Podcast: Why Capital Campaigns Fail

Season 3, Episode 23

In this episode, Amy Eisenstein and Andrea Kihlstedt tackle one of the most pressing concerns for campaign leaders: the fear of failure. They explore the nuanced definitions of campaign success and failure, revealing that it’s not just about meeting financial goals but also about setting the right expectations and navigating unexpected challenges.

Listen in as they recount real-life stories of organizations that faced campaign obstacles and emerged stronger. Discover how a clear order of solicitation, a compelling case for support, and a well-defined campaign plan can be your keys to success.

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Andrea Kihlstedt:
If you’re like most people and you’re heading into a campaign, your primary worry is whether your campaign is going to succeed or fail. In today’s session, Amy and I are going to unpack that issue for you.

Amy Eisenstein:
Hi, I’m Amy Eisenstein. I’m here with my colleague and co-founder, Andrea Kihlstedt, and we are here at Capital Campaign Pro, excited to talk about what it means when a campaign succeeds and what it means when it fails.

What is a Failing Capital Campaign?

So, let’s start there, Andrea. What do people mean when they think of or worry about their campaign failing?

Andrea Kihlstedt:
I think the simplistic thing that people worry about is that they’re going to set a goal, they’re going to talk to all their donors, and they’re going to fall short of the goal that they set, right? Isn’t that what you think of when you think about failure, right?

Amy Eisenstein:
Absolutely, yes.

Andrea Kihlstedt:
You need to raise $10 million. We get to $8 million, we have no one else to solicit and we failed.

That’s the simplistic thing that people worry about. In reality, the campaigns are much more complicated and the issues of success or failure are much more complicated, because in my mind, the real failure is that you don’t raise all the money that there is to be raised, is that you set a goal that’s too low.

That you set a goal that’s $5 million, and lo and behold, you raise the $5 million, but your project can’t happen with $5 million, you need to have raised more money. So the project is not successful, though you raised all of your money.

Why Not Raise Every Dollar You Can Possibly Raise?

To my mind, the definition of the campaign’s success is that you have raised every dollar that it is possible to raise for that project at that particular time. Now, that’s an interesting definition.

Amy Eisenstein:
I think it’s really interesting that you’re separating the project from the campaign. Those should be kept separate in people’s minds, because of course they’re connected, but sometimes they’re not mutually exclusive, right?

Because you can raise $5 million for a project that costs $6 million and you can get the last million from other sources, from whether you take money out or from the state or from other places, or you raise it over time, and you can still proceed with the project, and both the project and the campaign can be successful even though they’re not linked.

An Example of a Failing Capital Campaign

Andrea Kihlstedt:
Yeah, so let’s give a couple of examples of campaigns that might have been deemed failures, but actually weren’t. So one project that we know of, they set about having to raise a $3 million, but because they didn’t have very much campaign experience, they figured the way to do that was to send out a fancy brochure to all of their donors asking each of their donors to give $10,000, and that’s what they did.

Amy Eisenstein:
Yes.

Andrea Kihlstedt:
I mean, you can understand why someone would think that was the way to do it. They had loyal donors who gave to them year in and year out. They figured if they got $10,000 from a bunch of donors, they could raise their money.

Amy Eisenstein:
Yeah, and they had a big donor base too. They had a big donor base, so it wasn’t a totally crazy idea.

Andrea Kihlstedt:
No, it’s a perfectly understandable idea, unless you know how capital campaigns work. And fundraising, but capital campaigns in particular. So they created this beautiful brochure with lots of beautiful pictures, and they wrote a beautiful letter and they sent the letter out to everybody on their list. It cost a lot to send that mailing, and lo and behold, they got something like three checks of $10,000.

Now, honestly, that’s amazing to me that three people sent them checks of $10,000 because of a mailing. That amazes me. I think that’s a success, right?

Amy Eisenstein:
Yes. Yes, but they were hoping for $3 million and they got $30,000.

Andrea Kihlstedt:
And they got $30,000. So from their perspective, it was a dire failure.

Amy Eisenstein:
It was. Not from their perspective. It was. It was a big fat failure.

Andrea Kihlstedt:
It was, and that’s when they came to us to say:

“Oh my goodness, we don’t know what we’re doing. Clearly we didn’t do it right. This was a failure. Help us.”

So we did help them, and what we did with them was to simply explain to them and work with them going down the process of standard campaign ideology and practice. Identifying, cultivating and soliciting the largest gifts first.

Turning a Failing Campaign into a Success

So instead of going to everybody for an equal amount, we had them tier their donor base, and lo and behold, they found some people could give very large gifts, and they started with those people and then they worked down and it didn’t actually take them very long before they had raised their $3 million. And then they raised their goal and they raised a little more, and all told, their campaign was a huge success. And in fact, the building that the project was for was built and is now functioning, and that was a huge success too.

