A Parish Capital Campaign in this Economy?

September 18, 2009

Capital Campaigns, The Pilot

By Rick Blain, CFRE

Why would you consider conducting a capital campaign in such difficult economic conditions? The answer: “Because you need to”. It has been said that there is no good time to raise money, though many fundraising professionals would argue this statement. Perhaps the best time to raise money is when you can clearly demonstrate, and it is widely accepted, that you need to do so.

Do you have an “urgent need” that must be addressed through fundraising? Says whom?

It is not enough that the Pastor, Finance Committee or Pastoral Council has identified an “urgent need.” Do those from whom you will seek support share this opinion? More importantly, do they clearly see the need for, the benefits of, and the beneficiaries of this proposed fundraising effort? If all of these people agree that the identified need is urgent and fundraising would be beneficial, then perhaps you should proceed. But how can you be certain of success?

Before launching your capital campaign it is important that you receive feedback about your plans and “case for support”.  You should speak with those who will benefit from the fundraising effort and construction project, as well as from potential donors, who are themselves beneficiaries in one way or another.

Let’s assume that you have received the endorsement of all, and everyone has indicated that they will be supportive of the project. Stop. There is yet another very important question to be answered before you proceed with your capital campaign: Are you confident that the level of support, usually in the form of 3-5 year pledges, will be adequate to accomplish your objectives, to meet this urgent need? Will you very likely reach or exceed your fundraising goal?

Consider this scenario . . . You have a total project cost of $2 million. Your plan is to raise $1.5Million and borrow the balance, though you have agreed that you could borrow more than that amount if necessary. In your capital campaign “case for support” you are presenting that you need to raise $1.5Million (your campaign goal) toward the total project cost. But how did these numbers come about? And can you do it?

Undoubtedly your architect or general contractor gave you projected costs. And perhaps your offertory income and grand annual results suggest that you will be successful. Or perhaps your annual fund totals over the last few years give you confidence that you will reach your goal (through three-year pledges). Additionally, everyone has given you such positive feedback, has indicated that they would be supportive. But have they told you how supportive they will be, or can be?

This is an essential question; and you must be confident about the answer. And during our current economic crisis, it is an even bigger question. Given the state of our economy how can we be sure that people can and will make a charitable gift?

Actually, fundraising trends over the last forty years have led us to believe that fundraising is “recession proof.” Charitable giving has increased during that time even during recessionary periods. But this recession is different. How different? According to the Giving USA Foundation in its “Annual Report on Philanthropy for the Year 2008, charitable giving declined by only 2% over the previous year. Even when adjusted for inflation this decrease was only 5.7%. Giving to religious causes, which received 35% of the charitable giving total, actually increased over the previous year, by 5.5%. Education, which received 13% of the total, declined by 5.5%. Both the “ups” and “downs” were not dramatic.

The positive feedback you have received coupled with these national giving trends may be “indicators” of potential success, but are not “accurate predictors” of your fundraising success. Before launching a capital campaign most organizations will conduct a capital campaign feasibility study, sometimes referred to as a campaign planning study, to determine whether or not it is feasible to reach the established goal. And if not, it will indicate what would be an appropriate fundraising goal. A well constructed and conducted study will also identify opportunities for, and obstacles to, campaign success. Typically, such a study is conducted by a fundraising consulting firm, lending expertise and objectivity. This firm will conduct confidential interviews with potential donors, discussing with them the project and the case for support. Through these confidential conversations they will ascertain the level of interest in the project and the level of charitable support that will likely come from those being interviewed, as well as the constituencies they represent. The consulting firm will assess the results of these interviews and the parish’s past fundraising results, in the context of their vast campaign experience. Then the firm will then present you with a detailed report outlining their findings and projections, and a plan as to how you should proceed. It is possible that the study pointed to your not likely being successful, and your inability (or inadvisability) to proceed with your campaign at this time. The reasons for this conclusion will of course be detailed.

So, when is the best time for you to conduct your capital campaign? I don’t know for certain. But I do know, based upon historic giving trends, that a bad economy does not by itself give you the answer. Do your constituents see this as an urgent need? Can they, and will they, offer the necessary support? Do they see clearly who will benefit from this effort, and how they will benefit? Because in the end, people don’t give to an institution or to a building . . . people give to people for people. And when we remind ourselves that these are God’s people, we experience an even deeper desire to give, to give of our time, talent and treasure. For “it is in giving that we receive.”  Indeed we will all be the beneficiaries of this fundraising effort, contributors and recipients alike.

Rick Blain is Principal at Richard R. Blain & Associates, LLC.  For more information, please visit www.rrblain.com.

This article originally appeared in a special “Parish Stewardship & Fundraising” section of The Pilot on September 18, 2009

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