Capital campaigns are the most cost-efficient method of fundraising that exists (perhaps with the exception of planned giving). The key to this efficiency is scale. In a capital campaign, you are raising very large amounts of money, often significantly greater sums than the organization has ever raised.
How does an organization meet that challenge? As with all successful fundraising efforts, with meticulously planned strategies, targeting high-value donors, and leveraging the campaign’s high-stakes goals to inspire larger contributions. Capital campaigns are not just about reaching a financial target; they're about transforming the financial foundation of an organization, enabling it to achieve its long-term objectives and expand its impact.
Factors to Consider in a Capital Campaign Budget
So what does a capital campaign budget look like? Like any good consultant, the answer is: “It depends.” There are a range of factors that influence campaign costs such as how large your campaign is, how well-cultivated your donors are, the capabilities of your staff, and how complicated the campaign may be (e.g. local campaign vs national).
We typically suggest allocating roughly 10% of your campaign's target goal towards expenses, spread out over three years. While you might not require the full amount, starting with 10% is an effective strategy to secure your board's approval for the campaign budget.
Before readers get excited because there is a percentage involved, let me share that we agree that percentage-based compensation is unethical. That said, having a percentage-based ratio to understand and budget for campaign expenses can be helpful.
Allocating Your Capital Campaign Budget for Success
When planning a capital campaign, it's crucial to be strategic about where you allocate your funds to guarantee the success of your initiative. By focusing on these critical expenses, you can enhance your campaign's visibility, engage potential donors more effectively, and efficiently manage contributions, ensuring that your capital campaign achieves its objectives.
Consulting
For most campaigns, consulting is the largest chunk of a capital campaign budget. Just like an orthopedic surgeon is a highly specialized medical professional, campaign consultants are (or at least should be) highly specialized fundraising professionals. Most fundraising practitioners may engage in one or two campaigns in their careers. Campaign consultants, like DickersonBakker, lead dozens. That expertise applied to your campaign is an investment ensuring the greatest likelihood for success. Consulting expenses include campaign planning (feasibility) studies, ongoing campaign counsel, and travel.
Staff
It is not uncommon for a nonprofit to hire staff to assist with the campaign. Who they hire depends on their needs, though it is typically one of two types of roles. First, the agency may hire a major gift officer/campaign manager position. This is someone who is going to coordinate the campaign including campaign volunteers. This person may also develop a prospect list for the campaign. Second, the agency may hire support staff who can free up time for the senior leadership and senior fundraisers to focus more time on the campaign instead of other duties.
Messaging
Campaigns require a suite of messaging assets to effectively communicate the case and invite donors of all levels to participate. Sometimes, this can be something simple such as a case brochure. These days, no capital campaign is complete without video, web, social media, and robust print assets to reach the widest audience, across multiple channels. The value of these assets is not just to the donor, they can also inspire and empower campaign volunteers to be more effective fundraisers.
Campaign Events
These events serve as opportunities to engage with potential donors and create a buzz around your cause. It's important to carefully consider how much money should be allocated for each event, taking into account factors such as venue rental, catering, marketing materials, and any special guests or performers.
It's also essential to strategize which events will have the most impact in terms of reaching your fundraising goals and attracting new donors. By properly budgeting for campaign events, you can ensure that these gatherings are not only impactful but also cost-effective in achieving your overall fundraising objectives.
CRM Software
With the ever-increasing competition in the business world, customer relationship management has become a crucial aspect of success. A well-implemented CRM software can help organizations streamline their sales process, improve customer satisfaction, and increase revenue.
Therefore, when planning a capital campaign budget, it is vital to allocate a sufficient amount for implementing and maintaining robust CRM software. This investment will not only benefit your organization in the short term but also have long-term positive impacts on its growth and success.
Grant Support
It’s important to set aside a portion of your capital campaign budget specifically for securing grants. Grants can provide a significant source of funding for a campaign, as they often come with larger amounts and do not need to be repaid. However, obtaining grants can be a competitive and time-consuming process, which is why having dedicated funds for this purpose is necessary.
By setting aside a specific budget for grant support, organizations can ensure that they have the resources and flexibility to pursue various grant opportunities and increase their chances of success in securing these valuable sources of funding.
Research Funding
By setting aside a specific portion of the budget for research, organizations can ensure that they have the necessary resources to conduct important studies, gather data, and make informed decisions. This not only helps with creating effective programs but also attracts potential donors who are interested in supporting groundbreaking research efforts.
Additionally, allocating capital campaign budgets for research funding showcases an organization's commitment to innovation and progress, which can increase its credibility and trustworthiness among donors.
How Long Does it Take to See Results?
The key to remember with capital campaign expenses is that the campaign should pay for its own expenses. As such, the organization’s operating funds should not take a hit from the campaign. Of course, it frequently takes about 4-6 months for the campaign to become a net positive. This period of time requires seed money that either comes from cash reserves or an early donor.
Either way, it is important to remember that campaign expenses should be viewed as an investment instead of as an operational expense. Where else can you regularly invest $5 and get a return of $100? Honestly, I will take that arrangement to the bank every day of the week!
Looking to Get the Most Out of Your Capital Campaign Budget? Contact DickersonBakker
Considering a campaign but concerned about costs? Contact Dickerson Bakker to learn more about how to get started with your campaign without breaking your operational budget. We specialize in providing solutions that ensure you can embark on your campaign journey without jeopardizing your capital campaign budget. Let's work together to make your campaign a success without financial strain.
