Your organization has opted to conduct a capital campaign. This ambitious fundraising venture can be an enormous opportunity for your nonprofit, but before you start asking for donations and marketing your campaign, you need to ensure that it’s viable in the first place.
That’s where capital campaign feasibility studies come into play. Even though these studies are important to the success of a capital campaign, they’re surrounded by skepticism — usually due to misconceptions.
Perhaps you’ve heard of these common misconceptions regarding capital campaign feasibility studies:
- The purpose of a capital campaign feasibility study is to determine a fundraising goal
- A feasibility study will only tell us what we already know
- Every organization should conduct a feasibility study
- We can conduct a feasibility study in-house
- A feasibility study is a waste of time and money
- Consultants use feasibility studies to sell their capital campaign services
- The results of the capital campaign feasibility study aren’t that important
In this article, we’ll unpack each of these statements to uncover the truth. In the meantime, you’ll learn about the real purpose of capital campaign feasibility studies and how your organization can use them to your advantage!
1. The purpose of a capital campaign feasibility study is to determine a fundraising goal
Many nonprofits are under the misconception that feasibility studies are primarily used to determine a capital campaign’s fundraising goal — i.e., the amount of money that’s feasible for the organization to raise.
While this claim is true, it’s misleading. Imagine if someone claimed that the purpose of food was to enjoy different flavors. While this may be true in one sense, it misses the larger picture: that food is a means of sustaining our bodies so that we can live and produce energy.
Similarly, a feasibility study is a means to sustaining your capital campaign long-term.
A feasibility study is about so much more than the campaign goal. It’s a vital aspect of pre-campaign planning, and it will be used to construct the framework of your campaign.
Not only will the study help you determine your fundraising goal, but it will also help you develop a gift range chart so that you know how much to ask for, and perhaps most importantly, who you should ask in the first place.
Along with this vital information (which will be gleaned from donors during the interview process), a feasibility study should assist with other aspects of the capital campaign.
Specifically, a feasibility study should reveal:
- Who will take on leadership roles during your campaign. Interviewers should ask candidates whether they’d be willing to take on a leadership position and who they think would be the best fit for each role.
- Whether the campaign is timed strategically. The study should determine potential competition from other nonprofits or organizations.
- The campaign’s sustainability. A capital campaign entails increased operational costs as well as specific expenses. Nonprofits must have the infrastructure to support these costs.
- If a capital campaign is the right strategy. Your organization may not be ready for a capital campaign. It’s important to identify weaknesses in your infrastructure before you take the risk of conducting the campaign in the first place.
- Your nonprofit’s marketability. What do donors and community leaders think about your organization and your cause? Do they perceive the campaign as instrumental to your mission?
All of these factors are crucial to a successful capital campaign. A feasibility study will help your organization make informed decisions during your campaign planning.
Ultimately, a feasibility study can help you determine nearly every aspect of your campaign based on direct information from your most impactful constituents.
2. A capital campaign feasibility study will only tell us what we already know
Let’s say your nonprofit has a developed infrastructure, a stellar board, and a plethora of major donors to support your campaign.
You may be wondering why you can’t skip the feasibility study and start planning your campaign based on information in your donor database. After all, your nonprofit knows your donors best!
A feasibility study will only tell you what you already know, so you might as well move forward without one.
A successful feasibility study isn’t solely about results. In fact, it’s one of the most effective means of building long-term, sustainable relationships in your organization.
Specifically, a feasibility study is a cultivation tool that can help you develop stronger relationships with donors and key community leaders. Donors and leaders will be honored when you ask them for their opinions and take their feedback seriously. Just the act of setting up personal interviews and asking for their reactions to your case statement can be incredibly meaningful to these stakeholders.
Contributors want to know that their thoughts matter to your organization, and a feasibility study is a way to actively show how much you value your constituents.
A feasibility study is also a chance for stakeholders to express concerns that they may have been holding back, which can reveal aspects of your fundraising that you didn’t realize were an issue. People are more likely to be honest about reservations when asked for their opinions directly.
Plus, these key figures often have insights that can guide the course of your campaign — and the future of your organization. After all, a nonprofit is nothing without its donors!
