Complex Gifts: A Huge Opportunity for Your Capital Campaign

We often go to great pains to make the concepts of capital campaign simple. It’s an illusion, of course!

Campaigns often extend for three years or more and are peppered with complexity. Every day, you will likely encounter situations that are not clear and straightforward.

The best way to set yourself up to handle the sea of complexity is to clearly understand the essential principles of capital campaign fundraising. So, in post after post, we do our best to make things simple.

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3 Types of Complex Gifts for Capital Campaigns

Today, we are going to embrace the complexity of giving. (Of course, I’ll do my level best to make it simple!)

We’ll explore three types of complex gifts:

1. Gifts that are complex because they are given to multiple projects within the same ask.
2. Gifts that are complex because of the source of the gift itself.
3. Gifts that are complex because the donor uses a gift to motivate others to give.

Campaign Gifts that Fund Multiple Projects

Many capital campaigns fund more than one objective. Funds raised through a campaign might include:

• land acquisition
• a building project (including associated soft costs)
• start-up funds for a new project
• cash reserves
• endowment
• fundraising costs
• capacity building systems

Additionally, in some cases, even annual funds are included for a specific number of years.

Help Donors Understand the Complex Nature of Your Campaign

While most organizations prefer gifts made to the campaign as a whole and not officially restricted to one project or another, you should discuss the various aspects of your campaign with your donors so they understand the complex nature of your campaign.

Keep in mind, however, that money is fungible. That is, one dollar is the same as any other dollar. Donor interests in specific aspects of a project are best addressed by associating the donors’ name with the aspect of the project that most excites them.

There are situations in which donors elect to officially restrict their gifts and a special fund is created. But for many campaigns, that’s not the case.

Multiple Campaign Gifts from the Same Donor Over Time

Some donors give multiple gifts to the same campaign as the needs and focus shift over time.

• For example, a donors might make an initial gift to help purchase the land needed for the new building.
• Then, as the project takes shape, that donor might make a larger gift to the building campaign itself.
• Sometime later, the same donor might make a planned gift.
• And finally, as the campaign gets close to its goal, that same donor — once again – might give another gift, but this time to help the campaign reach the goal.

Four gifts to the same campaign. Each one important and all of them counting, collectively, toward a significant campaign gift!

Campaign Gifts that Come from Complex Sources

Donors often make blended gifts, pulling from various of their resources for the gift. A donor might, for example, give cash and appreciated securities to the portion of the campaign that requires near-term funding, and that donor might combine that with a planned gift.

Tax Benefits to the Donor Can Drive Gift Choices

Gifts are often more complex than that. The ways that large gifts are made often stems from tax benefits for the donors. For example, a donor might give a Charitable Gift Annuity through which a donor transfers assets to the charity. In exchange, the donor receives partial tax deduction and a lifetime stream of income.

Under some conditions, a donor over 70 and a half can save on taxes by giving directly from their Individual Retirement Accounts (IRA). And, occasionally, a donor will give real estate or other real property.

While you should be alert to the many ways a donor might make a gift so you can discuss them with your donors, remember that you should not give legal or tax advice. Always have donors use their own experts/advisors — lawyers, accountants, and financial planners.

Campaign Gifts That Generate Other Gifts

Finally, gifts can be complex in the way they function within the campaign. Most common are matching or challenge gifts that are structured to motivate others to give. Sometimes these gifts are motivated by the development staff that is looking for opportunities to breathe some energy into their campaign. But in other cases, an eager donor will step forward.

Matching and challenge gifts can be positioned in many ways and at different times in a campaign. All of them share three components:

1. the amount of the challenge;
2. the amount that must be raised to meet the challenge;
3. and a date by which the challenge must be complete.

For more information, check out the podcast we did on matching and challenge gifts.

Legacy and Bequest Challenges

The kind of challenge that has tickled my fancy recently are those in which the challenge money put up by the donor goes to one thing and the matching money goes to another.

The best example of this approach is a Legacy / Bequest Challenge, in which a donor puts up a specific amount of money for the challenge. Simply put, every time someone commits to including the organization in their will, a specified portion of the challenge is released to the annual fund.

With this wonderful idea, planned giving, which is often given too little attention because the results are so far in the future, has a real and immediate result!

Complex Gifts: Key Takeaways

While it’s tempting to wish that gifts were all simple, the best campaign make ample use of complex strategies to inspire donors to make the largest gifts they can make.

• They encourage donors to give to multiple aspects of the campaign — sometimes giving multiple gifts over the full span of the campaign.
• They support donors in finding ways to give that works best for their individual financial planning.
• They use campaign gifts strategically to motivate others to give in ways that will make the donor feel good and that will boost the campaign.

I’ve found that the best campaigns celebrate creative thinking — always looking for opportunities to work with donors to help them be as generous as they might be while at the same time doing the most good.

Grasp the essential principles of capital campaign fundraising. Use them to ground you as more complex decisions come your way. But also revel in the opportunity to think creatively with your donors to make your campaign extraordinary!