Donor Pyramids can Make or Break Your Capital Campaigns

donor pyramid

Are you starting a capital campaign? Then, missing this step could send your campaign down a rocky road. This important step is building a donor pyramid.  These structures also referred to as fundraising pyramids, are an accurate way to prioritize development efforts.

Yet, not all pyramids are created equal. Read on to see how to build one that will boost your campaign and help you exceed your goals.

What is a fundraising pyramid?

A fundraising pyramid is a visual that categorizes prospects by their engagement level. Further, it provides nonprofits a path to move donors from lower levels of giving to greater commitment.

fundraising pyramid

While some donors will move from one -time donations to planned giving, not everyone has the same journey.  For instance, mid-level donors are generally a reliable segment. They need a strategy that is tailored to them and they shouldn’t always be pushed up the giving ladder. However, there are still hidden gems in your donor base who can be nurtured all the way to the top of the pyramid.

Why Donor Pyramids can Make or Break Your Capital Campaign

A fundraising pyramid helps you focus your campaign dollars to the right set of prospects. When you build a data-driven pyramid, your data will automatically reveal patterns that you can use to build your campaign.

Starting a campaign that is aimed at a random sampling (or the entirety) of your database will dilute your ROI. When your entire base receives a generic message from your nonprofit, the number of people who will engage will naturally be low.

Even if you’re in the middle of a capital campaign and you realize that you’re not seeing results, a donor pyramid can help revive it. All you have to do is segment your base and prioritize those prospects who have the propensity, capacity, and intent to give.

How to Create a Data-Driven Fundraising Pyramid

Wealth screening is the first step. Screening data gives you a holistic picture of who your prospects are. In other words, you can understand your prospects’ wealth, lifestyle, interests, and affinities.  This means you now know their potential not only in terms of capacity to give but also interest and intent.

By learning more about who they are, you can really speak their language. For example, United Way of Greater Saint Louis says,

“We really like the level of granularity we can get in the data, understanding details, such as propensity to give and giving capacities helps to fill in gaps in the profiles….Finally, learning about a prospect’s interests can help us better shape the conversation to customize our asks. We are a lot more cautious about the ask now that we have more intelligence…”

Therefore, screening helps you segment your prospects into different rungs of your donor pyramid. Those with the highest capacity and engagement (for instance, those with high P2G scores) are candidates for major gifts or planned giving. Similarly, those with lower capacities but high engagement are well suited for mid-level or recurring donations.

Using Modeling to Enhance Fundraising Pyramids

Wealth Screening is the first step, which means that a wealth model can drive your capital campaign much further.

Screening can give you a broader view of your donor base. Modeling can actually help you predict the outcome of your campaign. For example, WealthEngine’s Gift Pyramid Model can automatically build a pyramid and predict campaign success.

In that sense, modeling is predictive based on custom insights that are deep and actionable. The model builds a specific formula for your organization’s donor base. The model generates a score against which you can compare your prospects. By doing this, the model automatically splits your list into 10 equal deciles. The top decile will represent the top 10% of prospects for your capital campaign. The top two represent the top 20% and so on.

Going from Pyramid to Campaign: Practical Implementation

Predictability allows you to improve your goal-setting. With your targeted campaign, you can not only set ambitious goals but also exceed them. Follow these steps after creating your data-driven donor pyramid:

1. Segment and target those donors who are apt for your campaign. Annual fund campaigns, for instance, can focus on prospects who have the highest inclination and capacity for this type of gift.

2. Evaluate your deciles to see which ones will be most effective for your campaign.

3. Set your budget based on the number of deciles you would like to include, or include deciles based on your campaign budget.

4. You can go down the list of deciles until you meet and exceed your campaign goals.

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Capital Campaigns: Fundraising Strategy for Nonprofits

What to Do When You Inherit a Fundraising Campaign

Capital Campaigns: Fundraising Strategy for Nonprofits

fundraising strategy

Strategic campaign fundraising is typically dependent on the structure of your capital campaign gift pyramid and your understanding of your donors. Once you’ve structured your gift pyramid, and you begin approaching existing and potential donors, it’s important to balance your need to procure gifts with your ability to connect with your donors. But, how do you effectively communicate with existing or potential donors? Here are three fundraising strategies for your nonprofit to use during the campaign fundraising process.

Sequential Solicitation

The primary fundraising strategy for all nonprofits when carrying out a capital campaign is sequential solicitation. Sequential solicitation is a guide, outlining the order in which you should receive gifts from lead donors to meet your campaign fundraising goal.

It’s important to secure your largest gifts first, and then work your way down the gift table, receiving smaller gifts towards the end of your capital campaign. Once you’ve achieved 50 to 70% of your goal (which you should complete during the Silent Phase), you can then make your capital campaign public and receive gifts from the community you’re serving.