Ultimately, you can use a capital campaign feasibility study as a strategic cultivation tool to learn more about high-impact donors and leaders so that you can craft more effective asks in the future.
3. Every organization should conduct a feasibility study
Everyone in the nonprofit world knows that feasibility studies are a common way that organizations get prepared for important fundraising projects (especially capital campaigns).
If your team is planning an ambitious capital campaign, it’s easy to think that conducting a feasibility study is the right next step to take before you start fundraising.
While fundraising feasibility studies can be a great way to get prepared for a capital campaign, some nonprofits simply aren’t ready to take them on.
In particular, if your organization hasn’t had the requisite fundraising experience, you may not be in the right place to start planning for a capital campaign.
Specifically, a capital campaign feasibility study might not be right for your nonprofit if your organization:
- Has an unclear idea of how the money will be spent. Since capital campaigns are dedicated to a single fundraising project with a large price tag, your team needs to be clear how the money is going to be spent.
- Does not have a proven fundraising track record. Not every nonprofit has a lot of experience fundraising. While it’s never too late to get started, your team should be realistic about whether you’re prepared to take on this challenge.
- Is unprepared to commit to the timeline of a capital campaign. Capital campaigns usually take several years to complete. On top of that, your team might need to take a year or more to get prepared. Are you ready to commit to that timeline?
If your nonprofit isn’t ready to take on a capital campaign, you aren’t ready for a feasibility study. While these studies can help organizations get prepared to conduct the campaign they envision, some nonprofits simply need more time lay basic groundwork.
One way to grow your organization so that it reaches a level in which it’s ready to realistically conduct a capital campaign? Work with a fundraising consultant to determine what your team should do to prepare for a future capital campaign.
This way, once you do complete a feasibility study, the results will yield meaningful data that your nonprofit can leverage into smarter fundraising.
Ultimately, while feasibility studies can be a great resource to some nonprofits, all organizations should take time to determine whether or not they are ready to take one on.
4. We can conduct a capital campaign feasibility study in-house
If your organization is worried about the expense of hiring a fundraising consultant, you may decide to conduct the study in-house.
After all, your leaders know your organization and your case for support better than anyone else. Plus, donors may be more willing to speak with someone they know than to consult with a stranger.
Regardless of pure intentions, in-house interviewers will hold a conflict of interest. Someone who’s invested in seeing the capital campaign through may be inclined to advance the project even if it poses hazards.
Specifically, conducting an in-house study will pose these risks:
- Interviewees may over-promise their commitment to the project to avoid offense. Interviewees are more likely to be honest to a third-party candidate who doesn’t have ties to the organization.
- A leader who’s invested in the capital campaign may gloss over negative findings or over-emphasize positive results. Even unintentionally, it’s easy for enthusiastic supporters to misrepresent a study.
- An in-house interviewer may miss important themes that fresh eyes would catch. As such, an in-house interviewer may fail to recognize incredible opportunities or glaring problems.
Thus, it’s best for organizations to hire outside assistance to conduct their feasibility studies. Nonprofits should purchase a feasibility study as a single service from fundraising consultants or consulting firms.
These trained experts can offer more than neutrality. They can help you use the feasibility study to its maximum potential!
Ultimately, a capital campaign consultant is the best choice to conduct interviews so that you receive the most accurate, honest results.
5. A capital campaign feasibility study is a waste of time and money
Nonprofits are right to question services that result in additional expenses. After all, funds should be focused on the mission.
A feasibility study will take too much time (3 to 4 months!) and will cost too many resources. If you want to launch a capital campaign, you need to do it sooner rather than later, and a feasibility study will just slow down the process.
A failed capital campaign is a much greater expense than the relatively minor costs of conducting a feasibility study.
This isn’t just about not meeting a fundraising goal. A failed capital campaign is a public endeavor that can undermine your organization’s legitimacy.
Donors want to give to competent, capable nonprofits who can use funds wisely and achieve their goals. A failed campaign can jeopardize your reputation and the support of donors in the future.
As such, a feasibility study is an opportunity to catch your nonprofit before it makes a fatal error.
But let’s not talk doomsday — there are many other reasons why a feasibility study isn’t a waste of resources!
