Fundraising campaigns are essential lifelines for nonprofit organizations. They provide the funding necessary to carry out programs, pay staff, and deliver services that create lasting impact. But behind every successful campaign is something far less visible, and just as critical: financial tracking.
Without solid processes in place to track the revenue raised and the expenses incurred, even the most compelling campaign can run into trouble. Overspending, donor miscommunication, weak internal controls, and compliance risks can quietly derail your efforts and limit long-term impact. That’s why keeping a close eye on the financials isn’t just smart, it’s essential.
Here are the key financial elements every nonprofit should track during a fundraising campaign:
1. Start With a Thoughtful Budget and Track Against It
Launching a campaign without a budget is like starting a road trip without a map. If you don’t know where you’re going, it’s impossible to get there. A budget is your campaign’s map which, if done correctly, can guide you safely to the destination.
So, before you embark on your campaign journey, be sure you’ve created a detailed budget that includes:
- Marketing and advertising costs (print, social, digital)
- Technological tools (donation platforms, CRMs, design software)
- Event-related expenses (venue, catering, rentals)
- Staff time and/or consultant fees
- And, of course, estimated revenues
Track your actual spending regularly. In your accounting software, create a sub-account (this could also be called a class code or dimension based on your software) labelled “Campaign” and code every related vendor invoice to it. For example, if you hire a consultant, code the invoice to “Professional fees” / “Campaign” noting the use of the sub-account. This level of detail is essential for accurate and complete financial tracking. By comparing actuals to your budget each month, you’ll be able to catch overspending early and find opportunities to cut costs without compromising your results.
Be realistic, not optimistic! A campaign demands a lot of time and money. Planning it and budgeting for it correctly will help you decide if it’s worth it.
2. Understand Your Cost per Dollar Raised (CPDR)
How efficient is your campaign? The answer lies in your Cost per Dollar Raised (CPDR). It’s calculated by dividing total expenses by total revenue raised. For example, spending $5,000 to raise $20,000 gives you a CPDR of $0.25, i.e. you’re spending a quarter to raise every dollar.
This metric helps you evaluate campaign performance beyond just dollars raised. A lower CPDR typically indicates a more financially efficient campaign. However, a slightly higher CPDR might be acceptable for donor acquisition or awareness-based efforts.
3. Plan for Cash Flow, Not Just Revenue
Revenue doesn’t always equal immediate cash. Maybe your total campaign donations exceeded the target goal. Maybe your actual results ended up close to the budget. All of that is good news. However, keep in mind that good news often doesn’t mean quick cash.
Be mindful of:
- Campaign invoices that need to be created by you and processed by the donor. That can all take time.
- Pledged gifts that won’t be paid until a later date, sometimes years after the end of the campaign.
- Planned or estate gifts, which may be counted toward your campaign goal but are inherently unpredictable in timing. These commitments can show strong fundraising progress on paper, but they don’t translate into immediate cash, so make sure to account for the difference when assessing your financial position.
It’s important to understand and estimate when the money will arrive to ensure you can maintain stable operations during and after the campaign. Automating pledge invoicing can help ensure timely billing and facilitate the tracking of receivables. This is something auditors will look at closely, particularly multiyear pledges.
A cash flow projection updated monthly is never a bad idea. Even though your organization is a nonprofit, you still need cash today to pay the bills due tomorrow, and when campaigns result in many multiyear pledges, it’s important to understand and project the cash flow implications.
4. Carefully Manage Restricted vs. Unrestricted Funds
Campaigns are typically launched to achieve a specific goal, whether it’s to build, renovate, research, or create something new. Because of this, the funds raised are often donor restricted. It’s rare to run a successful campaign purely for operating expenses, which makes careful tracking even more important.
When donor restrictions are in place, those funds must be spent in strict alignment with the donor’s intent. Consequently, a campaign can make you cash rich and unable to pay your day-to-day bills. Too many restricted donations can create cash flow bottlenecks, even if your total revenue looks strong on paper.
This is why it’s important to include regular annual giving campaigns either as part of or alongside your larger, goal-specific efforts. The unrestricted gifts from these campaigns provide the flexibility needed to support general operations and maintain financial stability.
To stay ahead of this, use that sub-account structure discussed in section 1 in your accounting software to clearly separate restricted funds.
5. Don’t Overlook In-Kind Contributions
Non-cash contributions (e.g., donated goods, services, or professional time) have real financial value and must be recorded properly for both budgeting and IRS reporting.
However, not all in-kind donations are alike, particularly when it comes to donated services. There are strict accounting rules that determine when these contributions can and cannot be recorded. On top of that, there are also specific IRS guidelines around donor acknowledgement letters for both goods and services. This is where your accountant becomes a critical partner in ensuring everything is handled correctly and compliantly.
And speaking of donated goods … Do you really want to take someone’s broken down car that doesn’t run? Or a plot of real estate with no viable use? That’s why a well-defined gift acceptance policy is essential (especially during a campaign) so your organization can make smart, mission-aligned decisions about every type of contribution.
6. Budget for Compliance and Reporting
It’s likely that your campaigns will trigger additional financial reporting requirements, like:
- State fundraising registrations
- Grant reporting documentation
- IRS compliance (e.g., Schedule B for Form 990)
These aren’t just boxes to check; they are critical steps for maintaining good standing with regulators and funders. Build both time and budget into your campaign plan to manage these requirements properly. Be sure to document everything thoroughly, and maintain copies of all filings, reports, and correspondence in a centralized location. That way, when year-end rolls around (or your auditor comes knocking), you’re not scrambling to track things down.
7. Wrap It Up with a Financial Debrief
Once the campaign ends, take time to reflect and perform a financial debrief. Did any fundraising channels exceed or fall short of expectations? Were you within budget? What financial risks or surprises occurred?
This debrief process isn’t just about wrapping things up; it’s about building a stronger foundation for your next fundraising effort. Documenting what you learn now sets you up for even greater impact later.
If managing and interpreting this data feels overwhelming, we at Chazin specialize in helping nonprofits like yours turn complex financial information into clear insights and actionable strategies. Together, we can make sure your numbers aren’t just sitting on a page but actively guiding your mission forward.
The numbers speak. Make sure you’re listening.
One Last Thought
At its core, fundraising is about building trust. That trust comes not only from how well you tell your story and show donors that you understand their passions and interests, but also from how wisely you spend, how clearly you report, and how sustainably you grow. By taking the time to set up the right financial tracking before your next campaign, you’ll position your organization to raise funds more confidently, report more clearly, and build lasting relationships with your supporters.
Need support implementing a campaign tracking framework that holds up under audit? At Chazin, we support nonprofit teams in tracking campaigns from start to finish, making sure nothing falls through the cracks and everything holds up under audit. We’re here to help you stay focused on your mission while we keep an eye on the numbers.
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Chazin
With over 20 years working exclusively with nonprofits, we pride ourselves in having a unique understanding of nonprofit accounting needs. We believe that nonprofits deserve personalized, quality service and should not settle for a one-size-fits-all approach. We collaborate with you to provide a fully virtual and customized solution that is not only cost-effective but also strengthens your accounting function. We offer a team of industry experts at your disposal to provide advice, leading technology, and to supplement existing staff to improve efficiency and compliance.