Tuesday, March 28, 2017

Introducing Abbott Square Part 4: The Most Important Question to Ask in a Capital Campaign

This is the fourth in a series of posts on the Santa Cruz Museum of Art & History (MAH)'s development of Abbott Square, a new creative community plaza in downtown Santa Cruz.

When you embark on a big capital campaign for a community project, don’t ask how much the project will cost. Ask how much it’s worth.

When we started the Abbott Square project, we focused on how much the project would cost. We were brand new to capital fundraising, and we were nervous about what we could afford. We had no idea what it would take to do a big campaign. We knew we’d have to reach out to new donors who weren’t connected to the MAH. We’d have to find them, get them involved, and get them invested. It all sounded daunting—especially for an organization that had no development director when we started the project.

So we played it cautious. At first, we wanted to fix up the plaza and add some art. We put a $250,000 price tag on that. Then, we realized we wanted to do more, maybe add some food, definitely make spaces for performances, and improve the infrastructure for community festivals and events. That brought the price tag to $1,000,000.

And then I sat down with a major donor—someone I hoped would give a big gift to the project. She changed my whole way of seeing the project. She taught me two crucial things:
  1. The project price tag is what it’s worth, not what it costs. She said, “This project is worth more than a million dollars. Having a town plaza, a place to connect in the middle of downtown, a creative gathering place—that’s huge. That’s worth a lot more than a million dollars.”
  2. Mega-donors make decisions based on the value and price tag of the project… not the balance in their bank accounts. She said, “Here’s how I look at things. I’m considering a project and let’s say I’ve bought in. I want to pay for a percentage of the project - let’s say 15%. So if you tell me the project costs $1,000,000, I’ll give you $150,000. If you tell me it’s $5,000,000, I’ll give you $750,000.”
Her insights blew my mind… and sent our team back to the campaign drawing board.

We made a crucial shift from scarcity thinking (“What’s the least we could do? What’s the least we could pay?”) to abundance thinking (“What’s the most we could do? What’s the full value of this project?”). Inspired by our supporters’ big dreams for the project’s potential, we started thinking bigger, too.

That donor encouraged us to think about what it would take to make the best possible version of Abbott Square. She pushed us to crunch the numbers on a meaningful food experience. We started to pencil out what it would cost to fill the plaza with great events and art activities every week. We talked to other donors to gauge what they thought the project was worth.

We got to $5,000,000.

We didn’t get there by inflating the budget. We didn’t get there through cost overruns. We got there by finding people who dreamed of a creative gathering place, listening to them, believing in their aspirations, and matching the scale of the project to the value they told us was there. We raised all $5,000,000, ahead of schedule. (And that donor? She gave $800,000.)

Now when people talk with me about their capital campaigns, I don’t ask how much the project will cost. I ask how much it’s worth—to their donors, and more importantly, to their community.

If the project is worth as much or more than it costs, you’re in for a pleasure of a fundraising campaign. If it’s worth less than it costs, hit the pause button and ask yourself—why are we doing this? Who is it for? How can we make it something so valuable to our community that it will feel more than worth the cost?

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