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•Major Gift Campaigns
•Capital Campaigns
•Planned Gift Campaigns
•Assignment Two
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¡Major Gifts Campaigns
¡Capital Campaigns
¡Planned Gift Campaigns
§Differences in size of gifts, types of projects funded, type of donor involved and development
tactics used

¡    An intensive, organized fundraising effort to secure philanthropic gifts for specific program
needs or projects, executed within a specific time period, usually for one year or more where the
goal is of a significant monetary amount.
¡

Capital campaigns are a type of major gift campaign. They fund capital needs such as buildings,
large-scale technological improvements or endowments. Endowments are funds that are held in
perpetuity with only a portion being spent each year. They tend to be longer term ,but  intensive
campaigns. In other words, an organization undertaking this kind of campaign will run such a
campaign for a year or perhaps a couple of years with very intensive activity during that period.

¡    An intensive, organized fundraising effort to secure philanthropic gifts for specific capital
needs or projects, executed within a specific time period, usually for one year or more where the
goal is for a significant, monetary amount.
¡   Capital = Durable, tangible asset; i.e. building or equipment

Capital campaigns are a type of major gift campaign. They fund capital needs such as buildings,
large-scale technological improvements or endowments. Endowments are funds that are held in
perpetuity with only a portion being spent each year. They tend to be longer term ,but  intensive
campaigns. In other words, an organization undertaking this kind of campaign will run such a
campaign for a year or perhaps a couple of years with very intensive activity during that period.

•Intensive, special appeal
•Meets an extraordinary need
•Capital: building new facilities, renovations, equipment
•Relatively low cost for fundraising administration
•  Specific, “stretch” financial goal
•  Focus on major donors

So, what are the characteristics:
They are intensive in activity and are centered around a special large-scale funding need.
Capital items are those associated with building new facilities, major renovations to a facility,
equipment, etc.
The sizeable goals associated with these campaigns demand careful, intensive preparation and
organization to achieve success.  Capital campaigns marshall high levels of attention, dedication
and commitment from board, volunteer and staff members.
What is good about these campaigns is that for the money raised (which is usually substantial) you
have a relatively low cost for fundraising administration.
The goals set for these campaigns are usually stretch goals, meaning that they represent a major
challenge over previous fundraising goals.
The focus for these campaigns is major donors – people who have in the past shown the interest,
ability and likelihood of giving at major gift levels.

• Most efficient fundraising method in terms                         of results, cost, and time
• Develops new leadership
• Focuses attention on organization
• Unites and strengthens constituency
• Identifies new prospects
• Raises donor sights
• Allows you to fulfill the community need

Why do you do these campaigns?
First, because they are efficient. For the results achieved, costs and time involved, they are the
best way to raise money.
As a result of doing these campaigns, the organization develops new leadership in the area of
development, an important resource going forward.
They focus attention on the organization. Aside from the monies raised, interest builds up
externally about the organization and the major initiatives it is focused on.
A major project and the capital campaign that supports it, unites and strengthens the support of
individuals around it. Campaigns tend to have a large p.r. impact.
New supporters (or prospects) tend to result from a campaign.
People start to think about the organization in different ways. In other words, rather than a small
annual gift, people start to think about the organization in their estate planning terms.Because
standards have been raised during the campaign effort, it is reasonable to expect a higher level of
giving afterwards.
But, of course, the most important reason for conducting a capital campaign is that it is the best
way to be in a position to fulfill a specific, large need in your community or among those you
serve.

 50%
   80-90%
   10-20%
   1%
 35%
 15%
Amount
Donors
Campaign Pyramid of Giving

As with most major gift campaigns, you have to keep in mind where your money typically comes from
and orient your efforts accordingly. And there is an inverse relationship between donors and
amounts received. In other words, what this graphic is trying to show is that the top 10-15% of
your donors in terms of the numbers of donors you have, represent the largest percentage of your
donation dollars received. Said another way, a small number of donors give most of your donation
dollars to your campaign. So this says, this is where you want to spend your time and effort in
raising monies through a capital campaign.

