Capacity Building Side Benefits of a Capital Campaign

By Dave Jones

A capital campaign is usually a big, concentrated, one time effort to fund new or remodeled facilities. Almost by definition, it’s a capacity building activity, since new facilities usually enhance or expand service delivery.

But there’s a little known side benefit to a capital campaign that also helps to build capacity: it’s called increased annual operations funding.

It may seem counter-intuitive to suppose that a capital campaign will somehow have a positive impact on fundraising for annual operations. But in almost every campaign Pathway Associates has been involved with (and there have been many) that’s exactly what happened. Annual support for the subject organization rose significantly in the years immediately following the close of the campaign–sometimes twenty percent or more!

How can this be possible? How can the process of asking donors to make large, multi-year commitments to your organization for a capital project result in more funding for annual operations?

Actually, it’s not as mysterious as it may seem.

Think about it. The capital campaign process is one of identifying and cultivating the support of a large number of highly capable donor prospects. Some of these prospects will be existing donors to your organization, donors who already know and love you and provide operational support year after year. But others will be new prospects who may not yet be fully aware of the importance of your organization or the role it plays in your community.

A capital campaign represents a unique opportunity tell your story to a broader audience of highly capable donors. It is an opportunity to reach deeper into the philanthropic community than perhaps you ever have before. It’s also an opportunity to develop brand new donor relationships and, in many cases, strengthen old ones.

Almost magically, the act of telling donors about your needs and introducing them to your plans has a way of building donor commitment to your cause in general. Even if a prospect declines to support your capital campaign, the odds that they will make an annual gift to your organization next time they are asked is greatly enhanced simply because they’ve had the opportunity to learn much more about you.

Similarly, perennial donors to your organization who do make a capital gift, will often as not increase their level of annual support because they now have a deeper understanding of your needs. And that’s a good thing! Because often the development of new facilities results in increased operational expenses.

Fortunately, the capital campaign process itself provides a partial solution.