Capital Campaigns Increasingly Common, and They Work, Study Says

If it seems like more nonprofit organizations than ever are running fundraising campaigns these days, that’s because they are.

About 46 percent of nonprofits were in either a capital or a special campaign during the first half of last year, up from a mere 12 percent in 2011, according to a new study. And another 28 percent said they were planning a capital drive.

A capital, or comprehensive, campaign is aimed at raising money for an organization’s long-term priorities, such as a new building. A special campaign usually has a lower financial goal and is intended to help finance a short-term need, such as a new program.

Capital drives, on average, were planned to last five years and raise $45 million, according to the study. Special campaigns were slated to run for an average of two years and raise $3 million.

The campaigns helped drive bigger revenues for those groups compared to other charities. Two-thirds of the organizations that said they were in a capital campaign also reported that giving was up for them during the first six months of 2015 compared with the same period of the previous year, while only 57 percent of nonprofits that were not running campaigns reported increases in donations.

The reliance on campaigns points to a potential hazard for nonprofits: relying too much on the same pool of major donors instead of building broader community support, says Tom Pollak, program director at the National Center for Charitable Statistics, at the Urban Institute, a partner in the study.

“My sense is that too many organizations are not doing the hard legwork they need to do to build a pipeline of small donors they can funnel into larger donations in the long term,” he says.

The study was the latest of the biannual fundraising surveys conducted by the Nonprofit Research Collaborative, a coalition of groups that serve the nonprofit world. Besides the National Center for Charitable Statistics, the coalition includes the Association of Fundraising Professionals, the Giving USA Foundation,, and other organizations.

Small Groups Lag

Larger organizations were found to be much more likely to run campaigns than smaller groups. Seventy-five percent of charities with $10 million or more in annual revenue were either in a capital campaign or planning one, compared to 41 percent of groups with annual revenue of under $1 million.

This gap can make it harder for small nonprofits to gather enough resources to expand their most effective or innovative ideas, says Mr. Pollak.

“I think there are opportunities for small organizations, but it’s hard,” he says. “They tend not to have the high-visibility missions that attract the very wealthy.”

Small charities’ lesser ability to mount campaigns can exacerbate the divide between the nonprofit world’s haves and have-nots, he suggests. “These trends undermine some of the core values of the sector, the diversity of the sector, and the ability to meet niche needs,” says Mr. Pollak.

Strong Growth Signs

The growth in campaigns also signaled overall strong fundraising performance among nonprofits. Fifty-nine percent of charities said their giving was up during the first six months of 2015 compared with the same period in 2014. That figure was up from the 52 percent of groups that reported increases during that period of 2014 compared with the same time in 2013.

Of the more than 1,000 organizations that participated in the study, 74 percent said they were on track to meet their 2015 fundraising goals, up from 70 percent in 2014.

Education organizations, a category that includes colleges, universities, and other education groups, were most likely of all nonprofits surveyed both to be running a capital campaign and to say their fundraising had increased in January through June 2015 over the first half of 2014. About 43 percent said they were in a capital drive, and 71 percent reported jumps in donations.

By contrast, only 16 percent of human-service charities were running capital campaigns, the least likely of all types of nonprofits to report doing so. But those groups reported a significant jump in fundraising during the first six months of last year: About 63 percent said donations were up from January through June 2015 compared with the same period in 2014, a figure significantly higher than the 48 percent that said fundraising was higher in the first six months of 2014 than during the same time in 2013. That 15-point leap was the highest among all types of charities in the survey.

Among other findings:

• More than half of all organizations said they saw increases in revenue from major gifts during the first six months of 2015: Fifty-five percent said so, up from 48 percent during the same period in 2014. The study did not define major gifts, which can vary widely among organizations.
• Donations from for-profit companies and their foundations grew strongly. Forty-four percent of charities said their corporate support was up during the first half of 2015 compared to the previous year; 38 percent said the same in 2014.
• Sixty-seven percent of the organizations said they count bequest commitments in their campaign results rather than waiting to count them when the bequest is paid after the donor’s death. In a statement, Michael Kenyon, president of the Partnership for Philanthropic Planning, a member of the Nonprofit Research Collaborative, said he found that “encouraging.”

Mr. Kenyon’s organization suggests that groups that count bequest commitments “should be very transparent about gifts that are revocable,” he said. Such information can “remind donors that these gifts are important — especially in a campaign that has an endowment component. But they aren’t necessarily in hand the day the campaign ends. Good stewardship after the campaign will keep those gifts in the pipeline.”

Fundraising Methods That Got the Biggest Increases

Percentage of charities that brought in more during in the first half of 2015 than in the first half of 2014

Source: Nonprofit Research Collaborative

Types of Groups That Ran Campaigns in Early 2015

Fundraising drives that were launched or were in progress during the first half of the year

Source: Nonprofit Research Collaborative

How Much Charities Hoped to Raise

Average campaign goals for drives that started or were in progress during the first six months of 2015

Source: Nonprofit Research Collaborative

Which Causes Raised More and Which Raised Less

How fundraising compared from the first six months of 2015 to the same period in 2014

* Category includes community foundations, donor-advised funds, Jewish federations, and United Ways.

Source: Nonprofit Research Collaborative