1. Capital Campaigns inReally Tough Times March 17, 2009 ByAbbie J. von Schlegell, CFREPrincipal228 main street, suite 272 williamstown, ma 01267 410-908-9068 abbievonschlegell.com

2. So why are you here? Are you planning a campaign? In nucleus phase? In the middle? Lean year campaigns offer lessons Maybe you are in one?2 3. Where do you want to go? Success in the campaign? Re-think the campaign strategy? Engage new prospects? Stop the campaign altogether? 4. Where does money come from? 5. What is a Capital Campaign?An intensive, organizedfundraising effort to securephilanthropic gifts for specificcapital needs or projects,executed within a specific timeperiod, usually for one year ormore. 6. What is it NOT? 7. Capital Campaign Characteristics Intensive, special appeal Meets an extraordinary need Capital: building new facilities, renovations, equipment Relatively low cost forfundraising & administration Specific, stretch financial goal 8. Who makes charitable contributions? 2007: $306 billion given to nonprofit organizations Individuals:$ 229 billion+ $23 billion bequests Foundations:$38 billion Individuals Corporations Corporations:Foundations $16 billionSource: Giving USA 2008 9. Who receives charitable contributions?*International aid, environment, public-benefit, foundations, unallocatedSource: Giving USA 2008 10. Giving is resilient Total giving up in current dollars every year but one since 1967 Decline in 1987 due to change in tax law Total giving declined just twice when adjusted for inflation1974 (Oil Crisis)2001 (failure to ask not failure to give) 11. Giving is resilient Total US giving in $ billions Grows 2% to 4% most years 12. Giving weathers economic storms Giving grows 2.7% per year (average) Giving grows more slowly during slowdowns and recessions Fewer than half of all charities experience declines in giving, even during tough times 13. Giving weathers economic storms I years with recessionI years with a slowdown 14. Nobody Knows Anything! =mc Global FundraisingGuidestar Survey StudyCauses most effected by Causes least effected bythe economic climate:the economic climate: Disease-related groups Childrens causes Mental health International reliefFaith-based groups Medical research Faith-based causes 15. Giving the market 16. Why do people give? Shared values Personal relationship Involvement with organizations mission Image and appeal of organization Recognition, tax deduction, parties 17. Some current realities Mortgage and housing crisis charitable giving sectorThough overall charitable giving in 2007 increased by3.9%, the number of donors declined AFP 2007 study ranked the economy #1 concern among charities surveyed Fundraising revenues and donor counts both down for the first quarter of 2008 compared to the same time last year [Target Analytics Index of National Fundraising Performance] 18. How is the economy affecting the sector? Report of both fundraising revenues and numbers of donors down in early 2008 Small charities affected more than larger Level of optimism for near future very low Increased (and funding) need for services for charities serving low income families (food pantries, shelters, job banks) 19. Economys effect on sector: public comments The latest victims of the sagging economy: charities. Our most optimistic forecast is now $1.5 million,compared with $2 million raised last year. Thedownturn in the economy has played a big part It makes a hell of a lot of difference You have a person whos worth $5 billion, and the next morning theyre worth a billion. It looks like 2008 could be one of the mostchallenging years charities have seen in some time. 20. Campaigns Lasting Longer* *CASE 9.08 Study Median 6.25 years Median quiet phase 33 to 40 months Median goal $50,000,000 Alumni largest source but less than 33% of total (Educational institutions only) 21. Board Members Feel Unprepared **The Chronicle of Higher Education 15% considered themselves very well prepared 40% described themselves as slightly prepared or not at all prepared More likely to feel unfulfilled and less valued Less likely to have a good relationship with CEO More likely to be somewhat newer or younger 22. Fashions in Fundraising The old way to campaign Find a project desire need desperation Make the case this will allow us to All the others are If we dont do this, we will 23. Fashions in Fundraising, TODAY NOW: Donor-Centric Identify his or her values, background, hotbuttons Discover his or her financial issues Find possible solutions to issues Make donor feel as if goals are being met Match the gift design with something in thecampaign 24. The new thing: strategic fundraising or campaigns Bringing things into alignment Remember first things come first! Value donors who can meet the first needs Make case for crucial needs Build program to make this happen: be strategic! Design the case for support Design the pool of potential donors 25. Trends in Philanthropy Trends are based on what we know about the past on assumptions about the future Lets look at what has been happening 26. Changes in Society/Culture Less and less support from Washington, DC to meet the needs of society Less and less support from the states for education and basic human needs Gradual shift back to non-profit sector to carry the load (# non-profits to increase) People living longer and longer (fear of outliving resources) Younger generations less philanthropic than their parents 27. So what do you do?First, know that it isvery, very hard!28 28. Campaigns in Lean Times Campaign progress plateaus Asks get very old Prospects will not return calls Campaign leaders drop out Lose heart, question strategy Dont make calls or even set meetings Donors cant make pledge payments Leaders will not authorize campaigns 29 29. Seven Strategiesfor Lean Times 1. Revive volunteer5. Lower/revise theleadershipgoal 2. Rethink prospect6. Pause or halt thestrategiescampaign 3. Rethink the needs7. Avoid this mess, ifand the casepossible! 