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are you ready for a capital campaign? with Sabrina Walker-Hernandez

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A lot of people think that once they decide they want to start a capital campaign, they can just jump right in and start raising money. But it takes a lot of planning and preparation to make sure your campaign is successful. So, how do you know if your small nonprofit is ready to launch a capital campaign?

On today's episode, we’re talking all about Capital Campaigns with Sabrina Walker-Hernandez, Certified Consultant, Coach, Facilitator & Best Selling Author helping small nonprofits build relationships that convert into more donations. She's worked for 25 years in our sector from direct services operations all the way to executive leadership, and she took an organization with an annual budget of 750,000 to 2.5 million a year operations and launched a $12 million capital campaign in the US's third poorest county.

Myths that Sabrina wants us to walk away from:

  • You can start a capital campaign right away: If you are a small nonprofit, you need to build your annual campaign before you go into a capital campaign because capital campaigns are all about individuals and relationships. And you want those individuals connected to you and your work before you ask them to dig deep into their pockets.

  • You can ask any of your donors to give to your capital campaign: Yes - you can ask each and every donor to give towards your capital campaign (it’s not just about the big gifts), BUT you really need to have a relationship with them before you go and ask them for a special gift. You can't take a person from zero to $250,000.

Sabrina’s thoughts on Capital Campaign

  • Relationships first. Start with individual giving as you build your foundation. You have to have a relationship with people before you go and ask them for the amount of money that you're going to need to complete a capital campaign.

  • Feasibility Study. Have a conversation with the individuals in the community to let them know about what you want to do and share your vision. Seek advice from people who want to be part of the campaign.

  • Identify the key person. The executive director doesn't necessarily have to lead, but you can identify a co-chair to lead the campaign or even hire a consultant that can guide you through the campaign.

  • Phases of the campaign. You can start to secure your top gifts from your top donors and board members first. Depending on your strategy, you can also have mid-level, the corporate approach, and the foundation approach. Lastly, you can also have a community approach to get everyone involved.

Favourite Quotes from Today’s Episode

Post your favorite quote on social media to share with us!

“People will follow success. When we first launched this capital campaign and we talked about $12 million, people did not think it could be done. So we had to come out strong and so people will follow success, invest upfront in getting those top donors on board. It will break or make your capital campaign.”

“You have to have a relationship with people before you go and ask them for the amount of money that you're going to need to complete a capital campaign. You're going to need large amounts of money. And so you have to already have that relationship with them. You can't take a person from, you know, zero to, man, my largest capital campaign gift from an individual's $250,000. There was no way that I could take them from zero to $250,000. ”

Resources from this Episode

Supporting World Hope

The Good Partnership


Cindy W.: Welcome back to the podcast everyone. I am so excited for today's conversation and our very gracious guest who let me change topics literally two minutes before recording because I saw that she was speaking on the topic of capital campaigns somewhere else. And I was like, we need to talk capital campaigns.

I've seen so many small organizations want capital campaigns to try and launch capital campaigns or feel completely overwhelmed knowing that they have very urgent capital needs. And today we are going to dive into all of that.

I'm so excited, I'm your host, Cindy Wagman, and you are listening to The Small Nonprofit podcast where we bring you practical and down-to-earth advice on how to get more done for your small organization. You are going to change the world and we're here to help.

So today's guest is Sabrina Walker Hernandez and Sabrina, is super impressive, I feel like I see her now everywhere online as a thought leader in our sector, and very relatable as well but her credentials are amazing. So she has a certificate in nonprofit management from Harvard Business School. She's worked for 25 years in our sector from direct services operations, and then all the way to executive leadership, and what's most exciting for me, she took an organization with an annual budget of 750,000 to 2.5 million a year operations, and launched a $12 million capital campaign in the US's third poorest county like we're going to get into that.

But most of all, she loves to put relationships first and really understands the power of relationships in our work. So Sabrina welcome to the podcast.

Sabrina W.: Thank you, thank you for having me. I'm so excited to be here. I love talking about capital campaigns and so I'm, I was willing to switch it up. I actually enjoy it because I think everything is interconnected and whatever you learn in the capital campaign process, it all goes back to, having strong relationships and board members even knowing I'll start off with something around board members. I will say that having a strong board is key, but that board it may be strong enough to say we are not right to lead this.

We need to identify, other true community members who have the influence to lead the capital campaign and be the face of this capital campaign that takes a strong board as well. It's not just about strong enough to ask for the money it's strong enough to know when to make a strategic decision and fade into the background.

