Podcast: When Capital Campaigns Hit a Snag: How to Respond, Adjust, and Keep Moving Forward

Season 5, Episode 19

In this episode, Amy Eisenstein and Andrea Kihlstedt explore the practical actions nonprofit leaders can take when campaigns encounter real-world bumps; from project delays to leadership changes and unexpected donor situations.

This episode offers a grounded perspective, seasoned guidance, and encouraging examples to help nonprofit leaders stay steady and strategic through the full arc of a campaign. Anyone planning or managing a capital campaign will walk away with a stronger sense of how to respond when circumstances shift and how to maintain momentum through uncertainty.

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Amy Eisenstein:
Something will go wrong with your campaign. And when that something goes wrong, you’re going to know what to do about it.

Hi, I’m Amy Eisenstein. I’m here with my colleague and co-founder, Andrea Kilstead, and we are going to talk about the bumps that inevitably happen during campaigns.

When Your Capital Campaigns Hits a Snag

Campaigns are long and complicated and… It’s rare that we would see a campaign that goes exactly smoothly and as planned from, you know, beginning to end. There are ups and downs in campaigns. That’s part of the process. And when you’re prepared and know what to do about it, it’s not a problem.

Andrea, why don’t you get us started?

Andrea Kihlstedt:
It’s funny, Amy, to think about it. It’s not a problem. I mean, the reality is that it is a problem, but you’re going to know how to deal with a problem. And that’s really the campaign problems are we were talking about what are the categories of campaign of problems that beset campaigns. So let us go through those with you so that you have some organizational structure in your mind to think about problems that you’re going to encounter.

Building, Zoning, and Project-Related Issues

So one set of problems is around the building, right? Or the project that you’re funding. That they might be things like zoning. The zoning may not go exactly the way you wanted. You may not be able to tie down the property in a way that you had hoped to. You may, when they’re excavating the basement, they may find… gasoline or something awful, right? That they have to mitigate.

Andrea Kihlstedt:
Bones. All kinds of things happen or go wrong. It may be, heaven forbid, that there are tariffs on steel and all of a sudden the price of your construction is going to skyrocket. And we’ve seen that a lot over the last few years. It may be that the contractor that you hired turns out to be not so great. Right? And you wish you had hired another one, and you have to figure out what to do about that. I mean, these are just some of the things that might go awry with the building project, with the project of your campaign.

Leadership and Board Changes During Your Campaign

Another thing that might go awry, and we see a lot of that, and Amy, you can parse this one a little, is issues of leadership. What kinds of things do we see with that?

Amy Eisenstein:
Right. I mean, your CEO or executive director leaves for whatever reason. Right. We’ve actually had somebody pass away and, you know, early on in the middle of a campaign, a leader leaves. or they quit or they get fired, whatever happens, leadership turns over, your development director quits or gets fired or whatever happens.

So leadership transitions can derail temporarily a campaign or at least, you know, a bump or a hiccup, whatever we’re going to call it. But it puts a snag in your campaign. So leadership transitions on the staffing side.

Now, of course, that can also happen on the board side. We can have some hiccups with the board. What happens with the board, Andrea?

Andrea Kihlstedt:
Well, sometimes you have a new board member who turns out is difficult, right? Board member comes on around the time of the campaign and it turns out that they are troublemakers, that they’re a problem. They create problems, that they create dissension in your board, that all of a sudden the board that felt like this was great is starting to unravel. That happens too. I mean, you know, we could write a book on things that happen.

Donor Problems During Your Campaign

But there’s a third kind of issue, right? The first were building-related or project-related problems. And the second was leadership problems. The third kind of problem are donor problems. And, you know, sometimes bizarre things happen.

Like a donor, your lead donor, right? who was wonderful and who has made a verbal commitment to the largest gift in your campaign in a very short period of time, ends up in the hospital and dies. And you have nothing on paper. And the children, the children of the donor, I mean, this actually happened in the campaign I did, the children of the donor came in. He had committed $2 million. All the kids see is that that $2 million isn’t going to be in their inheritance, right?

