Watters & Associates

CAPITAL VERSUS ANNUAL GIVING CAMPAIGNS

Funny how good things can happen for the wrong reason- Christopher Columbus was trying to find a shorter way to China when he discovered the “new world”. In the same way, some hospital foundations are created for the purpose of conducting a capital campaign. A foundation structure works best for long-term, ongoing friend and fundraising while a capital campaign needs a very focused, intense but relatively brief effort. In most cases, the legal, organizational and planning requirements for implementing a foundation are not necessary elements for a successful capital campaign. Still, those hospitals end up with a long-term organization that can ultimately mean more to the success of the hospital than the initial capital campaign.

While a capital campaign may not be the best starting point for a support foundation, annual giving is a most appropriate initial activity. Annual campaigns not only raise funds for specific purposes but also provide an entry point for new donors. Attracting new donors is essential for maintaining future support. The same donors are also potential candidates for remembrance giving, special events and planned giving. A capital campaign can be successful with one generous gift, but a limited number of donors in annual giving portend future tough times.

The techniques of prospect identification, peer to peer solicitation and donor recognition are similar for both annual giving and capital campaigns. Like a capital campaign, annual giving may focus on a specific project and may rely on lead gifts for much of the contributed total. The difference in the two is often a matter of degree: capital campaigns depend on the top ten to fifteen gifts for 50% or more of the total raised while annual giving cultivates a broad base of smaller donors for current and future support.

Another difference is in the frequency of campaigns. Capital campaigns are usually one-time attempts to raise as much money as possible for well-defined projects. Because of the high commitment level assumed by the donors, pledge periods of three to five years are commonplace. The intensity of the process limits the use of such a campaign to once every seven to ten years. In many cases, the campaign organization is disbanded after the goal is reached.

As the name implies, annual giving is an ongoing activity. New projects or general operations require continual support plus the search for new donors is unending. Instead of long pledge periods, annual giving cultivates lump sum gifts or short-term pledges but encourages the donor to become an ongoing supporter

Despite the differences between the two activities, there can be a healthy symbiotic relationship. Effective support foundations utilize an array of fundraising activities including annual giving, remembrance giving, special events, grant solicitation and planned giving. These ongoing activities create a significant donor base that is invaluable for capital campaigns. At the same time, capital campaign supporters are strong prospects for annual giving once they fulfill their pledges. The challenge is to involve the donors in both activities without wearing out your welcome.

Watters and Associates is proud to have worked with dozens of non-profit organizations in establishing support foundations. Our knowledge and experience help shorten the time it takes for foundations to be effective in the friend and fundraising process. We specialize in healthcare development programs and would enjoy the privilege of helping you start or enhance your program.

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