6 Hazards Created by Avoiding a Capital Campaign Feasibility Study
A capital campaign feasibility study allows your nonprofit to explore your project within your community and establish an achievable campaign goal. But what are the consequences if you decide you don’t want to conduct a capital campaign feasibility study?
Avoiding a Capital Campaign Feasibility Study
A private high school with a great reputation and generous donor base proposed an amazing project – an aquatics center for their championship-winning swimming and water polo teams. These kids were driving half an hour each way to practice and compete at the nearest pool. The school had a strong list of past major gift donors, families and alumni who they were sure would support this $12 million project that would strengthen the athletics program and drive enrollment. They wanted to move straight into a capital campaign.
Some nonprofits come to us convinced that they are ready to launch a capital campaign. They have a quantifiable need to expand their operation, they have architectural renderings and maybe even land on which to build, and they have an estimated cost of the construction project they propose. They are anxious to put shovels in the ground and they feel ready to start raising money. While these organizations do have a good start, they are missing a key component that would make their fundraising efficient and wildly successful: the capital campaign feasibility study.
The high school, which was adamant about not conducting a feasibility study, launched a campaign. After launching, they learned that there were members of their board who were not fully supportive, and the generous donors they expected to provide lead gifts were not interested in an aquatics project. They wanted to fund science labs and scholarships.
The feasibility study is an essential piece of capital campaign planning. A capital campaign feasibility study allows your nonprofit to explore your project with key stakeholders, potential donors and community leaders. As its name implies, the study determines the financial feasibility of the project. It answers the question of, will the community and donors support – in spirit and financially – the project you have in mind?
Beyond that, CampaignCounsel.org studies also identify challenges and how you can address them, early supporters and leaders, and a plan for successfully launching and managing the campaign. Because it does so much more than just establish financial feasibility, we call ours a Campaign Planning Study.
These studies rely on personal, one-on-one interviews to gather advice and share information with board members, donors, community leaders and philanthropists. This is your opportunity, and even your excuse, to get in front of people who can make your campaign successful and advance your mission by asking for advice and feedback.
The school’s pool campaign struggled without the information gathered and the strategy built during a feasibility study. An expected 18-month effort stretched beyond 3 years, when they finally found the last of the lead gifts needed to make the campaign a success. Here’s what you can learn from their experience.
What can happen if you don’t conduct a capital campaign feasibility study?
1. Board members may not fully buy into the project vision and their campaign responsibilities.
Your feasibility study should begin with your consultant conducting one-on-one interviews with your board members, administration and key staff members. Our study begins this way. Through these interviews, our team gets a strong understanding of your organization, your project, your perceived place in your community, and the level of support the project has with individual board members.
Our team also shares with board members what will be expected of them during a campaign, which can include being a champion for the campaign in the community, opening doors to other leaders and donors who could help, and making a personally significant gift. Engaging an outside party to conduct these interviews has the potential to elicit a dialog in which no one is hesitant to express their honest views.
If you don’t take the time to have these conversations early in the capital campaign planning process with your board members individually, you may not learn their true level of support, which could slow down or even derail your campaign.
2. You lose the chance to identify, qualify, educate and cultivate current donors through personal interviews before a campaign begins.
By considering who your most important contributors are and reaching out to them for their opinions, advice and suggestions, a capital campaign feasibility study allows your organization to listen. That listening builds stronger relationships between your organization and those who care about it. It also allows you to incorporate their feedback on your project and your organization into your plans and messaging so that the campaign you launch resonates with key supporters and the wider community.
Through personal interviews, this effort also helps to create early awareness about the project and the pending campaign. People realize they have the opportunity to be in on the ground floor and get excited about what they might be able to do to help launch the campaign. These important opportunities are lost when an organization foregoes the study.
3. You miss the opportunity to identify, qualify, educate and cultivate potential new donors via personal interviews.
As with current donors above, you gain the same opportunities with potential donors by conducting a feasibility study. These are people who may have never supported your organization before, but who may have the capacity to. A feasibility study may be your first opportunity to reach out to these folks to share information about your organization and your project. Their feedback is important to consider as you move your campaign into the community beyond your tried-and-true supporters and as you build new relationships for your organization.
4. You lose the ability to create a “donor-approved” case for support.
Personal interviews with donors, community leaders and philanthropists provide the feedback you need to create a case for support that resonates with your donor prospects and your community. If you rely only on staff and board input when creating a case for support, you may miss the mark on what is important to donors.
Your case for support should communicate the vital work you do for the community and encourage giving to the project. Knowing how your supporters view your organization and what inspires them most about your effort, will result in a “donor-approved” case for support that has the strength to push your campaign forward.
5. You have no way to determine the true philanthropic capacity of your current and prospective donors.
As we saw with the high school pool campaign, you shouldn’t make assumptions about your nonprofit’s campaign potential. You want reliable and current data. When our team interviews current or potential donors, we ask three important questions: Are you willing to champion this campaign to friends, family and peers? Are you willing to open doors to others who might want to support this project? If a campaign is launched, are you willing to make a pledge and if so, do you know how much you would give?
These three questions address the interviewee’s level of interest and their true philanthropic capacity. Maybe they love the project and want to be a lead donor, or maybe it does not align with their current philanthropic interests. This is valuable information – information that you need to make an informed decision about your nonprofit’s capital campaign potential.
Depending on the philosophy of your consultant, another hazard you may face is getting access to this valuable information. Some consulting groups only conduct confidential interviews. This means that they will not share the names and gift amounts provided by the interviewees, but will use that information if they are hired to conduct your campaign.
Our team has a different approach. We want you to know who will give, how much they will give, and why they will give, and so we do not conduct confidential interviews. We believe it is important that all the information is shared with you before you contract with a consultant to proceed with your campaign.
6. You don’t take the time to determine staff and system capacity to undertake a campaign in addition to regular duties.
During a feasibility study, your consultant should examine closely your organization’s ability to take on a campaign. That includes staffing, software, budget and systems. You’ll need the people and tools to run a large-scale project. It’s also important for your board to be fully aware of the staffing and tools required for a campaign so that they can help support your efforts.
A feasibility study is the best way to formally address staff and systems before launching a campaign. Failing to take this step before the work of a campaign begins may cause you to scramble to ramp up and waste valuable time, or leave you so frazzled that campaign management becomes impossible. None of these are good for your campaign.
Hire a consultant for your capital campaign feasibility study.
Nonprofits are best served by hiring an objective third-party to conduct their capital campaign feasibility studies. Capital campaign consultants are experienced and equipped to conduct these interviews and assess the information gathered. A consultant is likely to gather more candid and accurate information from interviewees who don’t have to worry about the feelings of an in-house interviewer. Without emotional ties to the organization, the consultant can help the nonprofit address problems, challenges and solutions strategically, and honestly assess the campaign’s feasibility.
It is also best that you don’t wrap your feasibility study and your campaign management into one contract. You want your consultant to complete your feasibility study and report to you the findings before discussing campaign management, keeping everyone honest and ensuring you have a strong working relationship before moving into a multi-year campaign together. Although you may use the same consultant for both the study and the campaign, you want to receive the results of your study independent of a contract for campaign management.
Do you have questions about your nonprofit’s need for a capital campaign feasibility study? Contact us. We’re happy to discuss it with you.
If you liked this, you might like to read this Campaign Planning Study vs. Feasibility Study When Considering a Capital Campaign.
Melissa Sais is vice president and partner of CampaignCounsel.org.
