A capital campaign is a significant undertaking for any nonprofit organization. Whether it’s for constructing a new facility, renovating existing infrastructure, or expanding programs, a capital campaign requires careful planning and strategic decision making. And like any major fundraising effort, it carries some risk. Before launching into a campaign, conducting a feasibility study is crucial to assess the campaign’s viability and determine what sort of return you can expect on your investment. If you’re considering launching a capital campaign in the year ahead, follow these steps first to conduct a feasibility study for your capital campaign.
1. Understand the Purpose of a Feasibility Study
A feasibility study is an integral part of the capital campaign planning process. It is designed to gather information and insights from key stakeholders to assess the campaign’s potential for success. The primary objectives of a feasibility study for a capital campaign include:
- Assessing Campaign Readiness: Determine if the organization is prepared to undertake a capital campaign, considering factors such as infrastructure, leadership, and capacity.
- Determining Fundraising Potential: Evaluate the organization’s ability to raise the required funds for the capital project and gauge the potential level of donor support.
- Identifying Potential Donors: Identify and cultivate major donors who are likely to contribute significant gifts to the capital campaign.
- Strengthening Case for Support: Refine the case for support, ensuring it resonates with donors and communicates the project’s importance and impact effectively.
2. Assemble a Feasibility Study Committee
To conduct a successful feasibility study for your capital campaign, form a committee that includes board members, key staff, and external fundraising consultants. This committee will oversee the study’s planning, execution and analysis, ensuring comprehensive coverage and unbiased perspectives. You may also include the people who use your nonprofit’s programs and services in this committee if appropriate.
3. Define the Feasibility Study Scope and Objectives
Clearly define the scope and objectives of the feasibility study. Identify the questions you need to answer, such as:
- Is our organization ready for a capital campaign?
- How much can be realistically raised for the project?
- Who are the potential major donors, and what are their interests?
Crafting specific study objectives will guide the data collection process and inform the study’s outcomes.
4. Identify Key Stakeholders
Identify and prioritize key stakeholders to be interviewed as part of the feasibility study. This typically includes major donors, board members, volunteers, community leaders, beneficiaries and key staff members. Ensure a diverse cross-section of perspectives is represented to gather comprehensive insights. Beneficiaries often get overlooked in this process, and that’s a mistake. The people who use your programs and services are best equipped to advise on whether the things you’re hoping to raise money for are really in their best interest, and they can help you position your campaign in a way that supports their needs and priorities.
5. Conduct Interviews and Surveys
The heart of the feasibility study lies in conducting in-depth interviews with the identified stakeholders. These interviews should be guided by a structured questionnaire to maintain consistency and ensure all relevant topics are covered. Topics to explore during the interviews may include:
- Perceptions of the organization’s strengths and weaknesses
- Interest in and support for the capital project(s)
- Potential gift amounts and reasons behind the willingness to give
- Perception of the organization’s capacity to manage the campaign
- Suggestions for improving the case for support
In addition to interviews, consider conducting online surveys to reach a broader audience and gather more quantitative data.
6. Analyze and Interpret the Data
Thoroughly analyze the data collected from interviews and surveys. Look for recurring themes, patterns, and commonalities in responses. Consider both the quantitative and qualitative feedback to gain a comprehensive understanding of stakeholders’ sentiments and perspectives.
7. Assess Campaign Readiness
Based on the data analysis, evaluate the organization’s readiness for the capital campaign. Assess factors such as board engagement, staff capacity, budget, existing donor relationships, and past fundraising success.
8. Determine Fundraising Potential
Use the information gathered to estimate the potential fundraising capacity for the capital campaign. Consider the total amount pledged or indicated by interviewed donors, as well as the level of enthusiasm and interest in the project. This estimation will inform the campaign’s fundraising goal and timeline.
9. Identify Major Donors
Identify potential major donors who have expressed a strong interest in the project and demonstrated capacity for significant gifts. Cultivate these relationships and develop tailored cultivation plans for each prospect.
10. Strengthen the Case for Support
Use the feedback received during the feasibility study to refine and strengthen the case for support. Address any concerns or gaps identified by stakeholders and ensure the case resonates with potential donors, while also representing your beneficiaries in a way that feels true and authentic to them.
11. Present the Findings and Recommendations
Present the feasibility study findings to the board and other key stakeholders. Share insights, fundraising potential, major donor prospects, and recommendations for moving forward with the capital campaign. If you’ve engaged your beneficiaries in the feasibility study, don’t forget to circle back with them as well.
12. Make Informed Decisions
Based on the feasibility study’s outcomes, the board and leadership team can make informed decisions about proceeding with the capital campaign. This may involve refining campaign goals, creating a campaign timeline, securing additional resources, engaging campaign leadership, and finally, launching the campaign.
Conducting a feasibility study is an essential step in the preparation and success of a nonprofit capital campaign. By gathering insights, assessing readiness, and identifying potential donors, the feasibility study helps set the stage for a strategic and effective fundraising effort.
Remember that the feasibility study is not just a box to check off; it is a crucial learning process that provides valuable feedback and informs critical decisions. By investing time and resources into a well-executed feasibility study, nonprofits can increase their chances of running a successful capital campaign and achieving their vision for impactful change.
