Podcast: Discussion of Setting the Right Goal for Your Capital Campaign

Season 2, Episode 25

In this episode, capital campaign experts Amy Eisenstein and Andrea Kihlstedt will help you think through the process of determining the right goal for your campaign. You’ll learn that it takes more than simply knowing how much your project will cost. And setting the right campaign goal sets your campaign up for success.

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This episode was recorded as part of a live webinar held Monday, February 7, 2022. To participate in future webinars, register at ToolkitTalks.com.

Andrea Kihlstedt:
Today, we’re going to dive into this complicated topic actually, of how to set your campaign goal. And, of course, setting a campaign goal, setting any goal, is a really important piece of work. How you set your goal has something significant to do with whether you’re successful, or might have something to do with whether you’re successful. So we thought we’d take a full 20 minutes and talk about that. And I’m going to start by just telling you a story, a story of a campaign that I’ve been working with recently, which raises, I think, a bunch of the questions that we all have to answer as we think about a campaign goal.

One of the ways to set up a campaign goal is to think carefully about what you want to accomplish with the money that you raise and make a list of those things, a simple list. We call those campaign objectives. So it might include a building. It might include some startup funds. It might include equipment and signage and landscaping. It might include some endowment or quasi-endowment component. It might include startup funds for a brand new program if you’re in a new facility, if you’re doing a new facility. It might include the renovation of the old facility, if you’re moving out of one facility and into another. You need to sit down and say, “Well, what are the things we want to raise money for?”

And then, on top of that, you have to add a line for how much money it’s going to cost you to raise that money. Because, in your campaign, you have to also raise the money that the campaign is going to cost. And campaigns do cost money. Now, they are the most efficient form of fundraising. You will make much more money on your campaign dollar than you will, for example, on your gala dollars. But if you’re going to do a $10 million campaign, the chances are that you should be budgeting, what, about a million dollars?

Amy Eisenstein:
10%.

Andrea Kihlstedt:
10%. But —

Amy Eisenstein:
Let’s start with 10%. It’s a nice round number. It’s easy to remember. You may not need all of it. We want to be conservative in our budgeting. So start with 10% over three years. So whatever your goal is for your campaign, add 10% for fundraising costs. And that includes everything, all your campaign expenses: Capital Campaign consultants, a new staff member, new systems or technology, it includes donor recognition, brochures, videos; whatever your campaign costs are.

Andrea Kihlstedt:
Right. Hospitality, as you take donors out. I mean, as we start going out again, taking donors out. Having little house gatherings. All of that stuff costs. And over a three year period you’d be amazed at how much money you’re going to spend if you do your campaign properly. So, on top of everything you’re going to spend to get your program ramped up … which is what your campaign is going to be about … you have to add the line for the amount of money it’s going to cost for your campaign.

Then you’re going to add all those numbers together. Now, with my little client, they did that. They made a wonderful list of all the things they wanted to raise money for, they added it up, and it came to about $8.5 million. Now, all right, that was fine, except that on their board and on their campaign committee were some of the very seasoned and significant fundraising volunteers in their community … they are in a small city. And their volunteers, who had had a great deal of experience with campaigns in that particular community, said … and it was hard to ignore them … “Listen, in this city, for an organization like this, you’re going to have a terrible time raising more than about $6 million, $5 million or $6 million. You’re a relatively new organization. Annually, you raise about $300,000 or $400,000. It’s very hard to imagine that you’re going to raise more than about $6 million.”

All right, now that put them in a pickle and they had some choices to make. All of a sudden, people they respected … and these weren’t people who were just naysayers, these were people who know the community well. These were people that anybody would love to have on their campaign committee. These were not nobody’s.

So they had to consider, “What are we going to do? Are we going to cut back our building costs, for example … it was a building campaign … are we going to cut back the building? Instead of being, I don’t know what it was, 20,000 square feet, are we going to cut it back to 15,000 square feet? Are we going to not dig out a basement and have a basement space which we can use? Are we going to significantly trim our budgets? Are we not going to have any cash, any endowment in this? Are we not going to have any kind of cash reserve? Are we not going to pay for startup for new programs? What are we going to cut? What are we going to cut to get this $8.5 million budget down to 6 million?” Right? Hard. Hard.

And they debated and they came to me. They did hire us. I’ve been their campaign consultant. And they said, “Well, we guess we better test a $6 million campaign.” And I said to them, “Listen, if you do a $6 million campaign and you actually cut down your building, in the end, will it give you what you need to move your project to the next level? And if not, why don’t you have the courage to actually go and test the higher goal? Why don’t you actually have the courage of your convictions to set a higher goal for now and see what the possibilities really are by going and talking to your donors?” And that’s what they did.

Amy Eisenstein:
And Andrea, when you’re talking about testing, you’re talking about the feasibility study.