Pre-Campaign Preparation
•  Conduct Feasibility Study – Consultant
•Internal Audit
•Maturity of fundraising program
•Soundness of gift administrative policies/  procedures
•Board and staff readiness and commitment
•Depth and breadth of donor/prospect pool
•Lead donor prospects
•Database system

So what does a capital campaign do differently? First, it involves a good bit of intensive study on
the front-end to assure that a capital campaign is the right fundraising tactic for the
organization.
We talk about this in terms of conducting a feasibility study. Quite often an organization will
hire an outside consultant whose job it is to determine whether a capital campaign is even feasible
for the organization.
A feasibility study will look at both the internal and external environments for the organization.
Internally, it looks at the maturity of the existing fundraising program. General rule of thumb
says that an organization less than ten years old should not be conducting a capital campaign. The
thinking is that the organization lacks the donor base, reputation and track record in the
community sufficient to launch a successful capital campaign.
The feasibility study also looks at whether the organization has gift administration procedures and
policies in place (administratively can it handle these types of gifts), is the board fully behind
(and personally committed to the campaign) and does the staff also possess commitment and readiness
for the extensive effort the campaign entails.
What is the depth and breadth of the donor and prospect pool. Are there enough current donors with
the inclination and ability to give at a higher level sufficient to make the goal.
Do we have a lead donor? Someone (or more) that we know can be counted on to give at least 20% of
the goal even before the campaign is launched.
Do we hafve sufficient database tools to administer the program (track, acknolwedge, monitor,
report, etc.)

Pre-Campaign Preparation
• Conduct Feasibility Study – Consultant
• External Audit
•Interview key community leaders
•Conduct focus groups
•Design and implement survey
•Analyze other fundraising in community
•Secure names of probable leaders and donors
•Analyze willingness of volunteer leaders to give and work in a campaign

But just as important is an external audit. A consultant can often help with this….determining
whether the community in which the organization resides has the capability, inclination and
interest in supporting the organization’s capital need through monetary gifts.
An external audit goes out into the community and asks key questions. It may personally interview
key community leaders or conduct focus groups to ask important questions. This may be done through
personal interviews, focus groups or mailed/telephone/internet surveys (typically done more
face-to-face with key community leaders). It is probing for such things as: how much do people know
about the organization, what is the reputation of the organization, what is known about the
specific need the campaign would address, how critical/relevant/important do people view this need,
what would donors support, at what level, is the timing right?
This external audit will also look at other fundraising initiatives going on in the community and
the degree of competition that the organizatoin’s campaign would face.
It helps build a foundational list of people who would likely support the campaign interms of
leadership and their dollars.
It also analyzes the willingness of volunteer leaders to give and work in a campaign.

1.Case Statement Viability
2.
2.Campaign Goal
3.
3.Board Leadership and other key volunteers
4.
4.Lead Donors
5.
5.Giving Climate

To be a bit more specific, these are the things we are assessing in a pre-campaign feasibility
study.
Do people resonate with the case statement – is the need compelling, inspiring, something people
will get behind and find credible
Is the goal reasonable – do the numbers work out? Will the existing base of donors and prospects
likely be able to give at such a level to reach the goal? Does the goals need to be altered.
Who will really get behind this?
Who  will be our lead donors?
And what is the giving climate in our community? Competition? Timing? Economic conditions?

The Successful Campaign
 Conducts both types of studies to provide building blocks for campaign, then . . .
• Recruits the right volunteer leadership
• Enjoys a sense of inevitable  success/optimism
• Utilizes proven methodology
• Prepares volunteers and staff
• Provides superb management of the             campaign and tracking of  prospects and  donors

Can’t overestimate the need for these kinds of feasibility studies. A capital campaign is a major
undertaking that puts a lot on the line for organizations – the money,leadership, time, effort,
reputation, image of the organization are at risk……do not want to enter into a capital campaign
that stands little chance of succeeding. Costs money to do this type of study, but absolutely
necessary. Sometimes the answer regarding whether or not to launch a capital campaign is no, or not
now.
If the answer is yes, we can move forward. Moving forward entails recruiting the right volunteer
leadership to head the campaign, getting people energized around the campaign and encouraging a
sense of optimism about the prospects for success, thinking through the appropriate methodology for
the campaign, preparing volunteers and staff, and assuring that we have the appropriate management
tools in place for such a campaign, most notably procedures and tools for tracking prospects and
donors.

