There’s a common misconception that donors don’t like to fund operating expenses — either for ongoing operations or for the capital campaign.
That’s true … as far as it goes! If you segregate operating expenses from program and give donors a choice, which do you think they’ll choose?
Operation Funding vs. Program Funding
Imagine saying this to one of your capital campaign prospects:
Dale, you can either make a gift that will build the Community Activity Room, or you can pay for the salary of the Campaign Manager for 3 years, while she raises the money we need for this project.
Which would you prefer?
I know which I’d pick … and it wouldn’t be the Campaign Manager’s salary!
But the problem here isn’t that Dale doesn’t want to fund operations. She understands full well that money doesn’t just fly in the door without any organization and staff. Dale knows that you need systems and computers and offices and staff and even toilet paper in order to raise money and conduct your programs. She’s not stupid!
But when you separate program from operations, you give donors like Dale a false choice.
And of course, they’ll chose impact and program over operations every time, reinforcing your belief that your donors don’t want to fund operations.
So what’s the solution? It’s simple, really.
Solution: Include Your Operating Costs in Every Program
Just incorporate the appropriate share of operating expenses into every program you do. Not only is that good for fundraising, it’s real and honest and appropriate. Because without overhead and operating funds (and yes, even toilet paper), you won’t have program. Period!
For your capital campaign, you should, of course, include the campaign costs in your campaign goal. You can show those expenses in the project budget. But don’t give donors the sense that their gifts are funding either the project or the campaign. Focus them on the project and the total campaign goal. To do anything else is misleading!
When it comes to your annual budget and fundraising, you may have some internal battles to fight to shift the model. Richard Perry of The Veritus Group has written a wonderful white paper on this subject. I encourage you to download it and share it with your ED and Board Chair.
Smarter Capital Campaign Budgeting
Campaign budgeting doesn’t have to be tricky. To learn more about developing an appropriate budget for your capital campaign, take a look at these two posts:
- Setting Your Capital Campaign Budget
- 4 Things You Need to Know to Create Your Capital Campaign Budget
Do you have a question about your capital campaign budget? Ask your question here or ask in the comments section below.