Capital Campaigns in
               Really Tough Times
                              March 17, 2009

                     ...
So why are you here?

• Are you planning a campaign? In nucleus
  phase? In the middle?
• Lean year campaigns offer lesson...
Where do you want to go?

                               Success in the campaign?


                          Re-think the...
Where does money come from?
What is a Capital
Campaign?
   An intensive, organized
   fundraising effort to secure
   philanthropic gifts for specific...
What is it NOT?
Capital Campaign
Characteristics
      • Intensive, special appeal
      • Meets an extraordinary need
      • Capital: bu...
Who makes
charitable contributions?
                                          2007: $306 billion given to
                ...
Who receives charitable
contributions?




                           *International aid, environment, public-
           ...
Giving is resilient
• Total giving up in current dollars every
          year but one since 1967
• Decline in 1987 due to ...
Giving is resilient
    Total US giving in $ billions
    Grows 2% to 4% most years
Giving
weathers economic storms
• Giving grows 2.7% per year (average)
• Giving grows more slowly during
          slowdow...
Giving weathers economic storms

   I years with recession
   I years with a “slowdown”
Nobody Knows Anything!
•=mc Global Fundraising      •Guidestar Survey
Study
                             •Causes most effe...
Giving ≠ the market
Why do people give?
• Shared values
• Personal relationship
• Involvement with
  organization’s mission
• Image and appeal...
Some current realities
•Mortgage and housing crisis ≠ charitable giving sector

•Though overall charitable giving in 2007 ...
How is the economy affecting
the sector?
• Report of both fundraising revenues and
      numbers of donors down in early 2...
Economy’s effect on sector:
public comments
• “The latest victims of the sagging economy: charities.”
• “Our most optimist...
Campaigns Lasting Longer*
*CASE 9.08 Study



• Median 6.25 years
• Median quiet phase 33 to 40 months
• Median goal $50,0...
Board Members Feel Unprepared
**The Chronicle of Higher Education
• 15% considered themselves “very well prepared”
• 40% d...
Fashions in Fundraising
• The old way to campaign
  – Find a project
      desire
      need
      desperation
• Make the ...
Fashions in Fundraising, TODAY
• NOW:
 – “Donor-Centric”
   • Identify his or her values, background, “hot
     buttons”
 ...
The “new” thing: strategic
fundraising or campaigns
• Bringing things into alignment
  – Remember first things come first!...
Trends in Philanthropy
• Trends are based
  – on what we know
    about the past
  – on assumptions about
    the future
•...
Changes in Society/Culture
• Less and less support from Washington, DC to
  meet the needs of society
• Less and less supp...
So what do you do?


     First, know that it is
       very, very hard!



                              28
Campaigns in Lean Times
• Campaign progress plateaus
  – Asks get very old
  – Prospects will not return calls
• Campaign ...
Seven Strategies
   for Lean Times
1. Revive volunteer
                       5. Lower/revise the
   leadership
          ...
Reviving Volunteer Leadership

• New tools for the Chair/s
• New supporting volunteers
• New Chair/s



                  ...
Rethinking Prospect Strategies
• When economy changed, where did the
  money go?
  – 401ks, home prices, stock market
  – ...
Know your donors and friends!

 Their interests

 Their passion

 Their concerns

 Their motivations
Look after your donors
• Implement donor relationship
  management strategy; accept it is not
  cheap; staff properly
• Be...
Look after current donors
 Thank Properly

                        Frequent Communications


                        T
Pho...
Rethinking needs and case
• A new need can attract new interest
• Stronger or different rationale adds
  urgency
  – Hard ...
Extending the Timeline

• Longer pledge periods
• Donors take pauses in pledge schedules
• Waiting out the bad economic ti...
Lowering the Goal
• Can you succeed with less?
  – Easier to sell if you have not gone public
  – The virtues of a real qu...
Pausing or Stopping
the Campaign
• If you cannot make the annual fund goal,
  the campaign does not matter
• How urgent ar...
Campaign Planning
in Lean Times
• Needs justification must be tighter
  – Real urgency
  – Efficiency and ROI important
• ...
Campaign Readiness




