“Let’s put on a show!”Planning a Capital Campaign

Presented by: Ben Sandel

540-421-6976 BenSandel@cdsconsulting.coop

Start with a great story – in three acts

- The story of your co-op

- The story of your capital campaign – why are you raising money from your members?

- The story of your financing – pro forma!

Your co-op’s story

• Your history – who you are, what you’ve done to get this far

• Your Vision & Ends (if you have them)

• Your plan – 4 Cornerstones in 3 Stages

Your capital campaign story

Co-ops exist to serve their members, and capital campaigns do that by:

Providing a meaningful way to interact with members Offering a service of value to members Helping you open the store your members are eagerly

awaiting

Cooperative Principle # 3: Members’ Economic Participation

Your capital campaign story

Association of Members(group activity)

Business Enterprise(building economic engine)

Community Focus(providing service)

Entrepreneurship(distributing risk, educatingAbout cooperative business)

Your financial story – pro forma

• Demonstrates due diligence

• Defines the financial need

• Required for the documentation you’ll be producing

Make it legal

Find a good lawyer Check state & federal laws & exemptions Review bylaws, articles & incorporation

status See if Preferred Shares are allowed Check if filings are required Have your lawyer check your prospectus,

subscription agreement & promissory note Start 3 months ahead

Member loans or preferred shares?

LOANS• Fixed payback dates• Show up as Debt• Easier sell• Members have more

control• Established and proven

SHARES• Buyback at board discretion• Show up as Equity• More challenging sell• Board/ops have more control• Innovative with less track

record

Can’t we do both, like a dramady?

PROS Offers options to members and board/operations Helps balance equity and debt Provides for more flexible financial planningCONS Increases paperwork, legal costs, complication Makes the ‘story’ to members more challenging Adds burden on operations May require more filings, registrations

Recruit your cast and crew Coordinator Callers Collectors Large investor contacts Administrative help and gofers Promotion and communication teams Legal, regulatory, financial and campaign expertiseDon’t underestimate the time commitment!

Secure your early backers

Pre-commitments from your board, volunteers and a few key supporters must make up

10 – 15% of your total capital campaign goal.

Build the set, plan the production

INTERNAL• Accountability & org chart• Financial planning docs• Calling scripts and FAQs• Call lists• Process docs• Tracking systems• Communication plan• Timeline

EXTERNAL• Risk & disclosure docs• Subscription agreements• Campaign brochures• Appeal letter(s)• Testimonials• Email updates• Press releases• Thank you notes• Confirmation letters and/or

share certificates

Determine your premier date

Plan your campaign for Spring or early Fall Start the legal preparations 3 months ahead,

and the rest 6 weeks before implementation If possible, align your implementation date with

the announcement of your lease with contingencies

Build the buzz

Add the capital campaign message to member communications well in advance

Foster relationships with local press Prepare press releases, update website, feature

in all social media

Rehearse, rehearse, rehearse Make sure materials are ready and systems are

working Check with every team member to make sure

they are available, committed and excited. Recruit replacements if needed

Have at least one caller training session (for ALL callers) the day the appeal letter hits your members’ mailboxes

Do practice calls with each other, family etc.

Make sure everyone is reading from the same script

• “Money doesn't talk, it swears...” ~Bob Dylan• “Money makes the world go ‘round” ~Fred Ebb• “For the love of money is a root of all kinds of evil ...” ~1

Timothy 6:10• “Money is power, freedom, a cushion, the root of all evil,

the sum of blessings.” ~Carl Sandburg• “Money is a needful and precious thing, and when well used, a noble thing…” ~Louisa May Alcott

Links to resources• Member Loan Toolbox (also applicable for preferred share campaigns)

http://www.cdsconsulting.coop/node/566• Article on sources of cooperative capital

http://www.cooperativegrocer.coop/articles/2013-04-11/grow-your-co-op• Article on conducting member loan campaigns

http://www.cooperativegrocer.coop/articles/2004-01-08/conducting-member-loan-campaigns

• Article on member loan programs http://www.cooperativegrocer.coop/node/2398

• Article on Preferred Stock offering http://www.cooperativegrocer.coop/articles/2009-01-21/small-town-new-building

• Webinar: Legal Issues and Alternative Equity Strategies for Cooperatives http://www.uwcc.wisc.edu/movies/LegalWebinar-2013-09-11.mp4