Posted on: Sunday, July 27, 2003

HAWAI'I'S NONPROFITS
Successful fund raising takes strategy

By Kelvin Taketa
Special to the Advertiser

Businesses raise capital by providing ownership rights or borrowing money.

When nonprofit agencies want to buy land, build a facility, start a new program or establish an endowment, they typically do it the old-fashioned way: fund raising, through a capital campaign.

An informal poll among several local funders identified more than 50 capital campaigns (with goals over $500,000) in various phases across the state, totaling more than $400 million.

This amount is approximately the same as what was contributed by Hawai'i households to charity in 2001. At a time when national and local data suggest that charitable giving among foundations, corporations and individuals has leveled off, it is important for organizations to carefully consider whether a capital campaign makes sense.

There is a saying in fund raising that the right time to ask for money is when you need it. Before an organization launches a campaign, it is worth considering whether raising capital is its most important objective.

In order for most campaigns to succeed, their most generous donors will need to focus on a capital gift — and staff and board time will be devoted to the campaign and little else in terms of fund raising. Are there other solutions to capital needs, such as securing a loan against future revenue or forming an alliance with other organizations to share resources or costs?

In addition, the capital campaign must address an urgent need and have a compelling case.

According to the Hawai'i Community Foundation's 2002 Giving Study, most people give to the organization that they believe is best suited for the job. An organization must not only communicate to its donors that it is addressing an important need and that it is the right one to meet the challenge, but also point out why giving to this campaign is essential.

Nothing succeeds like success. If done well, a capital campaign can help a nonprofit organization address critical needs while building a solid foundation for future success (and, sorry, future campaigns).

From our experience at the Hawai'i Community Foundation, there are a couple of readiness factors that can spell the difference between a campaign that is fun, exciting and celebratory, and one that is similar to walking knee-deep in mud.

First, an organization needs a committed group of volunteer leaders who are willing to make extraordinary gifts and ask others to join them. Usually, this leadership comes from an organization's governing board; without leadership by example, it is hard to ask others to follow.

Second, it is critical for an organization to have a solid system in place for building and cultivating strong donor allegiances. It is very difficult to meet campaign goals with a mediocre development program; it is best to start from a position of strength.

Finally, set a goal that is realistic for your organization. I have seen campaigns that sought to raise

$3 million when the most the organization had ever raised in a year was $100,000. I have seen prospect lists that are populated with individuals who have virtually no tie to the organization — the Bill Gates syndrome ("if only we can get an introduction, we can ask him for a major gift").

A nonprofit organization entering today's environment with a new campaign should not get discouraged, but should instead have a solid, realistic fund-raising plan.

That might mean setting a less lofty goal than the organization is confident it can achieve, or extending the length of the campaign. Attention should also be paid to understanding the donor marketplace: the psychosocial demographics of potential donors and their capacity to give to this additional funding request.

There is no question that the demand for charitable dollars grows more competitive as service needs increase and nonprofit organizations proliferate.

However, the key to any successful fund-raising campaign still resides in the relationship between the giver and receiver, and how well each knows and tells stories of the organization's mission and successes.

Kelvin H. Taketa is president and chief executive of the Hawai'i Community Foundation. E-mail him at kelvin@hcf-hawaii.org.