Andrea Kihlstedt:
That’s right.

Amy Eisenstein:
I just want to clarify for everybody. What does it mean to test your initial goal, working goal? And that is a feasibility study, when you go and you talk to the biggest potential donors in your community.

Okay. Go ahead. I didn’t mean to interrupt.

Andrea Kihlstedt:
Thank you. Yes. Yes. So that’s exactly right.

So they took a deep breath, they went to their donors; who said they couldn’t raise more than this. They went to their board members and committee members, and they brought me along. And I said, “Listen, guys, you’re not stuck with this. If you find that you really can’t raise the $8.5 million or $9 million you need for this project, you will have several opportunities to cut back, and to figure out how you’re going to cut back, later. But for going into it, let’s have the courage of our convictions and let’s see what we really hear when you go and talk to the people in your community.”

The people who had been naysayers said, “Okay, we can buy that. By all means, go ahead with it.” And they did. They went and they tested, I think, an $8 million goal. And lo and behold, in that testing, they actually found that they probably could raise $8 million or more, that they could even sneak into raising about $9 million. And that’s just because they went in their feasibility study. And as some of you know, the Toolkit advises organizations to do what we call a Guided Feasibility Study, where we work with you to develop and design and create the feasibility study plan and process. But we work with you so that you go and talk to your donors, instead of having us, the consultants, talk to your donors.

So they actually had these conversations with their donors and heard what the donors said. And could talk to the donors about why this project was costing so much and what the new building was going to give them. And talk to the donors about:

• Should they cut it back and not do the basement?
• Should they have a smaller footprint?

Then they could bring the donors into that conversation.

They came back, the feasibility study said they could raise $8 million plus. They went ahead with a working goal of $8 million. Now, take a look at that phrase: a working goal. That’s like a draft goal. And you can use that working goal all the way until you kick off the public phase of the campaign.

And to finish this particular story, they went with a working goal of, I think, $8.5 million to begin with. When they went to their very first donor … it was a foundation donor … they had the courage to ask for $3 million. And much to their delight and amazement, this foundation said that they were going to give them $3 million. And all of a sudden they start thinking about, “Well, maybe 8 million is not a big enough goal for us.” Right?

Amy Eisenstein:
And listen, I want you all to pay attention to this. If their working goal had been $6 million, that foundation would’ve given 2 million, not 3 million.

Andrea Kihlstedt:
That’s right.

Amy Eisenstein:
Because they didn’t want to give half. No donor wants to probably give half of the working goal. And so the reason that they were able to ask and receive for a $3 million gift is likely because the goal was higher. If the goal had been lower, that foundation would’ve given less.

Andrea Kihlstedt:
Well, and honestly, had they been going for a $6 million goal they would never have asked for $3 million from that foundation. It wouldn’t have felt right to them either. They probably would’ve asked for 1.5 million or 2 million, which that felt like a better ratio. So setting the higher goal gave them an opportunity to be asking at the highest levels for larger amounts. And when some of those larger gifts came in they knew that they could make this happen. And little by little, over the course of the whole campaign, the people who had said that they could only raise 6 million actually started laughing about it because they realized what a mistake it would’ve been to cut back before even testing.

So, lesson number one: if you know what your organization needs to move to the next level, and you make a list and it comes out to a number that takes your breath away, that’s okay, don’t worry about it. Test it. Test it. You can always pull back. If you give up on your aspirations, if your organization gives up on its aspirations, before you ever test it, I promise you, you will never achieve that higher level and your organization and the people you serve will be the ones to suffer.

Amy Eisenstein:
Yeah. Here’s the thing, a campaign is a lot of work. It’s a lot of effort. It’s a lot of volunteers. It’s a lot of staff time. It’s a lot of effort. And so to go for a project that only partially gets you to the way to your vision is not the best strategy from the beginning. You want to go for your full vision. Because you don’t want to get to the end of a long, hard campaign … no matter what the goal … and then two years later wish you had built the extra building or the extra facility, or added the technology, or included this piece or that piece, startup funding or programs and services, whatever it is.

And so a Capital Campaign is really an opportunity to vision, for the next five to 10 years of your organization or longer, and go for that big vision. And so starting with a scaled back vision is not a productive strategy. So when you’re setting the goal, go for your vision, start with the big vision. All right.

Andrea Kihlstedt:
Don’t get us wrong, we’re not telling you to pretend like this is a different universe. I mean, it has to be a real vision that you think is doable for the growth of your organization. So the leap has to be credible, it has to make sense. So that’s what should determine what it is you’re starting with.

Now, once you actually move into a campaign you will have several opportunities to change that goal; to raise it or to lower it. And that’s the whole period during which we use this phrase, as we said, a working goal, a draft goal. You will be able to change it after you do your feasibility study. When you see what those lead gifts are likely to be, you can either raise your goal or you can lower your goal.