But there are other kinds of gift problems as well, not so egregious perhaps, but gifts of misunderstanding where you thought a donor had said one thing and the donor thought that they had said another thing. where the terms of the gift simply weren’t spelled out properly, where a donor wants to give a gift over so many years that it doesn’t make sense. I’ll give you a million dollars over 15 years.

Amy Eisenstein:
Yeah, 20 years, right?

Andrea Kihlstedt:
20 years.

Amy Eisenstein:
But you need it for the building.

Andrea Kihlstedt:
You need it for the building. It doesn’t work, right? So there are problems like that that creep up. We come up with a fourth kind of problem.

Amy Eisenstein:
Well, OK, so I was dividing you clumped leadership and to staff and board and I was counting them separately. So three, four, you know, yes, we’ve got building issues or project issues. We’ve got leadership issues, staff and board, and then we’ve got donor issues. And just recently I was thinking about, you know, somebody who had made a gift and then there were ethical concerns that came up with the donor.

Gift-Related / Ethics Problems During Your Campaign

I think the donor was getting arrested and the organization, you know, gave back the gift. But it was the leadership gift to the campaign. But they couldn’t have money from this person who probably got the money unethically or illegally, I should say, not just unethically. There’s both of those concerns, right? Are you going to take gifts back? that are unethical and or, you know, clearly illegal activity contributed to the finances of this person. So, you know, donor problems, right? Gift problems is the last category. Yeah.

Andrea Kihlstedt:
You know, Amy, as we go through this list of problems, it really makes me reflect on how challenging this business can be. And at the same time, having done and worked on hundreds of campaigns, how amazing it is that we can get through these problems, that we can figure out how to deal with these problems, and we can have successful campaigns. Many successful campaigns that because these campaigns are big with big goals and an extended time frame, we have opportunities to kind of work with the challenges that come up to mitigate them, to figure out how to deal with them, to actually in some cases make the situation better than it was before.

Amy Eisenstein:
All right, so before we get into those two things that we’re going to share, I want to talk about also defining success, because I think that it’s an important concept and idea in campaigns.

How Do You Define Success During a Capital Campaign?

I mean, let’s say originally you’re talking about a goal of $10 million, and then ultimately you raise nine, and the board thinks you’re unsuccessful. Is that unsuccessful? You’ve raised $9 million. you know, towards a project that you do without maybe all the bells and whistles, or you sidetrack one small piece of something, or your endowment isn’t as big as you hoped it would be. The idea that a small organization raising $9 million is unsuccessful is crazy. And the question is how to position it, how to prepare people for it, how to talk about it, when to talk about it. Those are things that come into play when we’re thinking about campaign strategy.

So there are two things you’re going to talk about that organizations can do when they hit some of these bumps. But also, you know, I want you to also comment on, you know, how do we think about what success means in the campaign world?

Andrea Kihlstedt:
You know, Amy, one of the ways to think about success in the campaign world is not to think so much about money, but to think about whether the project was accomplished. To think about whether at the end of the campaign, you actually are able to do more for the community you serve. Yes. Whether you have lived out that part of what’s driving the campaign, because that’s what this is really all about. The money is just the means to an end. And if you are able to get to the end, right, without having raised as much money, and sometimes that happens.

I mean, one of our clients now actually in the middle of the construction project radically changed gears. The project they had thought they were going to do became too expensive to do. They stopped having raised a ton of money. They stopped and they bought another building. And then they changed the entire construction plan for the first building. They ended up with two buildings done for less money than they had originally started. And they raised less money than they had originally planned. Are they successful? You betcha they’re successful.

Amy Eisenstein:
Yeah, that’s a great example. And I think it’s important for board members and staff leaders to understand that projects and plans do morph and change. And that’s part of the process. And I think… I would say almost all the campaigns we work on do have some aspects that morph or change over the course of the campaign. And that’s just part of it. And so being willing to be flexible, to adapt, that will help you be successful and be able to celebrate the amazing things that your campaign ultimately accomplishes.

Contingency Plans When Struggling to Meet Your Goal

Now, the truth is that we see more organizations going over their goal than going under goal. But we want to be prepared with contingency plans so that people can be successful, whatever the dollar outcome turns out to be. All right, let’s talk about the two things that are in control of the organization that give them power. and flexibility and options when some of these issues come up.

