Budgeting for a Capital Campaign
If your organization has decided to consider a capital campaign, your next step is to setup a budget. Most nonprofits mistakenly only include the obvious costs, like construction. Your capital campaign project budget should include cost estimates for the following expenses:
Infrastructure: Bring in professionals to ensure that the infrastructure you hope to acquire or build meets the needs of your nonprofit and service area. Potential donors are going to ask, “How do you know this is the right size facility to meet your organization’s current and future needs?” Make sure your answer is more than just a rough estimate.
Don’t let your acquisition or construction estimates get outdated. We recommend working with numbers that are less than one year old. You also will want an idea of when these payments will become due, so you can carefully plan your cash flow during the project.
- Acquisition/construction costs
- All testing, zoning and permitting fees
- Design fees
- FFE (furnishings, fixtures, equipment)
Capital Campaign: There are typically two-steps to a capital campaign. Step one is campaign planning, or the feasibility study. It typically lasts 3-4 months. The next step is campaign management, in which your consultant will lead you through the fundraising process. Your consultant will be with your organization for a long time – at least one year and sometimes as many as three.
Fees vary greatly depending upon the consultant’s experience and the type of service they are providing. Resident consultants move to your community and spend nearly every day in your office. This is the most expensive form. The cheapest is the consultant who never comes onsite. He or she strategizes with the nonprofit electronically. This is the least expensive. There are many more consultants who provide services somewhere between these two examples, visiting the nonprofit in person when needed and working remotely.
The costs below are conservative capital campaign consulting estimates.
- Campaign Planning (feasibility study): $20-$30,000
- Campaign Management: estimate 10% of goal. This should include campaign materials (video, brochure, etc.) and monthly service fees for the consultant.
Total capital campaign costs of less than 15 percent of the campaign goal will be considered acceptable to most donors; less than 10 percent is considered very efficient. Include the cost of the campaign in your total campaign goal. If you are raising $5 million in a capital campaign you can make the goal $5.5 million so that funds raised can pay for the cost of the campaign.
Make sure to also plan your cash-flow budget. Read more about our free cash-flow formula download to help you get started on the path to success.