Capital Campaign Phases (continued)

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Capital Campaigns are intensive fund raising
efforts designed to raise a specified sum of money
within a defined time period to meet the varied assetbuilding needs of an organization
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Construction of new buildings”
Renovation or enlargement of existing buildings
Endowment creation or addition
Used to be the “once in a lifetime campaign…
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Now orgs host every 5 -10 years
Don’t rely on outside counsel
However, are much more intense than the regular annual fund
campaign of organizations, hence a module dedicated solely to the
topic
1
Sources for this module:
 Capital Campaigns from the Ground Up, Stanley
Weinstein, ACFRE, EMBA
– My Experience; ASRI & Butler Hospital
– CFRE Review Course – Faculty Manual
– Text – Achieving Excellence in Fund Raising, Hank Rosso
Inspiration for this module:
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Non-profits of all sizes are facing budgetary constraints that prohibit
strategic thinking and acting;
Revenue obtained via philanthropy is the catalyst
Now more than ever DOs must know the financial benefits
2
Example of Financial Benefit - Project: $15 Million Building
Scenario #1
Finance (Debt): $10 Million
Equity: $5 Million
New Revenue (from new building): $65,000/month
Monthly Debt (including interest) = $63,206/month
Net Income from operations: $1,795/month
Scenario #2
Finance (Debt): $5 Million
Equity: $5 Million
Fund Raising: $5 Million
New Revenue (from new building): $65,000/month
Monthly Debt (including interest) = $31,603/month
Net Income from operations: $33,397/month
3
Myth: non-profits can’t make a profit (i.e. a margin)
Run, don’t walk if you sit on this board! (remember –board
members are morally, legally and financially responsible)
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Non-profits are financially responsible for advancing their
mission
Sound fiscal policies are necessary for that advancement
Important to take lessons from the corporate community
Reserves and endowments help in planning for expansion
and supplementing specific/operating costs
Non-profits that practice this way attract more donorinvestor types
4
Prerequisites for Capital Fund Raising Success
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The non-profit must have a positive image
The need for the capital project must be well articulated
The organization must have identified and nurtured positive
relationships with potential donors who have the capability
and willingness to support the campaign at pacesetting levels
The nonprofit must attract strong volunteer leadership
The philanthropic environment and timing must be right
The campaign must be well organized and staffed with
individuals capable of undertaking and supporting a major
project initiative and fundraising campaign
The board of directors must have a sufficient number of
members who are influential in the community
Source: Capital Campaigns from the Ground Up, Weinstein, 2004
5
What to know from the “Get Go”
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Your organization has many building and planning options
Capital Campaigns need pacesetting lead gifts to success
Multi-year pledges
Never seek the “average gift”
Well executed capital campaigns don’t diminish ongoing
support
Include endowment goals
Those closest to the organization must set the pace
Two early steps (1) ballpark estimate of expenses (2) identify
prospects
The case for support = people (not organizational needs)
Source: Capital Campaigns from the Ground Up, Weinstein, 2004
6
Capital Campaign Phases
1. Preparation Phase (6 months to 3+ years)
Purpose: devoted to project planning and strengthening the
organization’s fund raising capacity
Success is determined by: (1) how well the project meets the needs
of external constituencies (2) how well the organization has
identified and cultivated relationships with top donors (3) how well
the organization has understood and reconciled project costs with
fund raising potential
2.Prospect identification and cultivation (early and ongoing)
Not a real phase; but an important exercise
Success is determined by: (1) the quality of prospects identified (2)
the thoughtfulness in designing meaningful cultivation activities (3)
the organization’s ability to nurture genuine and warm relationships
with potential major donors
Source: Capital Campaigns from the Ground Up, Weinstein, 2004
7
Capital Campaign Phases (continued)
3.Pre-campaign Planning Study Phase (3 to 6 months)
Purpose: devoted to selecting the fund raising consulting firm (if
using one), developing a test case for support, securing
appointments with potential top donors, conducting confidential
interviews (by fund raising consultant) and delivering the feasibility
report of those interviews
Success is determined by: (1) the choice of firm (2) the quality and
objectivity of the study (3) the quality of the interviewee list (4) the
board’s response to study recommendations (5) develop a gift-range
table
Source: Capital Campaigns from the Ground Up, Weinstein, 2004
8
Capital Campaign Phases (continued)
4.Quiet Phase (6 to 12 months)
Purpose: devoted to recruiting campaign leaders and soliciting their
commitments campaign leaders rate the giving capacity of their
prospects and match that capacity to naming opportunities; obtain
pacesetting lead gifts
Success is determined by: (1) the appropriate volunteer and staff person
to dialogue with the prospective donor (2) 100% of board giving is
achieved
Source: Capital Campaigns from the Ground Up, Weinstein, 2004
9
Capital Campaign Phases (continued)
5.Intermediate Phase (3 to 6 months)
Purpose: devoted to follow-up visits and conversations with lead gift
and major gift prospects who have not yet made their commitments.
