It’s New And Shiny – Many Nonprofits In Capital Campaigns

April 7, 2016       Mark Hrywna      

If it seems as if every nonprofit is in capital campaign mode these days, it’s probably because most of them are putting a donor’s name on the top of something or other. According a recent survey by the Nonprofit Research Collaborative (NRC), almost half of nonprofit executives polled said they had a structured campaign last year, compared with just 1 in 8 five years ago.

Prominent museums around the country have raised hundreds of millions of dollars for additions, new facilities and to underwrite programming. Major universities have made billion-dollar campaigns seem like the norm in recent years. It’s not just these headline-grabbing mega-campaigns, but smaller ones too.

Executives at almost as many organizations (27 percent) said they had a capital campaign in progress as said (28 percent) they are planning campaigns but were not in an active capital, endowment or comprehensive campaign. Almost one in five (19 percent) were running a special campaign.

The average campaign goal was $45 million in the NRC’s survey, ranging by category from $2.6 million to $84 million. Among small organizations with less than $250,000 revenue, 82 percent of respondents said they had campaign goals of $2 million or less. Among large organizations ($10-million plus), 34 percent stated goals of more than $55 million.

“All the big players always seem to be in capital campaigns,” said Tom Kissane, principal and managing director of CCS, a New York City-based consulting firm to nonprofits. Successful organizations immediately jump back into campaigns, he said, and now he’s seeing smaller organizations take a page out of big charities’ thinking and running back-to-back campaigns.

Everyone’s in a campaign after the recession, said Kissane. Fundraisers are getting smarter. “They recognize that if you do get into a campaign, you’re inspiring stakeholders to make transformation gifts,” he said. “We’re finding that even post-campaigns, nonprofits are able to sustain that heightened level of giving far more than they ever were before. A capital campaign has become this great moment to drive donor activity and continue to garner substantial generosity.”

Dimock Center in Roxbury, Mass., last fall launched its first major capital campaign in a generation. It’s the second largest community health center in the Boston area, with an annual budget of $44 million and a 9-acre campus that includes nine buildings. The last major campaign was 1988-90 to raise money to build a child and family services building, followed by another in 1992 that helped to renovate administration and health clinic buildings.

The $16-million campaign went public in November at the annual Steppin’ Out gala, culminating a quiet phase that began at the end of 2014 and moved more aggressively through 2015. Dimock has passed the $15-million mark and fundraisers expect to reach goal this year, according to Raquel Rosenblatt, vice president of institutional advancement.

The campaign is timely given the opioid crisis statewide and nationally, even fueling some of Dimock’s success in obtaining funding, including $5 million from the state. Dimock executives also applied for $5 million in New Market Tax Credits. The remaining $6 million will be raised this year, from board members, institutions, foundations and corporations.

Donor stewardship is always paramount, especially in capital campaigns, and on a multitude of levels. Donors of $100 or more are recognized with a brick in the courtyard of a planned new detox building, according to Rosenblatt. Dimock’s monthly e-newsletter includes a standard new section dedicated to the campaign as well as a campaign donor featured prominently on its website, that rotates monthly.

Board members play a big role, too. The 23 members of the Dimock Community Foundation Board eclipsed their overall $200,000 fundraising goal with $243,800 and board members continue to make the ask through targeted email solicitations, as well as promotion of a challenge gift and other social medial solicitations.

Rosenblatt joined Dimock from a smaller nonprofit in Boston that supports domestic violence survivors. Her former organization did a smaller campaign in recent years to keep open a shelter for teen parents, raising more than $300,000 to make up for some lost state funding. Rosenblatt also spent 11 years at Brandeis University, where her tenure included working on a $800-million comprehensive campaign for new construction, scholarships and professorships.

The Ulster County SPCA (UCSPCA) kicked off building expansion aimed at adding 20 kennels to its current 30 kennels already at capacity. The Kingston, N.Y.-based organization has raised almost $200,000 toward its goal of $250,000, kicking off the public phase in March among 300 supporters at its marquee fundraiser, the Fur Ball.

Like 44 percent of those in the NRC survey, existing staff or board members were used for the campaign rather than hiring consultants. There are approximately 19 paid staff and 40 volunteers doing all types of work for the UCSPCA campaign. The nearly 30-year-old facility hasn’t seen renovations in at least six years, according to Executive Director Adam Saunders, who estimated it’s probably the organization’s first campaign in about 18 years.

UCSPCA has an annual budget of about $1 million. The campaign started at the beginning of last year and ideally would like to raise the vast majority of it by spring, to be able to break ground while the weather is cooperating. Saunders expects they might need to raise a little more than the quarter-million, which was an initial estimate by contractors. “Everyone’s put little add-ons,” he said.

It’s not unusual for campaigns to reach past their goal, not only because of fundraising but necessity.

Some 42 percent of those surveyed used a fundraising or capital campaign consultant and 14 percent augmented existing staff by hiring contractors.

