Creating a Capital Campaign Budget that Works: Quick Guide
When you think about fundraising costs, it’s important to consider ROI (return on investment). How much is “reasonable” to spend to raise a dollar?
Depending on what type of fundraising you’re doing, the cost to raise $1 ranges anywhere from ten cents to fifty cents (or even more). In general, events are the most expensive type of fundraising, with major gift fundraising and planned giving being more cost-effective.
So what’s the most cost-effective type of fundraising? It’s capital campaign fundraising, hands-down. Capital campaigns offer huge returns for a relatively small investment — especially with a good capital campaign budget.
Quick Links — For your convenience, click on any of the four topics below to jump to that specific section:
- Capital Campaign Budget: Use the Ten Percent Rule
- Your Campaign Budget with Respect to Your Style and Culture
- 8 Capital Campaign Budgeting Categories
- Post-Campaign Staffing and Budgeting Considerations
- Include Your Campaign Budget In Your Campaign Goal
The first section outlines the basic principle of budgeting for your capital campaign.
Capital Campaign Budget: Use the Ten Percent Rule
Our rule of thumb is that you should budget approximately 10% of your campaign goal on campaign expenses, budgeted over three years. You may not need that much, but 10% is a great starting place to get your board on board with your campaign budget.
Budget the cost of your capital campaign at 10% of your overall campaign goal.
If anyone on your team believes you should be able to run a campaign without any additional staff, resources, or expenditures, the time to set them straight is in the early stages of planning your campaign.
Let’s say your campaign goal is $10 million. Your campaign budget would be $1,000,000 spent over three years. The costs are likely to be apportioned in unequal amounts as the requirements of your campaign demand.
Early Capital Campaign Costs
Early costs associated with your campaign will likely include:
- campaign consulting fees
- additional fundraising or administrative staff
- other outside support, including designers and writers
Mid-Capital Campaign Costs
As the campaign moves forward, you will budget money to cover the cost of other campaign necessities, including:
- campaign materials
- the campaign kick-off
- advertising to help get the word out about your campaign
Late Capital Campaign Costs
Toward the end of your campaign, you’ll budget for:
- campaign celebrations
- donor recognition
- volunteer appreciation
- printing (for the campaign brochure)
While the ten percent rule is simple to explain, that number is simply a rule of thumb.
Because many campaign expenses are the same whether your campaign is large or small, the larger your campaign, the less your campaign will cost relative to the goal. Likewise, the smaller the campaign goal, the higher your campaign budget will be relative to the campaign goal.
Your Capital Campaign Budget with Respect to Your Style and Culture
When developing the budget for your campaign, think carefully about the style and culture of your organization.
How much does your organization value elegance?
Consider the following:
- Is your annual event a four-course meal at the fanciest place in town? Or is your organization happier celebrating in-house with a simple picnic lunch?
- Does your organization prefer glossy materials and high-production value videos? Or are you delighted with newsprint and iPhone videos made by your program participants?
Decisions about appropriate styling choices relative to your brand can make a huge difference in your campaign budget. Be sure to plan your expenses according to the culture of your organization and expectations of your donor base.
8 Capital Campaign Budgeting Categories
There are a number of things you should plan to include in your campaign budget. We’ve identified eight categories you should examine:
- Consultants or other professional experts
- Office expenses
- Campaign materials
- Systems and technology
- Donor communication
- Events and celebrations
- Donor recognition
Go through each of the categories above and carefully consider the costs associated with each one.
Post-Campaign Staffing and Budgeting Considerations
If you hire additional staff for your campaign, you may want to keep them on your development staff after the campaign wraps up. Having worked on the campaign, that person is likely to have developed valuable skills and built relationships with donors that will strengthen your development program in the future.
But simply shifting a salary line from the campaign to the operating budget in the fourth year may strain your operating budget. If you anticipate keeping that person on after the campaign, consider shifting their salary over to the operating budget slowly over the course of the campaign. For example:
Year 1 — Campaign budget pays 100% of new development assistant salary.
Year 2 — Campaign budget pays 2/3 of development assistant salary, with the other 1/3 paid for from organizational budget.
Year 3 — Campaign budget pays 1/3 of development assistant salary, with the other 2/3 paid from organizational budget.
Year 4 — Full salary (100%) is paid for by the organization.
By doing that, you will have increased the capacity of your organization — an important goal of any campaign — by adding to your permanent development team through careful and strategic use of your campaign budget.
Include Your Campaign Budget In Your Campaign Goal
When calculating your campaign goal, keep in mind that the amount of money you spend on your campaign should be factored into your overall campaign budget.
Don’t hesitate to include the costs of your campaign in your campaign goal.
Raising money costs money. You don’t have to shy away from talking with your board and donors about the importance of adequately funding the costs of the campaign.
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Claire Axelrad says
This is a terrific article about all the pre-campaign planning considerations organizations should address before embarking on a large, special fundraising initiative. Thank you so much Amy and Andrea for taking the mystery out of capital campaigns, and for all you do to help nonprofits of all sizes and shapes reach their highest visions. I will be sharing this!