Capital Campaign Readiness: Answer These 6 Questions to Build Donor Confidence
Capital campaign readiness comes down to donor confidence. Be prepared to answer these six donor questions before launching your campaign.
Today, preparing for a capital campaign means preparing to answer A LOT of detailed questions from potential donors.
I’ve seen a spike in the number of questions from donors in just the past few years. And these aren’t just your standard high-level questions. Donors want to get into the weeds to understand every facet of your project.
Maybe it’s because the rising costs of goods and services are forcing larger and larger fundraising goals. Or, perhaps it’s due to a growing concern in the nonprofit sector about organizational sustainability.
Whatever the cause, I can promise you that potential donors and funders will read the fine print of your project scopes and scrutinize costs as they gauge their willingness to contribute to your capital campaign.
Be Prepared for These and Other Questions from Potential Donors
Preparedness is your biggest ally when heading into a feasibility study conversation with a potential donor. There are six questions in particular that I’ve recently experienced donors asking over and over again.
Study these questions, but don’t wait to be asked. By including this information up front as you speak with donors, you’ll demonstrate that your organization is thorough, methodical, and serious in preparing for the herculean efforts of a capital campaign.
1. What Are We Going to Get for the Money?
It may surprise you to learn that this question is not about how up-to-date, technologically advanced, or fancy the new facility will be. This question is actually a way for donors to understand the project’s ability to improve your organization’s mission impact. Behind this question is the desire to understand how your capital project will improve services or reach more people in need.
Your Answer Should Include: a presentation of program metrics in the case statement such as the number of people served now versus who can be served with bigger or better facilities. Or, a demonstration of how a new facility will improve your current service.
Also, include a thorough explanation of project costs. Many times this question arises from sticker shock. This is especially true today thanks to construction costs. Use photos and testimonials to help make the case to potential donors that what you’re seeking is necessary and valid.
2. What’s Included in the Project Budget?
Most donors and funders have been down this road before; they’ve experienced construction project budgets and are ready to go through yours’ line by line.
Your Answer Should Include: a detailed budget and a budget narrative to explain how the funds will be used. The budget narrative is key because it provides much-needed context behind each budget number. Especially with construction costs being so high, the narrative will show you’ve done your due diligence and that the figures are accurate and realistic.
3. How Will You Use the New Space?
This is another mission question. Yes, some donors and funders are curious about floor plans (especially if they’re seeking naming opportunities), but most ask this question because they want to envision the mission in action in your new space.
Your Answer Should Include: architectural renderings, floor plans, descriptions of program activities, and space usage that help paint a picture of how a fresh facility can transform your organization’s mission.
4. How Will Your Nonprofit Sustain Operations After the Campaign is Completed?
Answering this question correctly is vitally important to getting a donor on your side. We’ve all heard stories about how a nonprofit succeeded in a campaign only to run into trouble keeping the doors open shortly thereafter. Potential donors have heard these same stories, too.
These stories stem from problems that can arise when a nonprofit doesn’t consider future costs like increased utility bills, the hiring of new staff, project debt, or other costs impacting its operating budget.
Your Answer Should Include: pro forma financial information in the case statement. In my experience, this information does more to convince potential supporters that a nonprofit is equipped and ready to manage a capital project than just about anything else. It shows that the organization not only considered the implications of the project but that it understands and has planned for its long-term financial impact.
5. What Happens if You Don’t Meet Your Fundraising Goal?
This question is about risk. Your supporters want to know what will happen to their donations if the campaign is unsuccessful. Will their money be returned to them? Will it be spent in other ways? Or, how will the project move forward if the fundraising goal isn’t met?
Your Answer Should Include: contingency plans. Perhaps you plan to complete construction in phases to bridge the financial gap between funds raised and funds still needed. If the project is as necessary and urgent as the organization believes, then it’s important to show donors that there are many paths to success.
6. Can’t You Meet Your Objectives in Some Other (Cheaper) Way?
This question is about due diligence. It asks a nonprofit to justify costs by showing that what’s proposed is the best or only solution to the need.
Your Answer Should Include: a brief explanation of the research undertaken before arriving at the proposed project. Also, include a list of other options previously explored as well as needs assessments or market research to strengthen your argument. Together, these assets can demonstrate that the project is the best way to improve the organization’s mission impact.
Embrace Donor and Funder Questions. They’re a Valuable Source of Learning Before You Launch.
I understand the frustration that can come from being asked detailed questions about your project after doing the hard work of thoroughly preparing for a capital campaign. But it’s important to remember that your supporters are asking these questions because they want you to succeed.
They want to know, now more than ever, that you’re prepared to be the best possible steward of their generosity in what are tumultuous times.
By providing the answers to these questions during a feasibility study - or answering them before the questions are even asked - you’ll build donor confidence and get stronger buy-in, which can ultimately lead to larger contributions come campaign time.
As you begin preparing your answers and fine-tuning your feasibility study, remember I’m always here to help. If you’re looking for some guidance, don’t hesitate to get in touch.
Happy planning!
Dani
About The Author
For the past 25 years, Dani has helped nonprofits at local, regional, and global levels find sustainable solutions to tricky growth and funding issues. She works with leaders and teams to optimize their approach to fundraising, strategic planning, marketing, and more! Dani is passionate about helping motivated people build vibrant and effective nonprofit organizations—so they can make a meaningful impact in the world!