Success is determined by: (1) quality of volunteer training (2)
continued cultivation activities (3) peer relations established with
top prospects (4) achieving 50% of fund raising goal
6.Public Phase (6 to 12 months)
Purpose: introduce the effort to the public and announce over 50%
of the fund raising goal has been achieved; invite broader audiences
to support however still using
personal contacts. Later in this
phase, introduce phone and mail appeals
Success is determined by: (1) completed the campaign in the
specified time frame
7.Victory Celebration
Purpose: validate donor support (reduce buyer remorse)
Source: Capital Campaigns from the Ground Up, Weinstein, 2004
10
Capital Campaign Phases (continued)
8.Conclusion and Pledge Payout
Pledges are often made over a five-year period, keep these donors
engaged
–Make pledge payment reminders a source of inspiration and
information
–Invite donors to grand opening, tours of new building
–Inform donors about staff working on the new building/project
–Provide a separate “annual report” on the progress of the new project
with numbers of people served, innovative programs, how the project
has alleviated community stresses, etc.
–Recognize donors (e.g. the Donor Wall) – celebrate and publicize that
fixture
You will not get 100% of your pledges, so you need to do everything possible to TRY to
recruit as much as possible
Source: Capital Campaigns from the Ground Up, Weinstein, 2004
11
Source: The Fund Raising School, 2002. CAMPAIGN PHASES
12
The importance of a Feasibility Study
Tells organizational leadership:
1. How much money can be raised through philanthropy
2. How long it will take to meet this goal
3. How your constituents feel about the effort
4. How community members feel about the effort
5. How your effort aligns with community needs
6. Other fund raising campaigns that are occurring at the same time
7. Potentials for campaign leaders/leadership gifts
8. Steps that could be taken to strengthen capacity
9. Resources necessary (personnel, expertise)
Objectivity is the most important aspect of your feasibility study (use
unaffiliated outside counsel with experience)
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13
Marketing Materials: Another big (but necessary)
expense
“I didn’t have to read your materials. As soon as I saw it was from your
organization, that was as much as I needed to know. If you say the
organization needs $3 million, I know you do need it”
Mr. Unique Philanthropist
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Campaign Collateral provides information to those that don’t fully know
about the organization
Market research (done in prep of collateral) flushes out potential
objections
Empowers campaign volunteers; Signifies to the prospect and the
community that the fund raising effort is legitimate
A Cohesive look/brand signifies an organization and purpose
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∙401.232.6200 ∙ edc.bryant.edu
14
Marketing Materials (continued)
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During the campaign concentrates PR, Marketing, and
communications programs into five key messages:
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The organization’s position statement
The organization's achievements and reputation
The organization’s vision
The organization’s invitation to participate
The organization’s campaign theme
Components (physical evidence)
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brochure/folder that outlines the case
video
fact sheets, floor plans with naming opportunities, campaign
stationary, commitment cards
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∙401.232.6200 ∙ edc.bryant.edu
15
The Capital Campaign Committee
Source: The Fund Raising School, 2002. CAMPAIGN PHASES
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The Capital Campaign Committee
• Outline the various committees necessary and the number of people that
should be on those committees along with the talents necessary to best
serve those positions; job descriptions are helpful
• Some Board Members should sit on the Campaign Committee, however, it
should not be a board driven activity; goal is to engage volunteers outside
of the Board of Director’s circle
• Campaign Chair(s) – should be people of influence and affluence in order
to recruit other volunteer and donors; does not have to be a board
member
• Need to be able to sustain regular operations while leading a successful
campaign
• Examples provided in the handouts section
Prospect Identification
The Board and other organizational leadership will look to seven
main groups:
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Individuals
Businesses/Corporations
Foundations
Government Agencies
Associations (professional associations and unions)
Service clubs (e.g. Rotary, Kiwanis, Lions, etc.)
