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 the way nonprofit leaders test their plans and a goal in order to prepare for an upcoming capital campaign.

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 help evaluate the potential for success. They do not typically determine whether your campaign is “feasible,” as many board members fear.

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 mistakenly believe there’s no point in spending time and resources on a study for a campaign you’re going to do, regardless of the results.

However, going through the process of interviewing your best prospective donors to collect feedback before diving into a campaign will ensure your campaign is more likely to succeed. That’s because a thoughtful study process engages donors early, which leads to bigger gifts.

In addition, a well designed feasibility study will help you collect important data, in addition to engaging key donors, which will help you plan and implement 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

You cannot go to donors to ask them about 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. However, 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 do not have the financial capacity to make lead gifts, then you will get disappointing results.

3. A Nonprofit Feasibility Study Engages Top Donors

Taking the time to meet with top donors and explain your plans and ask for feedback is a great way to make your top prospects feel like insiders. By including them in feasibility conversations, you’re giving them an opportunity to engage early in the planning process alongside your top 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 something that you hadn’t considered as a strength before, but an outside perspective helps bring 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 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 participants (your largest donors), the consultant presents the preliminary campaign plans and collects feedback confidentially and anonymously.

Due to the confidential nature of the conversations, nonprofit leaders are left wondering who said what during interviews. If donors have questions or concerns, no one follows up, which is not good for relationship building.

In this model of confidential interviews, a consultant’s recommendations often lack transparency. You may feel confused by the final report from your consultant because you won’t learn which donor said what or how much a specific donor indicated they might give.

The old model does not help build relationships between donors and the leaders of your nonprofit or help nonprofit leaders prepare for soliciting these important 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 have found that organizations benefit when they use the study process to meet directly with their prominent supporters (rather than outsourcing those conversations to consultants) and build 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?

One concern about the new model is that 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 do not 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 recourse.

How to Prepare Your Nonprofit for a Feasibility Study

Before you hire a consultant, you will 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, but 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 will want to make sure your board is ready for a campaign (or at least ready to take the next step). This means they are 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. Therefore, 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 do not 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 Google search.
2. Review the websites of consultants you are 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. Hold additional meetings with other key leaders as needed.
5. Ask for proposals from consultants you’d like to consider.

You’ll notice there’s nothing mentioned above about 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 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 guidance 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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