The Appalachian Theatre of the High Country (ATHC) essentially started from scratch, first meeting more than five years ago. It took 18 months to get its tax-exempt status. The organization also had to overcome the stigma of another area theater that suffered through a capital campaign that failed, said John E. Cooper, Jr., chairman of ATHC’s campaign. A consultant’s feasibility study helped to estimate the original campaign goal of $5 million, which eventually grew to $7.2 million.

The public phase of ATHC’s campaign kicked off in June, having raised $6.1 million of what originally was a goal of $7.85 million. Fundraisers are more likely to try to raise $9 million to $10 million in an effort to reopen the 80-year-old theatre in downtown Boone, N.C.

“Everyone involved wants it to be more than it was as a theatre so it took on a larger potential as a performing arts venue,” Cooper said. With $6.3 million raised to date, he said it’s likely that another $3 million will be raised. Estimates on construction went up, leading to the likely new goal of $9 million, Cooper said.

Built in 1938, the 657-seat theatre has sat empty and boarded up since it closed in 2007. The Downtown Boone Development As­sociation (DBDA) purchased the property in 2011 from a bankrupt developer. Within a year the ATHC raised enough money to purchase the property from DBDA and began the process of raising funds in a quiet phase to bring the Art Deco style theatre back to its original splendor.

“With a project like this you never stop raising money. We want to open it debt free,” Cooper said. He also envisions it being used by other nonprofits, booking groups to try to raise money through programming.

When it comes to both gifts and pledges, ATHC’s fundraisers have encouraged longer-term pledges so donors know they can do more if they spread out payments three to five years.

ATHC has gone ahead and bid out the first phase for the façade and marquee, hoping to use local contractors that would get better prices than sources from Charlotte, which is about two hours away.

The area isn’t home to many corporate headquarters, Cooper conceded, but the Boone region does have the benefit of many residents who have second homes. These part-time residents have a bit of money and are “willing to invest in this type of community. That’s an immense help. “We’ve gotten gifts from local folks as well as second homeowners,” he said.

Almost all contributions have come from individuals, corporations and foundations but Cooper said there still are quite a few potential individual donors they’re working with who have not yet been to the theatre. “Once we get them in the theater, it’s a lot easier for them to see the potential,” he said, adding that it’s one reason the first phase is under way. “We want them to know we’re working and have accomplished quite a bit. Seeing the exterior will make people jump on board the project for those that have not been,” Cooper said.

Part of the plan includes partnering with neighboring Appalachian State University for programming, especially during the summer. There also are several community theaters and musical programs that never had a home. Cooper said they have commitments from three potential user groups, in addition to a church that would like to use it on Sundays and offered to make a pledge. “We have to look for all revenue streams that we can in a project like this,” he said.

Cooper said they’re hoping to complete the $9 million campaign this year and move into the next phase of construction. “The longer we wait, the more inflation will hit us,” he said.

Campaigns are so different from even a few years ago, according to Andrea Kihlstedt, who recently completed the fourth edition of her book Capital Campaigns: Strategies That Work. Kihlstedt and Gail Perry launched Capital Campaign Masters, which provides virtual coaching, online courses and on-site workshops for boards considering capital campaigns.

The various ways in which “we communicate and function broadly has shifted and changed in ways we do capital campaigns,” she said. For instance, capital campaigns used to be meeting-intensive, especially early on, but today people are comfortable with virtual meetings.

“What does the fact that people being comfortable with Skype and Google Voice affect what you can do with campaigns have people who might serve in steering committees but are not local,” Kihlstedt said.

Even as recently as a decade ago, email was not a primary form of communication as much as telephone. “The fact that major do­nors com­municate with email changes the configuration of how we do campaigns,” she said, today to say nothing of text messaging. “We’re having a sea change in the way campaigns function at some level, how people communicate and function,” she said. “We have immediate ways to connect with campaign chairs who travel all over the world and still have them involved. That’s a big deal,” she said.

“First and foremost, we need to take care of our donors, recognize them, keep them updated and engaged, showing the impact of what we’re doing,” Rosenblatt said. “Stewarding donors even before physical changes — that’s a big piece,” she said.

“Regardless of size or type of institution, you need to keep the momentum going. Any organization that wants to exceed goals tells a great story of going further,” she said. While at Brandeis, Rosenblatt recalls the campaign eclipsed $800 million and discussion ensued about continuing to $1 billion, which wasn’t as common as it is today. “That increases excitement. It’s a great story to tell the donor community,” she said.

Rosenblatt said the most important thing is to communicate with donors in the manner that they choose – whether that’s email, social media, text or phone. “Figuring out what the donor wants goes with learning the donor base,” she said. Communications have become more sophisticated and comprehensive, which can help continue momentum in a grassroots effort to drive small gifts from many people. “Just the fact that many people, even at small levels, have a huge impact; that gets people excited,” she said.    E

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