Churches and synagogues
However, do they have a link to your organization? Are they donors? The CDO
must steer the committee to look within.
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Your Best Prospects:
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share your organization’s values
are philanthropic
have the capacity to provide support at generous levels
have some identifiable reasons to support your organization
Turn to:
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Constituents – E.g. patients at a Hospital, Alumni from a University,
subscribers for Symphonies, etc.
Current and Former Board Members
Key Volunteers
Staff
Current Donors
Lapsed Donors (LYBUNT, SYBUNT)
Vendors
Source: Capital Campaigns from the Ground Up; Weinstein, 2004
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Those who give generously to similar organizations
– Start collecting lists, e.g.: symphony program books, hospital annual
reports, university publications, nonprofit newsletters, donor walls
– Engage campaign committee in identifying those with whom they
have personal connections
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Affluent individuals with whom someone in your organization has a
peer relationship
– Everyone knows that Bill Gates and Warren Buffett are (1) rich and
(2) philanthropic; but unless your organization has a connection, the
chances are low that you’ll get a gift from them
– The key is peer-to-peer relationships; The CDO does not have peerto-peer relationships with people of affluence
Source: Capital Campaigns from the Ground Up; Weinstein, 2004
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Four Key Areas of Prospect Research:
1.
2.
3.
4.
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The prospective supporter’s relationship to your organization
The prospect’s interests and hobbies, especially as they relate to your
organization
Networking (who in your organization is close to the prospect)
Capability (net worth, capacity to donate, and challenging contribution
amounts to request)
Identify as many prospects as possible to create the largest prospect
pool
Its worth while to gather more information about people with
lead/major gift capacity (since the top select donors make up the lion’s share of the
goal)
•
Your Gift-Range Table created in the planning phase will provide direction on the
gift levels you’ll need to obtain to meet the campaign’s goal
Source: Capital Campaigns from the Ground Up; Weinstein, 2004
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Prospect Rating and Evaluations (a.k.a. rating sessions):
The tried and trusted method to identify connections to prospects
while also identifying capacity and possible linkages
Step 1. – Create a Cover Page, Key Page, and Prospect Rating Form
(examples available in the handouts section)
Step 2. – Fill in the names of 300 – 400 individuals, foundations, and
corporations likely to be prime prospects
Step 3. – Take the list to your Board of Directors (and/or special rating
committee comprised of bankers, real estate brokers, insurance agents, stock brokers,
attorneys, i.e. the “movers and shakers”)
•
Volunteer’s name is important as is “willingness to visit” – remember, people give
to people
Step 4. – Development staff then create a Compiled Prospect Rating form
(see example in handouts section)
Source: Capital Campaigns from the Ground Up; Weinstein, 2004
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Rating sessions (continued)
Step 5. – Campaign leadership can then approach the appropriate
volunteer as the Compiled Prospect Rating form outlines “Who
knows who”
Supplemental Information:
Development staff can supplement the information by conducting
various searches using on-line resources.
“Wealth Screening” is a popular tactic where computer programs
look at various databases simultaneously to get an overall propensity
to give along with influence and inclination.
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Capacity to Give:
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The personal connection might get your organization and
appointment, but it does not guarantee that you’ll get a gift
The ask amount is very important; potential to offend
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Too high, may get a “no”
Too low, may be “leaving money on the table”
General Rules of Thumb:
– Close relationship to the organization, go with maximum capacity
– Not close, but has the potential, wait on the ask; if pressing deadline
then ask two levels below the donor’s capacity
– Foundation – upper end of the gift range
– Peer relationship – ask them to “think big”
24
Solicitor Training (or “orientation”)
Hint: adopt an organizational policy requiring that every
staff member and campaign volunteer must attend at least
one campaign orientation and training session.
Four Main Parts:
1.
Institution and project overview
2.
Instruction concerning securing appointments
3.
How to ask for a capital campaign commitment
4.
