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Weekly UpdatesA STATE-OF-THE-ART HEADQUARTERS BUILDING, INCREASED reserve funds, or premier research programs. It all comes down to money and how apt your association is at raising the funds needed to spearhead these kinds of initiatives. An increasing source of funding is the association capital campaign. Not just for foundations any more, capital campaigns are providing associations with a much-needed source of nondues revenue. And organizations of all staff and membership sizes have raised millions of dollars to fund projects, from supporting operations to awarding scholarships.
If they did it, certainly your association can, too. Right? Maybe not. Fundraising experts caution that launching and administering capital campaigns may look easier than it actually is.
Plan for the payout
When it comes to capital campaigns, there is definitely something to be said for having a plan of action in place. "Many associations will leap into a capital campaign without being fully prepared. They have no fundraising staff and have not identified a donor base," says Paulette V. Maehara, CAE, president and CEO of the Association of Fundraising Professionals, Alexandria, Virginia. "You have to have a specific structure in place to be successful. Capital campaigns are a great opportunity to raise awareness of an organization and obtain more resources without using member dues, but you should always conduct a feasibility study first so you understand your marketplace."
William B. Hanrahan, CEO of the Community Counselling Service, New York City, couldn't agree more. CCS has conducted feasibility studies for more than 100 associations and similar organizations in the past 10 years. "Capital campaigns give associations a great mechanism for raising money to support their goals and missions," he says. "But you have to do your homework. A campaign is going to either succeed or fail in the beginning." So the planning phase of a campaign is critical. "Campaigns begin with an idea from the CEO or the board," says Hanrahan. "Then you have to develop a case--a rationale for the need and use for the money." The CEO should be very much involved in developing the case because it is the CEO who must tell the association's story and communicate why the funds are needed.
Then, you are ready to talk to potential donors and test your campaign goal. "You'll need to survey the potential for raising money at specific levels using a gift table that lists different dollar amounts," Hanrahan advises. "Doing so will help you determine where you fall in the potential donor's--individual or corporate--spectrum of giving."
Along with surveying potential donors, he offers these rules of thumb for planning successful campaigns:
* Make a full commitment. If you are not ready to get behind the campaign 100 percent, keep working on the background research until you feel comfortable moving forward.
* Understand the motivation for giving. For most associations, donors are giving in support of the profession. They do not view themselves as supporting a capital campaign or foundation per se; that's just the vehicle for supporting the vision of the organization.
* Raise money in a positive environment. The emphasis should always be on the positive outcomes for the association. Avoid launching a save-the-association campaign.
* Don't kid yourself. Be reasonable and realistic about how much money you can actually raise.
* Recruit key people early in the process. Capital campaigns can help associations attract new volunteer leaders or better engage their current ones.
Consider the CEO's role
Once a campaign is officially launched, the chief staff executive's full participation is synonymous with the campaign's success. Members and other potential donors must feel that the CEO is fully behind the campaign. "The campaign has to represent the CEO's vision," says Hanrahan. "It's his or her reputation that's on the line." The CEO also must be highly visible throughout the campaign so that it maintains its momentum. "Members look to the association's leadership for direction," says Karen Ribler of KJR Consulting, LLC, Washington, D.C. "If they feel that you are not fully behind such a large endeavor, they will not invest in it."
Most associations will need to prepare for the fact that the campaign will take up a significant amount of the CEO's time. "When we get hired, I tell the CEO and his or her board that it's their campaign. They have do it," says Hanrahan. "This is not something that you can delegate to someone else to do." Your association must have the internal resources to get the job done while the CEO's focus is directed to fundraising for the campaign.
This dynamic differs from that of the fundraising required to fund an association's related foundation--a situation in which the board takes the lead. (If your association is considering launching a foundation rather than an in-house capital campaign, see "How to See Through Launching a (c)(3)" in the March 2005 issue of ASSOCIATION MANAGEMENT.) "Typically donors want to see the CEO," says Maehara of the Association of Fundraising Professionals. "They want to assess that person's competency to carry out the vision of the organization."
Launching a capital campaign may also require CEOs to step outside their comfort zones. "Most CEOs need some coaching before they start visiting donors," says Hanrahan. "Fundraising is not necessarily what they are used to doing, but once they understand how to go about it, they're great to work with." Most fundraising consultants will concede that no one likes hearing "no." At the same time, peer-to-peer fundraising is usually the most successful method for raising money in a capital campaign. "It's a good idea to pair the CEO with the board chair, a volunteer, or a fundraising staff member if the CEO or volunteer is uncomfortable asking for money," says Maehara. "They can support one another during the process."
Get the board involved
Identifying and pursuing donors is the cornerstone of capital campaigns. However, the most important caveat in working with donors is that you can't ask someone else to give if you haven't given yourself. In some instances, associations have difficulty reinforcing this point with their board members.
"The board needs to be giving and getting money. It's critical that the board support the campaign with 100 percent participation," says Maehara. "You need to make sure that board members understand that they have to support the organization financially. Many association boards weren't built with this in mind, and some members may have to leave during the course of the campaign."
Full participation from board members (and other donors) will not be a problem if you've done a good job of developing your case and are able to articulate it. "Don't assume that everyone wants to give," says Ribler of KJR Consulting. "And don't think that everyone understands the minutia of the association's decision to launch a capital campaign. Sometimes we forget to romance our givers by articulating a vision that they can relate to and feel good about. For example, the association is not just building a headquarters building or renovating the office, it is raising dollars to provide a working environment reflective of the membership to ensure its ability to carry out its mission in alignment with its members' priorities."
Follow the leaders
If you're prepared to undertake all of the steps outlined so far, perhaps your association is ready to launch a capital campaign. ASSOCIATION MANAGEMENT asked three association CEOs to discuss their experiences with launching their organizations' capital campaigns. While all of these associations are 501(c)(3) organizations, anyone can use their lessons learned as a guide for building a campaign.
Taking Small Steps
Campaign launch date: March 2003
Campaign goal: $200,000
Funds raised to date: $44,700
OUR ORGANIZATION--THE AMERICAN Society for Pharmacy Law, Springfield, Illinois--was struggling from year to year, existing on dues and conference revenues until one of our board members suggested that we launch a capital campaign. The Next Steps Campaign was announced at our 2003 annual meeting in New Orleans. It is a three-year campaign designed to help the association take the next step as a national organization by raising funds to maintain and improve existing services as well as to develop new ones. The funds raised will be allocated to four major strategic areas: operations, resources, scholarships, and programming. Since the launch, 10 percent of our members have given and pledged contributions totaling approximately $50,000.
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We are a small association with 400 members who are pharmacists, attorneys, and students of pharmacy law, and running the campaign has been an interesting process for us. Our main goal was to get ourselves on solid financial ground and work within our annual operating budget of $125,000; we've achieved this. At the same time, the campaign has helped us raise awareness of the association and pharmacy law. We've found that once you are out there making yourself more visible, members participate more in other programs as well. Our members are more engaged and involved than they were prior to the campaign.
We've had 100 percent financial participation in the campaign by our eight-member board, whose gifts ranged from $300 to $10,000. Board participation is, of course, important, since you have to give before you can ask others to give.
Our next step is to do more reaching out to members--and potential members. We know that our members are committed to the organization, and we believe that they will give because they want the organization to succeed. The whole process has just been amazing. We've had a major financial turnaround. Here are some of the lessons we've learned along the way:
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