Podcast: How to Incorporate and Leverage Challenge Gifts Into Your Campaign

Season 2, Episode 12

In this session Amy and Andrea discuss the strategic use of challenge gift as an important tool of your capital campaign. They discuss several ways you might make use of these gifts to motivate donors to give large gifts, energize donors to step up and set deadlines to stimulate giving.

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This episode was recorded as part of a live webinar held Monday, November 1, 2021. To participate in future webinars, register at ToolkitTalks.com.

Amy Eisenstein:
Today’s topic is challenge and matching gifts when it comes to campaigns and how to leverage some campaign gifts with challenge and matching gifts. So, but as always, we’re happy to answer any question you have. So go ahead and open up the Q and a box. If you brought a topic or a question, go ahead and stick it in there, but Andrea’s going to kick us off as always with the topic for today.

Andrea Kihlstedt:
Yes. So I just finished writing a blog post on this topic that will come out tomorrow or whenever the blog posts come out. So I’m thinking as deeply about this as I ever think about most anything. And here’s my thinking — so I went to my gym to my CrossFit box this morning and I actually lifted more weight than I ever lifted before above my head, which was exciting. Now I don’t care that you really know about that, except that it’s sort of a challenge and when I accomplish a challenge to be able to do something more than I’ve done before, it gives me a little zing. I mean, accomplishing a challenge gives you a little zing of adrenaline or whatever it is that gets you excited. And that’s such a basic human response. So the very notion of setting up challenge for matching the challenge is… I want to focus mainly on challenges today, the very idea of setting up challenges and then working towards them and then achieving them work because we are… We like to set up challenges and accomplish them because it gives us this little physical thing that happens or mental thing that happens.

And that’s true, not only of us individually for me going to the gym, but it’s also true of a donor that sets a challenge and the challenge is reached and then the donor feels really good or being the last person in, right? To actually reach a challenge, feels really good. I mean, we’re talking about using a structure in our campaigns as a way of piggybacking on what we know is a very real human phenomenon, which is the desire to achieve goals and to do them in concert or community with other people and that’s what a challenge does.

Amy Eisenstein:
And there’s other components like deadlines and things like that.

Andrea Kihlstedt:
Yes.

Amy Eisenstein:
But Andrea, you started a sense to say challenge and match —

Andrea Kihlstedt:
And match.

Amy Eisenstein:
Is there a difference —

Andrea Kihlstedt:
There is a difference. So a challenge gift is when someone says, “I’m going to give you X number of dollars and I’m going to put that amount of money in when you accomplish something, right? I’m going to put up $100,000 and when you raise $200,000 for this particular challenge, I’m going to put my $100,000 in on the top, right? And if you don’t raise your $200,000, guess what? I’m not going to give you that $100,000, is that same implication. Now, often donors soften that in the end, but that’s the idea. A matching gift is something quite different. It’s like I put in a dollar, you would in a dollar, right? I’m going to put up $100,000 and every time you raise a dollar or you raise $2, I’ll put in my money so that together we will fill the bank account as we go.

Now they’re both fine but the ones that I find really most useful, the ones that I like best are these challenges. And it’s because you can set them up in all kinds of ways through your campaign. Let me just describe a few of them. First of all, let me say that typically we don’t design a campaign plan having outlined the challenges that we’re going to use in the campaign plan, right? They are a strategic way to look at your campaign progress and see where you are having… Where things are slower then or not… Donors are not responding in the way you’d like, and then you get a donor to help you create a challenge grant to solve a specific problem or a specific… To change a specific part of your campaign that may not be going as fast or as quickly or as effectively as you’d like.

Add Challenges throughout Your Capital Campaign

Andrea Kihlstedt:
So you can make these things up and put them in place throughout your whole campaign. You can have 1, 2, 3, 4, 5 challenges at different phases in your campaign. So there are very flexible. Now, not only do they… Most challenges have three components. The challenger puts out a specific amount of money and there are terms about how much money needs to be raised in order to release the challenge and there is a deadline, right? And as Amy says, the deadline is really important because sometimes in these long sloggy campaigns where the quiet phase takes a long time, it feels like you have nothing to push people with, right? You need a deadline that is somewhere between the beginning of the quiet phase and the end of the quiet phase, that might I go on for 12 months or 18 months or that’s a long time. So if you construct your challenges that give you internal deadlines, that’s hugely helpful. All right. So that’s what a challenge is. I like it because it’s flexible. I like it because you can design it as you go to solve specific problems or things in your campaign that you would like to move forward. Okay. Amy, you —

Amy Eisenstein:
All right. So yeah. So let me… I understand what you’re saying about the difference between challenge and match, but challenge also has a match component and I think donors think of it that way, that when they give during a challenge that their money is being upped by the challenge by… It’s a match. I don’t know why —

Andrea Kihlstedt:
Not a match. It’s a challenge. Not a match. I’m not matching your money, the challenge… A challenge can be on all sorts of things. Let me give you an example:

So one client that I was working with had a major donor who they asked for a big amount of money that donor said, “Listen, we’re tired being the major donor in town. We want to trigger other… We want to find other donors in town. We’re going to set this up so that we’re going to put up X number of dollars at… If you can… Let’s say, we’re going to put up, I don’t know, 3 million in just [inaudible 00:06:55] round number. If you can find new donors that collectively give you a million dollars, we’ll give you 3 million, if you can find new donors, has to be new donors. Right?

