Soapbox Engage Blog

Capital campaigns have the potential to launch massive projects, making real progress towards fulfilling your nonprofit’s mission. However, these funding campaigns also have the potential to negatively impact your nonprofit’s bottomline and reputation if poorly executed.

Before beginning a capital campaign, almost all nonprofits conduct a feasibility study to ensure they are in a position where their campaign can succeed. Since a capital campaign is a serious undertaking, the feasibility study, alone, also requires proper research and preparation to be worthwhile.

Donorly’s team of consultants are experts on capital campaigns and have put together this article outlining six key steps for running a successful feasibility study that will set you up to run an equally successful capital campaign. In this guide, we’ll walk through the beginning to the end of conducting a feasibility study, addressing how to:

1. Understand What a Feasibility Study Achieves
2. Partner With a Feasibility Study Consultant
3. Set Campaign Goals
4. Prepare Your Case for Support
5. Determine Key Stakeholders
6. Assess the Results of the Study

The specifics of each step will depend on what your nonprofit discovers about itself and its capacity to run a capital campaign. Remember that sometimes feasibilities studies find a nonprofit is not equipped to launch a capital campaign without significant changes. Be open to the results of each step in the process, so your nonprofit makes the best decisions for its specific situation.

Understand What a Feasibility Study Achieves

Before conducting a feasibility study, ensure everyone on your team understands what it is and why its results matter. There’s a common misconception that feasibility studies are an unnecessary waste of resources, as hiring a consultant to conduct one is an expense that comes long before the campaign even begins. However, feasibility studies are a vital tool for outlining how your capital campaign can succeed, where it might fall short, and how you can get ahead of any potential failings.

A poorly run capital campaign can cause serious damage to your nonprofit’s relationship with both individual major donors and your community at large. For example, if your campaign fails to gain enough support from donors during the quiet phase, you’ll need to decide whether to downsize your campaign’s initial goals to continue following through on the project (even if the results are lackluster). Doing so, or outright abandoning the campaign altogether, can lead to awkward conversations with the major donors whom you have already signed on to support your project.

Feasibility studies prevent this kind of situation by assessing your nonprofit’s current pool of major donors, the scope of projects your nonprofit can successfully support, the amount of time you should allot to the project, and other key variables.

Feasibility studies don’t just tell your nonprofit whether or not they should run a capital campaign. They should also actively prepare your nonprofit to run as effective a campaign as possible by analyzing resources and troubleshooting problems ahead of time.

Partner With a Feasibility Study Consultant

Finding the right capital campaign consultant requires its own investment of time and resources. A consultant who fits with your nonprofit can become a long-term partner and provide valuable input into the direction of future campaigns.

1. Defining your needs. Understand what you are looking for in a consultant as you investigate your different options. In addition to feasibility studies, fundraising consultants also offer assistance with campaign strategy, prospect research, and new revenue stream identification.
2. Developing a request for proposal. A request for proposal (RFP) is a document that defines your nonprofit’s needs and communicates what you expect from your potential consultants. The RFP acts as the starting point in your relationship with consultants, as it gives them material facts about your current situation that they can use to create a strategy pitch for your consideration.
3. Beginning your search. Look to the internet, other organizations, and other professionals to get recommendations for potential consultants. Check each candidate’s past work experience to make sure their practices aligns with your nonprofit’s needs.
4. Making initial contact. Call or email each consultant to introduce yourself and your organization before sending your RFP. This helps build an initial relationship and can clear up any possible misunderstandings before submitting your RFP.
5. Reviewing proposals. As potential consultants respond to your RFP, review each proposed strategy for timelines, measurable goals, and action plans that fit with your nonprofit’s vision. Make amendments to the plans where necessary and reach back out to consultants to ensure they are willing to make needed changes.

As mentioned, feasibility study consultants often do more than just feasibility studies, meaning that the partner you choose can help shape your entire capital campaign. Take the time to research and assess each candidate, and treat meetings with your chosen consultants as the beginning of a relationship rather than a checkbox on your list.

Set Campaign Goals

Clear, actionable goals will help keep your campaign on track and allow your team to articulate your plans in a uniformed manner to your consultants, donors, and other important stakeholders.

During your feasibility study, divide your campaign goals into two general categories:

1. What the capital campaign will accomplish. At the end of your capital campaign, what will your nonprofit ideally have achieved? For example, a nonprofit focused on early education may launch a capital campaign to build a new daycare facility. This nonprofit would state a measurable goal for the end product of their capital campaign along the lines of: “Our new facility will support 50 families with young children in low-income neighborhoods.”
2. How funds are raised. Your fundraising goals take into account how much you need to raise in donations, what percentage will come from major gifts, and any other specific increases in donor retention, acquisition, or engagement that you’d like to see. Look at your data from previous campaigns and use online templates like this one to keep your documents organized.