Although campaign stalls can stem from internal campaign issues, such as an overworked staff, the most common reason is the failure to follow sequential solicitation. This is based on the four axioms of campaign fundraising:

  1. The ten largest gifts set the standard for the entire campaign
  2. Not following the top-down structure lowers giving sights across the board
  3. Extended solicitation at lower levels will not offset major gaps in upper ranges
  4. Once the first big gift sequence has been seriously violated, the entire program is in jeopardy

Approaching Potential Donors

Although the sequential solicitation model is in place, you may be wondering: how does it look in practice? Where do I start? That leads to our next fundraising strategy for nonprofits, which is an extension of sequential solicitation. Typically, there are 5 steps to sequential solicitation to help you approach potential donors:

  1. Inquire. First, you want to build a prospect list, or leverage Wealth data, to identify the right people who can provide funding to your campaign. Once you’ve identified potential donors, it’s important to conduct external and internal research to assess each group or individuals capacity and propensity to give.
  2. Plan. Once you’ve identified and researched potential donors, it’s time to figure out how you’ll engage with your donors. Besides outlining your intentions and goal, ask yourself: what aspect of the campaign would appeal to them? Is this appealing enough to gain their commitment?
  3. Cultivate. Now that you’ve considered the ways in which your donor might contribute to your goal, it’s time to probe. By bringing your potential donor closer to your cause, you’re able to show them what you’re doing and what you’re intending to do. In doing so, they may end up committed to your work and want to help.
  4. Procure and Secure. The time has come to explicitly request support and secure the contribution from your donor. If your donor has decided contributed, it’s your responsibility to follow up on the details in receiving the contribution. How much is the proposed donation? When the donation will be mad?; How will it be made?
  5. Express Gratitude. You’ve planned, engaged your donor, and have received your gift. Now what? It’s imperative to acknowledge the importance of your donor’s contribution, and their influence on your work at large. By creating a connection with them, and expressing your appreciation not only for their contribution but of them as an individual or organization, your donor may feel inclined to give later on.

Appealing to the Motivations of Donors

Our final fundraising strategy for nonprofits is identifying, understanding, and acting upon the motivations of donors. Now that you’ve structured a way to collect gifts, and how you can successfully approach potential donors, it’s important to understand the motivations of your donors. Generally, there are four types of motivations:

  1. Philanthropy. Donors with philanthropic motivations want to help change the world.  
  2. Connection. Donors motivated by affinity are those who wish to be connected to a cause that has similar values to their own.
  3. Reciprocity. Donors motivated by mutual benefit seek to help organizations that will, in return, provide them with some advantage.
  4. Social Consciousness. Donors with social motivations don’t simply want to contribute to a cause. They want to be part of a community.

By identifying their values, you’re able to create targeted messaging or find other ways to effectively communicate with donors. Not only will this help you with your existing or inherited campaign, but depending on the connection you forge with other groups or individuals, they may feel inclined to support and contribute to future projects of yours.

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What to Do When You Inherit a Fundraising Campaign

Getting your fundraising campaign plan approved is step one. Step two is maintaining and overseeing the campaign’s success. But, how do you go about making your campaign a success? How should you proceed if you face hurdles? Here are some tips to help you navigate through your newly inherited campaign.

What do you do when you inherit a capital campaign?

When you inherit a fundraising campaign, or capital campaign, you need to evaluate where the campaign stands, and where YOU stand within it. Now that you are part of a campaign, you must check if you have a strong case for support. Is the board still in support of your efforts? Is the community? Are key players willing to help you further? If your goal isn’t realistic and your case for aid is weakening, it’s time to fine-tune your approach.

After probing whether or not support still exists, you should evaluate giving trends. Have major gift leads been contributing as much as they can? How much more do we need in contributions? Are we on track to meeting at least 75% of our goal currently? Is the gift table filling out properly?

What are some of the common pitfalls when executing a capital campaign?

Before jumping into a capital campaign, you have to conduct a thorough, back-end analysis for your campaign. Some are keen on jumping into the campaign process immediately, but by not accounting for potential hurdles that could influence their goal, organizations are at risk of failing to complete their fundraising campaigns.

A back-end analysis involves assessing:

  • The capability in your database to understand existing donors
  • Which major gift leads you’re accessing (are you going back to the same major gift well over and over?)
  • How your donors and staff are approaching the steps they’re taking individually, and as a group, to meet the fundraising campaign goal (are people feeling burnt out?)

What do you do when your campaign starts well but begins to falter?

There are cases when you’ve received a few large gifts, and it seems like everything is smooth sailing. However, if you haven’t used a sequential solicitation model for your gift table (i.e. satisfying the largest gift first, then the second largest, etc.) or if members of your campaign team are beginning to feel burnt out, it’s important to regroup and understand where your campaign is faltering. Only then, can you keep moving in ways that are effective, not simply efficient.  