The Failed Campaign
•Launches the campaign without conducting two types of pre-campaign activities:
•Study One
• Market Analysis
• Operations Planning
• Facility Development Planning
• Financial Projections
•Study Two
• Campaign feasibility study
• Fundraising Assessment and Goal
• Case Assessment
• Leadership/Staff Assessment

Of course, many times a failed campaign can be traced back to failure to do these pre-campaign
feasibility assessments.

¡Indicates the number and size of various gifts that will be needed if organization is to meet
campaign goal
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A gifts table or chart indicates the number and size of the various gifts that will be needed if
the organization is to reach its goal; serves as a reality test with board and major donors; vital
part of the market survey used to determine the feasibility of a capital campaign goal; defines the
goals that must be met in order for the campaign to succeed; sets guidelines for volunteers to use
in gift solicitation; serves as a management tool for assessing campaign progress; serves as
valuable evaluation tool after campaign.
Traditional gift table is constructed as follows: The lead major gift – the single largest gift
needed is calculated to be 10 percent of the campaign goal. Thus in a $1million campaign,the lead
major gift needed is $100,000. Then each successively smaller gift needed is half of the amount of
the previous one, and the number of donors needed doubles. Not a perfect way to construct – may
underestimate the number of small gifts and overestimates the number of big gifts, but a place to
start.
Gift charts can be sobering – says without gifts on the order indicated, the entire effort has
little, if any, chance for success.
One of the most common fallacies regarding gift ranges and distribution patterns is the notion that
a campaign can succeed if everyone in the constituency gives same amount.

GiftChart.gif

So a gift table for a $1M goal in the U.S. would look something like this.

¡Top-down: Approach that emphasizes lead gifts and largest donors first.
§Personal visits
¡Second-tier of donors/prospects
§Personal visits/telephone/mail
¡Bottom-tier
§Telephone/internet/direct mail
§May not be necessary if goal met by first and second-tiers

Start at pinnacle of the pyramid. The highest tier of prospects from whom largest gifts are
expected. Approach them through personal visits.
Second tier are people who give somewhat smaller amounts but nevertheless significant in amount and
impact.
Bottom tier – approach them last – telephone/internet/direct mail.
100 percent participation is expected by board members. Savvy donors will ask about board
participation.
Why top down – start with prospect who could, conceivably be persuaded to give entire amount.
Failing that, look to raise the total amount from two donors, ---most effective way – minimizes
solicitation time and effort and money.

¡Those gifts that are secured before campaign “goes public”. May be up to 60 percent of campaign
goal.
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Lead gifts are critical to campaign success. Most campaigns do not go public until a certain
percentage of goal has been committed. May be between 40 and 60 percent. Lead gifts represent the
bulk of the money raised during this quiet phase.
Asking the lead donors to make their gift commitments early, before the campaign goes public,
creates a deadline that canencourage gift decisions.
Some donors will not make a gift decision unless they know it will be part of a larger
institutional fundraising effort= donors at the lead gift level want their gifts to be counted
among other large contributions – don’t want to be the lone wolf.
What do we know about lead gift donors: in the past they have been largely self-made, older (65 and
up) and passionate about the causes they fund. Strong values and deep beliefs are common – believe
in people and have great respect for knowledge….sometimes religion and spirituality can enter into
it. In U.S. deep belief in free enterprise system and generally conservative. Already know
something about the institution and believe in it. View giving as an investment and through
investment they desire to solve a problem. Expect to see a return on their investment. May want to
honor or memorialize someone else rather than themselves. Spouses and families are often involved
in gift decision.
Don’t underestimate women’s expanding role in major gift decision- women often control the wealth –
they outlive men on average. Over past 25 years, they have emerged inlarge numbers as an active,
independent force in philanthropy. Today’s nonprofit boards are heavily populated by and often
dominated by women. Average charitable gifts by women are increasing. Men tend to give out of
loyalty to institution, support the traditions of the institution to which they give and are more
likely to give before volunteering. Women are more likely to volunteer before giving – usually
prefer personal over public recognition, work as part of team toward goal.

