Podcast: Finding Lead Donors for Your Capital Campaign: Essential Strategies and Tools

Season 3, Episode 54

In this episode, hosts Andrea Kihlstedt and Amy Eisenstein tackle one of the most challenging aspects of capital campaigning: identifying and securing lead donors. If your nonprofit is grappling with a shortage of lead donors or struggling to predict where significant campaign contributions will come from, this episode is a must-listen.

The conversation also covers the real-world challenges nonprofits face in filling the top tiers of their gift range charts. Amy and Andrea discuss strategies for engaging potential donors who may not initially seem capable of making top-tier donations but can become key contributors through strategic cultivation and multiple gift requests.

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Andrea Kihlstedt:
Oh, my God, we don’t have enough lead donors for this campaign.

Amy Eisenstein:
Hi, I’m Amy Eisenstein. I’m here with my colleague and co-founder, Andrea Kihlstedt, and today we are talking about what to do if you do not have enough lead donors in your pipeline or on your depth chart. You’re not sure where the biggest donors to your campaign are going to come from, which is completely normal and typical.

Why Lead Donors Matter for Your Capital Campaign

Andrea, why don’t you set the stage for us about what this might look like for an organization contemplating a campaign?

Andrea Kihlstedt:
Yes. So let me start just by going over some basics. So you should know that the primary tool for any capital campaign is what we call the gift range chart. That’s the chart that shows how many gifts you need at what level to reach your campaign goal. And those charts are not the same for every organization.

They’re going to be fine-tuned to fit the donor, the size of the donor base of your organization, but once you have your gift range chart set for the working goal for your campaign, the next order of business is to create a second chart, which we call the depth chart, which says:

All right, if we need one gift of a million dollars, we probably need a couple of names of people who will be prospects for that gift.

And if we need two gifts of a half a million dollars on our gift chart, we probably need four or maybe five names of people who might give that half a million dollars. And the same with the gifts going down the gift range chart. So the next might be a $250,000 level, and you will need the names of people.

And the depth chart is the chart with the numbers over the top, across the top, and actual names of people who would be prospects for each of those donor levels, each of those giving levels. And between them, those two charts, the gift range chart, and the depth chart are the guides for your campaign.

Amy Eisenstein:
Okay, let’s back up just a little bit because I think you threw out a lot of concepts, and I want to make sure that all listeners are following along here.

Understanding the Gift Range Chart (Gift Pyramid) and Depth Chart

So the gift range chart, which is what you started with, some people call it a gift table or a gift pyramid, but basically you explained that it outlines how many gifts you need at what amounts for each to get to your goal.

Now you said something about being dependent on the donor base. So let’s just explain that for a minute. And I think people will, it’ll be become clearer to people who are newer to the campaign world.

Andrea Kihlstedt:
Right. Sure.

Amy Eisenstein:
So if you need to raise, if your campaign goal is $10 million, or a million dollars, or $100 million, truthfully, it doesn’t matter, your lead gift is going to be in the neighborhood of 25% of your campaign goal. So using $10 million as an example, the lead gift, the top gift at the top of your gift range chart, would be $2.5 million, or 25% of the goal.

Now, you said something about depending on your donor base, this gift chart may shift and it will. So if you are at an animal shelter or a children’s cancer organization and you’ve got a pretty wide base of support, your donor pyramid may be a teeny bit flatter, and you may be able to start with a lead gift of only 20% because you may have many more gifts to your campaign.

Now, I want to say this with a real grain of salt because you can never make up at the bottom of a gift range chart for a lack of gifts at the top. So proceed with caution if you’re in this category.

On the other side, if you’re at an independent school with only 100 families and you have a fairly narrow base for support, you have only a few donors to go to, parents and grandparents and families, you will need a much steeper gift pyramid or gift table. And the top gift may need to be 30 or 35% of your goal.

So that’s what people should think about, listeners should think about when creating a gift range chart. And then the next step, as you say, is to create the depth chart or the donor pipeline. And you’ll want two to three prospective donors, real people or foundations who can and are likely to give the gifts at the gift levels that you need that you’ve outlined in your gift range chart.

So the question is: Who are those people? The two or three prospects that you need to identify for each gift that you need in order to get to your goal.

Andrea Kihlstedt:
Now, Amy, you and I both know that these two tools, shall we call them, they really are tools, are the drivers of pretty much everything you will do during your campaign. These are not idle sheets of paper. These actually are practical, usable tools because you’re going to refer to them saying, all right, we’re going to solicit these gifts from the top down.