Amy Eisenstein:
Right. So that’s the challenge component.

Andrea Kihlstedt:
That’s the challenge component. Right? That’s really interesting.

Amy Eisenstein:
For sure. But I would say that then the organization should also say to those new donors, “Your donation’s going to be triple matched in addition —

Andrea Kihlstedt:
Wow.

Amy Eisenstein:
Yeah.

Andrea Kihlstedt:
You can use that language if you want and you can use the language. I mean, I would say to the donor, “Listen, we have this challenge and if we can raise X number of dollars from you, particularly because you are one of our new donors, right?

Amy Eisenstein:
Yeah.

Andrea Kihlstedt:
If it were a match, Amy, then you as a new donor would give $50,000 and this foundation would give $50,000 and it’s not the way it was set up. It was set up so that if they got a million dollars, the foundation would give them three.

Amy Eisenstein:
Three. All right.

Andrea Kihlstedt:
So that’s… The difference is that one is incremental and the other is not incremental, right? There is a difference between these two books.

Amy Eisenstein:
Okay.

Andrea Kihlstedt:
Now is it some kind of matching? Yes, but I like to be, I don’t know, I like clarity, so-

Amy Eisenstein:
All right.

Andrea Kihlstedt:
I see it as clearing that way.

When to Announce a Challenge

Amy Eisenstein:
All right. So Karen’s asking an interesting… We’ve got two Karens. They’re spelled differently. I’m looking at the second… I’m looking at the Karen who says, “Do we announce a match opportunity at the same time we announce a campaign or do we save the match challenge, match challenge, challenge match or one or the other announcement after early donors have already given to help drive additional donations?” I’m sure you have strong feelings of about that. When to announce and you touched on it, you said, “Use this to…” Or maybe did you say it now or did I just read your blog post?

Andrea Kihlstedt:
Use strategically. You use these opportunities to create challenges strategically to motivate particular groups of donors or particular timings. So for example, if you are soliciting your board and you want to create a real deadline for your board to have made all of their contributions to the campaign, you can go to one board member and say, “Would you put up a challenge where you will double your gift if everybody on the board makes their contribution by such and such a date?” Bingo, right? You have an external reason for everyone to have given by such and such a date, that’s a very strategic and effective way to use it to use a challenge. I’ve seen people use a challenge strategy to where they found that the mid-level gifts in their campaign weren’t coming in the way they thought and that’s often the case, right?

The larger gifts, you pay a lot more attention to the midlevel gifts are hard. Somebody can actually challenge mid-level donors. They can challenge people who haven’t yet given to the campaign who will give between 25 and $50,000. Right? It can be very specific and you can at that up strategically. Now, of course, what we haven’t talked about is that this also gives you a wonderful opportunity to go to some of your largest donors and say, “Listen, here’s what’s going on, would you help us by creating a challenge, a special challenge for this particular part of our campaign?” And you’re likely to get a second gift from that donor set up as a challenge. Now, somebody wanted to know what happens if you don’t meet the challenge, will the donor kick in that gift or not? Maybe, maybe not, depends on the donor. I don’t know if anybody ever worked with the Kresge Foundation.

Kresge Foundation was the champion of doing these things. They had very complicated formula for how they gave money. I don’t think they’re doing it much anymore, but if you didn’t do what it is you said that you were going to do, guess what? You didn’t get a penny.

Amy Eisenstein:
That is —

Andrea Kihlstedt:
Not a penny. You really didn’t. And they were rigorous about it. Now does that mean that a donor can’t kick in later, set up a challenge, the challenge didn’t happen and then eventually the donor gives the final gift to the campaign, right? Outside of the challenge, these things do happen all the time.

Amy Eisenstein:
So let us know in the chat, have you done a challenge? Say one or two lines about how it’s worked, if it’s worked, if the donor was flexible, if you needed the donor to be flexible. I think that that’s smart. So in the chat I want to address Michael’s writing to me and Andrea saying —

Andrea Kihlstedt:
Is he only talking to us?

