Why Capital Campaigns Fail
The Goodpeople Christian School was growing. Their enrollment reached that mystical 80% of capacity and school leadership was convinced they needed more space for students, to convert the existing auditorium into a gymnasium, and build a new auditorium. Architects were engaged, plans drawn, and costs estimated at $200 per square foot. These ideas had been discussed on and off for years with the board and it was assumed it would have widespread support. Artist renderings were presented to the community and displayed prominently as ‘coming soon.’ Fundraising commenced with bold confidence that “God Will Provide.” After all, they had prayed about it.
But then, things started to unravel. The final cost estimates came in way over budget and the project had to be scaled back. The school community was disillusioned because this new plan was not what had been presented. Funding for the project was significantly short of the final costs. The school needed a large loan to complete the project. Leadership justified this by saying, “This is how God provided for us.” Confidence in leadership eroded and the school struggled financially for many years. One year after the building was completed, the Head of School left. He was burned out. Leadership failed the school. Why the failure? This is an “all too often” scenario in schools. This illustration highlights three major reasons why Capital Campaigns Fail!
#1- The What Before Why = Failure First, campaigns fail because the “What” was decided before carefully considering the “Why.” In other words, their “Vision” (of where they were going, or what the “end” looked like) was not driving the plan for facilities. “Need” was driving their facilities. Needs are endless, tiring, and not motivating to most of our donors. Whereas, a compelling vision IS motivating and energizing! We must keep the “end” in mind – how lives will be transformed and remembering the number one reason why people give is to “See lives changed.” #2 - Faulty Planning Process = Failure Second, campaigns fail because of a “Lack of a proper planning process,” both for the priorities and the campaign to raise the money. The Goodpeople Christian School spent hours carefully laying out each new classroom, calculating the space between each desk, determining the width of the parking spaces, choosing the wall finishes, and on and on. They obtained feedback from all the coaches and performing arts teachers and volunteers, after the initial drafts. The process dragged on, trying to please everyone. Then, some members of the faculty started complaining that there was nothing for them. Their facility needs were largely left untouched. The building committee then began to backtrack and try to fit in a few perks for the faculty. My personal fundraising consultant, who I used for many years, taught me early-on: Ask for advice before you ask for money. Asking for money first will get you a lot of advice! The parents had been expected to carry the load of financial support for the campaign, but commitments had been slow, and now a disgruntled group in the school community was growing. The school should have developed a planning process, which obtained the input from all constituencies first before developing their plans and determining their financial capacity. School leadership started hearing comments from key donors like – “I am not giving anything to a building, when we have teachers in need” and “we need a Business Manager more than we need another auditorium.” A fundamental principle was neglected – Capital Campaigns need “something for everybody.” By this, I mean we must provide opportunities to give to buildings, people, and programs. A three-pronged approach allows everyone to participate. Plus, the participation should include typical “deferred” ways to give, such as wills, annuities, retirement plans, appreciated assets and gifts in kind.
#3 - Cost Overruns = Failure Third, campaigns fail because of the inability to accurately assess the costs. The Goodpeople Christian School had “over-promised and under-delivered.” They were anxious to motivate the school community to give by presenting an exciting plan, which turned out not to be an exciting vision. The people expected the plans to be what was built, but when the costs proved prohibitive, everyone had to accept some cutback in their area. This resulted in “trust” being eroded between several groups and the leadership. Then, when it was announced that the school needed to take out a loan, a small group of families did not re-enroll their students the following year. My experience with capital campaigns shows repeatedly the inability of school leadership to accurately assess costs. Schools erroneously believe that announcing a lower cost estimate rather than a higher cost will increase giving. But this backfires. It is when we accurately assess costs, provide liberal contingencies and then come in under budget that donors are encouraged and give more. In confidential interviews, donors repeatedly express their displeasure with cost overruns (even though they have said nothing publicly), and it does affect their giving. By the way, somewhere on the back hallway of The Goodpeople Christian School, the original plans for the building are still on a bulletin board, yellowed, and the “Coming Soon” sign crossed out in magic marker and instead now says, “Never Came.” So, how do we avoid this “Failure” scenario. Here is a suggested formula for a successful capital campaign:
Get the “Why” right before the “What" - Develop a compelling vision which drives the priorities
Wise Planning - Conduct a planning process, which obtains input from all stakeholders not only about multiple priorities, but financial capacity and ways to give before asking them for money.
Accurate Costs - Obtain accurate costs, add significant contingencies, and avoid debt.
Ora et labore: Pray and Work – The entire process of planning and execution is hard work and needs to be bathed in prayer. REPRINTED BY PERMISSION of Wayne K. Lynch, author. This version © by SchoolRIGHT, LLC. All rights reserved by author, Wayne K. Lynch.