                     42
Campaign Planning Studies
in these times
• Premature goal testing     energy of staff,
  volunteers, even prospects
• Inst...
Let donors tell
their stories and help you!
• Best donors often best askers
• Invite top prior donors to share their
  pas...
Readiness Evaluation
• Prospect base
  – Size, evaluation, qualification
• Data and data systems
• Staffing
• Needs ration...
So the Campaign is on Hold…
• Endowment comes from planned giving
• Capital or Program campaign
  – Becomes Major Gifts ef...
A Less Predictable
Environment
• Wither the estate tax?
• More extreme swings in US economy
• Global economy means less do...
To campaign or not to campaign?
• No one has stopped or withdrawn if in the
  nucleus or silent phase
• Those who are in c...
When Times are Hard, It’s
• Old money
• Established donors
• Urgent and justified needs
• Leaders who believe
• Passion fo...
Conclusions:
How to thrive in tough times
•   Keep asking
•   Be invitational & understanding
•   Remember the basics
•   ...
Conclusions, more
• Don’t panic! Step back calmly and plan
• Engage your Board members and friends
• Assess your communica...
You Can Do This!
• Work Together!
• Plan for a brighter future – we have gone
  through this before
• Be accountable to yo...
A closing statement from
Bernard Ross

quot;Invest time, intelligence and money into
  massively improving the donor
  exp...
And, in closing….

“Twenty years from now, this reduced
 giving will look like a blip, but…that
 blip seems pretty importa...
228 main street, suite 272   williamstown, ma 01267   410-908-9068   abbievonschlegell.com
                               ...
Capital Campaigns In Really Tough Times
Capital Campaigns In Really Tough Times
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Capital Campaigns In Really Tough Times