Amy Eisenstein:
Yes. He’s only talking to us and he’s saying, “Practice the talk for future presentations.” Michael, I want to tell you, I don’t know if you’re new to our Campaign Conversations, but actually one of the beautiful things about these talks is that they’re actually not practiced, obviously. We’re not doing a presentation, we’re bantering and we’re talking about our fundraising experience. Sometimes, most of the time, Andrea and I agree on most topics, sometimes we don’t and that’s actually I think what makes this back and forth special. There’s more than one way to do fundraising. It’s an art, it’s science, a part art, part science, but everybody’s experience is different. And I think what works with your community, with the organizations we’ve worked with, it’s not always exactly the same. There’s no… Not always one exact right or wrong way to do it and you’re getting a variety of opinions and experiences and I think honestly, that’s what makes this fun. So this is not practiced or polished. We’re responding to questions in real time and often we agree, sometimes we don’t.

Examples of Fundraising Challenges

Andrea Kihlstedt:
So… and Michael, I would encourage you, invite you in fact, in the chat, if you have a really simple way to describe this, we would welcome you to chat it in. So that would be terrific. So there is a lot to think about with regard to challenge gifts and we haven’t even talked about some of the more confusing ones. We just have talked about the simple ones so far. I just want to read this from Laurel. She has a challenge from a foundation. If she raises $24 million for a campaign, they will give… They will grant $6 million. She keeps them updated with interim reports as they approach their deadline. They have said they were open to a proportionate grant. For example, if they are… That’s interesting. If you reach 20 million, they’ll give 5 million. And they’re bridging the difference between a challenge and a match, right? That’s interesting. They want to give you that money, right? So they’re softening the edges of it, and that’s perfectly appropriate. They can do what they want. They want it to work for you. The donor wants it to work for you, which is what’s cool about setting these up, that the donor is doing this to help you.

Amy Eisenstein:
Yeah. So let’s read a few more Andrea, because people have been so generous in sharing their experiences.

Andrea Kihlstedt:
Yes.

Amy Eisenstein:
Gary says, once had a donor who challenged us to raise $1 million to establish an endowment near the end of our preserving the legacy campaign. And it was special since it created new donors and it grew an endowment with over 10 new endowed scholarships that would never have happened. The final result over 2.3 million of scholarship support in the end. I mean, that’s a great story, Gary, thank you for sharing. I think that is the point of whether it’s a challenge, it’s a match. It doesn’t matter. It helps motivate people. It helps encourage people. It helps leverage donations. And I think that that’s what everybody’s looking for. Let’s read one or couple more.

Andrea Kihlstedt:
No, wait, wait, wait. And imagine how it felt to be that donor, right? Who put up $1 million and ended up with 2.3 million that ended up leveraging 2.3 million of scholarship support. I Bet that wasn’t the last million dollars that donor ever gave to your organization, Gary.

Amy Eisenstein:
Right.

Andrea Kihlstedt:
I mean, it just… So this is fun for the donors and fun for the people who contribute to it and fun to help you think strategically about your campaign and how you might work with a donor to structure something as your campaign is moving along. I mean, that’s what’s so interesting about it to me.

Amy Eisenstein:
So Susan says, “We have a donor who gives to our annual appeal each year and we use it as a challenge to encourage participation. However, if we don’t reach the goal, they still give the same amount.” And that’s wonderful, Susan, I think that’s great. Let’s see. All right. So lots of great comments. All right. Are you ready to go to another question, Andrea, while-

Andrea Kihlstedt:
Sure.

Building a Donor List Before a Campaign

Amy Eisenstein:
I read these comments? Let’s go to Karen’s question who patiently put it in there right at the beginning? How many years does it take to build a donor list from 20 donors to enough to have a successful campaign? Of course, Karen, the answer is of course it depends. There’s no set number of years, right? It can happen quickly. It can take a long time and the reality is that your existing 20 donors could give you a lot of money, enough for whatever campaign project you need to do. So there’s no right amount of donor list, whether you have 100 donors or 500 donors or 10,000 donors it depends who’s on the list, how engaged they are, what kind of wealth they have, how committed they are to your cause.

Andrea Kihlstedt:
It depends Karen, on what it is you want to accomplish, right? So you have to look at, well, what are the objectives? What do we want to do with our campaign? And you have to calibrate what it is you want to do and whether it is realistic for the number of donors you have at this time and the life of your organization, right? You can do a campaign with 20 donors, right? It’ll just have to be calibrated depending on what it is you want to accomplish and who those 20 donors are. In fact, I have a story to tell.

So one of our Capital Campaign Pro toolkit members who came on about a year ago, and we spent some time working with them, helping them understand how a campaign was structured. They had a board that was very eager to raise $10 million for… It was the organization that bought land in their community and built housing for affordable housing on that land.

