How much does a capital campaign actually cost?
How do you budget for your fundraising and how much should it cost to run a fraternity capital campaign? We're glad you asked.
While there is no one-size-fits-all cost to raising major funds, we want to help you understand your options. We believe that when you better understand the path that works best for your fraternity, you can engage the most alumni.
The post will help you select the right approach and the best tools for your group to have a successful capital campaign give you an estimate of what you can expect to pay.
CHOOSING THE STRATEGY THAT’S BEST FOR YOUR FRATERNITY
Your strategy will directly impact the cost of your campaign. The number of people, the intensity of their involvement, and whether you choose to engage the expertise of fundraising professionals to support you will all affect the size of your campaign budget. Whatever strategy you choose, however, the execution of the campaign will influence not only what you spend and how much you raise, but also how the project positions your organization for the years to come.
UNDERSTANDING YOUR FUNDRAISING OPTIONS
Fundraising Firms: The Traditional Approach
Many groups choose to hire a fundraising firm that uses a traditional approach to capital campaign support which has mostly stayed the same for the past 60+ years. When you hire a fundraising firm the biggest chunk of your budget goes toward your lead gift officer who meets with prospective donors in person or on the phone. Their job is to travel around presenting your case and soliciting pledges which is both time consuming and costly, especially if your organization has members across the US.
Volunteers still participate in the campaign as committee members by helping to identify prospective donors, connecting alumni with the lead gift officer, and assisting with some other logistics, but lead gift services are typically rolled into a full-service agreement for the campaign.
The Cost:
Expect fees for this strategy to cost about 15% of your goal, not including travel and other expenses for personal solicitations.
Using a lead gift officer often costs upwards of $200,000 regardless of how much you raise.
Friend-raising: The Organic Approach
Friend-raising is our proven fundraising formula that uses a peer-to-peer approach. We believe the most effective fundraising comes from your relationships with your members.
The friend-raising approach allows you to maximize your membership and build lasting relationships with current and future donors at a fraction of the cost of hiring a fundraising firm.
This organic approach still includes professional support from an experienced team when it comes to critical tasks like goal-setting, strategic planning, and meticulous implementation. But as alumni yourself, you and your fellow volunteers are the ones best positioned to ask for financial support from your fellow alumni. When it comes to the future of your fraternity, we believe there is no better way to secure pledge commitments than by asking Brother-to-Brother. While this approach costs less, it does not sacrifice results, and– even more importantly– the campaign process serves as an opportunity for the brotherhood to reconnect.
The Cost:
Expect fees for this strategy to cost about $3,800 - $5,200 per month over 12-18 months.
If you're using an organic strategy, aim for consulting costs around 6% of your final campaign goal.
For example, we recently worked with a group that raised over $2 million and spent less than 7% on their campaign all-in.
The DIY Approach
Some groups don’t have a sizable budget to begin with, or they don’t feel comfortable contracting a bunch of strangers to handle their campaign. Understandably, these groups often choose to use the “Do-It-Yourself” approach without seeking any outside help. With the DIY approach, the only up-front costs to your group are the price of materials for creating and disseminating communications and the time of a dedicated group of volunteers. Sounds too good to be true, right?
Unfortunately, oftentimes it is.
The #1 reason groups who use the DIY approach fall short of reaching their financial goals is because it’s extremely difficult to hold yourself accountable without a trusted guide. Think of it like this: the DIY approach to campaign fundraising is like buying a gym membership. Now you have access to all the tools you need to get fit and stay in shape, right?
Unfortunately, reality often doesn’t work that way. In spite of your best intentions, life gets in the way, and– because of career busyness, family obligations, or other obstacles– it can be difficult to find the discipline to drag yourself and your buddies back to the gym.
Capital campaigns are no different. Volunteers often have busy lives, and running a campaign can feel like a full-time job (and without the necessary support, it can be). If you and your fellow volunteers don’t have the hours and the self-discipline needed for researching, strategizing, and running on the metaphorical treadmill, you may find that your campaign has ended before it’s even begun.
That’s where a trusted advisor comes in. At the gym, the fittest people always seem to work with personal trainers because it gets results. You have an expert guide there to cheer you on, coach you when you need help, and most importantly, hold you accountable for showing up and putting in the work.
The Cost:
The time, treasure, and talent of many extremely dedicated volunteers.
WHAT TO INCLUDE IN YOUR CAPITAL CAMPAIGN
Regardless of which strategy you choose, there are some standard components to a capital campaign that you’ll need to budget for. This isn't an exhaustive list, but you'll get a good idea of what you can expect to spend for a capital campaign. Keep in mind that you can adjust your campaign goal to include the cost of consulting.
Each of these price ranges depends on the level of service and options you choose.
Website (or landing page). When it comes to fundraising, you need to have an online home. Not only will it help you share your message with your members, it can also be an online hub for everything from updating their contact information, to checking upcoming event calendars, or even making online donations. Typically website development and setup range from $1,000 to $2,500 depending on your specifications and level of service.
Wealth Screening. This can be a useful tool to gain insights into your alumni database to help you lead a successful capital campaign. This service includes consulting records that aren’t always easily accessible (such as stock holdings, political donations, estimated income, and real estate) to learn who in your donor pool is willing and able to contribute significantly to your campaign fund. Depending on the size of your database, a wealth screening usually costs between $800 and $2,500.
Monthly campaign management and services. The proven formula for fundraising uses a data-driven approach combined with a template for best practices, strategy, and tactics. The fee for campaign support may include account management, strategy sessions, and coaching, depending on your group's unique needs. The price can range from $3,500 to $5,00 per month.
Campaign communications. You should typically include content creation and project management for marketing collateral such as cultivation packets for key prospective donors and volunteers, a magazine-style brochure to launch the public phase of your campaign, event invitations, email newsletters, direct response solicitation letters, pledge fulfillment reminders, and more. Pricing for these services ranges from $15,000 to $40,000 per year over two years. Your campaign may last up to five years, depending on your specific pledge fulfillment needs.
The annual fund. This is the backbone of your fraternity's fundraising efforts. It's important to keep your annual fundraising campaign going during a capital campaign to keep up the spirit of yearly giving. Plan to invest $10 to $15 per member per year to keep a strong annual fund.
The takeaway?
Whether you choose to use the traditional model, take the organic approach, or go the DIY route, campaign costs can vary greatly depending on your needs and goals. The right trusted advisor can help you achieve your fundraising goals within a budget that works for you.
But no matter how you decide to move forward, there's one thing you shouldn't count on: fully covering the up-front cost of your campaign with campaign donations alone. Nearly all capital campaigns accept 3-5 year pledge commitments in lieu of large one-time donations, which can be cost-prohibitive for many alumni. Therefore, you shouldn't count on cash flow to fund your capital campaign activities to begin with. Campaigns require a significant investment upfront that, when managed properly, pays dividends by the time you're through.
It's also important to keep in mind not only your short-term financial goals but the long-term impact that will best serve the fraternity's legacy and future generations of alumni. Make sure you work with a partner who prioritizes your group's best interests.
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