Prospect Research (Again)
nBasic Principles:
vLinkage, ability, interest
vSystem for research begins with determining internal and external constituents
vProcess is cumulative and on-going
vConfidentiality, accuracy timeliness of data is critical
vProspect identification is every board member’s responsibility
n

What should begin to be clear with capital campaigns is that we are dealing with a different type
of donor – one that has the capability to give at a substantial level, has different expectations
about the use of his/her gift, that takes longer to cultivate and that we hope has an affinity to
our organization.
How do we find these people? We find them through an important activity called prospect research –
in big nonprofits, they have whole work groups or at least a few individual, who are solely
dedicated to the task of prospect research.
What is it? It’s the p

¡With the new emphasis on CSR programs, what should you as a nonprofit consider in entering into:
§Sponsorships
§Naming rights arrangements?

¡Another Form of Major Gift
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Probably the ultimate gift a donor can give is in the form of what we called a planned gift.

¡PLANNING CONSIDERS
¡GIVING CONSIDERS
¡Estate planning issues
¡Financial ramifications
¡Tax implications
¡Philanthropic interests
¡Parting with an asset
¡Support for a cause

A planned gift has two primary components. Planning and giving. Planning considers estate planning
issues, financial ramifications and tax benefits for the donors. Gifting involves the acceptance by
the organization of a gift which is generally irrevocable. The donor is irrevocably parting with an
important asset in line with the donor’s philanthropic interests and thereby loses the ability
often to retrieve it if it needed in the future by the donor. Obviously the donor does this because
of a critical support for a particular cause.

¡“We estimate that the Czech Republic has 10,000 millionaires and 20,000 members of the world’s top
1% of wealth holders” Global Wealth Report, 2010.
¡“The Czech Republic is among the most successful of the former socialist nations in Eastern
Europe, but has many features in common with other transition economies. Average wealth grew
robustly from USD 12,000 in the year 2000 to USD 35,000 in 2007, after which the level dropped back
to USD 32,000.” Source: Global Wealth Report, 2010.
¡
¡
¡

—Outright gift – use of asset immediately
—Gifts of securities (stocks and bonds), intellectual property, paintings, patents, antiques,
jewelry, real estate, etc.
—Deferred gift – asset at donor’s death
—Revocable living trusts, estate, life insurance and annuity policies, IRAs and other retirement
plans, CDs, etc.
—Life income gift – gift today but donor stream of income for life
—Pooled income funds, charitable remainder unitrusts, charitable remainder annuity trusts, etc.

Planned gifts fall into three categories:
They can be an outright gift – which means that the organization receiving the gift has immediate
use of the gift. These can be in the form of money, gifts of securities (stocks and bonds),
intellectual property, or tangible personal property like paintings, antiques, jewelry,
collections, automobiles.…..value has to be assessed
The second category is deferred gifts- these are commonly known as bequests whereby the donor uses
the asset during his lifetime and the charity receives the asset at the donor’s death (a pledge is
made before death that this asset will come to the organization at death).
The third category is Life Income Gifts – whereby the donor makes a gift (pledge) today and
receives a stream of income for life off of that gift and upon the donor’s death the nonprofit has
use of the remainder value of the gift.
Nonprofits should be in position at minimum to handle successfully those gifts made through
securities, bequests and charitable remainder trusts. A complete program will be a planned giving
program that offers to donors life income gifts such as charitable gift annuities, deferred gift
annuities, a pooled income fund and the opportunity to make gifts of real estate
Planned gifts are attractive to donors for many reasons: can make larger gifts than they thought
possible. Donors can make a gift that pays a stream of income for life, increases the yield they
may currently receive from other investments, provides a charitable income tax deduction and
reduces or eliminates capital gains taxes or estate taxes.
The vehicles are tax oriented and require substantial time and effort to understand and negotiate.
A simple understanding of the gift vehicles does not mean one is capable of engaging in creating
planning techniques with these vehicles.
Planned giving has become much more sophisticated. Extensive contact with donor’s lawyer, financial
advisor, trust officer and or accountant necessary. A depth of knowledge in financial and estate
planning is essential.
Planned giving is attractive to organizations because attracts wider and larger gifts than
available through other means. Organization can build its endowment and its future through its
planned giving relationships with donors.
Planned giving is, however, fundraising and involves general fundraising principles. Many things
are different, however. Planning giving is highly technical, highly personalized and highly
structured. It is different from other fundraising programs in that it requires significant
planning and organizing in-house, necessitate education or retraining of staff, involves new types
of record keeping, reports to donors, government agencies, etc.

