Blueprint For A
Library Capital Campaign

Now that Proposition 14 has been approved by California voters, we can expect dozens of new library construction projects to be launched in the next year or two. Prop. 14 provides $350 million for library projects but requires all projects to be funded 35% locally. Those funds can come from several sources including local bond measures, general funds or private fundraising, or some combination of funding. A building or renovation campaign is an ideal time for a library to engage in a private fundraising campaign. The entire community gets excited by the prospect of a new library in town and it is much easier to obtain major gifts from donors during a capital campaign than it is during an annual fundraising drive.

A library capital campaign is not that different from any other capital campaign and most of the same principles apply. There are, however, several distinct areas that make a library campaign unique. This article will introduce basic principles of capital campaigns. It will also explore how libraries can avoid certain institutional pitfalls when embarking on a campaign.

Library fundraising is to some extent in its infancy. There have been some extraordinarily successful campaigns in New York, San Francisco and other major cities, but for the most part public libraries have resisted serious fundraising. Perhaps this is because libraries are places that are "free for all" and fundraising is seen as too commercial by many librarians. In the meantime, other worthy organizations are reaping the benefits of the greatest period of economic growth in American history. The engine driving that economy has, in large part, been California. State libraries are in a position to capitalize on the vast wealth that has been obtained by individuals, foundations and corporations in the past several years. To get in the game, libraries or their supporters often form library foundations. Friends of the Library groups have also conducted campaigns. In either case, 501(c)(3) nonprofit status is required so that contributions can be made tax deductible. This article assumes that a library considering a capital campaign has a nonprofit support arm to conduct the campaign.

This article is based, in large part, on the book Conducting a Successful Capital Campaign by Kent Dove. A second edition of this terrific book was published in 1999 by Jossey-Bass. It is required reading for anyone seriously involved in a campaign. Additional resources are included at the end of this article.

What is a Capital Campaign?

A capital campaign is an intensive fundraising effort on the part of a nonprofit organization to secure extraordinary gifts for a specific purpose (such as building construction, renovation, equipment acquisition, or endowment funds) during a specified period of time.

Seven Prerequisites for Success

Before a campaign is formally undertaken, there are certain prerequisites to success. Any successful campaign must have:

  1. A library with a strategic plan for growth and improvement
  2. Support from all key stakeholders (Library staff, director, and trustees, foundation and friends board, donors)
  3. Campaign objectives based on legitimate library plans, goals, budgets and needs
  4. A clear, concise and compelling case for support
  5. A feasibility study to assess internal and external preparedness
  6. Leadership trained and willing to solicit gifts
  7. Major donors willing to make lead gifts

Types of Campaigns

There are several types of capital campaigns that libraries engage in. The most typical is a building campaign, often referred to as a "bricks and mortar" campaign. These campaigns will become even more common in California after Proposition 14. Another type of campaign creates an endowment to provide a stream of income for an organization in perpetuity. These campaigns are still rare in library fundraising but libraries should consider building an endowment goal into their building campaigns to leverage the momentum and excitement of a new building or renovation. Another type of campaign is a Furnishings, Fixtures and Equipment (FF&E) or interior campaign. When a community passes a local bond measure for a new building in California, Proposition 13 requires all FF&E to be funded by private, non-bond measure funds. An interior furniture and equipment campaign is typically an additional 10-15% of the cost of a building or renovation.

Preparing for a Campaign

The most important year of any campaign is the one spent planning. The first requirement of any campaign is a strategic plan for the campaign. This road map will guide the campaign staff and volunteers through every step of the campaign. The actual document need not be more than 25 pages. The act of planning focuses and clarifies an organization's thinking. It is very easy to veer off course in a capital campaign. A good strategic plan helps keep an organization on course. The campaign plan is in addition to, not part of, the library's strategic plan.

Another requirement of a successful campaign is a market feasibility study. The importance of an external market feasibility study cannot be overstated — yet nonprofits often launch campaigns without making this initial investment in success. A feasibility study is a test of a campaign's philanthropic potential. This is done by conducting a selective survey of key constituents and potential leadership donors. Market feasibility studies are usually conducted by consultants through personal interviews. A typical survey might interview 50 people over a three to five week period. It specifically asks potential stakeholders to estimate their potential as donors to a campaign. Properly done, a feasibility study can minimize the cost and maximize the success of a campaign. It can also help an organization set campaign fundraising goals.

