What is a Capital Campaign?

Perhaps you heard others talk about running a capital campaign or you or your board feel like you need one. But what is a capital campaign and how does it differ from other types of fundraising campaigns?

Short answer: not much. Basically, I see a capital campaign as a fundraising effort on steroids. That is, you have larger goals, larger asks, and more urgency, but the basics remain the same.

So, what is one and when do you need one?

A capital campaign simply describes a marketing approach whereby you package one or more capital projects – e.g., large ticket, one-time expenditures – together. Capital campaigns frequently fund new building constructions, extensive renovation projects, and even large equipment purchases. The need for a timebound, large investment or infusion of funds differentiates a capital campaign from an annual fund campaign. Once you complete an annual fund campaign, you do it again the following year to pay for ongoing operations in a never-ending cycle. You may only run one capital campaign in a decade or during the life of the organization because once you build your building, you often do not need another one.

You could certainly raise the funds you need to complete a capital project within the confines of an annual fund campaign by seeking money for those projects. But often donors view capital campaigns differently and will make a larger gift to support a campaign because they know that you will not need the same amount in the future. In fact, many major donors will tie the amount of their gift to the campaign goal so the larger the goal, the greater the gift.

In addition to the type of project and its timebound nature, the marketing of a capital campaign differs from an annual fund. Often, you will discuss the capital projects as a “campaign” with a large goal and specific deadline. This creates urgency for your donors to give so you meet your goal before you break ground or start the project. Again, such urgency often does not exist for the annual fund because once you spend the funds, you will just need more so, as a donor, I can make a gift to you anytime. You need it as much next month as you will in six months.

The marketing of a capital campaign also often includes developing a specific name for the campaign, tagline, and collateral material to make it easy to share with donors and to differentiate it from other types of fundraising endeavors. While annual funds may have these types of marketing, often capital campaigns focus more on getting the word out to a larger audience.

Now that you understand the nature of a capital campaign, how do you launch and run one? Read the next Nonprofit Tips and Tidbits to learn more.