The number most owners carry into their first budget conversation is a construction number, and a construction number is not a total project budget. It is usually the largest line in that budget, which is exactly why it gets mistaken for the whole thing. A pastor hears that a comparable building went up for a certain price per square foot, multiplies by the size the congregation needs, and the result becomes the campaign goal. A developer takes a contractor’s rough figure from a lunch meeting and builds a pro forma around it. In both cases the figure may be perfectly accurate for what it measures. The trouble is what it leaves out, and what it leaves out can easily add a third or more on top of the building itself.

We would rather have that conversation in the first meeting than in the fourth month of construction. So this post walks through what a complete project budget actually contains, layer by layer, using an illustrative church building with a $4 million construction cost. The figures in the example are not a quote and not an industry average. They are the kind of numbers we see when we build these budgets with real clients, and they are meant to show proportion, not to replace an estimate for your project.

What a total project budget includes beyond construction

Start with the money that goes to people other than the builder. Architectural and engineering fees are the obvious piece, and owners usually expect them. What owners expect less often is the ring of professional services around the design team: the boundary and topographic survey, the geotechnical investigation that tells everyone what the soil will carry, the civil engineering for drainage and site utilities if it sits outside the architect’s agreement, special inspections and materials testing that the building code requires during construction, and, on more complex buildings, a commissioning agent who verifies that the mechanical systems actually perform as designed. Add legal review of the construction contract and an accountant for the financing paperwork. On our illustrative $4 million church, this whole professional layer can reasonably land around $440,000, and very little of it is optional.

Next come the costs a city or utility charges simply for letting the building exist. Building permit fees are usually modest. Water and sewer tap fees, impact fees, and the cost of extending a utility line to the property are often not. A site that looks finished on a survey can still need a sewer main run several hundred feet, or a turn lane the traffic engineer will require before the city signs off. These costs vary so much by jurisdiction that we treat them as something to investigate rather than estimate, and that investigation belongs before the land is bought or the campaign goal is announced. In our example we carry $120,000, but we have seen this line run a fraction of that and several times that, depending entirely on what the utility and the city ask for.

Then there is everything that makes a building usable on the first Sunday or the first day of business. Furniture, fixtures, and equipment is the industry term, and in a church it covers worship seating, nursery cribs, classroom tables, the commercial kitchen equipment if it is owner furnished, and the lobby furniture that makes the space feel like home. Technology is its own category now: the sound system, video projection and streaming, network and Wi-Fi, security cameras and access control, and the signage that tells a first-time guest where the children’s check-in is. Our illustrative budget carries $360,000 for this group. Churches in particular tend to underestimate it, because these items feel like purchases rather than construction, and because the old building’s chairs and speakers seem like they can simply move across the parking lot. Sometimes they can. Usually the new room is larger, the acoustics are different, and the old equipment was due for replacement anyway.

Financing and insurance make up the fourth layer. If the project carries a construction loan, interest accrues on each draw from the first month, and the loan carries origination and closing costs of its own. Builder’s risk insurance is sometimes carried by the contractor and sometimes by the owner, and that should be settled in the contract rather than discovered at the first claim. Capital campaigns carry their own costs as well, from printed materials to consultant fees. In our example this layer is $180,000, and the interest figure in particular depends on how quickly the campaign converts pledges into cash. Finally, there are transition costs: moving, temporary space if the congregation or business is displaced, utility deposits, and the overlap period when both the old and new buildings are being heated and cooled. We carry $40,000 for that, and it is the line most likely to be forgotten entirely.

Add those layers to the $4 million construction cost and the project is already at $5.14 million before a single dollar of contingency. That gap is not padding and it is not waste. It is the cost of turning a construction contract into a building that is permitted, furnished, connected, financed, and occupied, and it was always going to be spent. The only question is whether it was in the budget when the campaign goal was set.

Why construction contingency is really three different things

Most owners have heard that a project needs a contingency, and many have heard that five percent is the customary figure. Five percent is a reasonable number for one specific kind of contingency at one specific moment in a project. The mistake is using it as though it covers everything that can move. In practice we think about three separate reserves, because they protect against three different kinds of uncertainty and they behave differently over time.

