Most American college and universities use capital campaigns as the guiding structure to attract major gifts and fund large campus initiatives. Campaigns are flashy and they’re only getting bigger. However, our research into the fundraising operations of 140 colleges and universities suggests that capital campaigns have been pushed to a point of instability. Soon, these fundraising workhorses will be unable to deliver on their promises. Here are five common campaign myths and why they don’t make sense:
Myth 1: Capital campaigns will catapult your institution to prominence
The biggest capital campaigns make headlines both when they’re announced, and then when their goals are met. Many presidents and boards use campaigns to help cement their legacy. However, with colleges and universities constantly announcing campaigns of all sizes, most get lost in the news cycle.
Career defining goals and splashy headlines feed a myth around fundraising success: a campaign is the only way to show that an institution is serious about raising money and meeting goals. Suddenly each institution is trying to out-campaign the other. In this perpetual arms race, institutions focus on short-term accomplishments. Campaign goals suck current donors dry and disincentivize the work needed to develop the next generation of donors to replace them.
Myth 2: Capital campaigns will motivate donors
Even as campaign goals have blossomed, donor participation has decreased. In the end, an average of only 7 percent of constituents have given more than $1,000 in their lifetime. A campaign announcement doesn’t automatically motivate donors to write a check.
The low participation makes sense, most prospects require years of work and patient cultivation. Philanthropic relationships develop incrementally and a looming campaign goal on your end, doesn’t speed up the donor’s relationship timeline. Using a campaign goal to pressure new donors is like inviting someone out on a first date to meet your parents. In fact, large campaigns may reinforce that new donors don’t need to give since newsworthy mega-donors swoop in with $10M gifts to fill in huge campaign percentages that make a first-time $2,000 gift feel insignificant and un-needed.
Myth 3: Capital campaigns will unearth previously unknown high-net-worth donors
On average, 83 percent of your commitment dollars are coming from just 100 entities. These people have worked with a gift officer and have given before. Donors who give without cultivation are the exception, not the rule. New donors only account for between $6.5-$13M per year on average. A flashy campaign will not reduce the hard work and time needed to qualify new large donors and work to develop a relationship with them.
Myth 4: Capital campaigns will provide for immediate needs
Campaign goals aren’t always donor goals. If your campaign has been earmarked to support specific projects on campus, there’s no guarantee that your priorities will align with the priorities of the people whose support you need. Unrestricted giving is unpopular with donors and continues to decline. If your institution counts commitments toward your campaign goal but lacks the immediate cash to get projects done, the campaign is unable to provide for the projects it was initially designed to fund. Since 1980, the cumulative difference between commitments and cash gifts equals $394.7M. As long as commitments outweigh cash gifts, a campaign can succeed, but not provide the liquidity needed to fund actual initiatives.
Myth 5: Capital campaigns can’t fail
Can campaigns fail? We’ve not found a public announcement that one has. Campaigns are paused, extended, put on hold, re-prioritized, suspended. Whatever you choose to call it, it means that the stated goalposts needed adjustment, or that priorities changed. A failed campaign is a quiet failure quickly given another name.
Reassessing What Capital Campaigns Can Do
Campaigns have been the workhorse of college and university fundraising, but it’s time to adjust our expectations for them. Unless there’s solid work going on to cultivate new donors, expand relationships with old friends, and discover new, previously unassigned areas of wealth and inclination, fundraising shops will not be able to meet future goals. Steady, long-term work, leads to fundraising success now and in the future.
Are you starting a campaign? With smart techniques and forethought, you can meet your campaign goals and develop a pipeline of new donors for future initiatives. Drop us a line at email@example.com for more research and ideas around the capital campaign.