Podcast: Setting the Right Capital Campaign Goal: Practical Advice for Nonprofits

Season 4, Episode 42

In this episode, Amy Eisenstein and Andrea Kihlstedt explain how to set a realistic, aspirational fundraising goal for your capital campaign—without pulling a number out of thin air.

They share three essential factors to consider: the cost of your project, a multiple of your current fundraising capacity, and the potential size of your top gifts. You’ll learn how these inputs come together to form a working goal—a draft goal used to guide early planning and donor conversations.

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Amy Eisenstein:
Do you know how to set a campaign goal or even how to think about setting a campaign goal? Today, we’re going to share our three most important tips.

Hi, I’m Amy Eisenstein. I’m here with my colleague and co-founder, Andrea Kihlstedt. And today, we are going to be talking about how to think about setting your campaign goal.

3 Tips to Set the Right Capital Campaign Goal

Andrea, get us started.

Andrea Kihlstedt:
All right, Amy. Here, tip number one. So simple, so important, and you absolutely have to start there.

Figure out what it is you’re going to raise money for through your campaign. We call those campaign objectives. What are your campaign objectives? And how much are they going to cost? You could add up those numbers, and that’s one way to come up with the beginnings of your campaign goal.

Amy Eisenstein:
I think that’s so important. So starting with the vision, what is your campaign going to accomplish? And how much will it cost to implement and fulfill that vision? I think that’s the starting place for every campaign goal. Now, of course, that may be way high or not nearly high enough.

So let’s go to tip number two. How do we then calibrate it against what might be realistic in terms of your philanthropy raise?

Andrea Kihlstedt:
All right, so let’s say just for the sake of discussion, Amy, that an organization needs to have a new building, and the new building is going to cost $20 million. And this organization raises $2 million on average from philanthropic sources. Right? So they’ve put their campaign objectives together, which include a new building and maybe a little endowment and maybe some other things. And from —

Amy Eisenstein:
A maintenance fund. Don’t forget —

Andrea Kihlstedt:
A maintenance fund.

Amy Eisenstein:
… the maintenance fund.

Andrea Kihlstedt:
So from that point of view, maybe they’re talking about a campaign to raise $30 million for the building, the maintenance fund, the endowment.

Amy Eisenstein:
The program startup costs, the new staff for the building. Yeah, factor it all in.

Andrea Kihlstedt:
Right? So then the question is, all right, can we actually have a goal of $30 million? Does it remotely make sense?

Well, one way to look at that is to look at how much money you raise annually from your philanthropic sources. And this organization, this example organization raises $2 million a year. $2 million a year. So what if we say, all right, let’s multiply that times five, right? Five times two, $10 million. Well, it’s not beyond the realm of possibility that they could raise $10 million, but that’s a pretty far cry from the $30 million they think they need. Right?

Amy Eisenstein:
Right.

Andrea Kihlstedt:
Nonetheless, it gives us a range, right? On one hand we got 10 million, on the other hand we got 30 million. Now what do we do, Amy?

Amy Eisenstein:
Right. Okay, so you’re going to look at your annual fund, you’re going to multiply it by five or maybe more. Then you’re going to think about who are your top donors, your top 2, 3, 4, 5 donors to the campaign. What do those gifts look like?

Setting Up and Initial Working Goal

Now, if you’re at an organization and you’ve been talking to someone who you think realistically might give five to $10 million, well, you might be closer to the 30-million-dollar goal than you think. If you can’t even imagine who might give you $1 million, then you know that $10 million is going to be a big stretch.

1. So I think number one, what is your campaign project and vision cost to play out? So that’s one factor.
2. Two, what’s a realistic but aspirational multiplier of your annual campaign? So we’re going to start with five times your annual campaign.
3. And then who are your top donors? Who’s most likely to make the top, let’s say three gifts? And does it get you above the lowest number? Does it get you close to the highest number or closer to the highest number?

Okay, so then those three things factor into what we call an initial working goal. So why don’t you talk about a working goal and why we think about it that way?

Andrea Kihlstedt:
Yeah, so all campaigns start with a working goal. That’s sort of like a draft goal. You’re only using that quietly, you’re not announcing it. Because you then want to be testing, well, can we really bring in these large gifts in order to do that? In this particular example we’re using, maybe you would have a working goal of $25 million. Right? Okay.

Amy Eisenstein:
Yeah. And it’s not a range. It’s not 10 to 30 million that you’re testing.

Andrea Kihlstedt:
Right. Right.

Amy Eisenstein:
That’s not your goal, 10 to 30 million. But you’ve landed on 25 million, which is aspirational, within the realm of possibility based on the three things we’ve discussed. So good, you landed on a working goal or a draft goal of 25 million.

Your Working Goal Helps Your Early Campaign Planning

Andrea Kihlstedt:
Now you use that working goal in the early stages of your planning. Through a feasibility study, for example, where you’re going and talking to your largest owners to see, well, what really are the chances that we can bring in those large gifts? And at the end of your feasibility study, you might want to adjust the goal. Sometimes you end up adjusting it up, if you find out you have a 5-million-dollar gift out there. And sometimes you adjust it down. But you have an opportunity to play with and to tinker with that working goal.

You can then adjust it again before you come to the end of the quiet phase of your campaign, before you go make a public announcement of what your final campaign goal is. So it makes very good sense when you set your working goal to set your goal high because you’re not stuck with it. But you want to test high because that gives you an opportunity to talk to your largest owners about the largest gifts they might consider giving to you.