Cindy W.: Yeah. We can get into that in more detail later because every campaign that I've done every capital campaign we've had a very active campaign cabinet that was not, it was, there were a few board members, but mostly not and that cabinet really made the difference with the campaign. So I want to circle back to that.

I want to talk about campaign readiness, right? Organizations, I don't know why I just hear, I feel like I hear all the time like we want a capital campaign we've we need a capital campaign and then they want to just go and raise like $2 million in a year. And I can tell you how I feel about that, but I wonder, know how you feel about that?

Sabrina W.: If you're not having the foundational piece in place, in which again, I go back to build the relationships if you are not, okay. So if you have a, like a $25,000 operating budget, and then you want to go out and raise 2 million, don't have that roadmap and you're, you have not been strategic and just your operating budget is going to be very hard for you to make that leap to be to a $2 million capital campaign.

You have to have a strategy for your operation and a strategy for your capital campaign. And I would say you're operating is the proving ground for your ability to complete your capital campaign.

Cindy W.: And I was honestly really curious when you say operating you're talking about fundraising for operating. We're not just talking about government funding cause in Canada, a lot of organizations really like 99% of their money comes to the government.

Sabrina W.: Individual giving. And we're talking about individual giving that's where taught, that's where I believe truly in relationships. If you are a non-profit, small non-profit organization, small to medium and you have not, I don't want to say successfully launched into an individual giving plan, a plan or an individual or annual campaign you need to do that before you go into a capital campaign because you, capital campaign it's all about individuals and all about relationships. Yes. You will get, you will get some foundation grants, but there are very few government grants that will help you build a building when I did my capital campaign we have government support, but it was more on the lines of helping with the infrastructure com because we have raw land that was donated to us and we had to do all the infrastructure, put the road in the water pounded beyond my capacity, I don't speak that language, but we had to have all of that done. And really I started out when I took over my organization, we did not, we were raising zero from individuals. At zero.

Cindy W.: Wow.

Sabrina W.: Which is not a good place to be. I always say a good organization. Should have a fund diversification and no more than 20% of their budgets should rely on one source.

So look at what your budget looks like now. And if more than not even 20%, 10%, if more than 10, let's give you a good number. Let's say if more than it's really 20 though, let's say if more than 20% of your budget is grant, or more than 20% of your budget is one corporate gift, anything like that, then you need to start looking at diversification. That is number one. Because when you go into this capital campaign, you have to have individual giving support already established.

So knowing that and having zero, we started implementing as the board annual campaign where we just got very comfortable with setting face-to-face visits and asking people to support invest in our mission. They were not selling a ticket to a gala, raffle ticket. None of that. It was will you consider an investment of a thousand dollars into.

Cindy W.: I love that because very often people are uncomfortable asking for, they think it's like a, one-way like a give and take relationship. And so it makes them really uncomfortable and it's easier to sell or give something in return.

Sabrina W.: Right. Give something some illusion and they think, because you're going to get of this building, like they're selling this building that people are going to respond to that and that's not necessarily the case. You have to have a relationship with people before you go and ask them for the amount of money that you're going to need to complete a capital campaign.

You're going to need large amounts of money. And so you have to already have that relationship with them. You can't take a person from, zero to, yeah, man, my largest capital campaign gift from an individual's $250,000. There was no way that I could take them from zero to $250,000. We had to have a strap.

It took us five years. Five years to raise this. Yeah, it was not overnight. It was not, it was none of those magic pills. It was work.

Cindy W.: Yeah. I love, so like, these are not first-time donors because I do think a lot of people feel like, oh, we're just going to pull in people to the organization. My, in my experience that can happen, but that happens like in your five.

Sabrina W.: Right.

Cindy W.: Once you've built a community of donors who are giving to the campaign, they might bring in their friends and network.

Sabrina W.: Right because now they've invested and they'll lend their credibility to the process. But you're exactly right. It's year five, you need you have to have a relationship in advance so that you can get those foundational gifts. And then your D your, those who given will help you close the gap at the gate.

Cindy W.: So let's say for organizations listening to this, that they have, okay, so if you don't have an annual giving campaign specifically for individuals, that's your starting point, you need to build that foundation. Once we have that, how, there's feeds and building, there's like a lot of jargony things that people love to talk about an or sector like a feasibility study or a case for support and like both of those kinds of plans of capital campaigns. But I also don't always know if they're completely necessary. So what would your next step be?

Sabrina W.: I did a feasibility study, but it was not, it that sounds like I actually I did some research and did that. No, my feasibility study was going to visit with those top individuals in the community to let them know we are broaching on this. This is what we want to do. What are your thoughts around that? This is the, this is why we need to do this. This is the vision. What are your thoughts around it?

