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By Steven Shattuck
In the world of fundraising, myths often shroud the truth, creating unnecessary barriers and misconceptions.
Capital campaigns are no exception.
That’s why we recently surveyed a cohort of nonprofits across the United States and Canada, all in various phases of a capital campaign, to produce the inaugural State of Capital Campaigns Benchmark Report. Our goal was to learn more about the on-the-ground realities of nonprofits’ campaigns: their struggles, successes, team structures, and strategies.
Despite a tumultuous start to the 2020s, the data suggests that not only is capital campaign fundraising still thriving, but that unfounded fears and self-doubt may be the most significant barrier to launching a successful capital campaign, as opposed to societal and economic headwinds.
So, let’s dive into the numbers and uncover the reality behind successful capital campaigns.
Myth #1 – Only Large, “Sophisticated” Organizations can do a Capital Campaign
One of the most persistent myths about capital campaigns is that they are the exclusive domain of large, sophisticated organizations with vast resources and extensive donor networks.
However, the data from our survey dispels this myth.
We found that organizations with annual budgets under $1 million have the same success rate for capital campaigns as the rest of the field. The only difference was the average amount raised—around $3.5 million for small organizations compared to an average of around $8 million for larger peers.
In fact, small shops excelled in certain areas. For example, they reported higher levels of major donor relationship building and fundraising system improvement than larger organizations in the study.
This demonstrates that size alone is not a determining factor for campaign success. What matters most is having a compelling case for support, a clear plan, and dedicated leadership.
Myth #2 – The Annual Fund Suffers During and After a Capital Campaign
Many nonprofit leaders worry that launching a capital campaign will divert resources away from their annual fund, to the point that they abandon plans for a campaign altogether.
Similar myths are pervasive in the nonprofit sector, such as the fear that participating in Giving Tuesday will cannibalize year-end giving.
While there is no data to suggest that any of these year-end fears are founded, we do now have data to dispel capital campaign / annual fund cannibalization fears.
For organizations currently in the midst of a campaign, 79% said that their annual funds have either increased or stayed the same in the years in which the campaign was active.
For organizations who have recently completed a campaign, only 9% reported a decrease in the annual fund in the ensuing post-campaign years.
While correlation is not necessarily causation, there’s no reason why a capital campaign cannot complement the annual fund. Making a clear distinction between a donor’s “regular” annual gift and a special campaign gift towards a specific purpose (with a clear case for support) is the key to “protecting” your annual fund and engaging major donors with the opportunity to participate in the campaign.
Myth #3 – A Wealthy Board is Needed for a Successful Capital Campaign
It’s a common misconception that a wealthy board is essential for a capital campaign’s success. While having a financially supportive board can be beneficial, it’s not imperative.
We found that the average percentage of campaign goals raised from board members was only 14%. This suggests that organizations can run successful campaigns without relying heavily on board contributions.
Building an engaged board based on true passion and connection to your mission instead of wealth should not be a barrier to running a successful capital campaign!
Myth #4 – The Donor Pyramid is Bad for Giving
The traditional donor pyramid, which categorizes donors into tiers based on their giving capacity, has been questioned in recent years. Some argue that it limits donor engagement and discourages smaller donors.
However, our data suggests otherwise.
While diverse and inclusive fundraising approaches are essential, the donor pyramid still plays a valuable role. The top 20 gifts in our survey accounted for an average of 71% of campaign goals, highlighting the importance of major donors.
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The findings in the 2023 State of Capital Campaigns Benchmark Report clearly emphasize that successful campaigns are not exclusive to large organizations and highlights the importance of strategy. Additionally, the data debunks the idea that capital campaigns harm annual funds, takes the pressure off high-net-worth board recruitment, and underscores the continued relevance of the donor pyramid. These insights demonstrate that a well-planned capital campaign, driven by a compelling case for support, clear planning, and dedicated leadership, can succeed for nonprofits of all sizes and board structures, opening the door to growth and impact in fundraising efforts. As the nonprofit sector continues to evolve, data-driven insights like these will be crucial in shaping more effective and impactful capital campaigns. So, be not afraid to embark on your capital campaign journey, armed with the knowledge that success is within reach.
For the full findings, including new insights on volunteer committee diversity, the impact of feasibility studies, and how the pandemic and economic uncertainties of the past three years affected campaigns, read the complete study. Your team, leadership and board can use this data to level-set expectations and find encouragement that you can succeed!
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