Follow-up and campaign procedures
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Solicitor Training (continued)
1. Institution and project overview (inspirational)
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Organizational History, Current Challenges and Solution to those
challenges (i.e. the reason for the capital campaign)
Presented by CEO, Campaign Chair, other visionaries
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2. Instruction concerning securing appointments (informational,
confidence building, strategies for success)
– Importance of “in-person” visits
– “what and how to” advice; don’t slip into a solicitation…
– Staff support for the appointment and solicitation process
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Volunteers schedule visits “on behalf of the Campaign Chair”
CEO/CDO schedule visit for the Campaign Chair using his/her name
Volunteer schedules call while together with the CDO – “why don’t you
call prospect X now”, or “Let’s get together with your prospect list on
Tuesday morning and see how many appointments we can get.”
Source: Capital Campaigns from the Ground Up; Weinstein, 2004
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Solicitor Training (continued)
3. The Solicitation Process (empowering, informational)
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Build Rapport; two ears one mouth, use them proportionally
State the case for support
Encourage involvement – ask questions that solicit the prospects
feelings toward the overarching challenge; evoke feelings of “I can fix
this problem” or “I want to be a part of the solution”
Handling Objections – Don’t argue or persuade; substitute “and” for
“but”; use “feel, felt, found” approach
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Feel – indicates the listener understands the prospect’s concerns
Felt – indicates the prospect is not alone in their viewpoint
Found – offers the nonprofit representative an opportunity to supply
new information
An example of the Feel Felt Found approach is on the next slide
Source: Capital Campaigns from the Ground Up; Weinstein, 2004
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How it works - the Feel, Felt, Found Approach:
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Upon hearing a new and upsetting objection, admit that you
have not heard it before and that the situation sounds serious
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State that you are going to look into the matter and report the
concern to the organization’s board and management team.
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Assure the prospect that the administration is working to make
the organization as strong as possible.
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Let the prospect know that you speak to many people who
believe in the organization’s “bottom line” (i.e.: the institution’s
strongest and shortest rationale for support).
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Conclude by citing the bottom line as the reason that everyone
will work to overcome the problem and do everything possible
to strengthen the organization – including support for the
capital project
Source: Capital Campaigns from the Ground Up; Weinstein, 2004
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Solicitor Training (continued)
3. The Solicitation Process (continued)
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Seeking Advice
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About the Campaign: “Is there something our organization should be
doing that we’re not doing”, “when speaking to other community
leaders about our campaign, what points would you stress?””
About their Commitment: “Might you consider a personal commitment
in addition to the corporate pledge?”, “What is the best way to
approach your company?”,
4. The Closing
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Be aware of words and body language
Various closings:
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Use the naming opportunities page – “where do you see yourself
participating”
“Your leadership gift is important to this project, I hope you are in a
position to consider a pledge of $30,000 or more to help us.”
Source: Capital Campaigns from the Ground Up; Weinstein, 2004
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Solicitor Training (continued)
4. The Closing (continued)
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After the close, silence! (wait for the response…which will be one of
three answers: yes, no or maybe)
A “No” rarely means never; determine the true meaning of the “No”;
usually timing or amount
If prospect is solidly leaning toward a No, then ask them not to make
a decision now.
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Employ the two “Os” – Offer, Opportunities - “We would like to offer you an
opportunity to make a significant investment in….Your pledge of $xxx,xxx will
allow us to…”
“Please don’t decide not to support the campaign today. Let me get more
information and I’ll contact you in six month…”
“Maybes” – set appointments with both spouses or all the decision
makers
Predominately “Yes” Responses = asking too little
Source: Capital Campaigns from the Ground Up; Weinstein, 2004
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The Commitment Card (a.k.a. pledge card)
“Just leave me the pledge card and I’ll fill something in”
Famous last words, Prospect
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If you get a favorable response to your request, have the prospect sign
the pledge card and fill in the agreed upon terms, payment dates,
naming opportunities, etc.