We’re going to start by asking the people who can give the largest gifts. And gradually, we’re going to go down the depth chart, starting with the highest people who have the highest capacity and gradually soliciting people who are farther and farther down. That’s the essence of capital campaigns.

Learning Who Your Lead Donors Are

Now, what we really want to talk about, that lays the groundwork for what we want to talk about today, what we really want you to understand is this, that it’s very few organizations that, when they do their gift range chart and their depth chart, can account adequately for every gift in the top third, let’s say, of the gift range chart, very few organizations. Usually, an organization can account for maybe a half or two-thirds (if they’re lucky) of those gifts right up front.

Amy Eisenstein:
What you mean by that is identifying prospective donors right at the outset of who will make those gifts. So most organizations don’t know who all those prospects are right off the bat. In fact, they may be able to identify very few names right off the top of their head or from a first pass, it may take months to start to fill in that depth chart and figure out who’s in that donor pipeline.

Andrea Kihlstedt:
Because, of course, we don’t know everything about all of our donors, right? Sometimes we know relatively few things about our donors. So, to some extent, it’s a guessing game. It’s an educated guessing game. Who really fits in which category of your depth chart? And as Amy and I were discussing it, if you look back on campaign after campaign, right?

Donors Fall into Three Categories

When the campaign is all said and done and the money has all been raised, and then you ask the question of, all right, who actually made those gifts in the top third, for example, of your gift range chart, who were those people? They roughly fall into three categories.

1. People You Know

One category are people you know, you have cultivated them, they have given to your organization generously over years. You had every expectation right as you went into a campaign that they would be good prospects for some of those top gifts.

And I would hope that before you go ahead with your campaign, you actually can identify some of those people, right? It’s dangerous to go ahead if you can’t identify any of them, but let’s say a third of them, looking back on the success of your campaign, a third of them will be people you could point to right up front. Then maybe another third will be people that you thought would make a generous gift, but you really had no assurance that they had the capacity, or inclination, or history of giving really at the top level of your charts.

2. Loyal Donors Who Give Repeatedly

Now, some of those people will give multiple gifts to your campaign. You may ask them for a gift in the beginning, perhaps maybe they’ll give a $100,000 to help you purchase the land on which this building is going to happen. And then you go back to them when the campaign is going, and you’ll ask them for maybe $250,000 pledged over a period of years for the campaign.

All right, that’s $350,000. And then, as you get close to the end of your campaign, you may go back to them for a third or even a fourth gift. And from the perspective of looking at who actually made the lead gifts for your campaign, it turns out that some of those people you hadn’t thought of as lead donors, but they have made gift after gift after gift.

Guess what? They ended up not being $100,000 donors. They ended up being quarter of a million dollar donors or even half million dollar donors because they gave again and again.

So that’s another category of people, loyal donors who care about you, who don’t see themselves perhaps as lead donors, but through the three or four years of your campaign, they kept right on giving, lo and behold if it didn’t end up a big gift. And then the third category, so the first category of people you know and expect. The third category of people who were surprising but you knew them.

3. People You Don’t Really Know

Third category are people that you may not really yet know very well. They may be on your radar in your community, but they may be very low-level donors to you. They may be high donors in your community, but not yet donors to you. They may be a relative of someone who is a significant donor to you, brought in by a relative. These are surprising, right? Because you really can’t point to them upfront.

But many campaigns have people like that who, through the campaign itself, through the years of a campaign, these donors get brought in one way and another and end up making significant contributions to your campaign. Now, you don’t want to hang your whole campaign on these magical donors who come in out of nowhere, and they don’t really come in out of nowhere, right? They come in out of connections.

Amy Eisenstein:
But let’s emphasize that, Andrea. I don’t want anybody going away thinking that this is Mackenzie Scott or Oprah that are really going to materialize out of nowhere. These are people that you are not aware of, maybe at the beginning, early, early planning stages of your campaign, but that you do cultivate over a period of time and that you do engage.

So during your feasibility study, you might ask some key people, who else should we be talking to about our campaign? And then you go and meet with them, and you bring them in and you give them volunteer opportunities, and you ask them for advice over a period of months or years.

And it’s very strategic. It’s not magical. They don’t materialize out of nowhere. You may not be able to point to them exactly at the beginning of your campaign, but once you look back, you’ll see that over many months or years, you have cultivated these relationships.

