Capital Campaigns & Annual Funds: Your Questions Answered

When nonprofits embark on a capital campaign, one common question often arises: What happens to the annual fund? Many worry that focusing on a large campaign will siphon resources or donor attention away from the regular operating support they rely on. 

Fortunately, recent research offers reassurance: More than three-quarters of organizations reported that their annual funds either stayed the same or increased during their campaigns. Even better, 74% of organizations saw their annual funds grow in the years following their campaigns.

This guide explores the relationship between capital campaigns and annual funds, the role of comprehensive campaigns, and practical steps to ensure your annual fund thrives alongside your campaign efforts.

Capital Campaigns vs. Comprehensive Campaigns: Understanding the Difference 

Before diving into strategies, it’s essential to clarify the differences between capital campaigns and comprehensive campaigns.

Comprehensive campaigns include annual operating support as part of their campaign goal. Traditional capital campaigns do not. Both often include multiple campaign objectives. The difference is whether or not to wrap annual fundraising into the campaign. 

In other words:

Capital Campaigns

• Focus: Targeted, specific projects that significantly expand organizational capacity.

• Examples: Building a facility, renovating infrastructure, or creating an endowment.

• Distinctive Feature: Gifts are dedicated to the campaign’s purpose and are separate from annual fund contributions.

• Donor Experience: Typically involves rallying support for a visible, tangible outcome that inspires one-time, transformational gifts.

Comprehensive Campaigns

• Focus: Encompasses all organizational fundraising, including annual operating support, alongside new capital, endowment, and programmatic goals.

• Examples: Campaigns that include building projects, scholarships, endowment growth, and annual fund contributions.

• Distinctive Feature: Every dollar raised—whether for the annual fund or a specific project—counts toward the campaign goal.

• Donor Experience: Simplifies giving by consolidating asks, appealing to donors who support the institution broadly.

As Andrea Kihlstedt and Amy Eisenstein from Capital Campaign Pro highlighted in their recent podcast, comprehensive campaigns often work well for institutions with deeply loyal donor bases, like universities. In contrast, capital campaigns may be more appropriate for organizations with a specific, compelling project and less entrenched donor loyalty.

Which Campaign Type Should You Choose? 

The decision depends on your goals, donor base, and organizational context. Here are some considerations:

Choose a Capital Campaign When:

• Your campaign centers on a specific project, like building a facility or renovating a community asset.

• Your organization is rallying broad community support for a single, exciting initiative.

• You aim to engage new donors while maintaining clarity between one-time campaign gifts and annual support.

Choose a Comprehensive Campaign When:

• You’re pursuing multiple objectives, such as buildings, programs, endowments, and operational needs, over several years.

• Your donor base is deeply loyal and primarily supports the institution as a whole.

• You want to simplify donor messaging by consolidating all fundraising into a single initiative.

Strategies to Protect Your Annual Fund in Any Campaign 

Regardless of whether you choose a capital or comprehensive campaign, these strategies can help ensure your annual fund remains strong:

1. Be Crystal Clear About Gift Policies

Clarity is crucial. Define how you will count gifts, recognize donors, and communicate the role of the annual fund across your marketing channels. This is especially important for comprehensive campaigns, where donors may not distinguish between campaign and operational contributions without guidance.

2. Use the “Double Mention, Double Ask” Approach

In both campaign types, mention the importance of annual giving when soliciting campaign gifts—and vice versa. For example, during an annual fund ask, mention that a special campaign is coming. During campaign asks, emphasize the ongoing need for annual support.

3. Segment and Steward Your Donors

For traditional capital campaigns, start with your most loyal donors during the quiet phase, explaining how their capital gift complements their annual giving. In comprehensive campaigns, work closely with donors to ensure they understand how their contributions are allocated.

4. Time Your Appeals Strategically

Avoid overwhelming donors by spacing out annual and campaign asks. For example:

• In capital campaigns, ensure the quiet phase does not overlap with your key annual fundraising season, such as the months you focus on year-end giving.

• In comprehensive campaigns, structure pledge schedules to align with operational needs while reducing donor fatigue.

5. Engage Donors with Specific, Inspirational Goals

Donors often respond to compelling, tangible outcomes. For capital campaigns, focus on how the project will transform your organization’s impact. For comprehensive campaigns, highlight how their gifts fuel both immediate needs and long-term growth.

Final Thoughts: Clear Policies and Strategic Planning Are Key

Whether you choose a traditional capital campaign or a comprehensive campaign, success depends on clarity and strategy. Comprehensive campaigns can simplify giving and protect the annual fund by integrating operational needs into the overall goal. Capital campaigns can rally broad support around a specific project while maintaining clear distinctions between one-time gifts and annual contributions.

Whatever your approach, the key is to communicate clearly with donors, time your appeals effectively, and inspire support with a compelling vision. By doing so, you’ll ensure that your annual fund and campaign goals not only coexist but thrive together.