A capital campaign is a high-stakes, high-reward effort that can transform your organization’s future. A successful campaign demands a unified approach to marketing, fundraising, and operations, and requires everyone involved (including staff, board members, and supporters) to be on the same page.
Many nonprofits hesitate to launch a capital campaign due to the scale and complexity. Often, these organizations are unsure if they’re ready for a capital campaign and don’t want to fall short of their goals.
Luckily, a capital campaign feasibility study allows nonprofits to test their readiness for a large-scale fundraising effort. In this guide, we’ll explain what a feasibility study is and cover the basic information you need to know to conduct one.
What is a Capital Campaign Feasibility Study?
Before we dive into what a feasibility study is, you should first understand what a capital campaign is. Typically, these are intensive fundraising efforts aimed at raising a substantial amount of money for a specific “capital” project, such as building or renovating facilities, establishing an endowment, or expanding capacity in other ways.
Note that there is no single dollar amount that makes a campaign a capital campaign. DonorSearch explains that there’s no sector-wide standard amount for major gifts, which indicates that a “substantial amount” of money varies from organization to organization.
The first stage of a capital campaign involves a nonprofit conducting internal planning and a strategic assessment. This is when a feasibility study, an assessment of an organization’s preparedness for a major campaign, is conducted.
The purpose of a feasibility study is to test the viability of a nonprofit’s proposed capital campaign goal and gauge the strength of its case for support. It’s not a simple survey for feedback. Instead, it is a comprehensive assessment that combines internal data review and interviews with key stakeholders. At the end of the feasibility study, your nonprofit’s leadership should feel confident about their decision to proceed or not to proceed with the campaign.
The Core Components of a Feasibility Study
According to Convergent, a capital campaign feasibility study consists of the following five steps:
- Choose stakeholders to reach out to. Identify key major funders, board members, longtime volunteers, community stakeholders, and even local business owners you want to interview to determine if you can count on their support. You can also take this time to pinpoint new major donor prospects.
- Develop your case for support, which should include details about your nonprofit, an explanation of why your project is necessary and how it will benefit your mission, projected costs and timelines, and reasons why your community should support your capital campaign.
- Prepare feasibility study questions and conduct interviews. Typically, a feasibility study interview consists of 20–30 questions that give you an overview of the interviewee’s perspective of your nonprofit and its capital campaign. Your questions should tell you whether your organization has the credibility and trust needed to reach your campaign goal. Take notes in every interview so you can effectively analyze the results afterward.
- Conduct an internal readiness assessment. This determines whether your board members and internal staff members support your major fundraising effort. In particular, you want to take this time to pinpoint any internal gaps. For instance, if your financial tracking is subpar, you may enlist the help of a nonprofit accountant. Or, if you find that you’re lacking supporter data from your last few fundraising events, consider auditing your software and figuring out how to fix the issue.
- Evaluate your results and determine your next steps. Analyze the results of your interviews and internal assessment to determine if your nonprofit is ready to conduct a capital campaign. It’s helpful to summarize and present findings in a final report, which can easily be referenced in discussions with leadership and other key stakeholders.
Generally, a feasibility study gives you one of three results:
- A “green light” indicates strong support for your initiatives and internal processes that are well-equipped to handle a large-scale capital campaign.
- A “yellow light” indicates that you should proceed with caution. It means you have a chance of succeeding, but you can take steps to increase that chance, such as lowering your goal, strengthening your board, or reworking the storytelling in your case for support.
- A “red light” indicates that critical elements for capital campaign success are not yet in place, and you may have significant work to do before you can move forward.
When done correctly, a feasibility study not only tells you whether you can proceed with your capital campaign, but also gives you a roadmap to get to a place where you can move forward.
For this reason, many nonprofits consider hiring fundraising consultants to handle their feasibility studies. An expert can clearly present their findings, taking the hard work of analysis off your team’s plate. Additionally, as a third party, they bring an objective view that can uncover insights your staff members may not have been able to identify.
Why a Feasibility Study Is Non-Negotiable
Many nonprofits are tempted to skip their campaign’s feasibility study, often citing time or budget constraints. However, a feasibility study is the single most important factor in ensuring campaign success and reducing risk.
Here are four key benefits of conducting a capital campaign feasibility study:
- Identify challenges and opportunities. A study uncovers potential roadblocks before they become problems, allowing you to address them in advance. It also shows you opportunities to generate additional funds during your campaign.
- Test and validate your financial goal. A feasibility study determines if your campaign’s goal is realistic by testing the goal’s viability with top potential donors. This prevents you from launching a campaign with a goal that is either too high to be credible or too low to be inspiring.
- Cultivate top stakeholders. Feasibility interviews are a valuable touchpoint for top stakeholders. During an interview, you’re asking for the stakeholder’s thoughts and advice, which makes them feel like an active participant in your mission and strengthens your relationship with them.
- Redefine your case for support. A feasibility study is a first test of how well your case for support resonates with your community. You can confidently make adjustments to your case or proceed with it as is, depending on the feedback you receive.
Don’t forget that your nonprofit doesn’t have to handle the study alone! A capital campaign consultant can support you throughout the process, saving your team time while using their expertise to ensure the results are clear and thorough.
A capital campaign feasibility study is not a preliminary step to be rushed. Rather, it is the foundation upon which the entire structure of your campaign is built. By listening to your most important stakeholders, you gain the insights, build the relationships, and secure the confidence necessary to launch a successful, transformative capital campaign that creates change in your community.
