Capital Campaign Feasibility Study: The Ultimate Guide

Conducting a feasibility study ensures your capital campaign is highly likely to be successful.

Capital campaign feasibility studies help inform organizations of how much they can realistically expect to raise philanthropically and allow leaders to plan for alternative funding sources, if necessary, for the balance of the project.

Occasionally, it is necessary to scale back plans, but that is better to know up front than when you are struggling several years down the road.

Well-done feasibility studies give nonprofit leaders the data-informed confidence they need to lead successful campaigns.

Feasibility studies are also an important opportunity to strategically engage donors before asking them to support the campaign. Therefore, skipping this crucial step in the campaign planning process is foolish and irresponsible.

Quick Links — There’s a great deal to know about capital campaign feasibility studies. We’ll jump-start your understanding of this important topic in the sections below:

• What Is A Capital Campaign Feasibility Study?
• Why You Should Conduct a Feasibility Study
• Pros and Cons of the Old Model
• Benefits of the New Model: A Guided Feasibility Study
• How to Prepare Your Nonprofit for a Feasibility Study
• Hiring the Right Consultant for Your Feasibility Study

Read on to learn the ins and outs of conducting a feasibility study.

What is a Capital Campaign Feasibility Study?

A capital campaign feasibility study is how nonprofit leaders prepare for an upcoming capital campaign by testing their plans and financial goal.

This strategy relies on asking the advice and opinions of your largest donors and other community leaders before heading into a campaign. Their collective advice will help determine whether your plans are sound, your case for support is compelling, and your financial goals are realistic and feasible.

Feasibility studies should probably be called “campaign planning studies” because they help nonprofit leaders develop strong campaign plans and determine how likely they are to succeed. They do not typically determine whether your campaign is “feasible,” but they help you understand what goals and strategies are feasible.

Don’t Let Fear of Disappointing Results Prevent Good Planning

You might be concerned about conducting a feasibility study for fear the results will be disappointing.

Or you might need to do a campaign so badly that you expect you’re going to do one regardless of the results, so why spend the time and resources on a study?

The thing is, the process of interviewing your best prospective donors to collect feedback prior to a campaign will ensure your campaign is more likely to succeed, as you gather important feedback.

A well-designed feasibility study will help you collect important data and engaging key donors which will be crucial to planning and implementing a successful campaign.

Why You Should Conduct a Feasibility Study

In this section, we’ll examine five reasons to do a feasibility study.

1. A Nonprofit Feasibility Study Leads to Clear Campaign Plans

Donors don’t respond well to vague plans, so a feasibility study forces you and your team to come up with clear plans.

For example, you can’t go to donors and say

“We’d like to expand, but we don’t know where the new building will be, how big it will be, whether it needs renovating, or how much it will cost. What do you think?”

To vague plans, donors can only give vague answers. So, the more specific you can be, the more specific they will be. That doesn’t mean you need to have every detail worked out and ready. Your plans are likely to change over time. But it’s important to approach donors with clear thinking and as many details as possible.

2. A Nonprofit Feasibility Study Forces the Focus on Top Donors

Campaigns are successful when top donors make lead gifts.

Since it is not possible or realistic to interview hundreds of donors, the feasibility study process forces you to identify and engage the top prospective donors to your campaign. If you interview too many donors who don’t have the financial capacity to make lead gifts, you’ll get disappointing results.

3. A Nonprofit Feasibility Study Engages Top Donors

Your top donors will feel like “insiders” when you take the time to meet with them, explain your plans, and ask for feedback. By including them in feasibility conversations, you’re giving them an opportunity to engage early in the planning process alongside other leaders.

4. A Nonprofit Feasibility Study Clarifies Strengths and Weaknesses

Engaging outsiders in your planning process will help you identify strengths and weaknesses that you might not otherwise see.

If more than one person points to something concerning, it’s more likely you’ll address it as part of your pre-campaign planning process. You may also identify a strength that you hadn’t considered when an outside perspective brings it into focus.

5. A Nonprofit Feasibility Study Gives Your Board Confidence

Most board members don’t really understand what goes into a campaign or what makes one successful. They have no way to determine how much you can raise.

Feasibility studies help give them confidence that your top donors will support you in the effort. It’s much easier to vote in favor of moving ahead with a campaign after dozens of your top prospects have been consulted and they’ve given a green light to move forward.

Pros and Cons of the Old Model

Historically, feasibility studies have been conducted by experienced capital campaign consultants who help design the study, conduct confidential donor interviews, develop a report, and present the results with recommendations to your board.

During conversations (or “interviews”) with these largest donors, the consultant presents preliminary campaign plans and collects feedback confidentially and anonymously.

This method often leaves nonprofit leaders wondering who said what during interviews. If donors have questions or concerns, no one can follow up due to the confidential nature of the interview process.