Amy Eisenstein:
Okay, so let’s push back against that because I’m guessing that somebody listening is thinking — Andrea, the building costs $30 million and we’re only testing 25, and now you’re suggesting that we might need to lower it, either after the feasibility study or after the quiet phase, and that it’s not a problem. So why is that not a problem?

Campaign Plans Evolve – And So Might Your Goal

And how should organizations think about what if they can’t philanthropically raise what they need to do to complete the project? Is that a failed campaign? Can they not do it? What happens?

Andrea Kihlstedt:
Yeah, so there are many ways to fund the building. You can take out a long-term mortgage, you can have a bond issue, you can pull out of your organization’s cash reserves. Right? You don’t have to take the whole project costs and raise that from philanthropic sources.

So you have several things to be considering at the same time. One is what’s your campaign goal? The other is, well, what’s the financial plan that you can use so that your organization comes out whole, even if you can’t raise all that money philanthropically? And you need to be looking at all sides of that as you consider your campaign goal,

Amy Eisenstein:
And it will evolve and change as you start to raise money. You will have contingency plans, you will have plan A, plan B, plan C. And you go into a campaign hoping that you can raise the whole amount, whatever that might be, but knowing that either you could borrow against reserves, take a mortgage, as we talked about, and that’s why there’s flexibility as the campaign progresses.

And I have to say that we see organizations reach their goal and surpass it and raise the goal almost as often as we see organizations pull back a little bit. But aiming high initially is something that we encourage. This is an opportunity to raise as much as you possibly can in this moment for this specific project. And we want you to be aspirational and not wildly unrealistic. So finding that initial working goal is part art, part science.

And that’s what we do with our clients every single day. So if you, listener, are considering a campaign and thinking about how are we going to do this? How are we going to figure out what the right goal is for us? We hope that you’ll head on over to the Capital Campaign Pro website and sign up to talk to us about how we work and how we strategize with clients and how we analyze their data.

We didn’t really talk about analyzing data and digging deep into a donor database, which we do with clients. We sort of started with these three high level tips. These are to get to an initial working goal. And then you start working with a consultant who helps you be really strategic and really intentional and as aspirational as possible to get to the right goal, whatever that means initially, whatever your right working goal is.

Andrea Kihlstedt:
I’m amazed, Amy, in the years we’ve been in business, how many of our clients wind up being able to raise far more money than they ever thought they could. Partly because they didn’t understand campaigns when they began. Partly because as they start going down the road of a campaign, things open up, doors open, opportunities present themselves that they never even knew were out there when they began the campaign. It’s always so heartening and exciting to see organizations start out so timid with a goal, let’s say, of $10 million and up raising closer to 20. It’s like, oh, that’s amazing.

Amy Eisenstein:
Yeah, that is amazing. That’s always fun when that happens. And it happens more than you’d think. It really does. It’s amazing how often our campaigns, our clients are raising their goal. And I think that that has to do with courage, and it has to do with getting used to the idea, as you said, figuring out how campaigns work and how to talk to donors and how to ask for what you need and big gifts. And it’s all a learning process, which is beautiful too.

Andrea Kihlstedt:
Many of our clients start out having never asked anyone for $1 million, for example. They start out saying to us, “Well, no one’s ever given us $1 million.” And we say, “Well, have you ever asked for $1 million? Have you ever had an idea, a project that is big enough to ask for $1 million?” And of course, they haven’t. And a campaign unlocks all of that.

Amy Eisenstein:
I love that. Andrea.

Recap and Final Thoughts

All right, let’s just recap the three tips and then I’m going to ask you one final special question.

So the three tips to get you started towards your initial working goal or draft goal is one, figure out what the vision costs. What is the cost of the project and the reason behind the campaign? What are the costs of the campaign objectives? To the best of your ability. You won’t get it 100% right. It’ll evolve over time, and that’s not a problem. Costs and campaign goals do change. That’s why we work with a working goal or a draft goal because the project does evolve over time, the costs do change.

But come up with your initial costs and then compare that with five times what you raise philanthropically annually, and just see where they line up. And then think about your top three gifts that you can imagine to the campaign, and does that raise what you’re thinking about? Does it lower what you’re thinking about? And that’s a way to get started.

And then, of course, you’ll want to work with an expert to help you really hone and narrow and analyze the data more so that you can get to the best working goal possible. And of course, our team helps you be aspirational. So sort of to put on those courage wings and fly as high as you can. So those are the three tips to get started with your working goal.

Andrea, I have a final question for you, and that is, what is the best piece of advice that’s on your mind this week for people who are considering a campaign?

Andrea Kihlstedt:
Amy, you just brought it up, it’s courage, courage and grit and determination. In order to make these campaigns work, you need courage, grit, and determination.

Now, how do you get those? I think many people working in the nonprofit field get those by really reacquainting themselves with the importance of the mission of their organization. You have to remember that fundraising is not primarily about money, and money is not what gives you courage. What gives you courage is to see the difference you make in people’s lives.

So as you’re getting ready for a campaign, refresh your closeness to the mission of your organization. Refresh your commitment to your organization’s mission. Remember why you do this work, and let that drive your personal courage for this campaign.

Amy Eisenstein:
I love it. And then you will have a truly aspirational working goal. All right, thanks for joining us. Thanks, Andrea. We’ll see you next time.