Leaders, Volunteers and Staff

A good fundraising campaign has two kinds of leadership — volunteers who serve on governing boards and committees, and staff members who manage and serve the organization and campaign. Leadership is always the key factor in successful fundraising, whatever the cause, whatever the goal, and whatever the scope of the campaign.

The three key leaders in a library campaign are the chair of the governing board and/or campaign (often the same person), the library director, and the executive director of the library support organization conducting the campaign.

Developing the Board of Directors or campaign committee is another essential element in planning a campaign. The success of a campaign is usually dependent on what a handful of lead donors do. It is essential that the appropriate volunteers be enlisted who can influence the people who will make or break a campaign. Every community has leaders whose very involvement in a campaign gives it credibility. The library needs more, however, than just these people's names. One hundred percent participation (in giving) from the board in a capital campaign is a powerful signal to other donors. Once they have given, the role of each board member becomes that of solicitor. Remember, the single greatest mistake made in fundraising, and in capital campaigns in particular — is not asking for the gift. Every person on the board must be willing to become a fundraiser no matter what their other contributions may be to the organization.

This includes the library director who must take an active role in the campaign as an ambassador and a fundraiser. The library director should be an ex officio member of the board to avoid conflicts of interest. The board's independence should be encouraged, as it will result in ownership of the campaign and much greater results.

Finally, the board must hire (and be willing to pay for) a multi-talented executive director. The Management Center in San Francisco publishes an annual Wage & Benefit survey that can help determine market rates. Expect to budget between $60,000 and 90,000 for exceptional talent. The director must personify the character and goals of the campaign. He or she must b able to communicate those goals to the community. The director must create a strong fundraising team, but at the end of the day, the director must be primarily responsible for fundraising.

The Case Statement

Campaigns are built on the organization's case statement. This is the one definitive piece of the whole campaign. It describes the needs, goals, objectives, budget, plans, history, staff, and case for support in a campaign. All of the other campaign materials (brochures, newsletters, websites, etc.) are derived from the case statement. Just as a mission statement is at the core of an organization, a case statement is at the core of a campaign.

The case statement is a motivational document; it must be persuasive. It emphasizes the positive and sells strengths, successes, and opportunities. In a sense, it is like an investment prospectus. It invites investment. A case statement need not be more than a page or two long. In fact, it shouldn't be longer for most purposes. The case should be developed very early in the campaign so that it can be used in the feasibility study. It is the case for support that you are testing in the study. Many organizations present their case through a series of publications such as a historical piece, a financial case, a traditional program brochure with graphics, and a companion piece outlining recognition opportunities and ways of giving. All of these pieces are included in a major donor prospect packet. A proper case statement should be prepared and approved before any other document in the campaign.

The Gifts Chart

A gifts chart (often referred to as a donor pyramid) is an essential management tool; it provides a detailed projection of needed support and the truest indication of progress to date in any given campaign. Once a gifts chart is firmly established, it defines the detailed goals that must be met in order for a campaign to succeed. It is not enough to say you are going to raise $3 million, you need to determine how many gifts and what size gifts you need to succeed.

Certain assumptions are followed when constructing a gifts table. The 80/20 rule states that 80 percent of all funds will be donated by 20 percent of a campaign's donors. Typically, the top ten gifts in a campaign will represent 33 percent of the goal; the next hundred gifts will represent another third of the goal; and all of the rest of the gifts (often thousands) will represent the final third of the campaign goal. A gifts chart is a sobering document. It says in effect, that without gifts of the order indicated, the entire effort has little if any chance for success. A traditional gifts chart is calculated with a lead gift of 10 percent. A gifts chart is also used in a feasibility study to indicate to those being surveyed the size and number of gifts that will be needed to ensure success. Table 1 is an example of a gifts chart in a $3 million campaign.

Table 1

Gifts Chart Necessary for Success in a $3 million Campaign

 Gift RangeNumber of Gifts
Total
 
Lead Gifts
$300,000
1
$300,000
 
$200,000
2
$400,000
$100,000
2
$200,000
 
$50,000
6
$300,000
 
Major Gifts
$25,000
10
$250,000
 
$10,000
35
$350,000
 
$5,000
40
$200,000
 
Community Gifts
$2,000
100
$200,000
 
$1,000
300
$300,000
 
$500
200
$100,000
 
$100
(average)
4000
$400,000
 
Totals 
4709
$3,000,000

A library capital campaign should assume that it will need 3 or 4 prospects for each gift needed. These prospects can include foundations, businesses and community organizations, but a library should never lose sight of the fact that over 90% of giving in America is done by individuals. Strong individual (rather than institutional) support is key to a library capital campaign and a broad individual donor base will also ensure successful annual fundraising beyond the campaign.