And they wanted to raise $10 million and they looked at the Toolkit, they began to understand how a campaign worked, and then they dropped off the Toolkit, right? They said, “Bye, bye. We think we can do it ourselves. Thank you very much.” So last week I reached out to them. They indeed had raised $10 million from, are you ready? 16 gifts, 16 gifts. So there’s no telling how much money you can raise depending on who you have. It doesn’t matter whether you have 10,000 donors or not. It matters who’s on that list and how committed they are to your project. Right? I was so tickled. I was just-

Amy Eisenstein:
Great story. So Sarah’s saying in the comments, “We did it last year, they went from 20 donors to 870 donors and we built the list of donors by running a campaign,” she says. So, yeah. So there’s all sorts of good ways to do this. Now Jacquelyn next time, put your question in the Q&A box so we don’t miss it, but I see it here. She’s saying, “Do most donors providing challenge gifts want anonymity? Is there a best practice for this?’

Andrea Kihlstedt:
You know what, Jacqueline, some people desperately want to be anonymous and some people are happy to have their names front and center, and that is a personality type as much as anything else or a belief system or whatever it’s based on. But you have to find out what the donor’s preference is. And they’re both fine, right? There is nothing wrong with one or the other. Though I have a slight preference for people who are willing to let it be known that they have given a gift just because it takes a little courage to put that out there. And that tends, I believe, to attract more people who are willing to be courageous, but I don’t feel strongly about it one way or-

Amy Eisenstein:
Yeah. I have a slight preference for donors who are willing to share too. And to me it’s about making it seem slightly more real, if it’s anonymous it’s, I don’t know, it seems slightly less real. It’s perfectly fine, obviously you’re going to honor the donor’s wishes, but if they are on the fence or don’t mind, then I would say, “Would you let us use your name because that will… People recognize names in the community.” Then you can play the six degrees of separation, who do you know that knows that person. All right. Elizabeth’s asking a question. I think you answered it, but we can dive into it for another second or two here. Elizabeth’s asking, “Are these challenges done during the quiet phase or can it be used to launch the public phase with new younger donors?” And the answer Elizabeth is yes, you can do it when it seems like it’s strategic and will work well. And as long as you’re targeting the right donors, right?

In the quiet phase, you’re targeting different donors than you are in the public phase, as you say, with potentially new and younger donors. So it depends how the challenge or the match is set up and structured and you want to use it strategically based on the timing of your campaign and what phase you’re in. Absolutely.

Andrea Kihlstedt:
And it’s fun either, or it’s both end. Campaigns go on for two or three years. You construct your multiple challenges with different donors over that period of time, right? To motivate different donors to do different things. I mean, it’s a real tool and you should experiment with it. You should play with it. You should get conversant at it. There’s a lot to know about how to do this and there are some donors who particularly like to do this and there are some donors who couldn’t care less. So gradually you find out what donors actually like to do a challenge, right? This big donor I was telling you about that wanted to challenge new donors, wouldn’t surprise me of this organization didn’t go back to… Went back to them and towards the end of the campaign and say, “We know you like a challenge. We know you like setting up a challenge. How would you like to create a challenge for the final public face of this campaign?” And they’ll probably do that. They identify themselves as liking a challenge by suggesting it in the first place. So go right back to them say, “Here’s another opportunity to do that.” Right” It’s a cool thing.

Amy Eisenstein:
Yeah. Heather in the comments is saying that during the pandemic they’ve seen more businesses, business donors wanting to be anonymous and it’s a different experience than she had pre-pandemic. So I don’t know if that rings true for anybody else and I don’t know if there’s any real data or statistics on it, but all right.

An Important Aspect of Challenge Gifts

Andrea Kihlstedt:
And while people have a chance to think about questions, there’s one other aspect of challenge gifts. It’s a little more complicated yet. And because I’m all as amazed by it, I think it’s… I just want to mention it. And it’s this concept of a big quest challenge, the gist of it is this and we may have mentioned them on one of these calls before, but it’s worth talking about again, that one of the reasons that it’s very hard for organizations to focus attention on planned gifts, on deferred gifts, gifts that come in in the future, often a long time in the future is because all the work you do on getting people into your planned giving society or legacy society or you do to get people to include you in their will isn’t likely to land on the balance sheet of your organization during your tenure, which means that many organizations don’t focus their attention on planned gifts because they’re too busy bringing in current gifts today.