Once you have that goal, then you’ll build your gift range chart on that working goal. And, from there, you’ll actually go out and start soliciting the largest gifts through what we call the quiet phase of your campaign. And you can do that all the way until you’ve raised 65% of your campaign goal, and you decide you’re going to actually publish the goal. Then, at your kickoff, which is when the working goal becomes a published goal, by that time you have to make up your mind. And you could raise it for that published goal or you could lower it for that published.

The idea is, that by the time you kickoff the campaign with a published goal, you know for sure you can get there and that you will have raised every dollar that it is possible to raise for that vision. And I like that definition of campaign success, actually.

Amy Eisenstein:
So let me go back and clarify, Andrea. Everything you’ve said is super helpful, and, of course, on point as always. When you’re doing the quiet phase, that is when you’re raising, as Andrea said, 65%, sometimes 70%, or even 80% of your campaign goal by talking to the lead potential donors in your community. And you are going to be asking for gifts towards your working goal, towards the goal you’re working towards.

Now, there’s two scenarios, maybe three. But let’s say you get all the gifts you ask for in that quiet phase, everybody is so excited about your program and project, everybody gives to you. And you raise either your whole working goal, or even over it occasionally. Then you have an opportunity, before you’ve gone public, before you’ve done a press release, before you’ve kicked off the public phase of your campaign, to increase the goal and expand the project.

Another scenario, of course, is that you don’t get the gifts that you were hoping for in that quiet phase. Several people at the top of your gift pyramid don’t come through at the levels you are hoping they would, and it’s clear that you’re not going to be able to raise your working goal. The good news is you haven’t gone public with a goal yet, you haven’t announced it to the community. This is still a working goal in the quiet phase of your campaign. So this is your next chance to scale back the project and scale back the goal.

And when you do go public with your campaign, you will announce a slightly lower goal and a slightly scaled back project, which, at that point, will be, you believe, achievable. And you’ll be able to celebrate all the things that you’ve accomplished. Even if it’s not your dream project, you will still have significantly moved the organization in the direction you want to go.

Andrea Kihlstedt:
I mean, you know the hardest part of that? And I’ve experienced this. Is that sometimes the head of an organization, when they take on a big goal to begin with because they have an aspirational vision, sometimes it’s very hard for them not to feel like they’ve been a failure when they have to pull the goal back. And I think we have to be careful when we take on a big aspirational goal, to understand that it is not a failure if you have to change the goal downward. I mean, it’s really not. What it means is that you have tested the limits of what you can raise.

So let me go back to this definition of: what is a successful campaign? You might think that a successful campaign is a campaign that goes over its goal. I think a successful campaign is a campaign that has raised every possible dollar towards a compelling vision for your organization at that time. And if you define it that way, it puts a whole different way of thinking about campaign success. It’s no longer tied to a particular dollar goal, it doesn’t mean you are good or bad or successful or unsuccessful. You have to have the courage of your convictions and of your vision, and then you have to do your very best to articulate that and to do the campaign well. And then what you can raise will have been successful. And that’s it. I like that definition of success.

Amy Eisenstein:
And I think it’s important for people to remember, no matter how close or far you get from your goal, think of how far you’ve come. You will have come a long way from where you started with your fundraising. Because a good campaign is all about fundraising, infrastructure, and strategy, and best practice fundraising. So your whole team; your volunteers, your staff, your infrastructure, everything will have grown with you during that campaign. Even if you don’t get to your absolute dream vision, your campaign will be a success because you have taken your organization from here to there.

All right, any last thoughts about setting your key campaign goal, Andrea?

Andrea Kihlstedt:
Well, I just think it’s super important for people to think big enough. And if I were to do one thing different in my long consulting career … some of you know I was in the traditional Capital Campaign consulting business for a very long time. And sometimes I look back on that whole piece of my life and I think, “What would I do differently in that?”

And if I could do one thing differently, I would have encouraged all of my clients to go for more, to be more visionary upfront. I wouldn’t have let my fear of failure get in the way of their commitment and courage. I bet a bunch of them could have raised more money had I had the will and courage, as I have had more recently, to encourage people to go with their vision. So don’t be quick to give up on your vision if you think that’s really what your organization should be doing to serve your community better.

Amy Eisenstein:
All right. Listen, I want to remind you that if you are struggling to come up with your campaign goal or need some encouragement and inspiration, we do free strategy sessions. So please visit the Capital Campaign Pro website, and there’s a place to schedule a free strategy session and talk to one of our experts. And we would love to talk to you about how you’re going to go about setting your goal, strategize, answer your questions, and see if we might be a good fit to help support your campaign.

So, we’ll see you next week. And thanks for joining us.