Whether or not people say they want to be recognized, the plain fact is that 99 percent of all people love recognition. Since recognition is major motivation for giving, the campaign must provide recognition for major donors. (Public library staffs often want to avoid this reality. Campaign leaders need to negotiate this carefully early in the campaign.) A gifts chart helps an organization determine appropriate recognition and naming opportunities needed to succeed. It is a sign of poor planning, and a source of embarrassment, to have a list of named and memorial gift opportunities that does not match the gifts table.

Identifying, Researching and Rating Donors

There is no way to overemphasize the importance of leadership and major gifts to the success of a capital campaign. These gifts don't just happen. Someone makes them happen as a result of a well-thought-out cultivation and solicitation plan.

What is a lead or major gift? These are the gifts that make or break your campaign. A lead gift is a gift that serves to establish a trend for giving by others at the same level. In each campaign, these gifts are defined differently but in every campaign they are the result of a face-to-face request rather than by mail or phone. This is sometimes difficult for volunteer boards and solicitors to grasp due to a fear of fundraising, but nothing works better than face-to-face request when asking for a large gift. After a planning phase, a campaign's fundraising begins with a "quiet phase" of lead and major gift solicitation. In a $3 million campaign, a major gift might be any donation over $5,000 and a lead gift might be any gift over $50,000.

Cultivation of a major gift involves five steps: identification, research, interest, involvement and investment. A major gift prospect is someone who (1) has the capacity (assets or income stream) to make a big gift; (2) affinity or interest in the library; and (3) a contact with the organization (you know the person or have a connection). Using the example of the Gifts Chart above, a campaign should attempt to identify at least 3 or 4 prospects for every lead or major gift needed. In this example, where nearly 100 big gifts are needed, the Board and other key stakeholders should brainstorm in order to identify at least 300 to 500 prospects. Lists of past gifts to other community organizations (often available in annual reports or the donor wall in the lobby) are very helpful here. The next step is to rate each prospect to determine what they should be asked to contribute.

The evaluation committee should be selected carefully to represent a cross-section of positive thinking people who would know about the movers-and-shakers in your community. Bankers, lawyers, investment counselors, and other philanthropists make the best evaluators. You do not want too large a group nor do you need naysayers during this part of the process. A rating committee shouldn't try to cover all 500 prospects in one session because it can take an average of 5 minutes per prospect to discuss each prospect and record the needed data. These sessions must be entirely confidential to be effective. It should be noted that library fundraising is primarily local fundraising so it is best to keep your sites set on local prospects. From the start, all data you obtain on individuals, foundations, and companies should be kept in a relational fundraising database that can expand to meet future needs (rather than spreadsheets).

Cultivating and Soliciting Prospects

The cultivation of donors is a continuous and data intensive process. It often takes several steps, and anywhere from six weeks to six years of work to obtain a major gift. On average, the process of obtaining a major gift takes from six to eighteen months.

Prospect management is a systematic approach to tracking major donor prospects. It is a record of all information, contacts, and progress toward a request for a gift. It allows an organization to know who its best prospects are and where they stand in the process at any given time. A well designed prospect database can provide detail on a single prospect, select all prospects with a common trait, or give an overall view of the campaign's progress in obtaining major gifts. The most popular systems such as Donor Perfect and Raiser's Edge can cost over $5,000. At you will find a free database software that has proven effective for many nonprofit organizations. Ebase can be modified to be very effective for a library capital campaign by someone who knows Filemaker well. Additional data fields that are helpful include Rating, Priority, Assignment, Contacts, and Reporting.

The success of any campaign depends on volunteers who facilitate rather than restrict effective prospect solicitation. An effective rule of thumb regarding volunteer solicitation is that each volunteer will only obtain one gift for every three or four requests and that no volunteer should be assigned more than three or four prospects at a time. Note that solicitors will get rejected more often than not so they must be prepared to accept rejection and move to the next prospect. The campaign's top leadership should be assigned to cultivate and solicit a campaign's best prospects. It is equally important that the entire campaign stay focused on the best prospects throughout. Make some time for long shots, but reserve the bulk of your effort for your top rated prospects.

