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by Linda Lysakowski, ACFRE
The Campaign Budget
There are two budget areas that must be considered when embarking on a capital campaign—the project budget and the campaign budget.
The Project Budget
If the project involves construction, the architect or construction manager will generally help develop the budget for the building. This budget will include items such as:
- Construction costs (sometimes called hard costs, soft
costs being expenses such as fees and permits).
- Architectural fees (usually a percentage of the project).
- Architectural renderings (The renderings need to be completed
before the campaign is launched because they play an important
role in building the case for support. The costs affiliated
with the renderings will need to be funded up front.)
- Engineering and contractor fees.
- Fees and permits required by local municipalities.
- Environmental impact statements including historical
impact studies if the building involves a historical structure.
- Possible environmental clean up if issues are found such
as asbestos removal, soil remediation, etc.
- Furniture, fixtures and equipment.
- Communication systems (telephone, internet, etc.)
- Computer systems, including wiring.
- Rental for office space during construction phase (if
needed).
- Interest on loans for construction or bridge loan while
pledges are being paid.
- Inflation (the longer the project is delayed, the higher
expenses will be).
- Contingency for unexpected expenses.
Campaign Budget
Campaign expenses are a separate budget and are often funded through the campaign itself. For some organizations, if their operating budget allows for covering campaign expenses, the entire campaign dollars raised can go directly into the project. However, in most cases, these expenses will be folded into the overall goal for the campaign. Fundraising costs are dependent on many factors, such as the size of the campaign, the duration of the campaign, the geographic scope of the campaign, the amount of time required from a consultant, and the existing fundraising structure in place within the organization.
As a general rule these costs will run somewhere between 5% and 15% of the total campaign goal. Generally the larger the campaign, the lower this percentage will be.
The campaign budget may include such items as:
Personnel
If the organization needs to hire extra staff to manage the campaign, the budget should include salaries, benefits, and employment taxes.
Professional Services
This line item may include a campaign consultant, a grantwriter, a public relations consultant, and outside bookkeeping services. The organization should be sure that proposals from consultants include all anticipated expenses. Does the consultant require housing while on site, will there be rental cars, airfare, mileage expenses? Organizations should check with their state regulatory authorities to make sure their consultant contracts comply with state laws and that the counsel being engaged is registered in their state where registration is required.
Marketing and Education Materials
This line item should include all of the materials needed to promote the campaign including:
- graphic design;
- photography;
- printing of brochures, letterhead and envelopes;
- website design;
- audio visuals; and,
- telephone fundraising firm.
A word of caution on engaging telephone consulting firms. The organization should look for firms that work on a flat fee basis, not a percentage based fees, which is unethical according to AFP standards. In many states firms are required to disclose their fee if they work on a percentage basis.
Donor Recognition
How you will recognize donors needs to be planned early on, so donors can be advised as to what type of recognition they will receive. This line item should include the costs of both design and installation.
Campaign Events
Events should include donor cultivation, the kickoff event, report meetings, groundbreaking and dedication events. Event expenses will generally include facility rental, entertainment, equipment rental, catering, and possibly an event director or the fee for a professional events consultant.
Support Systems
If the organization needs to purchase software or hardware this can become a line item in the campaign budget or in the general operating budget, since the system will be used for ongoing development operations. Other line item expenses in this category will include telephone, fax, and Internet costs directly related to the campaign. Include line items for postage and office supplies in this category, as well.
Travel
Travel expenses may be a factor if the campaign is regional or national in scope, or if trips to national or regional foundations to solicit funds are required. Don’t underestimate this category, as it is often more costly then most campaigns budget for. Include line items for the travel (air, rental car, taxis, etc.), a set per diem cost, and entertainment expenses.
This campaign budget does not include the costs of a feasibility study, which can cost anywhere from $5,000 to $50,000 and should be undertaken before you begin to seriously work on the campaign itself.
The campaign budget should be developed during the campaign planning phase and monitored on a monthly basis.
More in this series:
What Is a Capital
Campaign, and When Do You Need One?
Are You Ready
for a Campaign?: Infrastructure
Are You Ready
for a Campaign?: Board, Volunteers, and Donors
Developing Your
Case for Support: Telling Your Story
Developing Your
Case for Support: Preparing Prospects for the “Ask”
The Planning
Study: Internal Assessment
The Planning
Study: External Assessment
The Campaign
Plan: Structuring Your Campaign
Budgeting the
Campaign
The Campaign
Cabinet & Other Campaign Volunteers
Identifying
and Cultivating Donors
Making the
Ask
Campaign
Events & PR
Recognition
and Stewardship
Life After
the Campaign