When it comes to nonprofit capital campaigns, organization is key.
Capital campaigns are exciting. When done well, they can transform your nonprofit’s future. But with all the excitement comes a rush of financial activity that, if not carefully managed, can overwhelm your regular operations.
When donations, pledges, purchases, and campaign-related expenses start pouring in, it’s important to keep things organized from the start. Without clear tracking, financial reports can become muddled, leaving leadership and donors without a clear picture of progress.
Tip 1: Separate Campaign Finances from Operations
The best way to maintain transparency is to create a separate system for campaign activity:
- Dedicated general ledger accounts for contributions, receivables, expenses, and fixed assets.
- Class or department codes within your accounting software to distinguish campaign transactions from everyday operations.
This ensures campaign dollars don’t distort your normal financial reporting and makes it easier to evaluate progress.
Tip 2: Document Pledges Clearly
Every campaign should use standardized pledge forms. These documents help eliminate confusion and provide the clarity auditors and donors expect. A good pledge form includes:
- The total pledge amount
- Payment terms (dates, amounts, number of installments)
- Any restrictions on the use of funds
- Instructions for handling excess funds if goals are surpassed
- Clear language on whether the pledge is unconditional, conditional, or just an intention
When pledge documentation is clear, your nonprofit avoids disputes and maintains donor trust.
Set Your Nonprofit Up for Success
Getting your campaign finances organized from the very beginning lays the groundwork for trust and success. By separating activity and documenting pledges well, you’ll avoid messy reporting and related issues later on. In the next part of our capital campaign series, we will break down the different types of donor commitments and how to account for them accurately. Looking for more guidance? Get in touch with our nonprofit advisors to talk about your upcoming capital campaign and how we can help!