4. Extend campaigntimeline30 30. Reviving Volunteer Leadership New tools for the Chair/s New supporting volunteers New Chair/s31 31. Rethinking Prospect Strategies When economy changed, where did the money go? 401ks, home prices, stock market Panic among general public Follow the money people are still rich, but perhaps not as much Reset gift table to meet revised/extended goals 32 32. Know your donors and friends! Their interests Their passion Their concerns Their motivations 33. Look after your donors Implement donor relationship management strategy; accept it is not cheap; staff properly Be rigorous about tactics number of mailings, length of letters etc. Accept fact, not prejudice or opinion 34. Look after current donorsThank ProperlyFrequent Communications T Phone your top donorsKeep in touch mailings 35. Rethinking needs and case A new need can attract new interest Stronger or different rationale adds urgency Hard economic times More tightly set budgets Urgency and efficient use of fundsmake campaign case succeed 37 36. Extending the Timeline Longer pledge periods Donors take pauses in pledge schedules Waiting out the bad economic times BUT, very tough if you need the funds now38 37. Lowering the Goal Can you succeed with less? Easier to sell if you have not gone public The virtues of a real quiet phase The risks of quitting early Resetting the Gift tables39 38. Pausing or Stopping the Campaign If you cannot make the annual fund goal, the campaign does not matter How urgent are the needs? If endowment, could likely wait Facilities can be urgent Difficult if you have announced Steward donors of record Shift to a project or major gifts strategy40 39. Campaign Planning in Lean Times Needs justification must be tighter Real urgency Efficiency and ROI important Readiness is critical, even more so Especially prospect readiness and knowledge Leadership even more important A multi-stage quiet or nucleus phase 41 40. Campaign Readiness42 41. Campaign Planning Studies in these times Premature goal testing energy of staff, volunteers, even prospects Instead: campaign readiness analysis and work to get you started Whatever you decide, a detailed pre- campaign strategy criticalquells dissent, calms worriesgives framework for analysis43 42. Let donors tell their stories and help you! Best donors often best askers Invite top prior donors to share their passion Ask your major donors for their advice, introductions Engage your family 43. Readiness Evaluation Prospect base Size, evaluation, qualification Data and data systems Staffing Needs rationale and case for support Recognition and image Volunteer leadership willingness 45 44. So the Campaign is on Hold Endowment comes from planned giving Capital or Program campaign Becomes Major Gifts effort Always can develop more prospects and relationships Always need to know more about people Always need more cultivation A strong annual fund means a stronger campaign 46 45. A Less Predictable Environment Wither the estate tax? More extreme swings in US economy Global economy means less domestic control Rapid wealth creation (and loss) from enterprise 46. To campaign or not to campaign? No one has stopped or withdrawn if in the nucleus or silent phase Those who are in campaigns: are Still getting meetings, still asking, still getting gifts Budget volunteer time: maintain momentum! Keep them focused Design flexible campaign timetable 47. When Times are Hard, Its Old money Established donors Urgent and justified needs Leaders who believe Passion for the cause Persistent and patient who prevail! 49 48. Conclusions: How to thrive in tough times Keep asking Be invitational & understanding Remember the basics Nurture your leadership Renewal/recapture/acquire Stay on message Focus on the positives Dont belabor financial circumstances Link to the greater good 49. Conclusions, more Dont panic! Step back calmly and plan Engage your Board members and friends Assess your communications plan and case for support Consider planned giving vehicles as alternatives Extend pledge payment schedules 50. You Can Do This! Work Together! Plan for a brighter future we have gone through this before Be accountable to your donors, your community, your friends Present your organization as lean, well managed and sensitive Be nimble and ready to act! 51. A closing statement from Bernard Rossquot;Invest time, intelligence and money into massively improving the donor experience with the charity. Remind donors they are wanted, needed and appreciatedFrom a study conducted by The Management Centre 2008 52. And, in closing.Twenty years from now, this reducedgiving will look like a blip, butthatblip seems pretty important rightnow. (Paul LaGasse) 53. 228 main street, suite 272 williamstown, ma 01267 410-908-9068 abbievonschlegell.com55