CharityVillage® Research: Large capital campaigns --- dinosaur or new dynamic

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Large capital campaigns --- dinosaur or new dynamic
July 11, 1995; Canadian FundRaiser

The explosion of capital campaigns in Canada is challenging the ability of traditionally supportive organizations, corporations and foundations to sustain their past levels of commitment. In fact, as Ross McGregor, Chairman, Ketchum Canada, points out, large capital campaigns are definitely a mixed blessing.
On one hand, they have greatly enhanced institutions' profits and self esteem, have forced institutions going this route to articulate their funding priorities, have raised giving targets and attracted new leadership. Overall, said McGregor in his address to the CCAE's annual conference in Calgary in June, they have been a powerful positive defining force. On the other hand, he added, to keep up with the Jones, some universities have been overly ambitious, have burnt out their leadership and have engaged in "creative accounting" when they fell short of their targets. Some campaigns have drained all the leadership and donations out of their community, to the detriment of smaller organizations.
One response to this situation has been smaller, more decentralized campaigns which have broadened the donor base and encouraged faculty members to get involved and focus on the fund raising opportunities offered by their own alumni. These faculty-based, more targeted campaigns have become common, with their characteristic moves management and effective stewardship strengths.
McGregor argues, however, that the large funding campaigns will continue to be attractive in spite of their immense costs. They will not disappear, though their objectives may change substantially. The notion of capital as bricks and mortar is giving way to human capital program concepts, and formula giving is yielding to a much more flexible approach.
Major donors are becoming more demanding, sophisticated and discriminating than ever. They are looking for:

a positive institutional image

strong strategic planning and fiscal management

details of the projects to be funded

tangible benefits for the broader community

strategic alliances, partnership opportunities and tangible benefits for themselves

creativity, uniqueness and lateral rather than linear thinking

urgency - why they should fund your campaign.

Postponing the inevitable?
Tim Broadhead, Vice President of the J.W. McConnell Foundation, told the CCAE delegates that many foundations are willing to continue to support major capital campaigns, but with increasing reservations. The McConnell Foundation, he stressed, is very concerned about the real impact of the many new buildings being funded. In some cases these major donations may have merely allowed the institutions involved to continue doing what was politically and organizationally easier, and to postpone the need to rethink their priorities and engage in fundamental strategic planning.
Doug Baldwin, Senior Vice President, Imperial Oil Ltd. pointed out that we are seeing new and creative partnerships between education and business, focusing for the benefit of all sectors of society on the development of problem solving, innovation and social skills in the workforce of tomorrow.
How does the corporate community provide its support? In recent years Imperial Oil, for example, has taken a long, hard look at its corporate giving, in order to ensure that the funds are being applied as effectively as possible. "We are looking at unique ways to provide support and to channel our funds into programs that provide measurable benefits to the corporation and to the community. Today we align our support more carefully with our strategic interests, such as universities where we are most likely to recruit employees."
Infrastructure is overbuilt
Many of the 10,000 requests Imperial Oil received last year (600 were supported) were for major capital campaigns. In general, however, Imperial Oil is much less interested in buildings than it has been in the past. "The infrastructure, as we see it, is overbuilt," said Baldwin. "We prefer to spread our large commitments over several years, to allow us to monitor the activity and when necessary, withdraw our support". He added that Imperial Oil doesn't support endowments or operating expenses. When assessing funding requests it looks for:

good fiscal controls

tangible benefits for the institution, Imperial Oil, and the community

an opportunity for Imperial Oil to be part of a continuing presence

a carefully defined plan for use of any funds that may be raised in excess of the objectives.