1. Create Your Capital Campaign Budget Early
We all know the phrase, “It takes money to raise money,” yet too often I see nonprofit organizations go into a capital campaign without first creating a budget for the campaign itself.
Don’t make this mistake – it’ll end up costing you more money down the road and it’ll make your campaign much less effective!
Instead, create a preliminary campaign budget early in your campaign process – and include the campaign costs in your ultimate campaign goal. For example, let’s say you want to raise $5,000,000 and you estimate the cost of the campaign at $500,000. In that case, your working campaign goal will actually be $5,500,000. (You’ll have to front-end some money to pay for early campaign expenses, but you can include these expenses in your campaign goal as well.)
What will you be spending the money on? I’ll cover the details in another post, and a sample campaign budget is included below. For more detailed information, including several sample capital campaign budgets, consider buying my book.
(Gail and I will be going over capital campaign finances in our Capital Campaign Magic coaching program! Submit an application to be considered for the April sessions.)
2. Calculate Your Initial Campaign Budget as a Percent of Your Campaign Goal
The budget for launching a successful capital campaign is calculated as a percentage of your fundraising goal – the larger the goal, the smaller the percentage. Why? Because some campaign costs will be the same, no matter how big or small your goal. These same costs, though, will be come to a larger percentage of your goal if your goal is a smaller one.
Let’s take a look at the ballpark:
If your campaign is small — $2,000,000 or less, you can expect to spend 15% of the goal. If you’re raising between $3,000,000 and $5,000,000, though, expect to spend around 10% of that amount on your campaign.
And if your goal is closer to $10,000,000, you can expect to spend around 4% or 5% to raise those funds.
Once you’ve come up with a basic estimate based on percentages, run the numbers the other way and build budget from the ground up with a list of everything you think you’ll need to make your capital campaign a success.
3. Consider Your Organization’s Style as as You Estimate Your Budget
As you estimate your capital campaign costs with a broad brush, keep in mind that your organization’s style will make a difference to your actual costs.
If yours is an organization that will require embossed invitations and events featuring fancy dinners, for example, your campaign will be more expensive. (That doesn’t mean you should skimp! If your major donors are used to this kind of treatment, they’ll expect it in your capital campaign.)
If your organization is more basic and your board members and donors will be happy with hot chocolate and donuts kick-off inside a construction tent instead of champagne and fancy flowers, obviously your campaign will cost less.
4. Use Your Campaign Budget to Strengthen Your Overall Development Program
Because you’ll raise much more money (5 to 10 times as much) through your capital campaign than you do for your annual fund, and because you can include the campaign’s expenses in your campaign goal, capital campaigns are a great time to invest in your staff and update your systems.
Do you need to upgrade your donor tracking software? Are you lacking an experienced major gifts person? Does your social media and/or your overall online presence need some polishing?
A capital campaign is your opportunity to invest in people and systems that will, in good time, provide you with a great ROI for all of your fundraising endeavors. In other words, the money you spend on your capital campaign, done correctly, can have a positive impact on your entire fundraising program for years!
Here’s a capital campaign budget worksheet (courtesy of Paula Peter of The Solstice Group) to give you some ideas about what your organization might need. This is just one sample, though – for a more complete picture, consider buying my book, Capital Campaigns: Strategies that Work.
Gail and I are here for you! Let us know what help you need in getting ready for your campaign.