So that was a story that started out a failure because they didn’t know what they were doing and ended up a big success because the possibilities were right under their nose. Once they knew how to do this business, they could do it successfully.

Did they declare failure in the middle? No. They didn’t send a letter to their donor base saying:

“We have had an abject failure. Please send us more money.”

No, they didn’t do that, right? They simply swallowed it, turned around, started again in a different way and made the campaign succeed. And that’s actually the strategy that most organizations should take when they hit a bump in their road of their campaign. And most campaigns do hit bumps in the road for one reason or another.

Amy Eisenstein:
So let’s look at it as a stall rather than a failure. A stall, an opportunity to regroup, reset the strategy, find additional resources or staff or whatever you need to do and reset so that you can finish out your campaign in a way that makes sense.

An Example of a Successful Campaign That Felt Like a Failure

Andrea Kihlstedt:
I’m going to give you another story. Yeah, let me give you another story.

So here’s an organization that was doing a great big expansion to their significant operation, and they wanted to raise, I think, $12 million. They set about doing it. They were very well organized about doing it. They knew what they were doing about fundraising, and lo and behold, they did raise $12 million. It was a little more than $12 million. Only, this was during COVID period, and perhaps you’ll remember that during that period, building construction costs were skyrocketing.

So, as they finished out their campaign, their successful campaign to raise $12 million, the new construction estimates for their project came back not at $10 million where they had been projected, but at $15 million or something to that effect.

So all of a sudden, their successful campaign to raise $12 million felt like a failure because they could no longer build the project for the amount of money they had raised. Now, how do you handle that?

Amy Eisenstein:
So they’re working on it and I think they’re around 13 or $14 million now, and yet the board is frustrated and upset and sees the campaign as a failure, and it’s not. It’s taking a little longer than anticipated. They’re still going to build the building. May they have to scale back on some of the bells and whistles in the building or borrow a little bit more than they anticipated? Yes, but the campaign’s a success.

They’re going to have a new building and a new theater, and so everybody has to take things into perspective, and I think they’ve raised multipliers more than they ever thought imaginable, and so they should be celebrating a huge success.

Do they have some challenges because the costs of the building projects skyrocketed? They do. They’re working through them and we’re helping them do that, but it’s challenging, for sure.

Andrea Kihlstedt:
I would frame that as being not failure, but frustration. And you can understand that the people who serve on a board get frustrated.

They’ve been working on this for years now, and every time they think that things have gone swimmingly, they’ve gotten the big gifts in, things have gone the way they want, there’s a new wrinkle in the fabric, and there are board members who are just incredibly frustrated. That’s a leadership challenge.

• How do you help a board continue to position where they are in a positive light rather than a negative light?
• How do you help them put messages into the community that aren’t woe is me messages?

But we have done an amazing job, and given the circumstances, we have a little ways yet to go. That’s an interesting and a different challenge from the challenge, which is what happens when our campaign fails, because the campaign didn’t fail. It’s how do we message around the fact that we need to continue to raise money even through this period?

Amy Eisenstein:
Yeah, I think part of the challenge is identifying ways, and as you said, to reframe the conversation. I think it is important for them to celebrate and acknowledge all that they’ve accomplished and invite and encourage people to support them as they work to cross the finish line.

I mean, whether or not they consider their campaign a success or failure is about attitude, right? They are going to build a magnificent building. Will it have every single bell and whistle they hoped for because of the rising construction costs? Maybe, maybe not. But they have achieved a significant accomplishment, and I hope that at the end of the day, they recognize it and are really able to celebrate in the community and with their donors.

It’s Important to Keep Your Eye on the Overall Prize

Andrea Kihlstedt:
Amy, I think you raised a really important point, which is that while we are in the throes of a capital campaign, while we are working like mad on achieving a certain dollar goal, it feels like that’s the be all and end all. But in five years when the building is built, or in 10 years when the building is built and the programs are successful, nobody’s going to remember how much money was raised through the campaign.

What they’re going to remember is that their community has this amazing facility, right? The campaign is going to fade. The campaign by itself is not important. It’s only important as a means to an end, as a means to making something special happen. And I think it’s important that we keep that in mind. Now, let’s talk about a third case. I have a third case, which sometimes we talk to a lot of people.

An Organizational Failure as Opposed to a Campaign Failure

A lot of people call us about their campaigns and they tell us their happy stories and they tell us their stories of woe. And sometimes we hear a story that goes sort of like this:

Seven years ago, our board started a campaign and then the executive director left, and then the development director left, and then the board chair turned over and the campaign sort of muddled along and nobody was really paying attention to it, and we were supposed to have raised $8 million and it’s now seven years later and we raised $3 million, and it’s still sort of hanging out there and we don’t know what to do.

I mean, that’s a story we hear, right? That it’s just languished. That the campaign languished in the midst of a whole bunch of organizational turnover.