Andrea Kihlstedt:
Right. You know, it took me a long time, Amy, when I was fresh in this business, when I was new in this business, to really get very clear on the fact that there are two important tools that you can control in a campaign. and that together they can make a huge difference.

Lower the Campaign Goal

So one of those is that you can raise or lower your campaign goal. We use, we work on a campaign for much of the campaign with something that we call a working goal. And we don’t actually tie down the goal. We don’t have brochures that mention the final goal until quite late in the campaign, until we’re pretty sure that everything is hunky-dory.

• We know what we’re raising money for.
• We know how much money we’re going to raise.
• We know where the rest of the money is going to come from.

And then we say, all right, we’ve already raised $9 million towards a $10 million goal. That’s an announcement, right? Our goal is $10 million, or maybe you’ve raised it a little. But the fact that we work with a working goal, a draft goal, a flexible goal for much of the campaign gives us a huge ability to shift the goal according to what’s actually happening on the ground, what’s happening with our donors, what’s happening with the project itself. You know, problems that we may be encountering.

Revise the Campaign Timeline

So the goal is one of the things that we can control. The other thing that we can control is the timeline.

Now, most campaigns start out with a three-year timeline, some a little quicker, most three years, sometimes five years. The three years is often set because in many campaigns you give donors the option of pledging their gifts over three years. And because campaigns take roughly 36 months if everything goes fine. But if everything doesn’t go fine, you can extend your campaign timeline. You can say, all right, you know, it took longer to get this building stuff tied down than we thought it would. And we couldn’t get answers from some of our major donors until the zoning was tied down, for example.

So everything got delayed. Well, we can add another year to the campaign timeline. We can control that. And together, right, I think about it like flying a, I don’t know, an air balloon with, I don’t know what those things are where you have two lines.

Amy Eisenstein:
Right, to add heat and contract.

Andrea Kihlstedt:
Yes, exactly, right? You can play with those a little. You can extend the timeline. You can shrink the goal. You can extend, you can expand the goal depending on what’s going on. But those are your two levers. Maybe they’re levers.

Amy Eisenstein:
Well, let’s OK, let’s talk about reasons to and not to extend the timeline, because we don’t want people to continue to extend the timeline and hope that they’re just going to get to their goal and keep extending the timeline, extending the timeline. There is there is very clear and specific reasons to not extend the timeline when it’s time to call it right, as it were. So what is what is that?

Andrea Kihlstedt:
So, I mean, one of the characteristics of any capital campaign is that it has a beginning, a middle, and an end, right? That it doesn’t just dribble out forever.

Unlike your annual fundraising, right, which goes on year after year after year after year, right? Capital campaigns don’t do that. Donors make a gift. It’s a special gift. They may pledge it over a certain period. But once the campaign is done, once you’ve gotten, you know, once you’ve raised the money, The campaign is over and then you can celebrate it.

Amy Eisenstein:
OK, so I was leading you somewhere and you didn’t go there. So I’m going to say when you don’t have any more prospects on your list. Oh, realistic. Right.

Andrea Kihlstedt:
You can’t just place to go.

Amy Eisenstein:
Right. You can’t just extend the timeline a year and hope that you’re going to raise another million if there’s no more viable. What’s the word I’m looking for?

Andrea Kihlstedt:
Prospects.

Amy Eisenstein:
Qualified. Qualified. That’s the word I was looking for. Qualified prospects. So the reason to extend the timeline is if you have 10 or 20 or 30 people that you’re going to solicit, that you have connections to, that you can get meetings with, that you have reason to believe can and might make a gift, that you’re cultivating, that you’re actively soliciting, then you can extend the timeline. But if you’re out of prospects, it’s time to call it.

Andrea Kihlstedt:
Absolutely. I thank you, Amy. I totally missed that ball that you threw me.

Amy Eisenstein:
No worries. No worries. OK, so that’s fine. But but so if you have more prospects, extending the timeline is a good strategy. If you don’t, it’s not. And it’s time to say, OK, you know, we were hoping to raise 10 million dollars. We’re at seven and a half. Here’s what we’re able to do with the project for seven and a half, and we need to celebrate that. So, yeah.

