Capital Campaign Series Part 3: Does Your Nonprofit Really Need a Feasibility Study?
Capital Campaign Readiness, Part 3: External Readiness
So far, in our blog series on Campaign Readiness, we’ve discussed the benefits and challenges of executing a capital campaign. And we’ve talked about how to make sure your internal team is ready to take on such an endeavor.
Now, it’s on to part three in our series: testing to determine if your donors will embrace your campaign by conducting the all-important feasibility study.
What is a Nonprofit Feasibility Study?
A feasibility study is a research project that helps your organization answer crucial capital campaign questions before beginning your campaign, such as:
Is there sufficient monetary support to reach our campaign goal? Most importantly, feasibility studies help organizations determine whether the capital they wish to raise is realistic based on existing monetary support. Ideally, you’ll unearth multiple donor prospects capable of making one of the top ten campaign donations and determine how close those donations get you to your campaign goal.
Do we have enough volunteers to support the campaign?
Volunteers willing to jump in and dedicate themselves to your capital campaign will be a key ingredient in its success. A feasibility study shows you how many volunteers you’ll need for tasks like serving on the capital campaign committee, hosting events, providing marketing support…the list is long. Many hands make light work, so your ability to properly staff will make the jobs of your most dedicated volunteers even easier. And donors respond favorably to people who are personally committed to a cause, especially when those people give not only their money but their time. Volunteers can be big drivers of donor dollars.Do you offer a safe space for donors and constituents to provide honest thoughts on your leadership, mission, programs, reputation, and impact?
If the answer is “no,” or if you’re not sure, a feasibility study is a critical step before beginning your campaign. Why? Because honest feedback is needed before we can understand what needs to change to move your organization forward. Feasibility studies offer a way for people to give anonymous feedback, increasing the likelihood that they’ll speak truly and reveal areas for improvement.Do you have a compelling case statement?
Every successful capital campaign must make its case for support. This includes a compelling messaging document, also known as a case statement. Feasibility studies can test your case statement with key stakeholders and gather feedback to help make key messages clearer, more compelling, and more impactful before your campaign kicks off.Do you have a strategy to roll out your campaign?
Feasibility studies help inform a campaign’s timeline and final goal. They can also help organizations gain insight into the tactics and activities that will best connect to the desires and motivations of potential donors, setting your campaign apart.
With these questions answered, your feasibility study will serve as a compass pointing your capital campaign in the right direction and giving you the best chance of reaching your fundraising goal.
Feasibility Studies Seem Expensive and Time-Consuming. Do I Really Need One?
Yes!
With very few exceptions, I recommend that organizations conduct a feasibility study before beginning a capital campaign. Why?
Because capital campaigns are not a time for guesswork.
Rather than focusing on the cost of the feasibility study itself, consider the cost of diving headfirst into a capital campaign - with the time, money, and resources needed to do so - without first understanding what fundraising goals are feasible or the many resources needed to make your campaign a success.
Feasibility studies help ensure that your campaign will have a high degree of success before you even get started. And, if the feasibility study doesn’t support your tested campaign objectives, that’s also hugely valuable information to know before you begin. This insight will help you address the weakest parts of your project, preventing you from making costly and damaging mistakes.
It’s Rare, But There Are Times When a Feasibility Study is Not Needed
Of course, there are exceptions to the rule and times when a feasibility study is not worth the time or investment. If your organization falls into one of these categories, you may be able to bypass this step.
Your Campaign Goal is Less Than or Equal to Your Annual Operating Budget
In these cases, you can reasonably assume that you’ll meet your fundraising goals from your current donor base.You Know Where Your Top Gifts Are Coming From
If you’re confident that you know where and from whom your top 10-15 gifts will come, a feasibility study is something you can probably do without. That’s because the top 10-15 gifts typically account for 60-80% of a campaign’s total goal. So, if you already know where more than half of your donor dollars are coming from, you may not see a huge return on the investment of the time and resources that a feasibility study requires.You’re Embarking on Phase Two of a Multi-Phase Campaign
When you’re preparing for phase two of a campaign, chances are your goal, and phases have already been tested in a prior study. Hopefully, a feasibility study was conducted prior to the start of phase one. By the start of phase two, as long as the campaign is unfolding as planned, a second feasibility study isn’t usually necessary.
I believe that more data is always better than not enough data. So, if you’re unsure where your organization falls within this spectrum, I recommend opting for a feasibility study so you know, without a doubt, that your campaign is set up for success.
Can an Organization Conduct its Own Feasibility Study?
Great question! And there’s a simple answer. No.
Hear me out. Yes, you’re probably thinking that I am biased - of course, I’m going to recommend a study that Beam Consulting can conduct for you. And, of course, this is true. But we do this work because we believe in its ability to make capital campaigns as successful as possible. And one of the true elements of the success of a study is a third-party partner who can come in and objectively analyze the results.
Why? Because people are naturally reluctant to share bad news or negative feedback. A consultant provides your staff and other constituents with a safe space to share important feedback anonymously.
I can’t tell you how many times I’ve had someone in an interview tell me that they’ve been afraid to share feedback with their leadership team. And that’s a dangerous state in which to operate any organization.
The reality is that you need to hear it all - the good, the bad, and the ugly - if you’re going to run a successful campaign.
And as consultants, we can analyze the qualitative data we receive and convert it into an actionable, realistic, and measurable campaign plan, saving you time and money in the long run.
You’re Ready to Begin Your Feasibility Study. Great! Now What?
Before you kick off your study, you’ll need a campaign gift pyramid, a case statement, and a group of constituents to participate in focus groups and 1:1 interviews.
In some cases, you’ll also need a business plan, cash flow projections, staff lists, and other materials. Your consultant should guide you through this information-gathering process, so you have what you need to get started.
A thoughtful and thorough feasibility study is your compass as you run your capital campaign. Yes, it’s a lot of effort. But the intelligence and direction you’ll gain will help you mitigate the inherent risk of running a campaign and, ultimately, raise the capital needed to sustain and strengthen your organization.
As always, my team and I are here to help you navigate your capital campaign journey, beginning with a solid data-driven feasibility study.
Connect with us, and let’s get started. We look forward to chatting with you soon!
My best,
Dani
About The Author
For the past 25 years, Dani has helped nonprofits at local, regional, and global levels find sustainable solutions to tricky growth and funding issues. She works with leaders and teams to optimize their approach to fundraising, strategic planning, marketing, and more! Dani is passionate about helping motivated people build vibrant and effective nonprofit organizations—so they can make a meaningful impact in the world!