MCC/NFF Workshop - Arts Capital Campaigns (11/08)


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A presentation (PowerPoint) on nonprofit capital campaigns for arts organizations, given at a November 2008 workshop offered jointly by the Massachusetts Cultural Council and the Nonprofit Finance Fund.

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MCC/NFF Workshop - Arts Capital Campaigns (11/08)

  1. 1. THE CAPITAL CAMPAIGN: A Partnership Critical Integration of Facilities Planning, Financial Management and Fund-Raising Strategies for Successful Capitalization of Expansion Projects in Today’s Nonprofit Organizations Presented at a Workshop Conducted by The Massachusetts Cultural Council and the Nonprofit Finance Fund Worcester, Massachusetts November 12, 2008 Trident Communications Group
  2. 2. Getting the Discussion Started Plans for expansion of facilities and programs require a parallel plan for the organization’s capitalization.  Advance project/facilities planning and development of financing strategies should be fully integrated with fund-raising plans early on in the planning process.  Essential details of the expansion program should be settled and confirmed before fund- raising initiatives are undertaken.  Success requires viability, belief, commitment and lots of hard work.  The governing board always must take the lead.  Everyone in the organization being on the same page is ESSENTIAL for this partnership. Trident Communications Group 2
  3. 3. Foundation of the Campaign The expansion project must be defensible.  The message (organizational “story”) of mission and accomplishment is critical.  The case for support must be compelling for the expansion project to have credibility.  The governing board must take the lead  Everyone in the organization being on the same page is ESSENTIAL for this partnership.  The advancement/fund-raising process should be inspirational and motivational.  Fund-raising efforts should be productive and FUN, not gruesome tasks!  A sense of humor always helps! Trident Communications Group 3
  4. 4. NOW FOR THAT SENSE OF HUMOR! Don’t shoot the horse until you’ve learned to drive the tractor!  Sometimes the old ways are the best ways!  Always keep the horse in front of the cart! Trident Communications Group 4
  5. 5. AND SOMETIMES ………. The old ways work even better when combined with some of the new!  The process of major-gifts fund raising has changed in many ways.  Computer technology, improved communication, and research capabilities have enhanced results.  At its most basic level, fund raising is still a person-to-person process. Trident Communications Group 5
  6. 6. COMPETING IN TODAY’S FUND-RAISING ENVIRONMENT  Philanthropy in the USA rises consistently on an annual basis -- always has.  $306.39 billion contributed in 2007.  Many new nonprofits and worthy causes making the “Ask.” Competition is stiff!  Massachusetts nonprofits increased in number by more than 90% since 1996 (27,462 in 2008).  All things considered, any time is the “best time” for a major-gifts campaign, if well-prepared.  Difficult economic environments do NOT necessarily lead to campaign failure!  Periods of economic downturn call for redoubled focus, commitment and effort.  A strong case for support and firm board commitment are key factors.  Assessment of external environment and internal readiness must come first. Trident Communications Group 6
  7. 7. Nonprofit Growth in Massachusetts (1996 - 2004) SOURCE: National Center for Charitable Statistics 25,000 20,000 15,000 10,000 5,000 0 Foundations Nonprofits 1996 2,584 14,306 2004 4,068 20,882 NOTE: The number of registered nonprofit organizations in Massachusetts grew to 27,462 by October 2008. Trident Communications Group 7
  8. 8. GIVING USA 2007 - FROM WHOM $306.39 Billion in Gifts in 2007 (by source type) Source: The Giving Institute - Giving USA 2008 Corporations $15.69 5.1% Foundations $38.52 12.6% Individuals $229.03 74.8% Bequests $23.15 7.6% Trident Communications Group 8
  9. 9. GIVING USA 2007 - TO WHAT $306.39 Billion in Gifts in 2007 (by recipient type) Source: The Giving Institute - Giving USA 2008 International Environment & Affairs Animals $13.22 $6.96 4.3% 2.3% Arts, Culture, Humanities $13.67 Foundations Unallocated Giving 4.5% $27.73 $23.67 Public-Society Benefit 9.1% 7.7% $22.65 7.4% Health $23.15 7.6% Religion $102.32 Human Services 33.4% $29.64 Education 9.7% $43.32 14.1% Trident Communications Group 9
  10. 10. THE GENEROSITY INDEX Relative Ranking of States by Affluence & Charitable Giving (Source: Ellis L. Phillips Foundation, 200 Generosity Index) STATE HAVING GIVING RELATION INDEX Mississippi 50 5 45 1 Arkansas 47 6 41 2 Oklahoma 43 8 35 3 Louisiana 42 10 32 4 Alabama 38 7 31 5 Minnesota 12 39 -27 46 Massachusetts 3 30 -27 47 New Jersey 2 35 -33 48 Rhode Island 15 50 -35 49 New Hampshire 8 48 -40 50 Trident Communications Group 10