Determining these goals will give your consultant and capital campaign team a clear outline in which to measure your nonprofit during the feasibility study. Keeping careful records of previous campaigns can help your team make accurate, reflective goals that your team can use as a guide for obtainable improvements.

If this is your nonprofit’s first attempt at a capital campaign, look at your data from previous large-scale campaigns and compare your findings to that of organizations that are similar in size and practice to yours. Ensure that you practice good data hygiene in all of your campaigns and take the time to clean up your database before pulling data from it for your consultants to analyze. This will minimize the amount of unnecessary or irrelevant data your team will have to look through when setting benchmarks and actionable goals for your campaign.

Prepare Your Case for Support

Successfully pitching your mission to both individual donors and your community at large is fundamental to your capital campaign. Preparing an initial case for support during the feasibility study will allow your team to evaluate its effectiveness and further tailor it to appeal to key donors.

Think back to the “what the capital campaign will accomplish” goal. This goal should be a launching off point for your case statement as you describe:

• Who your nonprofit is and why your mission is important.
• The problem your campaign is trying to solve.
• How your campaign’s solution or objective will solve the problem.
• An outlined action plan and estimated budget.

Your statement for support should be assembled together in a branded document, featuring your nonprofit’s logo and any informative photos and testimonies about your impact.

Double the Donation’s guide to feasibility studies stresses that your case statement will determine the direction of the rest of your campaign, even at this early stage. After its completion, your case statement will be used to gauge donors’ willingness to back your capital campaign. It can (and should) be refined further during this process, but the initial interviews and presentations of the feasibility study can impact your nonprofit’s ability to secure donations during the campaign’s quiet phase.

Determine Key Stakeholders

During your feasibility study, you’ll need to reach out to key figures who will help you complete your capital campaign by donating, assisting with the project’s completion, or otherwise helping in either the fundraising or the project itself.

This article has previously discussed the importance of major donors during your feasibility study, but your nonprofit should also reach out to:

• Your board members. Your board will need to approve your nonprofit’s capital campaign plan, which means you should seek their input early on. Board members can also be a vital resource for finding additional stakeholders to reach out to such as local businesses and corporate sponsors.
• Your constituents. Ensure the people who your capital campaign will impact are behind your project. In addition to being respectful of their wishes, speaking with your constituents ahead of time can provide useful stories, statistics, and other insights that you can then share during the kickoff and public phase of your campaign.
• Community stakeholders. Given that many capital campaigns aim to fund construction projects, be sure to check in with the proper figures in your community to get your project approved. Local foundations and businesses are also useful to reach out to for potential sponsorships.

Create a list of stakeholders to reach out to and improve your chances of receiving funding by first meeting with stakeholders that are of middle or lower priority. This will allow you to hammer out any missing details of your campaign pitch before interviewing high priority stakeholders.

These early conversations should be real opportunities rather than just practice, but your team should take the time after each interview to review feedback and determine how to improve your next stakeholder meeting.

Assess the Results of the Study

After its completion, your feasibility study will inform multiple aspects of your capital campaign, such as your: timeline, fundraising goal, budget, software needs, number of gifts needed at different sizes, and the overall scale of your project.

Taken together, these many aspects of your feasibility study will determine whether your nonprofit’s capital campaign is:

1. Feasible. If your project is found to be feasible, start putting your plans into action to make the most of the connections you reached out to during the study.
2. Feasible upon implementing recommended changes. Examine the results of your feasibility study, paying special attention to problem areas. Take steps to correct problems that the study found or make plans to handle potential problems the study discovered that may occur during the campaign.
3. Unfeasible at the current moment. Hearing that your capital campaign is unfeasible can be disappointing, but it is best to accept this outcome and grow your nonprofit’s resources, infrastructure, and capacity to launch a successful campaign later. You can run smaller scale projects to improve your nonprofit’s connections and funds to set yourself up for future success based on your feasibility study’s results.

Whether you are ready to start your capital campaign or not, remember to look back to your feasibility study’s results to inform your decisions moving forward. For instance, even if your study found your plans to be fully feasible, you should still use the data collected to flow smoothly into your campaign’s planning phase.

Capital campaigns are an undertaking that can take years to complete. A feasibility study ensures that your nonprofit doesn’t begin this effort underprepared. Whether your feasibility study determines your nonprofit is ready or not, conducting the study itself will inform your nonprofit about its current resources and lay the foundation for strong long-term partnerships with your consultant and stakeholders alike.

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Guest Post by Sandra Davis

Founder and President Sandra Davis leads Donorly with 30 years of fundraising experience and leadership. Sandra has consulted on numerous capital campaigns, led strategic planning and feasibility study efforts, and managed board development and recruitment efforts, planned giving, special events, and annual giving programs. Under her leadership, Donorly has grown to support the fundraising efforts of over 75 clients to date.