Capital Campaign vs. Capacity Campaign – Which Should You Have?

You might think that capital campaigns are only right when you need a new building or significant investment in capital improvements.

But you’d be wrong!

Instead, think of capital campaigns this way:

A capital campaign is any fundraising campaign that raises money over and above annual fundraising to increase your organization’s capacity to carry out its mission.

The clearest and most accurate terminology for what most people call capital campaigns should really be Capacity Campaigns. The two terms are really interchangeable.

But alas… habits of language are hard to change.

So you should simply be clear on the key concepts of this type of fundraising as it relates to your organization, as well as the specific things you can raise money for using a campaign fundraising strategy — regardless of whether the money raised is for a capital investment or for increasing your organization’s capacity.

Capital / Capacity Campaigns — 3 Key Concepts

Capital / capactity campaigns have these three key concepts in common:

1. The money raised through a campaign is over and above annual fundraising.
2. The money you will raise will be directed toward non-recurring expenses.
3. Once the campaign money has been raised (and spent) your organization will be able to have more impact.

Let’s break the campaign characteristics down one by one.

1. Over and Above Annual Fundraising

Most of the money raised for capital / capacity campaigns comes from donors who already give to your organization. When you ask them for capital gifts, you are asking them to make special, larger gifts that will not replace their annual fundraising but will provide a special infusion of capital.

This makes good sense when you think about it from the donor’s point of view. Consider your own giving, for example. Chances are good that you support some organizations with a gift you make year after year. You get in the habit of giving to them at a particular level. That level may creep up over time, but usually people’s recurring gifts follow a steady pattern.

In fact, you probably calibrate your gift amounts to a relatively low level because you anticipate that you’ll give recurring gifts to that organization. It’s likely that you make your recurring gifts from your checking account rather than your investments.

But when one of your pet organizations comes to you and asks for a special, larger gift to springboard its effectiveness to the next level, you may consider giving at a different level.

An example:

Let’s say you give an organization $250 /yr and that you are happy with the way they treat you. They say thank you promptly. They tell you what your gift makes possible. And they stay in touch.

Then, one spring day, you get a call from a board member you know asking to meet with you to talk about a special campaign the organization is launching that will make an out-sized difference in the organization’s ability to deliver its services.

Instead of asking you for $250, the board member asks you for $25,000! That’s certainly not a gift you would consider year after year. But, if you think about making a gift like that out of your investment portfolio rather than your check book, it might even be possible.

The board member, if trained well, might say “Stephanie, I hope that you will continue right on with your annual gift of $250, but this year, we would like you to consider a very special gift of $25,000.”

You don’t expect your campaign donors to give at the higher level forever. Those gifts will not be applied to general operating expenses. Those out-sized gifts will help build capacity!

2. Money Raised for Non-Recurring Expenses

Most capital / capacity campaigns raise money for special expenditures that are not recurring expenses. Money raised through these campaigns might be spent on the following items:

• New buildings and renovations
• Equipment and furnishings
• Start-up expenses for new programs
• Systems and expertise
• Investment in fundraising and increased income
• Opportunity funds

Notice that staff salaries do not appear in that list of non-recurring expenses. You may include staff salaries for new programs, for example, but you will have to account for the fact that the campaign money will not be ongoing.

So, you might include staff salaries in declining amounts over perhaps three years to give the organization time to increase annual revenues in other ways.

Notice too, that I haven’t included either debt repayment or endowment in the list. Many campaigns include one or both of those items and I will address them in a future post.

3. Increased Impact

The fuel for capital / capacity campaign fundraising comes from the promise of increasing the organization’s impact in the field. While the infusion of money that comes from a campaign may strengthen and stabilize your organization, that’s not the real reason donors will make an out-sized gift.

Donors give large gift because they want to do more good in the world. Big campaign gifts may fund buildings or expansions or new programs, but the real recipients are the people you serve.

Your organization’s financial needs are not the point of a capacity campaign or a capital campaign. “Please give because we need money,” is not a powerful case for support!

These extraordinary fundraising initiatives catch fire because the infusion of money will enable the organization to do more good — much more good — in the world.

Donors will give because they care about your mission. And they will give more, sometimes remarkably more, because you make a strong case that their increased investment will benefit the cause they care deeply about.

Comprehensive Campaigns, Debt Repayment and Endowment

In case you are wondering about comprehensive campaigns, repaying debt through a campaign or raising money for your endowment through a campaign, these will be topics for future posts.

If you have more questions you’d like to learn about, please leave a comment below.

Get Help with the Focus of Your Campaign

Lastly, if you’d like help thinking through what your campaign should focus on, fill out this application for a free Campaign Strategy Session. One of our campaign experts will be happy to talk with you about the possibilities.