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For accounting purposes – a signed multi-year pledge is 100% recognized in
the year of the commitment
For the “Maybes” – discuss some conditions and what you need to do to
get to yes, but don’t leave the pledge card
Getting a signature in person:
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Illustrates that you feel the prospect’s/donor’s gift is very important
Shows respect for the donor/prospect
Strengthens the relationship between the donor and the organization
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Role Playing
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Good exercise for orientations (trainings); warning: people usually
feel very uncomfortable do it
See “Advice to the Volunteers or Staff Solicitor” (Winstein, 2004) in
handout section
Team Solicitations:
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More effective than one solicitor; don’t overwhelm (two solicitors
for one prospect is ideal)
Board Chair (volunteer) with CEO (staff) is the most effective;
however, there are other options that could be more appropriate
due to the prospect – alignment is key here; trying to achieve a
volunteer perspective and an internal perspective
Two sets of ears; two perspectives
32
After the Solicitation Meeting:
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Report back to the Development Office
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Staff will make the appropriate entries, notations into the database
Send a “thank-you” note
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Handwritten note from the volunteer solicitor is the most effective
Can be generated from the Development Staff on organizational letter
head (signed by the volunteer and staff solicitor)
Regardless of the outcome
Communicate and Recognize Successes
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Send updates to entire Campaign Committee as each commitment card
is signed
Reinforces the Campaign’s rationale among volunteers and donors
Fosters commitment to the challenging campaign timeline
Fosters a culture of a winning project (people want to support
successful projects)
Whole is greater than the sum of the parts
33
Managing a Capital Campaign
– Is a huge task; often difficult for the CDO as he/she needs to sustain
regular operations of the fund raising program
– Often Campaign Consultants are used:
• Provide singly focused to meet the campaign goal
• Expert direction of the Board and CEO (very good if new organization or
and organization in transition (from non-fund raising to fund raising)
• Has a lot of experience from other organizations’ campaigns
• Knows how to motivate volunteers and staff
• Is a contractual arrangement (creating another reason for motivating staff,
particularly the ED/CEO)
• Can provide education to the existing Development staff adding value in
– There are various services Consultants will provide:
• On-site management (e.g. acting as part of your staff; another CDO)
• Off-site management with guidance and direction
• Hybrid (two days per week on-site combined with access on off days)
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Managing a Capital Campaign (continued)
– If no outside consultant is brought in to manage the campaign, you
should hire dedicated staff for the duration of the effort, E.g.
• Campaign Director – An advanced professional who can make visits with
volunteers and manage other campaign/development staff
• Campaign Coordinator – manages logistics; provides administrative
support
• Campaign Assistant – Solely provides administrative support
• Campaign Grant Writer, Communications Officer, Government
Relationship Officer – dependent on the talent-gap in your Development
office and target prospect pool for your campaign
– Pre-fund raising (planning phase) ROI will be above the benchmarks
for Development programs
– ROI of the entire Development program (including all CC expenses) will
then go far below benchmarks in fund raising mode ($.07 - $.15 to
raise $1)
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Design your Solicitation Matrix
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Make is simple; in Excel (or table in Word)
Horizon headings:
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Prospect’s Name
Volunteer Solicitor #1
Volunteer Solicitor #2
Staff Solicitor/Representative #1
Staff Solicitor/Representative #2
Ask Amount
P2G Rating (1,2,3)
Naming Opportunity
Prospect’s Contact Information (primarily phone #)s
Two Columns for dates
You can put as much information as you want in the matrix
as long as it is useful
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The Solicitation Matrix
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Is a quick reference guide to who is doing what (i.e. what volunteer
and staff member is assigned to a specific prospect)
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Can provide a visual to promote “many hands make light work” and
allow for the CDO to delegate
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Helps Development staff in preparing the solicitation materials, i.e.
Proposal, Letter of Intent (a.k.a. pledge card)
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Does not replace your database; should be entered into the
database first and exported into this format
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Note: whenever there is manual duplication, there is chance for human
error; it’s a good idea to minimize manual duplication to avoid
costly/timely and embarrassing errors
If you have a very small shop, and do not have a sophisticated
database/fund raising software, then this will be your database
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Cultivating Campaign Prospects
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Your campaign effort should be prepared to handle the “Nos” that
are really “Not Yets” via cultivation
Have a “Plan B” set up in advance in order to respond effectively
(main goal: address prospect’s concerns)
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Requires the availability of organizational leadership (CEO, Board Chair,
other key personnel or legacy leaders)
Requires excellent listening skills of the volunteer/staff solicitors
Requires excellent record keeping from Campaign Administrative staff
in order to implement next steps
Suggested tactics:
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Meeting with the CEO
Tour of facility; witness the “good being done”
Talk with a program head (these staff members are generally viewed as
non-threatening; “servant leaders”)
Invite to public lectures or event where other donors will be present
Invite to a Board Committee meeting (if appropriate)
Send evidence of expertise/position (press articles, journal
publications)
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Post-Commitment Campaign Tasks:
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Enter the gift; verify the pledge card is complete:
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Is it signed?
