When nonprofits embark on a capital campaign, the excitement is often centered on the project itself—whether it’s constructing a new building, expanding services, or launching a major initiative. But one of the most common mistakes is failing to account for the full cost of a successful fundraising effort.
You can’t focus solely on project costs without factoring in campaign costs—the necessary investments in fundraising, marketing, and donor engagement that will actually make the campaign a success.
If you don’t budget for the campaign itself, you risk running out of fundraising fuel before reaching your goal. Let’s break it down.
Understanding Project Costs vs. Campaign Costs
🔹 Project Costs = The actual expenses needed to complete the initiative. These typically include:
✔️ Construction, renovation, or land acquisition
✔️ Permits, zoning, and legal fees
✔️ Equipment, technology, or furnishings
✔️ Program expansion or new service offerings
🔹 Campaign Costs = The expenses required to raise the funds successfully. These often include: ✔️ Feasibility study and campaign planning ✔️ Fundraising counsel or other consultants ✔️ Additional development staff or temporary campaign roles ✔️ Donor engagement events and recognition efforts ✔️ Marketing, branding, and case statement development ✔️ Fundraising technology like CRMs and wealth screening tools
The 10% Rule: Budgeting for Your Campaign Costs
A general best practice is to allocate 10% of the total campaign goal to campaign costs. For example, if you’re running a $5 million campaign, you should expect to invest at least $500,000 in campaign-related expenses.
While this is a rule of thumb, many organizations spend less than the full 10%. However, budgeting for it builds in a cushion in case of unexpected challenges—ensuring your team has the support and resources needed to execute a successful campaign.
Allocating this 10% ensures you have the resources to:
✅ Expand fundraising capacity – A capital campaign shouldn’t exist in a vacuum. Done right, it strengthens your overall development program by building donor engagement strategies that last well beyond the campaign itself.
✅ Staff the campaign appropriately – Running a campaign is time-intensive and requires focused fundraising leadership. If your campaign efforts are pulling attention away from annual fundraising efforts, you may experience shortfalls in operating revenue. Proper staffing ensures your team can sustain both short-term campaign success and long-term development goals.
✅ Bring in the expertise you need – Most nonprofits don’t have all the in-house skills necessary to run a major campaign. PR, marketing, finance, and high-level fundraising strategy all play crucial roles, and outside expertise can be a game-changer. Investing in specialists ensures that your campaign messaging, donor outreach, and financial management are all executed at the highest level.
✅ Invest in donor engagement – A well-run capital campaign isn’t just about hitting a fundraising goal—it’s an opportunity to build deeper, long-term relationships with donors. Proper budgeting allows for high-impact donor engagement efforts, from personalized stewardship to public recognition that fosters continued giving.
Why This Matters
Without planning for campaign costs, organizations often find themselves:
🚨 Pulling from their annual fund or general operating budget – When campaign costs aren’t properly accounted for, organizations often end up reallocating funds meant for day-to-day operations, potentially jeopardizing their financial stability and ongoing programs.
🚨 Understaffed and overextended – Expecting existing fundraising staff to manage a capital campaign on top of their normal workload can lead to burnout, donor neglect, and missed fundraising opportunities. A campaign requires dedicated attention and resources to be successful.
🚨 Delayed in implementation – Many organizations underestimate the resources needed to fundraise effectively. Without proper budgeting, campaigns can stall, leading to project delays, donor frustration, and difficult decisions about scaling back goals.
On the flip side, organizations that budget properly for their campaign don’t just raise more money—they position themselves for long-term fundraising success. They emerge from the campaign with:
✔️ Stronger donor relationships – A well-executed campaign fosters deeper engagement, trust, and commitment from key supporters, often leading to increased donor retention and future giving.
✔️ A clearer, more strategic fundraising plan – Capital campaigns require organizations to refine their messaging, donor segmentation, and fundraising approach, skills that benefit fundraising efforts long after the campaign ends.
✔️ A stronger fundraising infrastructure for future growth – Whether it’s enhanced donor data, improved engagement strategies, or a more skilled development team, the investments made in a well-resourced campaign set the organization up for sustained success.
By planning ahead and fully funding your campaign, you’re not just reaching a fundraising goal—you’re building a stronger, more resilient organization.
Planning for Success
If you’re preparing for a capital campaign, take a step back and ask:
💡 Are we budgeting for the campaign itself—not just the project?
💡 Do we have the right staffing, consulting, and fundraising systems in place?💡 How can we ensure this campaign strengthens our long-term fundraising capacity?
When in doubt, plan for success—not just for the project. A well-resourced campaign isn’t an extra expense—it’s an investment in your nonprofit’s future.
Frances Roen is a Georgia girl at heart, and has been graciously adopted by beautiful, snowy Minnesota. She is a forty-something daughter, friend, mom, wife, and entrepreneur, and is always on the look-out for a perfectly
fried piece of chicken.
Frances is a Certified Fundraising Executive (CFRE) with nearly 20 years of experience fundraising and has raised over $200M for nonprofits. She has held fundraising positions at The Bakken Museum, Augustana Care Corporation, and YouthLink and consulted with dozens of nonprofit clients across the globe. In these roles, she has been responsible for all aspects of fundraising including comprehensive campaigns, major and planned gifts, annual funds, events, communications, corporate partnerships, and volunteers.
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