Andrea Kihlstedt:
Right. And we’re going to take the next three months or six months to raise another half million, right, in the public phase of our campaign, and then we’re going to have a big celebration.

Amy Eisenstein:
Right. So the good news about campaign strategy and if in the quiet phase you haven’t announced a formal goal, which you shouldn’t have, as Andrea said, you’re using a working goal, a goal you’re working towards or a draft goal of $10 million. And you’re telling your quiet phase prospects that we’re using a working goal and that’s written on all of your information, your proposals, the documents that you’re sharing quietly and privately in these one-on-one solicitations, then you can go back to them and say, hey, listen, you know, these things happened.

We’re now working, you know, we’re going to announce a goal of $8 million. And will you help us get there? And this is what’s going to change or adjust in terms of the project or what we’re able to accomplish. And that’s just how campaigns work.

Andrea Kihlstedt:
Yeah, that’s just how campaigns work. Right. So, you know, I think when people do campaigns and get through them and are successful at them and have lived through all of these sleepless nights, right, with all this anxiety, and it is anxiety producing, right, they come out stronger.

They come out sort of with an understanding that that life happens, that one of the big skills in life and one of the big skills of a campaign is to be able to understand and deal with the challenges as they come at you and to know what levers you have to pull or to tinker with in order to get through them and to move forward. And that’s really what our conversation has been about today.

An Unexpected Surprise During Your Campaign

Amy Eisenstein:
Let me say one thing that’s going to give people hope. You know, obviously, we’ve been talking about the challenges, and sometimes that leads to lowering the goal. Sometimes it leads to extending the timeline. So those are the two things that can happen.

But often in a campaign, we raise the goal. You start working with a working goal of $10 million, and in the quiet phase, donors come through in big ways. They’re so excited that you raise $10 million in the quiet phase and then you get to raise the goal to $11 or $12 million.

That happens just as much or more than lowering the goal. So I don’t want you to think that these challenges… Now, those campaigns face challenges too and hurdles. And it’s just a matter of strategy and how you get over them and how you get around them and then keep going. you know, we should total up our campaigns. I think many more go over goal.

Andrea Kihlstedt:
I was just going to say that.

Our campaigns have many, many more have raised their goals from the initial assessment than have lowered the goals. And then, of course, they raise the goal and then they’ve set themselves up for having to work like mad to get to the…

Amy Eisenstein:
The new goal, the new raised goal.

Andrea Kihlstedt:
The new raised goal. So it’s always living on the edge, right? The title of this should be Living on the Edge, right? Because even when things have gone swimmingly, you make it so you’re living on the edge.

And Amy, to get back to the initial question you posed, what is campaign success, right? What is a successful campaign? I’ll give you a new definition. I think a successful campaign is when an organization has been able to raise all the money that it is possible to have raised for that particular project at that particular time.

Now, that’s an interesting definition because it says that if your organization raised $5 million, but had you had more courage, you could have raised $8 million, that your campaign was not successful, even though that’s what you set out to raise.

Amy Eisenstein:
It’s hard to measure, right?

Andrea Kihlstedt:
Hard to measure. But the idea is a good one, that you should be stretching to the edge of what you can raise, which means that you’re always a little unsure. And we’d rather have you fail by not getting quite to the stretch than having settled for something easy.

Final Thoughts

Amy Eisenstein:
Right. Okay. I think that’s a perfect point to make.

So we’re going to start organizations with an aspirational, data-backed, data-driven, aspirational goal. And so, you know, we may think, okay, it would be easy or this organization could raise $6 million, but we’re going to push them really hard to raise 10. And then if they scale back to nine, you know, that’s way more than would have been comfortable or what they know they could have raised.

So that’s the fun and exciting part about campaigns is really pushing everybody on the leadership team, the donors, the community to raise as much as possible for this particular project at this particular moment. So thank you for bringing that into the conversation.

I’m glad we discussed this today.

Andrea Kihlstedt:
Yes, me too. Me too. It’s always fun to do this with you, Amy.