And that the quest challenge helps you bridge that gap. Here’s in very simple terms the way it works, someone puts up a certain amount of money. A donor who believes in endowment for example, puts up a certain amount of money. Let’s say puts up $100,000 and he says everyone during this particular period of time, everyone who indicates or shows written document that says that they are going to include you in their estate plans, that will unlock $10,000 of my hundred… Or $1,000, I will give $1,000 in cash to the organization now to the campaign or the annual fund. So, and that $100,000 if every signed bequest intention triggers $1,000, right? You get 100 of those people, you get a $100,000 in the door, right? Depending on what that is and that’s really… And you get all those long term planned gifts for the future, which is powerful. And that’s-

Amy Eisenstein:
Very powerful.

Andrea Kihlstedt:
A lot of money, actually. I mean, the average planned gift, I believe is $40,000. It’s the average planned gift is $40,000. So you multiply that, right? 100 times 40, right? That ends up being a whole lot of money over time.

Amy Eisenstein:
Yeah. We’ve got a few questions here about new donors and finding donors and I think it’s a challenge, especially for small and startup organization. Actually, It’s a challenge for all organizations. So, well, I don’t think we want to go too deep into this topic. I think the bottom line is that it’s critical that you talk to people in your community, leaders in your community, people who care about your organization and your mission and so there’s no magic formula to finding new donors, but it’s really about identifying people who care about your organization, who care about your mission, who want to solve the problem that you’re solving. And they’re more than likely local to your community. Now, if you have an organization that spans nationwide or worldwide, I don’t mean local physically to your community necessarily, but within your community of people that care about your mission and there’s no way to do that other than to talk to people and leverage your networks, work on getting board members who care about your mission and care about your cause and having them talk to their friends and family, because if they care, then hopefully their friends and family care. You want to add anything to that, Andrea?

Andrea Kihlstedt:
Well, just this, that it’s very common in the context of a capital campaign to either do a feasibility study or a set of leadership interviews, where you interview the people who are the movers and shakers, who are the most influential people in your community, telling them what it is you’re thinking about, getting their advice and thoughts about your plans and that that’s not a bad way to begin to bring some people into the fold of your organization and may lead them to become donors even if they’re not yet. So in the early stages of a campaign where you’re focused on drawing the leaders, both philanthropic leaders and other leaders of your community together, you can create structures in the context of your campaign that will help you begin to build those relationships. And as you do those people who have… Who are in positions of power or influence in your community are likely to know others.

And if they believe in what you do and they come to understand and to become supporters of yours, then they can help you expand your network. So I guess the point of that is start by doing some power mapping. I mean, by thinking about who are the most influential people and how can you begin to have conversations with them and then how can you get them to help you expand the circle, the spheres of influence in your community. You will be better off doing that than buying a mailing list of 500 names, right? One is a strategic approach to drawing in the people who may have the most effect, right? For you and your project, as opposed to just having hundreds of names you’re going to be emailing calls, right? That’s a big difference.

Case Statement as a Feasibility Study? No Way

Amy Eisenstein:
Yeah so, Audrey has a great question following up what you were just talking about Andrea, she says, “Can the preparation of your case statement serve as your feasibility study, since both processes require talking to stakeholders, trying to get two birds with one stone?” The answer is no.

Okay. All right. I think you’re probably confusing the two processes, Audrey. You are going to take a prepared case for support or a case statement, right? Out to donors to test it in the feasibility study and get feedback on it. Okay. I’m not articulating it. Well, Andrea, you take the first crack at it.

Andrea Kihlstedt:
Well, let me say Audrey, first of all, you don’t want to kill two birds with one stone in this particular endeavor. You are the… What you really want to be doing is having more conversations with your major donors, not fewer, right? Every conversation you can have with your major donors that is a genuine, real conversation where you’re asking them for advice is a benefit. I know it takes twice the time, but you are not… You shouldn’t calibrate this in terms of time, you should calibrate it in terms of effectiveness. So the way we would think about it is that you would first pull together a small group of people to help you prepare and give feedback on the feasibility study… I mean, on the case for support, until it… Is still going to be a draft, but at least it will be cogent. A draft that you’ve gotten feedback on. Then you will take that out to a broader group of people in your community to test the feasibility study of the plan that you have described in that document. This is a two part process.

Amy Eisenstein:
Right. So the first time you’re going out, first of all it’s not the same exact group at the beginning, it’s going to be a much smaller group, a handful of people that are close to your organization probably who are going to help you create the initial plan for your campaign and that’s your case statement in part and then in the feasibility study you’re going to go to a larger group probably and test the specific plan. So the first time you go to people, when you’re creating the case statement, you don’t have a plan put together. You need to create the plan. The second time in the feasibility study is really testing a specific plan that you’ve come up with. And so those are two different processes and they serve two different functions. And it’s two opportunities, as Andrea said, to engage some of your key stakeholders. So —

Annual Campaigns vs. Capital Campaigns

Andrea Kihlstedt:
Shronda is very keen that we answer her question because she’s posted it both places. So Shronda, let us talk about this. First of all, you say, “What’s the best time to launch an annual / capital campaign.” These are two different things, right? You’ve got an annual… You have annual fundraising, which is recurring fundraising, you probably ask people, you probably have a spring appeal and a fall appeal, right? For that with the anticipation that people will give you year after year. And then you have a capital campaign occasionally on top of that. So we have two different things going on here, you can’t just cluster them together first of all.

