Recently I had an interesting call. There was a young church that found a building that they wanted to buy. Up until that time, they had been meeting in a local school gym.
As you can image, this young church was super excited and began to dream. Big dreams. This church was only a few years old and had lot of families with small children. They had all the passion and energy that one would expect from a community of young people who cared passionately about changing their piece of the world.
But as their dreams grew, so did some concerns—especially from some of the older and wiser members of their community. The question that was gnawing at them was, “Can we afford this?”
If you’ve ever seen a family struggle with a house payment that was too big, you’ll understand the concern. A large house payment seems okay until your car breaks down and you’re maxing out your credit card to get your car fixed so you can get to work.
The church had put the cart before the horse, so to speak. Before they went through the process of figuring out how much they could afford, they found a building.
So, this member called me to ask, “Do you think we can afford this?”
This is what a feasibility study is all about. A feasibility study is an in-depth study looking at multiple factors to help determine how much money a charitable organization can raise over a set timeframe for a capital campaign. Can you raise any money? Can you raise millions?
Because this church needed to quickly decide if they should move forward or pull the plug, I offered a rule of thumb. Most churches when properly conducting a capital campaign with a paid consultant can raise 2-3 times the annual giving over the course of three years. If you move forward without professional help, plan on 1.5 times annual giving over three years.
This church’s annual giving was about $400,000 per year. Using this number, this church would raise about $1 million over the next 3 years.
There are some risks to using this metric, however. Imagine one church member gives 25% or more of all giving and dies, moves away, or leaves the church? Or what if you have several members who have the capacity to give huge gifts, but haven’t because they haven’t seen the need for a significant gift yet? Or what if the plans are somewhat controversial and some members don’t want to give?
These situations (and others) are uncovered during a feasibility study. Moving forward on a capital campaign is like building on a property without doing soil testing or buying a home without having a home inspection done first. No one would dream of moving forward without the necessary precautions first. It’s the same with a feasibility study.
When Jesus told his followers to consider the cost of discipleship, he uses this example:
For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation, and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build, and was not able to finish.’ Luke 14:28-30.
It is wise to carefully study your fundraising potential before beginning a capital campaign. It is money very well spent.
Recently, I had a client ask me who they should invite to a fundraising dinner. Here’s the situation they faced:
They had recently received several very large donations from some of their donors and they had a fundraising event coming up. The question was, “Should we invite our big donors to come to a fundraising dinner even though they just made a big donation?”
Great question. No one wants to offend a donor who just made a large gift by asking for another gift. We certainly don’t want to appear greedy, desperate or unappreciative.
But neither do we want to not invite one of our biggest donors to an important event! It’s easy to see the dilemma they faced and why this client struggled to decide what to do.
Here are two things to consider:
1. Is this a free event or an event that you need to buy a ticket to attend?
2. If you need to buy a ticket, how much does that ticket cost?
First, if the event is free, invite them! Leave it up to them if they want to make another donation or not! Donors to your cause want you to be successful. Their presence there (especially if they are known for their generosity) can encourage others to give.
If you are selling tickets to this event, also invite them! Fundraising dinners can be expensive to put on. The food alone might cost $50 per person, so it makes sense that someone who donated a large amount would certainly want to help cover the cost of their $100 ticket. I’ve never had dinner with a donor at a restaurant who has pledged $500 or more also expect me to also pick up the tab.
Finally, if you are selling “tables” to the event, most certainly invite them! Imagine with me that your donor just gave you $10,000 last month. This month you are promoting your event where you are selling tables (10 seats at each table) to your dinner for $1,000, $5,000, $10,000 or more.
I would invite your $10,000 donor to come to your dinner but I’d “gift” them a table. That means they can come for free and invite their friends to sit at the table with them (also for free.)
It’s the perfect win-win situation. You are gracious and thank your donor by gifting them a prominent table, while knowing that they will invite their friends to come, learn about your organization and they and their friends will likely make a donation.
There’s one last thing to consider: think of it from their point of view. Your donors participate in your mission by giving. Don’t deny them an opportunity to help, just as you wouldn’t deny a volunteer an opportunity to volunteer. Donors love to give, just like volunteers love to volunteer!
"Relationally intelligent" is probably the best way to describe how fundraising should be approached. So, what does it mean to be "relationally intelligent" when it comes to fundraising--and specifically, when asking someone for money?
At the beginning of the meeting, set the context. Let those you are meeting with know that you are there to challenge them to do something big for God, but in the end, your relationship is going to be okay whatever they decide. This lets them know that their decision should be based upon God's leading, not on any pressure they may perceive from you.
Next, make the ask clearly and succinctly. Here's what I’ve said to high capacity donors: "I'd like to ask you to pray about giving more of your hard-earned money to God's purposes in the world."
Then I add, "I have no idea what you are capable of giving or what you had in mind, but would you prayerfully consider a gift of [insert dollar amount]." I literally ask them for a specific donation amount.
Here's why: If you don't make the request specific, the person or couple you are with won't have any idea if you want them to consider a gift of $500, $5,000, $50,000, $500,000 or even $5 million!
Think of it this way, if your neighbor were going to take a trip and asked you to care for their lawn while they were gone, you'd want to know how long they will be gone (a week, a month, the whole summer?), what they would want you to do (mow, water, fertilize?), and how often they would want you to do it (weekly or when it looks like it needs it?). It's the same with fundraising. The more specific you are, the easier the conversation is.
Before you leave, agree upon a time to get back together. "Could we meet again in two weeks to see where you are with this?" I find it easiest to set a time and location right then and there while everyone has their calendar handy.
If you do all of this, at your next meeting, all you need to ask is, "So, how is God leading you?"
It's normal to get nervous or feel a lump in your throat! But leadership requires growing in this skill. The more confidently you can do this, the easier the conversation goes!