  1. 1. Capital Campaigns in Really Tough Times March 17, 2009 By Abbie J. von Schlegell, CFRE Principal 228 main street, suite 272 williamstown, ma 01267 410-908-9068 abbievonschlegell.com
  2. 2. So why are you here? • Are you planning a campaign? In nucleus phase? In the middle? • Lean year campaigns offer lessons • Maybe you are in one? 2
  3. 3. Where do you want to go? Success in the campaign? Re-think the campaign strategy? Engage new prospects? Stop the campaign altogether?
  4. 4. Where does money come from?
  5. 5. What is a Capital Campaign? An intensive, organized fundraising effort to secure philanthropic gifts for specific capital needs or projects, executed within a specific time period, usually for one year or more.
  6. 6. What is it NOT?
  7. 7. Capital Campaign Characteristics • Intensive, special appeal • Meets an extraordinary need • Capital: building new facilities, renovations, equipment – Relatively low cost for fundraising & administration – Specific, “stretch” financial goal
  8. 8. Who makes charitable contributions? 2007: $306 billion given to nonprofit organizations – Individuals: $ 229 billion + $23 billion bequests – Foundations: $38 billion Individuals Corporations – Corporations: Foundations $16 billion Source: Giving USA 2008
  9. 9. Who receives charitable contributions? *International aid, environment, public- benefit, foundations, unallocated Source: Giving USA 2008
  10. 10. Giving is resilient • Total giving up in current dollars every year but one since 1967 • Decline in 1987 due to change in tax law • Total giving declined just twice when adjusted for inflation 1974 (Oil Crisis) 2001 (failure to ask – not failure to give)
  11. 11. Giving is resilient Total US giving in $ billions Grows 2% to 4% most years
  12. 12. Giving weathers economic storms • Giving grows 2.7% per year (average) • Giving grows more slowly during slowdowns and recessions • Fewer than half of all charities experience declines in giving, even during tough times
  13. 13. Giving weathers economic storms I years with recession I years with a “slowdown”
  14. 14. Nobody Knows Anything! •=mc Global Fundraising •Guidestar Survey Study •Causes most effected by •Causes least effected by the economic climate: the economic climate: –Disease-related groups –Children’s causes –Mental health –International relief –Faith-based groups –Medical research –Faith-based causes
  15. 15. Giving ≠ the market
  16. 16. Why do people give? • Shared values • Personal relationship • Involvement with organization’s mission • Image and appeal of organization • Recognition, tax deduction, parties
  17. 17. Some current realities •Mortgage and housing crisis ≠ charitable giving sector •Though overall charitable giving in 2007 increased by 3.9%, the number of donors declined • AFP 2007 study ranked the economy #1 concern among charities surveyed • Fundraising revenues and donor counts both down for the first quarter of 2008 compared to the same time last year [Target Analytics Index of National Fundraising Performance]
  18. 18. How is the economy affecting the sector? • Report of both fundraising revenues and numbers of donors down in early 2008 • Small charities affected more than larger • Level of optimism for near future very low • Increased (and funding) need for services for charities serving low income families (food pantries, shelters, job banks)
  19. 19. Economy’s effect on sector: public comments • “The latest victims of the sagging economy: charities.” • “Our most optimistic forecast is now $1.5 million, compared with $2 million raised last year. The downturn in the economy has played a big part” • “It makes a hell of a lot of difference …You have a person who’s worth $5 billion, and the next morning they’re worth a billion.” • “It looks like 2008 could be one of the most challenging years charities have seen in some time.”
  20. 20. Campaigns Lasting Longer* *CASE 9.08 Study • Median 6.25 years • Median quiet phase 33 to 40 months • Median goal $50,000,000 • Alumni largest source but less than 33% of total (Educational institutions only)
  21. 21. Board Members Feel Unprepared **The Chronicle of Higher Education • 15% considered themselves “very well prepared” • 40% described themselves as “slightly prepared” or “not at all prepared” • More likely to feel unfulfilled and less valued • Less likely to have a good relationship with CEO • More likely to be somewhat newer or younger
  22. 22. Fashions in Fundraising • The old way to campaign – Find a project desire need desperation • Make the case “this will allow us to… “All the others are… “If we don’t do this, we will…
  23. 23. Fashions in Fundraising, TODAY • NOW: – “Donor-Centric” • Identify his or her values, background, “hot buttons” • Discover his or her financial issues • Find possible solutions to issues • Make donor feel as if goals are being met – Match the gift design with something in the campaign
  24. 24. The “new” thing: strategic fundraising or campaigns • Bringing things into alignment – Remember first things come first! – Value donors who can meet the first needs – Make case for crucial needs • Build program to make this happen: be strategic! – Design the case for support – Design the pool of potential donors
  25. 25. Trends in Philanthropy • Trends are based – on what we know about the past – on assumptions about the future • Let’s look at what has been happening
  26. 26. Changes in Society/Culture • Less and less support from Washington, DC to meet the needs of society • Less and less support from the states for education and basic human needs • Gradual shift back to non-profit sector to carry the load (# non-profits to increase) • People living longer and longer (fear of outliving resources) • Younger generations less philanthropic than their parents