  11. 11. A CAPITAL CAMPAIGN: THE BASIC CONCEPTS • A capital campaign is an extraordinary, extended and intensive major-gifts fund-raising effort intended to generate philanthropic support for a capital project designed to significantly strengthen an organization’s ability to carry out its mission and conduct its programs. • A capital campaign seeks to solicit major gifts from carefully selected and evaluated prospective donors in order to support the acquisition or improvement of a significant capital asset for the organization. • A capital campaign can be conducted for “brick-and-mortar” needs (i.e., building or renovating facilities, etc.), special projects (i.e., purchasing equipment or other assets), an endowment fund for future needs, or a combination of such needs. • A capital campaign is designed to advance the strategic interests of the organization, while annual giving is intended to raise funds for current, annual operating needs. • A capital campaign must be tied to a project that is justifiably needed and well-defined. • A capital campaign must be “owned” and conducted by the organization’s board. • A capital campaign must be based on VOLUNTEER commitment to the mission. • A capital campaign helps to broaden the organization’s overall philanthropy program. Trident Communications Group 11
  12. 12. INDIVIDUAL PROSPECTS: MOTIVATIONS FOR GIVING 51% I strongly believe in the cause. 41% I want to give back. 34% I have a sense of obligation. 29% I feel I am doing something worthwhile. 24% I have the means to give. 23% My religious beliefs call me to give. (Source: Fidelity Charitable Gift Fund) Trident Communications Group 12
  13. 13. SAMPLE CAMPAIGN GIFT CHART (A Capital Campaign for $8 Million) Total Number of Dollar Range of Number of Prospects Gifts Required Required Gifts Required 1-2 $1,000,000 10-20 2 $500,000 10 5 $250,000 25 10 $100,000 30 15 $50,000 100 30 $25,000 175 45 $10,000 200 100 $2,500 300 300 $1,000 600 508-509 between $1,000 and from 1,450-1,460 $1,000,000 each prospects Trident Communications Group 13
  14. 14. ARE WE READY FOR A CAPITAL CAMPAIGN NOW? IF SO: IF NOT:  Activate and energize the governing  Engage professional advancement board; counsel;  Engage professional advancement  Conduct an “audit” of the strengths and counsel; weaknesses of the advancement  Conduct the needed assessment of the program and resources; external environment;  Begin a program of board-building and  Conduct the needed assessment of -strengthening initiatives; internal readiness;  Focus on building strength into the  Begin the planning process; existing advancement/philanthropy pro-  Organize the needed volunteer gram; resources;  Place particular emphasis on  Prepare a budget; strengthening the annual giving pro- gram;  Integrate the campaign plan into the overall philanthropy plan;  Begin building a program of deferred and “legacy” giving;  Anticipate the campaign’s effect on other aspects of the philanthropy  Partner with the PR/marketing staff to program; strengthen and articulate the organiza- tional “story.”  Begin the prospecting process. Trident Communications Group 14
  15. 15. A FINAL OVERVIEW: CRITICAL FACTORS FOR SUCCESS  A well-conceived project and a strong, well-articulated case for support  A committed governing board and senior management  Enthusiastic volunteer leadership and a sufficient volunteer corps  A well-executed assessment of the external fund-raising environment  A carefully conducted internal assessment of campaign readiness  A practical plan for dealing with organizational shortcomings  A realistic campaign goal and informed objectives  An adequate budget for campaign expenses  Adequate, internal staffing to support campaign activities  Involvement by professional advancement/fund-raising counsel  Sufficient sources of identifiable, interested and well-inclined prospects  A well-conceived and manageable campaign plan and timeline  Appropriate public relations, marketing and communications support  EVERYONE IN THE ORGANIZATION ON THE SAME PAGE! Trident Communications Group 15
  16. 16. IS EVERYONE ON THE SAME PAGE? (A Discussion of Campaign Goal at a Steering Committee Meeting) “Excuse me, but is it $100 million in 5 years, or $5 million in 100 years?” Trident Communications Group 16
  17. 17. GOOD LUCK WITH YOUR CURRENT OR PLANNED PROJECT! Achieve and celebrate your success! Trident Communications Group 17
  18. 18. Trident Communications Group Organizational Advancement Counsel 56 Augusta Way, Dover, New Hampshire 03820-5014 603/749-6547 603/749-6548 [FAX] • •