Directing a Successful Capital Campaign in Any Economy
- By Ellen Kollie
- December 1st, 2010
When it comes to launching a capital campaign, there are a number of dos and don’ts to be followed to ensure success. “The first is never launch a campaign on the eve of an historic economic recession,” chuckled Stephen L. Ward, CPA, MPA, executive director of the Centralia College Foundation in Washington.
“We couldn’t have introduced a campaign at a worse time,” Ward continued, recalling the launch of the college’s modest $3M program in 2008. Wrapped up this past June, the 2 ½-year campaign took a year longer than initially anticipated, but has allowed the college to complete three renovation and new construction projects: a gymnasium, college center, and science facility.
A second rule to follow to ensure capital campaign success is to make sure the stars are in alignment, as they have been for the team at Oregon State University (OSU) in Corvallis. The OSU Foundation launched its first-ever campaign in 2007, with a whopping goal of $625M. In spite of a poor economy, the foundation reached its goal this fall, and, instead of calling it a successful program completed early, opted to raise the goal to $850M and continue fundraising through the already-scheduled 2013 deadline.
To review, for a successful capital campaign, do not launch at the beginning of a recession and do check that the stars are in alignment before launching. After that, the rest should be pretty easy.
In Bad Times
Seriously, though, how do you run a capital campaign when the economy is collapsing all around you? “Unfortunately,” said Bruce Flessner, a principal at Bentz Whaley Flessner, Minneapolis-based philanthropy experts, “there is no magic to it. It’s just good hard work through a period of time.”
Flessner notes that it’s possible to take a negative stance and say that, because the economy is weak, there’s no way anyone can raise any money. However, both the Centralia and OSU campaigns prove that that simply isn’t so. “The truth is,” he said, “people still give away serious amounts of money in bad times.”
Flessner pointed out that campaigns are more likely to be successful in a weakened economy if you have a history of strong programs before the economy dipped. “If you have shown your donors that you have good will and are trustworthy,” he stressed, “you’ll have their support. You also have to have presidents and deans who want to see rainmaking as a high priority. You have to tell your story well. You have to focus on wealthy alumni, because you don’t build campus facilities a thousand dollars at a time — you need donors who need to make big gifts.”
One way to help those donors who want to make big gifts is by putting together different kinds of gift agreements. “In a good economy,” said Mike Goodwin, president and CEO of the OSU Foundation, “we would have tried to accelerate the payment schedule for three- to five-year pledge payments. Now we work with their financial situation. Can they make a balloon payment through time?”
And Ward recommends, after tying multiple projects together in order to create appeal to a wide audience, considering alternative means of fundraising. For example, Centralia Foundation members applied for grant money. They were rewarded with a National Science Foundation grant for STEM (Science, Technology, Engineering and Mathematics) students, and a $400,000 grant for science equipment from the Department of Education.
And in Good Times
Running a capital campaign in a strong economy isn’t so different from running one in a poor economy. Goodwin recommends conducting feasibility studies before announcing a goal. “Then,” he continued, “make sure that the projects you’re raising money for are projects that resonate with donors. Finally, stay close to donors — engage them in what you’re trying to do.”
Goodwin’s advice must be worth listening to, since he is directing OSU’s so far successful, $850M, two-phase campaign. “The first phase is allowing us to complete funding for 16 facility projects, both new and renovation,” said Molly Brown, senior director of Strategic Communications & Donor Relations and associate campaign director. “The second phase is allowing us to assist the people in the programs in those facilities. Specifically, we have an ambitious goal to create endowed faculty positions and merit-based scholarships for high-achieving students. We want to raise the University to the next level of distinction, building excellence and national recognition.”
Ward has two pieces of advice for running a successful campaign. The first is that it’s critical to understand the community and donors. “We’re a small community (80,000 countywide), and you don’t go to the well that often,” he said. In fact, the Foundation waited for a few years after the local hospital completed a campaign before beginning the recently completed program — Centralia’s third in 20 years.
“People in this community serve many organizations,” Ward explained. “For instance, I serve on the hospital board. And the chief hospital administrator is a member of the Centralia Foundation board. We knew that, if we went at the same time, neither one of us would do well.”
Ward’s second piece of advice is to have strong leadership that supports the campaign. “The chairperson has to understand the message, be credible with your audience, and believe in what you’re doing,” he said. “We were fortunate to have co-chairs who could deliver our message with such sincerity that it wasn’t questioned.”
And in This Time
What about right now? Is now a good time to start a capital campaign? For that, let’s review the two main rules of thumb: Is the nation on the eve of a recession? Are the stars in alignment? It appears that the answers are “no” and “yes,” respectively, so go ahead and give it a whirl. Flessner affirmed this answer: “It’s not a bad time to start a campaign. It’s a good time, actually. Campaigns are five to eight years long, and I believe that we’ll see a return to some prosperity in the next five to eight years.”
Speaking from the vantage of one who has met his goal, albeit through the course of a recession, Ward agreed. “If I had to do it over, I would have launched the capital campaign six months sooner and received the commitments sooner. But now’s not a bad time to fire up a campaign.”