So it was more, it was a real, it was a cultivation move in seeking advice from the people that we knew that we want it to be a part of this capital campaign. We either wanted them to chair, co-chair, beyond the committee or be a giver. And so we set up those meetings and we went and those, that was the conversation.It wasn't this research paper or anything like that? No, it was strategic and setting up meetings with the right people.

Cindy W.: Yeah. It's starting, you're basically starting the ask through the relationship, which is exactly what I've done and finding those champions that early, the earliest gifts in your campaign come from those conversations.

Sabrina W.: Feasibility study conversations. That's what it is. It's just strategy. It's not so whatever you call it, that's what it is. That's the next step.

Cindy W.: And I would say that's also the point, in your campaign to know if you have a campaign or not.

Sabrina W.: Exactly, because if they're not excited, then you might want to you step back. And you're like, okay this didn't work out the way I thought it was going to work out. But if they are excited and they ask questions and they are on board with that, I will say that when I did go out for this feasibility study, I had a board member.

And that's the other thing I would say, if you are thinking of a capital campaign. I always go back to strategy, Cindy, thinking of a capital campaign, and that's what you want to do then that's when you look at your board and you say, okay, do I have anybody from construction on my board? Do I have anybody? From architecture and engineering, because when you were doing that pre that feasibility I wanted to take some graphics with me, but I didn't want to pay for those graphics. I had a board member. I started, we, we started, being strategic about who we placed on the board. And we had some graphics with us when went. For these to share the vision with people, because people are still at the end of the day, they're visual.

And so we did take some graphics with us about this is what we have in mind. This is what we're excited about, and this is why we're excited about it.

Cindy W.: I love that. And I think yet it's tangible, but you're also not spending like all this time building a case for support yet. It could come later, but this is like to me this is also the groundwork of building that case, hearing what people say and their feedback helps you understand the positioning of the campaign.

Sabrina W.: Right and language that you need to reflect back in the community.

That's a feasibility study. All it's not that complicated. I think people just they make things complicated on necessarily and you just have to be, it's not complicated, it's strategic and there's a difference.

Cindy W.: Yes. Yeah. And yeah, don't like those kinds of terms were like gatekeeping like it was no, you just have to go out and have a conversation.

Yes. But I know our listeners like love the little details. And so I'd love to ask you how you, what you told those people to, like, why you wanted to meet with them? What did you call it? What did you, how did you set their expectations?

Sabrina W.: Yeah. Pretty simple, if you're doing cultivation you have a relationship with them. So you get, you're able to pick up the phone and you're able to say, Hey, I would love to come in and talk to you about, the vision that we have on understanding, cause I was youth services.

So I will be the first to say youth service. I consider easy to present, right? Because it's futures, the kids, it's all that. So I, I won't knock that.

Have that conversation about I would love to come in and talk about where we want to take the organization. As far as our building, you've been on a tour of our existing building. You understand the conditions that we have and we have a vision and we would like to come in and share that vision with you. And that was how we secured the means.

Cindy W.: Thank you. I know that's a place where people fall down or get stuck.

Sabrina W.: I don't, never surprise you, donors. Just tell them what you, don't surprise them, let them know what you're doing. And if they say, are you going to ask for money? And you can say, no, I'm at that time.

Cindy W.: Not right now.

Sabrina W.: Not right now. Not right now. Not right now. I just want to get your advice on something, and how to move forward.

Cindy W.: Yeah. Yeah. My other little trick with these is flattery. Like we're coming to you first and I've always used you're so important to us, but also like for the right people, sometimes I'll say also, I see how. like how everyone looks up to you and them, you're a leader in the organization or you're a leader to our supporters and you're someone we really want to hear from right at the beginning.

Sabrina W.: That's good girl.

Cindy W.: Yeah, it's been a while, but it's, I actually really enjoy the capital campaign. So we're having these conversations. We're like, okay. Yes. The feedback is great. People are excited. And now we're embarking on a five-year journey. One of the biggest questions I get is who's doing the work and how do we budget for a fundraising resource or support to actually do this? Because can it be just the executive director?

Sabrina W.: No, I don't think so. I'll say I'm only gonna speak from my experience in my, my perspective. I did not feel comfortable with it being just me. Yeah, it is not my wheel. It was not my wheelhouse. Fundraising is my wheelhouse, but at that time, capital campaigns were not my wheelhouse. And so I hired a capital campaign consultant.

And my capital campaign consultant has success, when we did our research. They had successfully completed a project in our community for our local museum, and they had also completed a capital campaign project for our food bank. So they had a proven track record. And so we use that consultant.