Major gift solicitation is a delicate presentation of an opportunity to invest in your community's library. Solicitation is not begging and thinking of it that way will surely keep volunteers from making that all-important call. One advantage of a capital campaign is that it necessitates asking for large gifts within a defined period of time. While cultivation is extremely important, the most common reason campaign's do not receive a gift is the failure to ask for one.

Each solicitation is a campaign in itself. You've got to know the prospect — his or her needs, hopes, and reasons for caring — before calling to set up a time to meet. Make the appointment by phone but never make The Ask that way if it can be avoided. Prepare a presentation — don't wing it. Select solicitors who have made major gifts themselves. Script The Ask and rehearse it until it is internalized. Go in pairs. Visual aids really help keep you on track and maintain the donor's interest. Involve the person if you can. Listen to the donor — they will give you clues about where to focus your presentation. Prepare responses to difficult objections in advance but never argue with a prospect. Don't wait until the bill is paid for lunch before you get to the point. Ask for the gift! Look the person in the eyes and be specific about the amount you are requesting. Then stop talking and wait for a response. Solicitors often forget this point out of fear of rejection. Remember that a large request, if it is within the donor's ability, is usually flattering. If the person needs time to think about it or talk to their spouse, try to set a time to follow up. After the visit, send a note of thanks and write up your notes of the meeting for entry in the database.

The Public Management Institute has identified fourteen major errors that are most commonly madeÿ in soliciting gifts: (1) not asking for the gift; (2) not asking for a large enough gift; (3) not listening — talking too much; (4) not asking questions; (5) talking about the organization rather than the people who benefit; (6)not being flexible and not having enough alternatives to offer the prospect; (7) not knowing enough about the prospect before asking; (8) forgetting to summarize the reasons for investment; (9) not having prearranged plans between co-solicitors; (10) asking for the gift too soon in the press; (11) speaking rather than stopping after asking for the gift; (12) settling on the first offer that a prospect suggests; (13) not cultivating the donor first; and (14) not training solicitors well enough. These mistakes are all avoidable with proper preparation.

Someone once defined major gift solicitation as the right person asking for the right amount from the right prospect for the right reason at the right time. It sounds so simple, but it is anything but easy. It is hard work, but no other form of fund raising provides more bang for your organization's buck.

Campaign Structure and Logistics

Like a political campaign, a capital campaign plan must include certain operational essentials such as a timetable, process for acknowledgment, operating budget, and projections. Some of the most important operational issues are discussed below.

A typical three to five year campaign has five phases: (1) Feasibility Study; (2) Planning; (3) Quiet Phase (lead gifts); (4) Public Phase; and (5) Completion. From the beginning of the campaign, all gifts should be acknowledged within 48 hours with a letter of appreciation that also acts as a receipt for tax purposes. It should include the gift amount, date and the organization's tax identification number. A system for keeping track of pledges and payments must also be in place at the start so that staff can report on the campaign's progress at any time. A weekly or monthly campaign report helps keep the key stakeholders focused on the campaign.

How will the campaign accept donations? The more options you can provide a donor the better. A campaign must apply to accept all major credit cards. It should also set up a brokerage account to accept gifts of stock. Electronic funds transfer is becoming important to monthly and quarterly giving programs and can save time and money compared to accepting credit card gifts. What gifts would the library refuse to accept? It is also a good idea to try to set some general policy for handling potentially controversial gifts. What if a tobacco company wanted to make a gift toward the children's room?

There are several factors to budgeting for the costs of the campaign including size of the goal, but the most important thing to know is that you have to spend money to raise money. Volunteer Boards are often penny wise and pound-foolish in this regard. A library should plan to budget between 15 and 20 percent of the campaign goal to conduct the campaign. Hiring a good executive director or campaign director is essential to success and a good leader is worth the extra investment in salary.

Successful Materials and PR

Publications and publicity alone do not raise money but funds cannot be raised without them. Do not skimp on campaign publications. Prestige pieces are a necessity, and they will pay for themselves. The case statement is the key document as it leads to the creation of brochures and other pieces. Other materials include, but are not limited to, a campaign logo, slogan, letterhead, #10 envelopes, remittance envelopes, business reply envelopes, JIT ("Just In Time") paper for multiple uses, blank library note cards (that fit your laser printer), mailing labels, major donor packet folders, architectural renderings, blueprints, stock photos, pledge forms, color brochures (prestige), black and white brochures (for distribution with every cardholder checkout), bookmarks, project budgets, projected sources of support by category, a committed support summary (to date), recognition opportunities, board bios, library statistics or "brag sheet", posters, web sites, newsletters, and videos. Whenever possible, include an opportunity for a donor to make a gift by adding a remittance device and/or envelope.