There are two key methods to refreshing your efforts:

1. See if your models are still strong

If they aren’t, identify areas that can be fine-tuned or where new donors or staff can come in to help with your efforts.

2. Be honest with your board and ask for help

When it comes to a fundraising campaign where you’ve invested a lot of time and money into efforts your intent on seeing through, you’re not above asking for help. No one is. By doing this, some board members may be willing to contribute more or have their constituents contribute more.

How do you create effective campaign messaging?

Although it may seem counterintuitive, when creating a fundraising campaign, it’s best to refrain from making the messaging about you. During the campaign process, you have to make the donor the hero of the story. Instead of articulating the goal and accomplishments of your organization, it’s more effective to create interpersonal connections by showing your audience your investment in:

  • The community
  • Individual lives
  • The project
  • The impact of your project

Once you’ve been able to express your intent and forge a connection with your community members, it’s crucial to express your gratitude. Simply put, say ‘thank you’. Thank them for their efforts in making your project a success. After all, this project, this goal, will benefit them. It’s intended to. It’s simply your responsibility to show them that their contributions have been put to good use.

Capital Campaign Definition: What is a Capital Campaign?

what is a capital campaign

 Just what is a capital campaign and how can it help your nonprofit or higher educational institution? Here’s a capital campaign definition along with three key insights on when you should start one for your organization.

If you want to begin fundraising for your nonprofit, you have to ask yourself: What is a capital campaign goal, what is ours, and how do we go about achieving it? If you want to achieve a specific goal, you should start a capital campaign. But, how do you start one? And, what do you need? Here are some tips and information to guide you through the beginning stages of your campaign.

What is a Capital Campaign?

So, what is a capital campaign exactly? A capital campaign is a rigorous attempt, made by a nonprofit organization, to raise major gifts for one specific goal or a variety of goals. If you have multiple goals, your capital campaign is a comprehensive campaign. Having multiple goals classifies your project as a comprehensive campaign.

These donations or gifts are typically used to renovate or acquire a building. However, they are also used to raise money for endowments, scholarships, or other grants. Essentially, you’re trying to raise a significant number of funds within a defined period of time as a way to support the larger goals and mission of your organization.

When to Start a Capital Campaign

There are three common catalysts that inspire nonprofits to initiate capital campaigns:

1. You’re in dire need of a new space or new resources 

Suppose someone is selling the facility your organization has been using. Your organization will need a new space and fast. To minimize disruptions to your organization and the community at large, you decide to fundraise for a new space so you can maintain business as usual.

2. You’ve outgrown your space

As an organization, you all may come to the conclusion that your current space is no longer meeting the needs of the organization or the needs of communities you serve. To better cater to your evolving needs, you may fundraise for a new space or an addition to your existing building.

3. You want to have a tangible legacy

These are rare cases, but your organization may feel inclined, towards the end of its time, to have a tangible legacy which may be in the form of a building that will be of use to the community.

How to Organize a Capital Campaign

Organizing a capital campaign involves a thorough evaluation of the state of your organization and a clear determination of your goals.

Although the director of development or the executive director of the organization plays a key role in the initiation of a successful capital campaign, they can’t manage the campaign on their own. During the first year of a campaign, a director can spend about 75-80% of their time focused on the project. After some time, however, it’s important to delegate the work. The work can be assigned to someone in the organization or an outside hire. They will help conduct business as usual, while they oversee the stability of your campaign. 

5 Capital Campaign Phases

Before executing your campaign, you have to assess your readiness. Part of that assessment is making sure that you have clear goals outlined before jumping in. It’s important to take a good look at what your organizational needs are. If you’ve created your goal in a vacuum, without consulting others in your organization, the goal will fail to serve either the organization, the community or both. It’s integral to align your intentions for your organization with specific fundraising areas, and then plan how you will execute.  

Now that you’ve determined what your community needs, how do you go about achieving your capital campaign goal? How do you organize your efforts, and use your time and resources wisely? A capital campaign is typically broken down into steps. More specifically, there are five phases in the campaign process:  

1. Planning Phase

During this initial stage, you should evaluate all the moving parts you’ll need to involve in your campaign. This will include forming a capital campaign feasibility study, creating a goal or multiple goals, determining your budget, brainstorming necessary resources, and gathering your team.  

2. Silent Phase

Now that you’ve planned out your capital campaign, it’s time to step into the first stage of execution. Within this period, which typically lasts for 18 months, you’ll be focusing on satisfying your major gift leads. It’s during this time that you’re receiving the bulk of your principal or major donations. It’s important to achieve 75% of your total goal before opening up your campaign to the public. You can use wealth screening to find hidden gems of big donors in your existing contacts.