Now, let me say for my people that are frugal out there, you have to step out in faith because my consultant at the time, and this was 2004 no, 2008. Cause it was in the middle of a recession. I do remember that. Yes, but we decided we were going to move forward anyway. He was at editing now I see it, it was a great discount, but he was $5,000 a month. That was his rate.

And we had him on board for 36 months.

Cindy W.: That's a very good rate.

Sabrina W.: Yes. So very good rate. And we had him on for three years. But we didn't have necessarily the budget. To hire the consultant. So that was a part of our discussions when we actually went out to lunch we went after we did the interview, did the interviews.

We did a wealth screening as well and for those who don't know what a wealth screening is, it really is when you plug your different donors into a system and it comes back to you and they just look at all the public records what people own their value in the home, their business. And it gives you like a rating on income range or, wealth range.

And so we did the wealth screening we had done a feasibility study and the consultant helped us really. Now at this point, cause you said next steps. So now this point based on the interviews, based on the feedback from the consultant and the wealth screening, we went out and we said, okay, who do we want to be, our no co-chairs.

And when we identify who our co-chairs were, I went to the co-chairs and I was very honest sometimes yes, you have to be vulnerable. And I was very honest. I was honest with the board and I was honest with the people, we had identified, and I said, this is not my wheelhouse I need to have consultant support in this. This is the rate. And would you be willing to take the lead gift to cover this cost?

Cindy W.: Love it.

Sabrina W.: As we embark on this and that's how we secure it at least the first 12 months for the consultant, he was worth his weight in gold. And he was very strategic. And I will say why I had, why I chose to hire a consultant to, and I kept saying being vulnerable and not my wheelhouse is because we, although we were the third poorest county in the United States and we knew that capital campaign was going to be a combination of individual gifts and foundation gifts.

And with foundation gifts, there's a strategy around foundation gifts. So there are certain foundations that like to be at the forefront of the capital campaign. There are certain foundations that you have to have this foundation already on board before this foundation will come in. And then there are certain foundations that are closers. He knew that. I did not.

Cindy W.: Yeah.

Sabrina W.: And he also knew about new market tax credits and so different ways of innovative ways to fund capital campaigns. So I thought it was all worth it.

Cindy W.: I've always heard like expect 10% of your overall goal to be the cost of the campaign staffing and not just like consultants, but recognize that if you have fundraising staff in the house already, or the executive director's time and donor recognition

Sabrina W.: Yes. and I'm frugal, I'm going to tell you right now I'm frugal. And when I looked at how much we paid salting and the architect and I was like, oh my god but all of those things are part of your capital campaign. You have to have those schematic designs. You have to have, and this is before you ask for money for the building. And I think people don't realize that. So it's yes it, it takes quite a bit.

Cindy W.: Now, I love that your co-chairs basically gave you the startup costs. My other question was going to be like, when did cash flow start coming in? But it sounds like that started relatively early for you.

Sabrina W.: Yes. Cash flow started coming in relatively early for us. But as with all campaigns, that here's another strategy that we did understanding the situation that we're in and where we relocated our capital campaign chair bought in, we really stored it the bank president to be our co-chair because we knew at one, at some point or another, we were going to need a bridge loan because, with capital campaigns, you have to realize you don't get the money upfront. People give large amounts, but they have five years to pay those pledges in most cases. I only have one person who gave a hundred thousand dollars and she wrote a check for that because she was a part of another board where someone had passed away. And had a five-year pledge and the family did not honor it.

And so she's like I had that experience and I will not do that to anyone. So she wrote a hundred thousand dollar check. Most people don't have the capacity to do that. So they take five years to pay whatever pledge amount it is. And so understanding that you can't wait five years to start the project so you are going to have to get what they call a bridge loan.

And that's through your bank and what you need to do with that bridge loan, how do you justify getting a loan, you have to take all your pledges that you have, and you have to present that to the bank to show that the money will be coming in.

And so these are all the things that you need to do that a consultant can help, that you have to do this. I don't know that they have to do these things. I digress, but it is, it's so helpful.

Cindy W.: I think because most people don't have experience with this. And then you're going into this massive project on top of the fundraising. You're figuring out I remember when I was partnering organization, building a shelter.

Sabrina W.: Yeah.

Cindy W.: Like all the technical building stuff. There's a lot of stuff there too, which we obviously wanna dive into, but like you're outside of your comfort zone on all fronts. Yeah.

Sabrina W.: All fronts. And when you said that it reminded me you still have to raise your operating budget while you're doing this.