise substantial funds in a set amount of time for a specific-large scale project. They typically fund large investments such as new buildings, endowments, or expensive equipment necessary to the operations of the nonprofit.

Capital campaigns can run for many years and rely heavily on major gifts to reach the goal.

Capital Campaign vs. Annual Fund: What’s the Difference?

While capital campaigns are intensive, multi-year initiatives focused on a specific large-scale project, annual funds are ongoing, yearly campaigns meant to raise an unrestricted amount for operational costs. Simply stated, capital campaigns are for specific projects, and annual funds are for general operating expenses.

 This table details the key differences between capital campaigns and annual funds: 

When Should a Nonprofit Launch a Capital Campaign?

Nonprofits should launch a capital campaign if there is a big project that requires a concerted fundraising effort.

Here are common triggers that indicate the need for a capital campaign:

• Purchasing major equipment
• Creating or expanding an endowment
• Launching a new program or major initiative

Types of Capital Campaigns

There are four main types of capital campaigns you can launch, based on your organization’s goals:

• Building Campaign: These typically fund new construction projects or major renovations to existing buildings.
• Endowment Campaign: Designed to build permanent, invested funds for long-term financial stability and operating income.
• Equipment Campaign: Funds are raised to purchase major equipment necessary for continued operations such as medical equipment, specialized vehicles, etc.
• Comprehensive Campaign: These campaigns encompass many different goals, combining capital needs with endowment growth and funds for operating expenses.

Steps to Planning a Successful Capital Campaign

Here are the six main steps to take to successfully plan and launch a capital campaign:

1. Planning and Assessment: Define your goals for the project by asking key questions. What will the funds accomplish? Why is this project necessary? Do we need additional staff resources? How much money do we need to raise? Once you have defined your goals, begin drafting a business case for the campaign. You’ll need to provide a compelling reason for embarking on a large-scale initiative and be able to articulate the intended impact. Consider hiring a capital campaign consultant or advisor to help steer the project forward, without taking away existing staff from their current projects.
2. Conduct a Feasibility Study: Once you’ve created a fundraising plan, test it with a few major donor prospects through interviews to assess if they are willing to fund the initiative. Tailor your messaging, campaign scope, and goals accordingly based on the results of the study. Feasibility studies typically last for 3 to 4 months and allow your team to refine the strategy before heading into the major stages.
3. Quiet Phase: The quite phase of a capital campaign is an initial, private planning and fundraising period that can last anywhere from 6 to 24 months, and where a majority of your fundraising goal will be met. Nonprofits should aim to secure 70 to 90% of the overall goal from top major donors and stakeholders during this phase before going public with the campaign.
4. Publicly Launch Your Campaign: The public launch of a capital campaign signals the transition from the quiet phase to the public initiative to secure the remaining funds needed to hit the campaign goal. Plan your launch once you’ve reached 70 to 90% of your goal through major gifts.
5. Public Fundraising Phase: The public fundraising page in a capital campaign is the final push where the last 10 to 30% of your fundraising goal can be raised through smaller, broader gifts. This phase typically lasts 3 to 6 months and employs wide-reaching strategies such as direct mail, social media, and email campaigns to garner the support of a large community.
6. Stewardship and Wrap-Up: Once you have reached your fundraising goal and the campaign has concluded, begin post-campaign stewardship activities. Implement a donor stewardship plan to thank donors and review the success of the campaign to identify what worked and areas for improvement. Be sure to also solidify relationships with your major donors and others that contributed to the success of your campaign for future fundraising efforts.

Major Costs Associated with a Capital Campaign

Capital campaigns often come with extra associated costs to ensure maximum success within the campaign:

• Campaign Consultants: You can choose to hire a capital campaign consultant, who is an expert advisor that helps nonprofits plan, manage, and execute capital campaigns. They can lead the charge on campaign planning, feasibility studies, leadership training, and overall campaign management, in order to preserve the time of your team members.
• Marketing Costs: A portion of your capital campaign budget will be needed to fund marketing activities, such as the production of campaign materials, including case studies, brochures, promotional videos, and events for the campaign.
• Additional Staff Resources: Additional team members may be necessary to manage the increased workload of running a capital campaign for multiple years. Consider adding to your development team or creating extra positions that work solely on the campaign.

Organizations should allot 10% of your total campaign goal towards these expenses to ensure maximum success.

Key Roles in a Capital Campaign

The success of your capital campaigns depends on the team you have available to help you succeed.

• Campaign Chair: The capital campaign chair is responsible for the success of the fundraising campaign. They act as the public spokesperson of the campaign.
• Development Director: In a capital campaign, the development director helps drive the overall fundraising strategy, acting as the lead fundraiser that organizes donor cultivation, campaign planning, and volunteer management.
• Board Members: Board members are critical to the success of a capital campaign. 100% board participation is expected for a capital campaign project, and they should be ready to provide active buy-in, leadership, and commitment to getting the project over the finish line.
• Volunteers: Volunteers are crucial to capital campaigns, acting as ambassadors and solicitors within various committees for the campaign. They can serve on steering committees to help identify donor prospects, make introductions, solicit gifts, and thank donors.

Capital campaigns aren’t just about raising money to fund a large project, they are an investment into the future of your organization. When done well, capital campaigns strengthen relationships with donors, aligns your leadership team to the goals of your nonprofit, and creates momentum for future fundraising efforts. The organizations that succeed at their capital campaigns are the ones that communicate clearly with donors, and execute consistently across each stage of the long campaign process.