3. Kick-Off Phase

You’ve now approached all your major donors, and are now able to introduce your campaign to the public! This is the point where you’re able to communicate your goal or goals to potential donors and outline your greater intention for the campaign.

4. Public Phase

You’re now winding down your efforts. Since you’ve already approached your major donors and satisfied the majority of your campaign, you can now connect with the community and smaller donors. It’s these smaller gifts that will bring your goal to a close.

5. Wrap-Up and Assessment Phase

Once your campaign has been successfully completed, it’s important to actively reflect on the process. Above all, when reflecting back on the process, it’s important to ask yourself: What worked? What wasn’t as effective as anticipated? How could we mold our process for future campaigns?

 

Set your capital campaign in motion. Schedule a WealthEngine demo and speak with one of our experienced consultants.

10 Capital Campaign Feasibility Study Questions to Ask Before Launching

Wondering if a capital campaign is right for your nonprofit? Use these 10 capital campaign feasibility study questions to help you make your campaign goals realistic and achievable.

Capital Campaign Feasibility Study Questions

Before launching a capital campaign, you need to figure out whether or not your organization is ready to put your plan into action. But, how do you do that? How do you know if you’re ready? When conducting a feasibility study for your capital campaign, it’s important to gather info (from a third party) on the following:

1. What is your nonprofit trying to fund?

In order to assess how easy it’ll be to reach your goal, you have to define what your goal is. To determine your goal, it’s important to ask yourself:

  • What does our organization need?
  • What does our community need?
  • How and what can we create to serve current and future needs?

By articulating your intent, you’re creating a transparent channel of communication between yourself and the groups you wish to serve. This is also an opportunity for you to introduce your pre-campaign plan, and outline your fiscal goal and desired timeline. 

2. What is the fundraising history of your nonprofit?

By reviewing your fundraising history, you’re able to identify factors that may have influenced the success of your previous campaigns. So, it’s important to ask yourself: What worked? How can we improve? Reflecting on past experiences allows you to refine your existing campaign model, and account for potential obstacles. 

3. What are the strengths of your nonprofit? In which ways can you change?

Apart from identifying the strengths and weaknesses of your campaign process, it’s important to evaluate how your organization functions overall. So, ask yourself: What strengths does our organization possess that can be leveraged to meet our goal? What organizational hurdles do we face that keeps us from conducting business as usual?

4. Who does the proposed campaign goal serve? What immediate and long-term goals does it satisfy?

After outlining your goal,  it’s necessary to identify the groups your campaign serves. If community support is needed, you need to outline the ways in which your goal serves them. So, another crucial capital campaign feasibility study question to ask is: what do contributors get when they donate? Above all, determining this gives them, and major gift leads, the incentive to support your efforts.

5. How does the community perceive your nonprofit?

Positive perception is key in a capital campaign. If the community you’re raising funds for is in support of your efforts, they’ll want to donate and help you meet your goal. If not, even though you may gain major gifts during the quiet phase of your campaign, you’ll have no way of being able to wrap it up efficiently.

6. How can your nonprofit better serve the community?

Your capital campaign feasibility study questions should address your community’s immediate and future needs. So, it’s your responsibility to anticipate what their needs will be later on, and adapt your goal to meet those needs. By doing that, you’re showing them that your project is worth the investment because they can use the building or funded project you’ve set up at any given time.

7. Does the proposed campaign goal seem attainable? Why or why not?

The core capital campaign feasibility study question is: is your goal practical? If it is, you can begin taking actionable steps. So, you can start hiring additional resources and staff, and map out micro-goals for your campaign. But, if your goal doesn’t seem attainable, it’s important to revisit it and figure out how it can be adjusted to be achievable.

8. Which existing board members or staff are already willing to be ambassadors for this campaign?

When attracting major gift leads, members of these major companies want to give to nonprofits they know. If you don’t have members of your board or leadership team as ambassadors, major leads may feel less inclined to give to your campaign. In other words, establishing a point of connection makes the gift collection process that much easier.

9. What additional support (resources, staff, etc.) does your nonprofit need to successfully carry out their goal?

Not only is your campaign made to satisfy your specific goal, but it also accounts for everything you’ll need in order to achieve it. This includes additional staff, materials, construction, events, and travel. So, what will you need that you don’t already have? Be sure to account for this capital campaign feasibility study question as you create your goals. 

10. What potential obstacles could your nonprofit run into during the campaign?

Before you carry out your campaign, you have to account for potential risks that may hinder your success. If you jump in without doing any form of risk assessment, your campaign is more likely to fail. If your campaign does fall apart, it takes nearly a decade for your organization to regain community credibility.

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WealthEngine’s consultants can guide you through other capital campaign feasibility study questions you may consider. Fill the form on the right to speak with one of our experts.