Now, to us that says something is wrong. There’s a leadership problem somewhere in this organization, that there is something going on that needs to be solved. The problem isn’t the campaign. The problem is embedded in whatever’s happening with the board, with the executive director, with the leadership of the organization. Maybe it’s embedded in the culture or the history of the organization. I don’t know where that comes from, but you’re not going to solve the campaign issue until you can solve the other issues. When somebody comes to us and says:

“How do we take our $3 million languishing campaign and how do we get to the 8 million goal eight years later?”

We roll our eyes because they’re pointing to the wrong problem.

Amy Eisenstein:
So in that case, I would think that we would recommend acknowledging the end of the campaign and the donors that did give, figuring out what you could or might do with the funds and going back to those donors and saying:

“Here’s what’s happening. Here’s what’s happened. This is the direction we’d like to take. Of course, we can’t do the $8 million project, but we can do this. And how does this feel? What are your thoughts?”

So honesty, openness, transparency, and wrap it up and celebrate what you did raise, and you can’t worry about the rest of it. I mean, will it impact your fundraising in the future? It will, but you’re not raising more money right now.

So it kind of doesn’t matter. Start fresh. Celebrate what was raised, talk to the donors and move on. Don’t drag it out. We were going to talk about a few things that organizations really need to succeed and not fail.

Tips to Avoid a Stalled or Failing Campaign

Let’s see if we can give people a few things to help ensure that they’re not going to be in a situation where their campaign is potentially failing or stalled, really stalled, and what to do.

Always Start with the Largest Donors

Starting with your largest donors and going top down. That’s always a key strategy.

So when organizations think that they can start with mid-level gifts or even really don’t know what their top gifts are, that really frightens me. When organizations say, “Oh, well, somebody gave a half a million dollars.” Well, if your campaign’s for $10 million, unfortunately, even that isn’t the leadership level gift. So we need to revisit that, rethink the strategy, and start correctly at the top.

Andrea Kihlstedt:
Yeah, that’s one thing you need for success, is a clear order of solicitation and a focus on the large gift. That’s one thing.

Have a Compelling Reason for the Campaign

Another thing, and maybe we should do three of these, Amy. So the second one I would say is you really need a compelling project. You need a compelling case for support. You need to be raising money around something that is exciting, not just around day-in, day-out fundraising.

If you don’t have a compelling project, you better stop and rethink what it is you’re raising money for. Capital campaigns are successful because they raise money for something that is exciting, that will boost your organization to the next level of operation. So double check and make sure you’ve got that covered before you go very far down the campaign road.

Amy Eisenstein:
Right. So let’s give some examples:

• So if it’s your 50th anniversary, that’s not exciting or compelling.
• If you want to build your endowment, also not exciting and compelling.
• If you just want to grow a little bit incrementally what you’re doing, that’s nice. It’s annual fund fundraising, and you should be doing that anyways, but that is not motivation enough for a campaign.

Andrea Kihlstedt:
How about this one, Amy? “We just need more money.”

Amy Eisenstein:
“We just need more money.” That’s right. It’s a tough sell, right?

Andrea Kihlstedt:
It’s a tough sell. It really is a tough sell.

Amy Eisenstein:
A strong case for support, some exciting project, and it doesn’t have to be a building, but it does have to be exciting. It has to expand your programs and services. It has to expand and improve your reach and your service to your clients. What’s number three?

Your Campaign Plan Must be Solid

Andrea Kihlstedt:
So number three is you really need a very clear and specific and well done campaign plan. You can’t just ad hoc this. You can’t just decide:

“Well, today we’re going to ask Susie, and tomorrow we’re going to ask Johnny, and maybe they’re going to give us this money.”

You actually need a campaign plan that has policies, that has a timetable, that has a donor recognition plan, that has staffing, that has a budget. You actually need to step back and create a campaign plan before you go into a campaign.

If you’re just saying, “Well, let’s go out and ask a few of our friends for money,” the chances are your campaign’s going to fail. If you have a really solid campaign plan that you have put together and you’ve thought through and you’ve had expert advice putting together, it’s going to greatly increase your chances of success.

So we’ve got three things. Let’s remember these three things, right? Let me start with the last one.

1. A solid, strong campaign plan;
2. A compelling and exciting case for support;
3. And the one Amy started with, which is a top-down order of solicitation, the laser-focus on those top gifts.

If you do those three things, your chances of campaign success are going to be pretty darn high.

Amy Eisenstein:
And I just want to remind listeners that that is exactly what we do here with our clients at Capital Campaign Pro. So if you’re looking for a campaign plan and a campaign strategy and to do the best you can and ensure that your campaign does not fail, I hope you will visit our website and sign up to talk to us to determine whether or not we can help you with your campaign.

So thanks for joining us, and we’ll see you next time.