Amy Eisenstein:
And let me just say, annual funds are for annual ongoing operating needs.

Andrea Kihlstedt:
Right.

Amy Eisenstein:
Capital campaigns generally are for longer term, bigger strategic needs that are multiyear last long into the future, propel your organization to the next level. So they also, while the time timing is different, the functionality of what the money is used for is different as well.

Andrea Kihlstedt:
Yeah. And there’s a fair amount to know about that, but we won’t go into that. I do think that we should take your question a little farther, which is when is a good time… Let me broaden it, when is a good time to attract new corporate and philanthropic donors. So here’s the answer to that. Don’t you love it when I have an answer. So the answer to that is this that the best way to begin to attract new corporate and philanthropic donors is when you find opportunities to go and ask for their advice, that’s the best way. The best way to do it is not to go and ask them out of the blue for money, unless they have a program that you fit into and you have someone who’s willing to usher that. But again, I would start with thinking about the largest and most influential donors in your community and I would of begin by talking to them about their interests, their philanthropic interests and your organization to see if there is an overlap, to see if there’s a way that what you do interests them.

And once you know that and they’ll tell you if you ask, once you know that, then you will have a better idea how to approach them. And that’s… This is not a seasonal question, right? This is not… It’s not better to do it in November or March, it doesn’t much matter. The reality is you should be doing this year round. You should always be spending a portion of your time getting to know the philanthropists and corporations in your community who give away money to understand what it is they want to do. And put it… Every Friday, you should make a list of three people you want to reach out to the following week and you should get in touch with them not to ask them for money, but to find out what they’re interested in, where the overlaps might be in terms of what you do. If you do that every week, I promise you your fundraising program will begin to grow.

Amy Eisenstein:
All right. So we’re going to take a quick seventh-inning stretch here while people type in their questions. We’re taking more questions. But I want to ask in the chat, let us know where you are right now, today in your capital campaign. Just thinking about it, doing some serious planning in the middle of a feasibility study or a feasibility study stage or have started to raise money. So those are the four general categories, just thinking about it, doing serious planning, feasibility study, which means you’re talking to your leadership level donors to get feedback on the plans or are you actually already raising money? So we’re just curious, let us know in the chat and we’re going to take our literal and figurative stretch. So stretch if you need to stretch, stretch and then we’ll see where everybody’s at. And if you have a question about your particular phase or stage or what to do next, go ahead and put it in the Q&A box.

Now Susan’s asked a question about reporting anonymous donors on a 990 and I realized, I don’t know the answer, but I know who does and that’s your accountant. So please reach out to your accountant for an answer on that. If anybody in the chat is an accountant. Remember we don’t play accountants on TV. We’re not financial planners, we’re not accountants, we’re not lawyers, we’re fundraisers. So Susan, you need to talk to your accountant about something that’s 990 related. All right.

Andrea Kihlstedt:
That was the perfect answer, Amy.

Overlap and Asking for Advice

Amy Eisenstein:
Michelle. My friend Michelle is asking, “How is having a conversation about overlap the same as asking for advice? Isn’t that something different?”

Andrea Kihlstedt:
Well, that’s an interesting question, actually. I suppose one can lead to the other. They are related, right? Here’s the way they’re related, that you go in with a curiosity about the person you were talking to rather than with a request for money. And there are several ways to do that, right? One is to ask them about their philanthropic interests and what they give to and what in the community they like to support and then you can ask them, how if at all your organization might fit into this. That’s a perfectly good conversation to have with a donor. And if they’re not interested, if they know somebody in their world that they think you should be talking to, there’s no reason not to do that as well.

There may also be specific things you can ask them about advice for it, right? You can say of the organizations you support, who does it the best, and can you connect us to that person so that we learn what they do, right? I mean, there are all kinds of things to ask for advice about. The bigger point is that you don’t want your first meeting with a donor to be, we are a needy organization, please give us money, right? You have homework to do before that. In some cases, it will be obvious that there are some pieces of advice you really do want from them because they’re in a position to give it to you. In other cases, you’re just going to be curious about how they give away money, what their philanthropic intentions are and how they see the community more broadly with regard to how you might function. People are generally happy to help if you ask them.

