Located in my small Vermont town, the Plainfield Cooperative grocery store is more than fifty years old. A visit to its current location – a small-ish room in the former grange hall – is like a visit to the 1970s. 

Uneven wooden floors, narrow aisles, aging equipment. An interesting assortment of products, ranging from uber-local produce to homemade donuts to incense (yes, the old hippie DNA persists).

Despite all this lovable quirk – and more than $1 million in annual sales – the co-op has been losing money for years.

Faced with this trajectory, the members made a bold move, backed by two years of planning: we just purchased the local hardware store, three miles up the main highway, which also includes a grocery section, café, and greenhouse.

We’re in the early stages of merging the two businesses and relocating the co-op into the hardware store.

Show them the money

The total cost of the project – buying the business and the building, plus transition expenses – is north of $2 million. Roughly three quarters of this total was pledged by lenders – commercial, state, and philanthropic – on the condition that we raise the balance, in gifts and loans, from the community … and raise it in less than three months.

I’ve participated in several capital campaigns, but this was my first campaign supporting a business. Yes, the Plainfield Co-op has a decidedly nonprofit vibe, but it’s a member-owned, for-profit enterprise.

Would the usual fundraising rules apply?

Capital campaign 101

Not knowing a better option, we began with the classic capital campaign playbook.

1. Recruit a committee. More than a dozen members agreed to help, including a few with fundraising expertise (yes, I’m one of them) who informally led the campaign. Thanks to a modest grant, we also had support from a talented consultant.

2. Identify donors. We gathered the committee, swore confidentiality, and started brainstorming names and ask amounts. (Here’s the exercise we used.) Plainfield Co-op has about one thousand members – maybe one-third are active shoppers – so we started there. After repeating this exercise to involve more askers, we had our prospect list.

3. Use the list to reality-test your goal. We identified nearly $1 million in asks during these brainstorming meetings. I divided this total in half to account for a) asks that never happen, and b) donors who give less than anticipated. Therefore, I felt confident we could reach our community fundraising goal of roughly $500,000.

4. Prepare materials, including our campaign summary, FAQs, pledge form, financial projections for the newly merged business, and a gift chart. Because we were seeking member loans as well as gifts – standard practice when member-owned businesses raise money – we included loan paperwork reviewed and approved by the relevant state agency. These were all assembled into donor packets.

We also lined up a fiscal sponsor, the Cooperative Development Institute, for donors who wanted a tax-deduction. This was important to some supporters and irrelevant to others.

5. Train the askers and assign asks. We provided training to committee members – including role plays – and then the volunteers chose their assignments. In many cases, they paired up to talk with donors.

6. Remind, retrain, remind again. We periodically updated and distributed the gift chart to committee members. As needed, we offered additional training. The campaign leaders followed up with volunteers one-on-one: “Are you doing your visits? What are you hearing? How can we help?”

As the energy lagged and the campaign slowed – as every campaign does – these reminders were essential.

What happened?

Amazing news: we raised $475,000 in eleven weeks. About 30% is gifts; the balance was provided as low-interest (2% to 3%) community loans.

This total was sufficient to meet our match requirements; secure the commercial, state, and philanthropic loans; and purchase the hardware store. We did it!

While we have the funding needed to merge the businesses, fundraising continues until the end of the year to provide additional working capital for the store.

What we learned

Successful fundraising requires two ingredients: optimism and persistence. A third factor – a looming deadline – is also useful.

Optimism was essential, given the spotty financial history of the co-op. Our solution: we had solid financial projections and the enthusiasm of commercial lenders who were unlikely to back a marginal project. This increased donor confidence.

Persistence was less relevant, since this campaign was a sprint. Nonetheless, I lost count of the reminder emails and texts that went out to committee members over the course of those eleven weeks. 

Finally, none of this would have happened without an impending deadline. We needed to raise a specific amount by a specific date. Deadlines concentrate the mind and provide a useful excuse to stay in touch with volunteers, donors, and financial partners.

Bottom line: Fundraising is pretty much fundraising, whether you’re raising money for a nonprofit cause or, in this case, a cooperatively owned for-profit business.