Capital campaign feasibility studies can:
- Excite donors about your capital campaign. A feasibility study is a great opportunity to rile early interest for the quiet phase of the campaign.
- Cultivate donor relationships. There’s no downside to learning more about your donors and speaking with them through targeted interviews. They are the blood of your organization, after all!
- Identify holes in your infrastructure. Regardless of whether you move forward with your capital campaign, a feasibility study can help you identify organizational weaknesses. Fixing these issues will help you strengthen your nonprofit as a whole.
- Build sustainable strategies. The opportunity to get feedback on your case statement and assess your fundraising strategy is fundamental to your growth as an organization. Even if you determine that your nonprofit is more than ready for a campaign, you can always refine these elements to reach your full potential.
- Increase your marketability. Understanding your nonprofit’s role in your community and reputation can help you craft marketing strategies that speak your donors’ language.
Ultimately, if you can see the value in using your donors’ and leaders’ insights to strengthen your nonprofit, then you should see the value in feasibility studies, too. This is especially true because there are resources available to make these studies easier than ever.
Capital campaign feasibility studies are an investment of time and resources and are critical for testing the case for support as well as the financial goal for your campaign. Taking anywhere from 2 to 4 months to complete, feasibility studies traditionally rely on campaign consultants to interview your best potential donors. However, there might be a better way.
Resources such as the Capital Campaign Toolkit are designed to help. The Toolkit’s team of expert campaign advisors have developed a “Guided Feasibility Study” where nonprofit leaders interview their own donors, rather than relying on an outside consultant. This helps build relationships prior to starting a campaign, engages donors right up front, and often leads to early gift commitments.
You will not want to skip this crucial step to learn from and engage donors prior to starting a campaign.
Learn more about the Capital Campaign Toolkit here.
6. Consultants use feasibility studies to sell their capital campaign services
Many nonprofits hire a capital campaign consultant to assist with campaign management. As such, organizations may be skeptical about hiring a consultant to perform a feasibility study.
If they know they can earn more money by conducting the campaign, fundraising consultants may promote the project regardless of the results.
Nonprofits can easily avoid a conflict of interest by purchasing a feasibility study as a single service from a consulting firm.
That way, your nonprofit is under no obligation to hire the consultant after the results of study. Of course, you can extend your contract if the consultant works particularly well with your organization.
If your organization is still concerned with potential conflicts of interest, consider this: a consultant’s reputation is on the line with every campaign they support.
If a campaign fails, a consultant will have spent tons of time and energy on a project that they can’t use as a reference.
In fact, many consultants will refuse further service to organizations who choose to proceed with a capital campaign despite negative results from the study.
The key is to find a reputable firm that values the integrity of their consultants, and you should have nothing to worry about!
Ultimately, capital campaign consultants won’t use your feasibility study as an opportunity to sell their services if you purchase the study as a single service and choose a reputable firm.
7. The results of the capital campaign feasibility study aren’t that important
Even if a feasibility study reveals that you aren’t quite ready for a capital campaign, you may want to proceed anyway. After all, your board members are already excited about the project, and you really do need this new building to advance your mission.
Your problems aren’t that bad. Surely you can move forward and fix them later!
A feasibility study is designed to help you, not discourage you unnecessarily.
While the results may sometimes be hard to accept, it’s important to take them seriously. Just remember: any results, no matter how jarring, are an opportunity to improve your organization.
Knowing your weaknesses will help you strengthen your internal operations.
Capital campaigns can wait, if necessary. What’s most important is that your organization puts sustainable solutions in place so that you can continue to serve communities and people in need!
Ultimately, the results of a feasibility study are for your benefit. Take them into serious consideration before you decide to proceed.
Maximize Feasibility Study Results
Now that you know the truth behind capital campaign feasibility studies, it’s time to learn the strategies for conducting your own and maximizing your results!
The Capital Campaign Timeline
When should you conduct a capital campaign feasibility study? How does it fit into the bigger picture of your campaign timeline? Find out with this resource!
Top 10 Nonprofit Consulting Firms
You’ll need a fundraising consultant to conduct your feasibility study. Learn more about the services from these top nonprofit consulting firms!