¡Organization has:
§Positive community image
§Longevity in community
§Group of prospects and donors of affluence and age
§Ability to meet its operational needs through other sources
§Energy/will to support a planned giving program with long-term pay-offs

Planned  giving is a person-to-person, close-contact effort. The marketing and cultivation are
different, more time consuming and usually more expensive.
It is often said that it takes three to five years for a planned giving program to be up and
running with a regular flow of gifts. Can’t be shortsighted in developing these programs.
A planned giving program may be as simple as a bequest program (donors include a gift in their
will) or as complex as sophisticated estate planning with closely held stock involving several
generations of the donor’s family. There are extremes.
How do you know whether your organization is a candidate for a planned giving program? Some of the
things that must be in place:
You have to be a nonprofit with a positive community image and a well-established position in the
community. These are usually organization that have been around a minimum of ten years.
There is a significant group of prospects and donors of relative affluence over age sixty.
The nonprofit has sufficient current resources to meet its operational needs and can afford to
defer the receipt of planned gifts to some point in the future.
The board of the nonprofit is willing to support a planned giving program and to commit money and
resources to it.
The board should set policies and guidelines for a planned giving program:
Types of planned gifts to be sought
Criteria for acceptance of gifts
Procedures for evaluating the feasibility of certain assets as gifts
Who will be authorized to accept gifts and to commit the nonprofit to planned giving arrangements.

¡Prospecting system
¡Cultivation plan
¡Marketing plan
¡Legal/accounting support
¡Record-keeping system
¡
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How do you manage a planned giving program?
You have to have a good system for identifying the prospects.
You have to have a plan for cultivating the relationship with that prospect over time.
You have to have a good marketing plan for these kinds of gifts. Donors will want information about
the financial benefits of making such a planned gift, such as tax implications and cash flow and
help in determining the type, size and timing of their gifts. Donors will have practical
considerations – but emotions also drive these gifts.
Most effective marketing appeals to the psychological motivations and offers financial solutions
for the donors too.
To reach current and prospective donors, planned giving materials should appear continually over a
sustained time period. Planned gifts rarely close immediately, usually a culmination of consistent,
repetitive marketing follow-up that will  result in a donor making a planned gift.
Essential part of the marketing effort is written material (brochures, guides) that explain planned
giving options – types of- focuses on organization mission. Include a response form .
Use newsletter to discuss planned gift opportunities. Use targeted mailings, Use advertisements,
conduct seminars for prospects and donors.
Provide legal and accounting support.
Record-keeping is particularly important because you have to track the prospects for a longer
period, and keep track of when that gift might be actually realized; follow-up is long term.

—Charitable gift planners in non-profits
—Independent planned giving consultants
—Financial planners
—Trust companies
—Community foundations
—Accountants
—Attorneys
—Insurance agents
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Have to keep in mind that many times you must market not to the donor, but to the intermediaries
who counsel the donor on their planned giving options and decisions. These include financial
planners, trust companies, accountants, attorneys, insurance agents, etc. So  have seminars,
mailings, communication ongoing with them.

¡Relationships with planned gift donors



¡Major Gift Campaigns
¡Capital Campaigns
¡Planned Gift Campaigns
§Differences in size of gifts, types of projects funded, type of donor involved and development
tactics used
¡Assignment Two