  27. 27. So what do you do? First, know that it is very, very hard! 28
  28. 28. Campaigns in Lean Times • Campaign progress plateaus – Asks get very old – Prospects will not return calls • Campaign leaders drop out – Lose heart, question strategy – Don’t make calls or even set meetings • Donors can’t make pledge payments • Leaders will not authorize campaigns 29
  29. 29. Seven Strategies for Lean Times 1. Revive volunteer 5. Lower/revise the leadership goal 2. Rethink prospect 6. Pause or halt the strategies campaign 3. Rethink the needs 7. Avoid this mess, if and the case possible! 4. Extend campaign timeline 30
  30. 30. Reviving Volunteer Leadership • New tools for the Chair/s • New supporting volunteers • New Chair/s 31
  31. 31. Rethinking Prospect Strategies • When economy changed, where did the money go? – 401ks, home prices, stock market – Panic among general public • Follow the money – people are still rich, but perhaps not as much • Reset gift table to meet revised/extended goals 32
  32. 32. Know your donors and friends! Their interests Their passion Their concerns Their motivations
  33. 33. Look after your donors • Implement donor relationship management strategy; accept it is not cheap; staff properly • Be rigorous about tactics – number of mailings, length of letters etc. • Accept fact, not prejudice or opinion
  34. 34. Look after current donors Thank Properly Frequent Communications T Phone your top donors Keep in touch mailings
  35. 35. Rethinking needs and case • A new need can attract new interest • Stronger or different rationale adds urgency – Hard economic times – More tightly set budgets Urgency and efficient use of funds make campaign case succeed 37
  36. 36. Extending the Timeline • Longer pledge periods • Donors take pauses in pledge schedules • Waiting out the bad economic times • BUT, very tough if you need the funds now 38
  37. 37. Lowering the Goal • Can you succeed with less? – Easier to sell if you have not gone public – The virtues of a real quiet phase • The risks of quitting early • Resetting the Gift tables 39
  38. 38. Pausing or Stopping the Campaign • If you cannot make the annual fund goal, the campaign does not matter • How urgent are the needs? • If endowment, could likely wait • Facilities can be urgent • Difficult if you have announced • Steward donors of record • Shift to a project or major gifts strategy 40
  39. 39. Campaign Planning in Lean Times • Needs justification must be tighter – Real urgency – Efficiency and ROI important • Readiness is critical, even more so – Especially prospect readiness and knowledge • Leadership even more important • A multi-stage quiet or nucleus phase 41
  40. 40. Campaign Readiness 42
  41. 41. Campaign Planning Studies in these times • Premature goal testing energy of staff, volunteers, even prospects • Instead: campaign readiness analysis and work to get you started • Whatever you decide, a detailed pre- campaign strategy critical quells dissent, calms worries – gives framework for analysis – 43
  42. 42. Let donors tell their stories and help you! • Best donors often best askers • Invite top prior donors to share their passion • Ask your major donors for their advice, introductions • Engage your family
  43. 43. Readiness Evaluation • Prospect base – Size, evaluation, qualification • Data and data systems • Staffing • Needs rationale and case for support • Recognition and image • Volunteer leadership willingness 45
  44. 44. So the Campaign is on Hold… • Endowment comes from planned giving • Capital or Program campaign – Becomes Major Gifts effort • Always can develop more prospects and relationships – Always need to know more about people – Always need more cultivation • A strong annual fund means a stronger campaign 46
  45. 45. A Less Predictable Environment • Wither the estate tax? • More extreme swings in US economy • Global economy means less domestic control • Rapid wealth creation (and loss) from enterprise
  46. 46. To campaign or not to campaign? • No one has stopped or withdrawn if in the nucleus or silent phase • Those who are in campaigns: are – Still getting meetings, still asking, still getting gifts • Budget volunteer time: maintain momentum! Keep them focused • Design flexible campaign timetable
  47. 47. When Times are Hard, It’s • Old money • Established donors • Urgent and justified needs • Leaders who believe • Passion for the cause • Persistent and patient who prevail! 49
  48. 48. Conclusions: How to thrive in tough times • Keep asking • Be invitational & understanding • Remember the basics • Nurture your leadership • Renewal/recapture/acquire • Stay on message • Focus on the positives • Don’t belabor financial circumstances • Link to the greater good
  49. 49. Conclusions, more • Don’t panic! Step back calmly and plan • Engage your Board members and friends • Assess your communications plan and case for support • Consider planned giving vehicles as alternatives • Extend pledge payment schedules
  50. 50. You Can Do This! • Work Together! • Plan for a brighter future – we have gone through this before • Be accountable to your donors, your community, your friends • Present your organization as lean, well managed and sensitive • Be nimble and ready to act!
  51. 51. A closing statement from Bernard Ross quot;Invest time, intelligence and money into massively improving the donor experience with the charity. Remind donors they are wanted, needed and appreciated” From a study conducted by The Management Centre 2008
  52. 52. And, in closing…. “Twenty years from now, this reduced giving will look like a blip, but…that blip seems pretty important right now.” (Paul LaGasse)
  53. 53. 228 main street, suite 272 williamstown, ma 01267 410-908-9068 abbievonschlegell.com 55
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