Amy Eisenstein:
So we have gotten some great comments in the chat. And a couple of things I want to react to, one is if you are in the planning stages or just thinking about it stages or feasibility study stages, I invite you and encourage you to visit the Capital Campaign Pro website so that you can see how we might support you and the leaders at your nonprofit going through a campaign. So that’s first thing. So please do visit our website. You can sign up to have a strategy session with me or Andrea or one of our other team members about and we’ll just answer your questions about your campaign. We’ll talk you through the planning and if it turns out that Capital Campaign Pro can help you through your campaign and provide some support, we would love the opportunity to do that. So I hope you’ll do that.

Creating Challenges in the Middle of a Campaign

Amy Eisenstein:
A couple of things that caught my eye in the chat, somebody said, “We’ve raised two thirds of our goal and we’re still in the quiet phase,” and I want to applaud you because so many people are in a rush to go public with their campaign. And really it’s so important to know that you do want to raise 70, 80% of your goal before you go public and ask in a broad way. So Bravo to you. I missed where that is. Another comment, I don’t want to call this person out, but in the… She writes, “We’re in the middle of a campaign and now want to create additional structure and challenges.” Now, of course you can create challenge gifts and matching gifts in the middle of a campaign and that’s fine, but additional structure to me, I hope that most of you are going to create structure for your campaign and campaign… I don’t know if this is exactly what the person who’s writing in means, but campaign policies, structure, donor recognition, that should all be created before you start raising money not in the middle of a campaign.

And I’m not sure if that’s exactly what the person means, but I just wanted to react to that and the opportunity or the timing to create structure for your campaign policies, donor recognition and planning other things, is it the beginning of the campaign, of course not in the middle or at the end of the campaign. So many people raising money, quiet phase, exciting to see what… Did some… Anything else catch your eye, Andrea?

Andrea Kihlstedt:
For Nicole, she says “Four years of a long campaign, but the public phase will be in June, 2022.” That’s a long time, Nicole. Good for you. I hope you will be tremendously successful. I just know how long that gets and it’s easy for campaigns to go on for that long, I’m not calling you out for being too long. It does… Sometimes with some frequency, it goes on for quite a while.

Amy Eisenstein:
Yeah.

Andrea Kihlstedt:
Let’s see, what else do we see here?

Propper Pre-Campaign Planning

Amy Eisenstein:
All right. So somebody’s saying, “Started a campaign, raised some money, but done without a plan now on hold until the board learns more about fundraising.” We do see a lot of people get stuck when they don’t do proper planning at the beginning. So thank you for sharing that and admitting that it is a major challenge when you are pressured to dive into a campaign too fast. This is probably the biggest fundraising challenge or opportunity that your organization has ever undertaken and it does take some planning. It always worries me when a board says, “All right, let’s raise 10 times more than we’ve ever raised before,” and we don’t want to have any planning, do any additional resources, no support. How do they think you’re going to do that with no additional resources or support? Let’s just wave far magic wand and raise 10 times more? No, it takes planning. It takes strategy. It takes knowhow. It takes conversations with donors. So don’t be bullied into jump starting a campaign if you don’t have a solid plan in place, if you don’t know what you’re doing. This is not the time to wing it.

Andrea Kihlstedt:
Yeah. And you know what’s amazing to me is that when you do have a plan and by a plan, I don’t mean that it needs to be cast in stone, that it needs to be a 40-page document cast in stone, but you need to have a pretty good idea of what you’re raising the money for, how much money you’re raising, what the gift range chart looks like, what the depth chart is, what the calendar picture of your campaign is, what your donor recognition plan is. And when you do that and you start walking your way through the chances are very good you will be successful, right? That’s what’s amazing, that this process works, right? If you have done the steps of the process, it tends to work. That the things we see that get in the way and we’ve talked some about this at the Toolkit, we see two primary things that get in the way. One is that something goes wrong with the land deal, right? If it’s a building project, all of a sudden the zoning doesn’t go through or the lands, the sale of the land to the organization falls through or something happens beyond your control, right? That draws the campaign to a halt for the moment while that gets sorted out. And that’s incredibly frustrating and not all that uncommon.

So that’s number one. The other thing we see way too much of is a change in development staff, right? Where a development director or a major gifts person or even an executive director leaves and that throws a monkey wrench in things and really it’s always troubling to us when we see that. I mean, we have upon occasion actually jumped in and had one of our advisors serve as interim director because the campaign was moving along and all of a sudden the development director was left and they didn’t want to pause the campaign. So we put someone in for a period of time while they found a new development director. That’s not what we do primary… Not our primary business, but it seemed like it was important. It’s always distressing, right? When somebody… If you were a development director in an organization and you were thinking about leaving that you might not want to stay there, don’t wait till the middle of the campaign to make that decision. Either make it in the beginning or stay through the campaign and then leave.

But it’s very disrupting when it happens in the middle of a campaign. That’s, yeah [inaudible 00:46:59] this happens with more frequency than we would like to see.