The first is design contingency, and it lives inside the cost estimate during design. At schematic design, the drawings show the shape of the building and the major systems, but not the thousands of details that will eventually be priced. An honest estimate at that stage carries an allowance for everything not yet drawn, and that allowance should be larger early and shrink as the drawings become complete. By the time the construction documents are finished, the design contingency should be close to zero, because there is nothing left undrawn. If an estimate at schematic design carries no design contingency at all, it is not a conservative estimate. It is an incomplete one that happens to look precise.

The second is escalation, and it covers the time between when a number is estimated and when the work is actually bought. This is the reserve that owners most often fold into general contingency and then discover is missing. Construction prices do not hold still while a congregation raises money or a developer waits on entitlements. According to the Bureau of Labor Statistics producer price data compiled by the Associated General Contractors in September 2026, prices for inputs to new nonresidential construction rose 8.9 percent from August 2025 to August 2026, and the prices contractors charged for new nonresidential buildings rose 5.3 percent over the same twelve months. Individual materials moved much further: over that same year, steel mill products rose 23.4 percent, copper and brass mill shapes 20.9 percent, and aluminum mill shapes 27.3 percent. Measured from February 2020, input prices for new nonresidential construction are up 53.8 percent.

Those figures describe the past year, not a forecast, and escalation can slow or reverse. But an owner who prices a building in January and bids it the following January has taken on a full year of market movement, and nothing in a five percent construction contingency was meant to absorb that. We price escalation as its own line, tied to the actual schedule from estimate to bid, and we revisit it each time the schedule moves. In our illustrative budget, a year of escalation at a rate in line with recent building price increases adds roughly $200,000 to $240,000. We wrote about how to read the current market in more depth in our look at whether now is a good time to build.

The third reserve is the owner’s construction contingency, and it is what most people mean when they say contingency. It is held by the owner after the contract is signed, and it pays for the things nobody could reasonably have known: rock where the geotechnical borings found soil, an existing wall that turns out not to be where the old drawings showed it, a code official’s interpretation that differs from the design team’s, or a gap in the documents that a contractor fairly prices as a change. For a new building on a well-investigated site, we usually recommend something on the order of ten percent of construction cost, which is $400,000 in our example. For a renovation of an older building, where the unknowns sit behind every wall, we often recommend more, and we say so plainly before the campaign goal is set rather than after the first change order arrives.

Where this advice does not apply, and where it can go wrong

None of this means every project should carry the largest possible reserves. A pre-engineered building on a flat, already-serviced pad has fewer unknowns than a sanctuary addition tied into a 1970s building, and its contingency can reasonably be smaller. An owner who has already bought furniture for a new space, or whose technology is genuinely new and portable, does not need to budget for it twice. The structure of the budget is constant; the size of each layer depends on the project, and part of our job is to explain why each line is the size it is rather than defaulting to a percentage because it is customary.

There is also a real risk on the other side. An inflated budget can stall a campaign before it starts, and a large unexplained contingency has a way of being spent whether or not the surprises materialize. The answer to that is not a smaller, less honest number. It is a budget where every reserve has a named purpose, a rule for when it can be released, and a point in the schedule when the unused portion returns to the owner. When the honest total is more than the organization can raise, the right response is to change the project, by phasing the work, right-sizing the program, or reconsidering the site, rather than to shrink the contingencies until the spreadsheet balances. Our post on defining the building program covers how those decisions get made before design begins.

Put all of it together and our illustrative church, with its $4 million construction cost, carries a total project budget somewhere around $5.75 million once professional services, fees, furnishings and technology, financing, transition, escalation, and contingency are counted. That is roughly 44 percent above the construction number. Your project’s ratio will be different, sometimes lower and occasionally higher, but the categories will be the same. The owners who come through construction with their finances and their credibility intact are rarely the ones who found a cheaper building. They are the ones who knew the real number before they made a public commitment to it.

At UNITE, we build the total project budget alongside the building program, not after the design is finished, because the budget and the program are really the same decision expressed two ways. We have watched enough projects over more than 25 years and more than 1,000 church buildings to know which lines get forgotten and which reserves get spent too early, and we would rather put those numbers in front of a building committee in the first month than defend a missing line item in the twelfth. If you are holding a construction figure and wondering what the rest of the budget looks like, we would be glad to sit down with you and build it out line by line, whether or not you are ready to start design.