The Reality Check for Church Capital Fundraising Campaigns
[This post is adapted from Greg Gibbs' book, Capital Campaign Playbook. Greg has successfully led close to 200 capital campaigns in his career and is proud to work with the team at ministryengine. If you are looking ahead to a Capital Campaign, schedule your free consulting call today.]
An absolutely vital part of the discovery process is assessing our reality. It is a look at our current data – the indicators of congregational engagement, involvement, and financial support.
Why? Because the greatest predictor of future behavior is past behavior. We operate in faith and optimism, but we also have an eye on the numbers and ground ourselves in reality. It is recommended that church leaders assess both Capacity and Inclination.
Looking at Capacity answers the most popular question a consultant hears when it comes to campaigns: How much can our church raise? And the idea of Inclination delves into the more difficult question to answer: What will our congregation actually give?
Capacity
In the capital campaign world, the church’s general budget revenue is used as a top-level predictive tool regarding the church’s capacity. In other words, if we are simply making an educated guess or general estimate, we start with the church’s annual operating revenue and then multiply that by some factor: 1 times that number, or 1.5 times, 2 times, or 3 times.
Prior to the downturn of 2008-2010, the church capital campaign world was somewhat straightforward and fairly predictable:
Church Operating Budget = X
Capital Gifts Over Three Years = 2 or 3-times X
When I was trained almost twenty years ago, the major capital campaign consulting companies for churches in America were groups like RSI, Cargill (for whom I worked in the early 2000’s), Injoy and a few others. And with rare exceptions, these companies would regularly lead churches to campaigns that resulted in double or triple the annual income in capital gifts over a three-year period.
Things have changed – the dynamics in play before 2008 are very different than those today. The two most common stats are no longer the norm. Back in the day, most campaigns garnered at least 2 times general income and most campaigns were over a three-year collection period. It was clockwork. Like the Cubs never getting to the World Series. Well, that was then and this is now. These dynamics have shifted considerably. And just look at those Cubs!
Current Trend:
Churches are bold if they estimate that multi-year pledges will amount to anything larger than 1.5 times the church’s income
Inclination
Perhaps even more important than a congregation’s capacity to give is their collective inclination to do so. What this means is that a person or congregation may have a capacity to give X, but there is another factor in play: What are they likely to give to the project at hand? Not what could they give but what are they likely to give?
Some projects tend to motivate people to give to their full capacity. Some may even cause people to stretch beyond what is comfortable as an act of faith.
Others, not so much.
Much of this is connected with the emotional tie-in and buy-in associated with varying aspects of church life. A part of it is connected with something tangible that we “get to see” when the money has been invested. This is why Debt or Dirt campaigns are the hardest to explain and connect with vision as well as people’s hearts. When we are retiring a mortgage or securing land, these are very important strategies for church life, but are just more difficult to create emotional support for. And this is why New Church Building or Sanctuary Renovation can garner lots of passion. It affects everybody in significant ways and is tied into our spiritual practices and places.
Where would you rank your individual components or projects on a 1 to 10 scale, with 1 being “very difficult to gain emotional buy-in” and 10 being “easy to gain buy-in, people will be ecstatic”?
My friend Rocky Miskelly is a passionate, life-long football fan of the University of Mississippi. He would explain the importance of understanding congregational buy-in by using football fans as an analogy as he talked about Ole Miss.
He describes the difference between a “fan” and a “supporter” of the football team. A fan likes to cheer for the team and a supporter writes a check to fund the team. Just like a great college football program, you need both fans and supporters in the church. But it would be helpful to know who is in what classification before a major project is underway.
Unfortunately, we have a hard time in church capital campaigns figuring out whether people will be fans of a capital project or supporters. And if they are supporters, to what degree will they be supportive? What is their sense of buy-in? Can we identify the biggest challenges we will face when asking people to fund this particular initiative?
NOTE: The top-notch consulting firms will have a formal assessment tool that allows for a “test” of the congregation’s level of support during the planning phase so that church leaders don’t get surprised during the public phase (when it is often too late to make adjustments).
The group at Aly Sterling Philanthropy offers the benefits of a formal study:
- Do I have a large enough donor base to support my goal?
- Does the project make sense and offer a concrete solution?
- Do I have the support of leadership?
- How much should we expect to raise?
- Is now the right time to host a capital campaign?
- What questions do potential donors have about the project?
- Who are potential major gift prospects/campaign leaders?
Capacity Versus Project Cost
I continue to be befuddled by churches that create wish lists and dream projects and spend time and money designing something they have no business designing. Not because churches shouldn’t dream or be creative, but because without some grounding in financial reality, it can burn up energy unnecessarily.
Some churches really slow down progress by having to retreat from plans because they are way beyond the scope of what can be raised. Should we not have some sense of what our church is likely to give (and whether or not we are willing to borrow the rest) before we start designing with no financial parameters? If I were shopping for a house, a car, or budgeting for renovation in my personal life, I would start with the answer to the question, “How much can I afford to spend?” or “Am I willing to borrow money to renovate my kitchen?” Churches seem to get this in reverse order. I have met with more than a few churches that have an estimated cost for their project that is 4 or 5 times their annual budget or more.
When I discover this, I hope and pray that the leadership has not been casting vision or creating excitement about a project that they will not be able to afford. If they have been talking it up, we are immediately thrown into a back-peddling exercise before we can start a fund-raising campaign. Or the church will put itself into a position of borrowing more than they ever imagined. This undesirable outcome is the clear result of not gathering all of the necessary information to lead well.
For this post, I wanted to help you see that there is more to a Capital Campaign than the public phase and introduce you to the Discovery Phase. In subsequent posts we will continue to unpack each of these three phases - Discover, Design, & Disciple - to help you think through how God might lead you to steward the resources in your congregation.