Is the pledge payment schedule clearly outlined with amounts and dates?
Is there a naming opportunity?
How does the donor want to be recognized (in the annual report, on the
donor wall, on the naming opportunity)?
Have instructions been provided to donor for stock transfers?
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Pledge Payment Reminders – an opportunity to (1) inform the donor of
how their money is being used and (2) update on organizational
accomplishments; update letters at same time every year (to avoid duplicate
and stale messaging)
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Stewardship – the campaign has (1) brought in new donors at major gift
capacity and (2) moved loyal donors up the donor pyramid resulting in a
larger number of donors would need more individual attention and
engagement; the goal in the development process (regardless of gift level) is
to renew current donors
39
Grants and Government Funding
“When volunteer campaign leaders first contemplate the need for pacesetting
leadership gifts, they often turn their, attention to corporate contributions, foundation
grants and public funding”
(Weinstein, 2004)
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Per Weinstein 20% of Capital Campaign revenue is from Grants
(foundations, corporations, public funding)
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HOWEVER, some organizations rely more largely on funding from
foundations and government funding
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Fairly young Development Programs
Organizations with Boards and/or CEOs that don’t participate in fund
raising
Perceivable “hard to fund” organizations that provide community
benefit
Organizations with large capital needs (e.g.: hospitals/clinics,
colleges/educational programs, large social service organizations)
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Grants – Foundations/Corporations
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Use the original Campaign Case Statement (printed on organizational
letterhead, not the flashy marketing materials)
Try to request a meeting or site visits prior to the proposal submission
to communicate the importance of foundation gifts (i.e. explain why
individual giving will be low)
Align your request to the Foundation’s giving guidelines (see
guidestar.org or Foundation Center Online – www.foundationcenter.org)
Need to have a measureable impact; highly quantifiable
Government Funding (Federal or State Appropriations)
– An appropriation is a line item in the state or federal budget
designated to your organization for a specific purpose
– Requires a legislator to champion your request; submit a bill to the
legislature ultimately becoming law (i.e. an approved budget)
41
Government Funding (continued)
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Frame for support - “is this a good use of tax payer dollars?”, i.e.:
•
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•
•
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Is this an innovative replicable program (in another county; in another
state)
Does it address a crisis (e.g. healthcare)?
Is it easy to communicate (in 10 words or less)?
How will championship of this project impact your senators’ and
representative’s professional image?
State Appropriations are specific to each state; contact your
representative (generally some kind of application or form)
Federal Appropriations
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•
Applications are due in February for the proceeding budget year (2011
funding requests were due in February of 2010)
Contact your Senators and your representative regarding your
organization’s interest in a Federal Appropriation (suggested timing: late
fall, two years prior to funding need; Fall of 2010 for 2012 funding)
42
Government Funding (continued)
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Federal Appropriations
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•
•
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Develop relationships with the legislative staff at the State-based offices
(go to them; ask them to visit your organization; communicate “the
needs of the people your organization serves”)
Visit the DC offices; meeting with members of the Federal Delegation;
communicate “the needs of the people your organization serves” as it
relates to your Federal Appropriation request; offer to be the eyes and
ears for this concern at the State level (stress partnership )
Communicate regularly with State and DC based staff on updates of
your project
Generally a two-year timeframe from intent to funding (example
below):
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September 2008 – idea conception; contact delegation re: appropriations
February 2009 – submit applications
April 2009 – DC visits; champion request; meet with federal delegation
Summer 2009 – committee meetings; mark-up posted
September – December 2009 – 2010 federal budget approved
April 2010 – Grants.gov application due
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Final Thoughts on Capital Campaigns:
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Marathon, not a sprint
Requires lots of planning, involving the entire organization, a diverse
and large volunteer group
The CEO and the Board of Directors must be fully engaged (and
available/accessible)
Additional staff in the Development Office are needed
Additional marketing resources are needed
Has more legs than the money being raised (great PR, community
benefit, recruitment of other board members, volunteers and
donors)
The best fund raising and management experience that any
development professional or board member will ever get!
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