By Connie Clark, Of Counsel
Great Lakes Region

The relationship between a capital campaign and an annual giving campaign often causes great concern. In the 1950s, an ongoing debate began among major fundraising firms and organizations over what should happen to the annual fund or annual campaign during a capital campaign. Should it go forward as usual, or should it be “postponed” until after the capital campaign pledges are in?

Well-established older institutions such as universities, particularly the Ivy League schools with enormous annual drives and ongoing capital campaigns spanning decades, stood firm in their decisions to run both campaigns simultaneously. They recognized it would be financial suicide to suspend their annual drives during a capital campaign.

Newer participants in capital campaign fundraising suspended their annual campaigns during a capital drive, fearing the reactions of members, clients, local foundations, and close friends of the organization to multiple appeals in the same year(s). Valid concerns were brought forth by board members and volunteers about increased gift expectations and “double asks” of already very committed supporters in the community. Organizations were split. Some ceased their annual campaigns and some continued them—or found ways to fold their annual campaigns into the capital campaign.

In recent years, the debate has been more or less resolved. Among the organizations that continued their annual appeals, fears of falling annual giving revenues were very rarely realized. In some instances, due to increased publicity for the nonprofit, annual giving actually increased gradually during the course of the capital campaign.

New donors to the organization, brought in during the capital campaign, moved on to become annual donors in the years following the capital drive. Organizations that viewed the capital campaign as an opportunity to build their annual support devised methods to keep the new capital donors involved. The capital campaigns actually provided a means to support and grow the annual campaign after the capital campaign goal was reached.

In many organizations that suspended annual appeals, once the campaign was over, a lag of annual giving occurred which took years to make up. Donors had gotten out of the “habit” of giving to these nonprofits. They questioned, “Do they really need annual support? How did they get along during their capital campaign without it, if they really needed it?” Also, donors who had no interest in supporting bricks and mortar were simply not asked at all during the campaign. So, their donations were lost.

Many local foundations and family- or donor-directed funds have no interest in supporting capital campaigns. Their mission statements and guidelines clearly state they do not support capital campaigns. A clear plan can be developed to make capital requests from those that support capital projects, and to approach programmatic-based funders for annual project needs during the course of the capital campaign. This gives the advantage of a clear difference between your annual and capital campaign, and it may make it easier for your volunteers to feel comfortable making requests on behalf of your organization.

Also, for organizations that provide services in multiple counties, or geographic areas, opportunities often exist to approach new donors that would be unsuited to support the capital campaign for the annual campaign. If a strong relationship does not exist between the potential funder and the organization, an annual campaign may be a good way to get a new donor on board by supporting a program or initiative they care about. Use this opportunity provided by the annual campaign to involve the new donor. Then, one day in the future they may become a capital or endowment donor.

Local and national foundations recognize and accept the need for nonprofits to expand and improve their facilities while they continue to sustain a very viable, and important, annual campaign. They are very informed about the need to generate operating support for day-to-day needs and the most mission-focused program initiatives while a capital campaign is underway.

‘One Gift’ Approach

Many organizations use the double ask, or “one gift” method, when approaching foundations, donors, and board members who have provided annual support over the years. (A variation of this is the annual campaign goal wrapped into the capital campaign goal.) It is a bit harder to train volunteers this solicitation technique, but it has some clear advantages. First and foremost, it avoids a second request for the annual appeal after a request for the capital appeal has been made, or vice versa. It also strongly communicates the need for on-going annual support during the short-term capital campaign process.

In this “one gift” approach, the donor is informed of the capital campaign and its goals and then the need for on-going annual support is also explained. The donor is given the opportunity to consider their capital campaign gift and their annual support plans together, over a given time period, such as three years. The donor has the ultimate privilege of “splitting the gift” or increasing or decreasing their annual pledge as it relates to their capital gift pledge ability. Once the visit is completed and a pledge secured, a personal giving plan is developed for the donor based upon their request.

A “one gift” approach does several things for the organization. For the next three years or so, the organization knows its baseline for annual support income. It can also budget capital campaign income for bridge loans or other shortfall planning for the capital campaign. For the donor, the “one gift” greatly helps with their personal resource planning and, most importantly, it will help them feel good about their gift and ability to manage their financial support of one of their favorite organizations over the next few years.

Whether an organization chooses to wrap the annual campaign into the capital campaign, use a separate annual campaign appeal, or use a one gift approach, it is crucial that nonprofits communicate their need to sustain their programs and operations through annual support while building or expanding their facilities. If the nonprofit does a good job, the capital campaign will actually enhance the annual fund support long after the capital campaign is completed so the organizations mission will be reached for years to come.

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