Capital Campaigns and the Impact of Donor Fatigue [SUBSCRIBERS-ONLY]

Capital campaigns generate a lot of excitement and buzz for nonprofit organizations. Leveraging and harnessing this energy feeds hope for a brighter future. However, nonprofits must maintain a focus on protecting long-term financial health. At the conclusion of the capital campaign, the organization must be in a stronger position. One critical consideration is gauging the negative impact on current and future cash in-flows resulting from donor fatigue.

It is best to anticipate some level of disruption to regular funding patterns resulting from donor fatigue, since donor capacity and willingness to increase giving is uncertain and may cause some donors to divert a portion of their regular donations to support the capital campaign. Over time this hurdle can be conquered, but if too large of a front-end budget deficit accumulates, the climb out could take longer than expected and disrupt operational capacity.

Organizations tend to over-concentrate planning on generating funds for the capital campaign. It is important to concentrate equally on mitigating the potential negative impact the capital campaign might have on regular funding streams and adjust annual operating budgets accordingly. Separating the regular annual operating budget from the capital campaign budget will help you observe the capital campaign’s bottom-line effect on normal operations.