Allaying the Campaign Fears of a Nervous Board

Amy Eisenstein:
Yeah. Right. Heather’s asking a question. It sounds like her organization is ready to grow to the next level and yet her board members feel hesitant. They’re stalling, they’re nervous, they’re fearful. What do you say, Andrea to board members who, there seems to be a compelling need for a growth in programs and services. How do you get them over that fear?

Andrea Kihlstedt:
Well, one of the reasons that you do a feasibility study is to help the board develop confidence that what you’re planning actually has the potential of succeeding. And the Toolkit now works with organizations to do what we call a Guided Feasibility Study, where we walk beside our client and helping them plan a feasibility study and we train them and they do the interviews and then we help them put the recommendations together and co-present the report to the board. And that is all designed to build board confidence to say to the board, “Yes, we believe, we know from these interviews that you have had with your largest donors, that the money is likely to be there. This is how we know it. This is why we know it,” or, “We have tested it and you’re right to be anxious, that you probably may not be able to raise the amount of money you set out to raise,” but you can’t make it up. Right?

You can’t tell the… You can’t build the board confidence just by saying, “They’re there, build it,” and they will come. That’s not going to work. The board is going to be left holding the bag if the campaign is not successful. They are right to be anxious. If the organization overspends and can’t raise the money, there are going to be serious consequences to pay. So this is a time for a feasibility study, a Guided Feasibility Study, a traditional feasibility study but where you really go and talk to people to assess how much money you can raise. And that’s what I would do.

Amy Eisenstein:
And generally a feasibility study, I think lots of people are so concerned that a feasibility study will say, you can’t do a campaign. And generally a feasibility study will say, if you’re not ready for a campaign, it will say, do X, Y, and Z to get ready for a campaign and you may not be able to raise all the money you hoped. So scale back the project or the programs or do things in phases. So general, a feasibility study says… Doesn’t say you can’t do it at all, but here are the steps you need to take to get ready to do it or this is how much approximately you could raise now. So how can the project or the program be adjusted? But you do need enough board members and funding to be courageous to say, this is important enough that we’re going to test it because doing a feasibility study is an investment of resources and time. And so it’s not free, they have to have the courage to say, “You know what? This is important enough that we want to really test it.”

Regarding Feasibility Studies

Andrea Kihlstedt:
So, Sarah wants to know if we have samples of a feasibility study. All of them are, first of all, they’re proprietary, the organizations own them. And second of all, they are all unique to the organization. So seeing what one feasibility study of one organization won’t have anything to do with what you’re going to learn about your organization. So I understand the desire to want to understand better. We have information about feasibility studies, but we don’t have a study report that we would share with… We have many study reports but none that we would share with anybody.

Amy Eisenstein:
So Sarah, I would encourage you to go to Capital Campaign Pro website and then hover over the bar that says services and there is a feasibility study page that will give you a really good sense of what happens with a feasibility study, what it is, what you should expect. There’s a five minute video on feasibility studies that you can share with your board members. So start there at Capital Campaign Pro website and go to our feasibility study page. Okay.

Andrea Kihlstedt:
Well done. You need to start working on building relationships with individual major donors, corporations are fickle and difficult and they tend to want visibility. So I would not want to do a campaign relying on corporate funding. That doesn’t mean they won’t give you some money, but it’s not the best of philanthropic markets. So get busy building relationships with donors.

Amy Eisenstein:
All right. So Gary’s writing in, in the chat slightly to our earlier conversation. Gary says, “Once I had a trustee say that we should raise $100 million and I said to him that I think we can succeed if you give us the first 50 million.” So I think that’s great, right? If you have board members pushing you to start planning or dive into a campaign, you can ask them, “Are you making the lead gift?” And if they say yes, then you could say, “All right, let’s get planning.”

Andrea Kihlstedt:
Gary, don’t keep us in suspense. Did he?

Amy Eisenstein:
I think he did not. But all right, Andrea, any final thoughts on challenge gifts, matching gifts or anything else that you want to leave us with today?

Andrea Kihlstedt:
Well, no I just think that this is… That if you are going into a campaign, you should understand that this is a tool to be used as your campaign moves forward and you should keep it in your back pocket, right? It’s something you can pull out, something that you can work with donors to structure and to do. And it’s a powerful tool. I don’t think there’s enough written on it or said about it. There will be a blog post coming out tomorrow that writes, I hope cogently, about some of this material. And it’s always fun to be with all of you. Thank you for —

Amy Eisenstein:
Thank you so much for joining us, Andrea. As always, it is a total pleasure doing these with you and answering everybody’s questions. We have such a good time. It’s such a wonderful way to start the week. Thank you guys for joining us. We’ll see you next week.