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INTERVIEW: Starting your capital campaign with Andrea Kihlstedt

12 September 2016

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 September 12, 2016
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Hey, everybody. Welcome. This is Mazarine Treyz of Wild Woman Fundraising and today I am so, so pleased to do my very first interview – hopefully there will be more – with Andrea Kihlstedt, who is the head of Capital Campaign Masters, who’s written a book on capital campaigns. It’s a textbook which is in its fourth edition, which is incredible, and who is also doing the Train Your Board website. She will be teaching at our Nonprofit Leadership Summit, just 2 weeks away on September 27th! But today I’m here to talk with her about capital campaigns. Andrea, thank you so much for being here.

AK: Well, I’m happy to be here, Mazarine. Thank you so much for having me.

MT: You’ve done capital campaigns for 30 years now. Why should people listen to you about them? Tell us about you.

AK:  I cut my teeth in fundraising on capital campaigns years ago and have been a consultant in that field and a writer in that field and a trainer in that field. I have worked on very small campaigns and very big campaigns, for 30 years.  I have come to think of capital campaign fundraising as the most remarkable kind of fundraising. It’s the kind of fundraising that really pushes an organization to do what it should be doing to raise more money. It forces you into major gifts fundraising, and if you do it right, you can change and ramp up the entire fundraising culture of your organization. Getting people who really didn’t understand fundraising before to understand the power of being able to identify and cultivate people and ask them to give big, transformational gifts.

So unlike annual funds, I find it remarkably exciting. There’s nothing of a slog about capital campaign fundraising. There’s nothing year in, year out. The stakes are high, the goals are high, the opportunities are huge, and it takes a little courage. Maybe even a lot of courage. But the benefit of doing a capital campaign for an organization every ten or fifteen years is probably unmatched in the fundraising field.

MT: Have you ever worked with a small nonprofit who’s never done a capital campaign before?

AK: Absolutely. There are lots of them. Typically what happens is that a small organization finds that it needs to expand, or it’s losing its lease and it needs to build a building. Something critical happens that forces the organization to think about how it can raise more money to cover its expanded programs. Often in a small organization, they don’t think to do this unless there is a really critical need. That pushes the organization to have the courage and the will to move into this kind of fundraising.

Though I’ve worked on some very big campaigns, I find the little campaigns the most exciting and the most transformational. It takes a few people with a clear idea and a lot of courage, and the ability to be clear about the impact of the campaign, about the benefits of the campaign. Then they have an opportunity to reach out to the major donors in their community to get those donors to sign on for major gifts.

MT: So I’m thinking of a small nonprofit right now that I know. They don’t know the first thing about capital campaigns. They know they need a building, but they don’t know what to do. I’ve heard that a feasibility study is often the first step. What is a feasibility study?

AK: Well, let me begin by saying that I don’t think a feasibility study is the first step. So one of the things that I’ve done in recent years, having worked on and conducted many feasibility studies in my career. But what I’ve come up with is an idea that it really shouldn’t be a first step.

To answer your question, a feasibility study is a study done by a consultant or a consulting firm that tests a plan. It does that by helping the organization to develop a case for support and sharing that case for support with the major donors, and seeing if the major donors are going to be willing to support that project. So from that, they go back to the organization and make a recommendation about how much money the organization can raise.

My problem with an organization doing a feasibility study as the first thing is does is that really you shouldn’t be sending a consultant to go check with your major donors about something that they haven’t yet been engaged in. So I believe that an organization should do a fairly significant process of what I call pre-campaign planning. That’s actually the area in which I have developed a suite of services through Capital Campaign Masters, where we work with organizations from the time they begin to think about a capital campaign, until the time they hire a consultant.

4 Steps to Get Ready for a Feasibility Study

You must:

  1. Be clear on what it is you’re going to raise money for.
  2. Identify and engage your top 30 donors
  3. Have built, created, written a preliminary case for support articulating why your project is important, what impact it will have.
  4. Bring your campaign leadership and your board along, so that they understand what’s going to be demanded of them and expected of them.

 

You want to do all of that, really, before you go out and hire a consultant to test the plan.

You shouldn’t be sending a consultant out to talk to big donors unless the big donors are already engaged. Because their engagement is what’s going to cause them to want to give. Organizations again and again don’t do that. Why don’t they do it? Because they don’t know where to turn. They don’t know who to go to. They don’t know where to get information. As you see, these small organizations tend not to be sophisticated about fundraising. They tend not to have campaign experience, and maybe not even any major gifts experience. So I think it’s tremendously important for organizations to do a lot of learning and a lot of work before hiring a consultant.

MT: So what I’m hearing is that the most common mistake nonprofits make before they do a capital campaign is they hire a consultant to talk to major donors before the major donors are ready.

AK: Many small organizations won’t have major donors on their board. Because major donors aren’t going to be interested in serving on a little bitty daycare center board. It’s not likely that that’s who’s going to serve on that board. So the organization needs to build a bridge between itself and its plans to expand, and the people in their community who have the potential to give large gifts.

MT: So that’s something that often doesn’t happen before people say, we need to do a capital campaign.

AK: That’s right, and really, nobody wants to give large gifts to organizations they don’t know very much about. That stands to reason. It’s one thing to give $50. It’s another thing to give $50,000. They’re not going to write a check for $50,000 just because someone comes out of the blue and asks you for money for a daycare center down the road or an animal shelter, or whatever the project is.

So an organization has to prepare itself by doing work, building stronger relationships with the people in their community and the organizations in their community who have the capacity to give large gifts. Then they’re going to be ready to hire a consultant to do a feasibility study to test their plan with donors who are already engaged.

Read part two of this interview here on September 13th and learn the 4 steps for pre-campaign planning, the 5 steps of a capital campaign, and why you can’t just get 1,000 $1K gifts.

Read part three here on September 14th and learn the tools you need to have in your capital campaign toolbox.

Nonprofit Leadership Summit

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