Effective literature is not enough; for a campaign to succeed, a comprehensive public relations and marketing plan is also required. The objective of the PR plan is to increase awareness of the campaign especially amongst your target markets. A library's PR efforts must strike a balance between its past achievements and current needs to be successful. When between 50 and 60 percent of a campaign's goal has been reached, the campaign should be formally announced ("go public") through a major media event and announcement. Waiting to make the official announcement of the campaign until most leadership gifts have been made allows the library to increase or decrease its goal before making it public.

Concluding the Campaign

Once the campaign has "gone public", the focus shifts to including the entire community in the campaign. While personal solicitation is the most effective form of major gift fundraising, it is unrealistic to think that library supporters will be able to ask every one in town to participate in this way. Direct mail and telephone solicitation are the most effective ways to reach out to the broader community. They are also a wonderful way to build the organization's donor base of support for beyond the campaign. While direct mail is less expensive and less intrusive, it is also far less effective. While direct mail might yield a 5% return and an average gift of $50, it is not unusual for telefundraising to yield a 15% return and an average gift over $125. Telephone fundraising is expensive, however, and must be budgeted into the overall campaign. In either case, the campaign will need the library's permission to contact cardholders to support the library. This is a difficult but essential element of success that should be dealt with early in the campaign.

The Kresge Foundation in Troy, Michigan provides significant grants to capital campaigns. Over the years, the Kresge Foundation has given major capital grants to many library renovation and building campaigns. Kresge provides matching challenge grants that require organizations to complete their campaigns to obtain the Kresge grant. A library campaign should apply to Kresge as soon as possible after it has obtained pledges for half of its goal. Since Kresge will never give an organization more than one-third what it has remaining to raise, a library should consider raising its goal before applying for a Kresge grant. The application process is very rigorous and requires at least six weeks.

A Kresge challenge grant deadline helps deal with the greatest enemy of a capital campaign, volunteer procrastination. Maintaining volunteer excitement over a three to five year time span can be challenging, especially as the campaign winds down. Deadlines and constant communication are essential to take a library campaign over the finish line. Even the most dedicated volunteers will sometimes find fundraising difficult. It is as essential to recognize the efforts of campaign volunteers as it is to recognize major donors. This should be done throughout the campaign. It is the job of the fundraising staff to help everyone push through periods where the campaign appears to stall. Staff helps to maintain momentum and to express the right mixture of confidence and enthusiasm, tempered by sober reality, to carry the campaign to victory.

When the victory party is over and the ribbon has been cut, two types of final reports should be issued: an internal report and a published document. The former is a hard look at the campaign's outcomes, both good and bad. The latter is solely a celebration of the success you have had and a final accounting of the campaign. It is essential not to forget about your donors when the campaign is done. The fact that 80 percent of all funds will be donated by 20 percent of a campaign's donors makes it vitally important that the institution treat major donors with extreme care. When the campaign is successful and celebration is at hand, it is time to begin a new period of cultivation

Additional Resources

About the author: Glen Gilbert is Executive Director of the Berkeley Public Library Foundation which is currently engaged in a $3.7 million capital campaign to restore and complete the Landmark Central Berkeley Public Library. Glen founded the office to establish that Foundation. He is the former Director of Development and Public Relations at SeniorNet. After graduating from Harvard Law School in 1989, Glen was an attorney at Landels, Ripley & Diamond in San Francisco, a human rights consultant to the Tibetan government-in-exile in India, an Assistant Professor of Law in Prague, and Legislative Counsel to the Pacific Island nation of Palau in Micronesia. Glen's writing has been published in the Ecology Law Quarterly, Boston Globe, San Francisco Examiner, Asahi (Tokyo) News, Prague Post, FFCL BOOKENDS! and Toronto Star. His first real job as a teenager was as a shelver in the Malden Public Library in Massachusetts. He has loved libraries ever since. He is a serves on the FRIENDS & FOUNDATIONS of California Libraries (FFCL) Advisory Council and a frequent speaker at FFCL events.

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