Think About Your Lead Donors with the Long Term in Mind

Andrea Kihlstedt:
One of the things to think about is that the building of these relationships through a campaign is one of the things that sets your organization on firmer footing for fundraising going forward. Because those donors at the top of your donor pyramid, that top third, those top 20 donors, right, are people who are going to keep on giving to your organization. They’re not going to stop. They’re not going to give a campaign gift and then vanish. When they give a campaign gift, they invest in your organization, they want to see your organization succeed.

So it’s that attention to the top of your giving pyramid, that top third that drives the success of your campaign and drives the long-term financial growth of your organization.

Amy Eisenstein:
I guess the point is that while it’s okay not to know who all of the largest donors will be to your campaign at the beginning, in fact you won’t. I think that’s the point, you won’t. It’s critical that you know who some of them are and you understand the process for working to build those relationships throughout the campaign.

Most of the donors are going to be people who are making much lower-level gifts already to your organization, even if you don’t know that they have significant capabilities. And they will emerge over time as you go through the campaign process, as you engage more and more people through various campaign committees and subcommittees, as you talk to people early on about your plans informally and formally through a feasibility study process.

So there’s lots of campaign strategy that goes into helping these people surface and emerge as your lead donors for your campaign.

A Story to Illustrate the Point

Andrea Kihlstedt:
Yeah, Amy, I’d like to give one story here, just an example of a story.

Years ago, I did a campaign for one of these science centers, science factories, where kids come in and get to play with all kinds of things that are scientific games, right? Where they learn about science. And a man decided he wanted to create this new science factory in his community. And he was totally keen on doing that.

He really started from nothing. It was a heartwarming story. And the first thing that we told him to do was just to go and start talking to people in the community. Talk to his contacts, tell them what he had in mind, what he wanted to do. And one of the people that he went and talked to was someone who had been a friend of his, who was a judge, a very well-known, well-regarded judge in that community who had just retired recently retired from the bench, and everybody knew about him because of his distinguished judging career.

And he was a friend of this guy who founded the science factory, and he went and talked to him. And lo and behold, if it didn’t turn out that this judge was also someone who had spent a lot of his childhood in the basement, tinkering, tinkering with radios and taking things apart and putting things together, and he had a real fondness for that kind of science, the do-it-yourself, learn in your basement, take things apart, put them together. And he had a real sense that he had been formed as a person in his basement explorations, and he was so excited that this new science organization was being created in his community that lo and behold, he became one of the lead donors to this organization. Now, nobody much knew about his interest, or his passion, or that he had spent time in the basement as a kid.

Amy Eisenstein:
And as a judge, he probably didn’t make contributions.

Andrea Kihlstedt:
That’s right. Exactly. So it was just the fact of talking to people about it and following where these stories go and why people are passionate is sometimes surprising and makes you realize that the essence of identifying people who could give is the wonder of curiosity, of being curious about them and see who lights up at your particular mission. Not everyone will, and that’s fine, but some people will, and bingo, a lead gift will emerge.

Amy Eisenstein:
Yeah, I think that’s a good reminder. And most nonprofit leaders and listeners you may identify with this are not sure who their lead donors are or if they’re prepared for a campaign. So I’d love to encourage you to visit our website at capitalcampaignpro.com/assess. And there is a readiness assessment that you can download and take to see how far along or how close you might be to being ready for a capital campaign. So again, head on over to capitalcampaignpro.com/assess, and you will be able to download our readiness assessment to see how close or far you might be to getting ready for a capital campaign.

Also, of course, we’d be happy to talk to you about the specifics of your campaign and see if you are on track and ready to do this and if we might be able to help. So visit us at Capital Campaign Pro and sign up to talk to us. We’d love to talk to you.

Final Thoughts

All right, so I think the point is that most organizations are not able right off the bat to identify all of their lead donors, for sure, maybe a third of them. That’s our roundabout estimate that right off the bat, you should be able to identify the top third of your donors that you need for the top of your gift range chart for those top 20 gifts. And doing the work will help the others emerge.

What’s your key takeaway, Andrea?

Andrea Kihlstedt:
I think that’s right. And my other key takeaway is dust off your curiosity. Understand that getting to know people is more than half the process of any effective fundraising. And it’s particularly important when you’re talking about inviting people to give significant gifts to a capital campaign that is moving an organization forward in your community.

So don’t be afraid of talking to people. Talk to them, tell them what you’re doing, tell them why you’re doing it. Watch for them to get excited. If they don’t get excited, then that’s fine. Maybe they know some people who would get excited, but that’s the way real fundraising happens, even at this high level. That’s the way it happens.

Amy Eisenstein:
Excellent. All right. Well, thanks for joining us, and we hope to see you next time.