You may feel confused by the report because you won’t learn which donor said what, or how much a specific donor indicated they might give. As a result, a consultant’s recommendations often lack transparency.

The old model doesn’t help build relationships between donors and the leaders of your nonprofit, or help nonprofit leaders learn to have strategic conversations with donors.

Here’s the good news — there is a better way.

Benefits of the New Model: A Guided Feasibility Study

At Capital Campaign Pro, we developed a new feasibility study model with a focus on building transparent and honest relationships between donors and nonprofit leaders, the Guided Feasibility Study. Plus, nonprofit leaders still get the benefits of consulting expertise, data collection, and analysis used in the old model.

We’ve found that organizations benefit when they use the study process to meet directly with their prominent supporters (rather than outsourcing those conversations to consultants). They end up building stronger relationships prior to the start of a capital campaign.

In the new, guided model, an experienced consultant will help your team:

• Develop the strategy
• Outline a plan
• Write a strong case for support
• Develop a discussion guide
• Select interviewees
• Develop questions
• Train interviewers
• Debrief interviews
• Provide data collection tools
• Conduct analysis
• Make recommendations
• Report to the board

The feasibility study interviews provide your leaders (as opposed to an outside consultant) with a valuable opportunity to build and strengthen their relationships with major donors early in the campaign planning process, and should not be missed.

Will Donors Really Be Honest with Nonprofit Leaders?

Some may worry that in the new model, donors won’t be open and honest with nonprofit leaders. Many consultants who use the old model raise this as an issue in favor of a more confidential process.

However, we’ve found that donors are more likely to want to share their open, honest feedback directly with nonprofit leaders. After doing more than a hundred Guided Feasibility Studies where nonprofit leaders interview their own donors, we can confidently say that you don’t need to be concerned about donors being open and honest with your nonprofit leaders. They are and they will be!

In fact, you should be relieved that an outside consultant won’t be asking your biggest donors to share their concerns confidentially without any opportunity for you to follow up.

How to Prepare Your Nonprofit for a Feasibility Study

Before you hire a consultant, you’ll want to do these things.

1. Determine Your Preliminary Campaign Objectives

Clarify the project for which your campaign will raise money. Some examples include a new building or renovation/construction costs, new programs/services, scholarship funds, technology, facilities maintenance costs, fundraising expenses, additional staff, endowment, etc.

Feasibility studies don’t tell you how much money your organization can raise in a vacuum; rather, they test how much money you can raise for a specific project or set of initiatives.

2. Engage your Board in Getting Ready for a Campaign

Before you hire a consultant, you’ll want to make sure your board is ready for a campaign (or at least ready to take the next step). This means they’re excited about the project and understand the associated costs.

3. Develop a Preliminary Campaign Fundraising Goal

Attach dollar estimates to your campaign objectives so that you can gauge how much you need to raise. This is your initial working goal, which will be tested in the feasibility study.

Now it’s time to hire a consultant to help guide you through a feasibility study.

Hiring the Right Consultant for Your Feasibility Study

Not every consultant is right for every campaign or every team. It’s important to find the right fit for you and your organization.

Campaign consultants provide a wide range of services and have a wide range of experience. You want an experienced campaign consultant with a track record of success. They should have consulted on at least five campaigns from start to finish. You don’t want to be a guinea pig for their consulting practice.

Hire the RIGHT Campaign Consultant: 5 Steps

Follow these steps to hire the right consultant for your organization:

1. Ask for referrals and do a search online.
2. Review the websites of consultants you’re considering.
3. Schedule initial meetings with three to five consultants. Be prepared to share details about your campaign, your fundraising strategy, your team, and what you need.
4. Meet with other key leaders as appropriate.
5. Ask for proposals from consultants you’d like to consider.

You’ll notice there’s nothing mentioned above about Requests for Proposals (RFPs). Successful, busy consultants don’t respond to RFPs, so don’t waste your time creating them.

We hope you’ll consider Capital Campaign Pro as one of the top consulting companies you evaluate for your feasibility study and your campaign. We have a wide range of services and offerings.

Are you Ready for a Guided Feasibility Study?

If your organization is getting ready for a capital campaign, a feasibility study will be an important part of your planning process. Done well, it will help you plan a campaign that is likely to succeed and it will give you an opportunity to engage your top donors in the process.

A Guided Feasibility Study with Capital Campaign Pro gives you all the benefits of building relationships with your donors, plus the support of an experienced campaign expert to guide you through the study and your campaign, from start to finish.

And even more important, a Guided Feasibility Study conducted with expert support and training will give your board members the confidence they need to accept the recommendations and move forward with your campaign.

Additional Campaign Resources

To learn more about conducting a successful capital campaign, explore the following additional resources:

• Capital Campaigns 101: Ultimate Guide for Beginners
• Capital Campaign Case for Support: Crafting a Complete Plan
• How to Create a Capital Campaign Brochure: Our Top 4 Tips

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