When You Need a Feasibility Study for Your Capital Campaign, and When You Don’t
When You Need a Feasibility Study for Your Capital Campaign, and When You Don’t
By Lindsay Jordan, Founder & CEO
I get it. I really do. The feasibility study is the most time-consuming, most expensive component of the planning phase of the capital campaign. And you’re not guaranteed to get good news out of it. As a matter of fact, sometimes we get earth-shattering, stop-the-presses feedback that alters the entire trajectory of a campaign.
So why would a nonprofit invest precious resources to potentially get zero return AND bad news?
Because it’s considerably more expensive to launch a capital campaign that is doomed to fail (when you factor in the donations you’ll have to return, donors who now refuse to give to programs or gen ops because of a botched capital campaign, and the loss of public trust thanks to bad publicity)
Because the majority of our clients don’t get bad news - in fact, you may get GOOD news, like our client the Child Advocacy Network, where we identified more than 100% of our campaign goal in the feasibility study and then raised 113%!
The truth is, there are some campaigns that need a feasibility study more than others. Based on more than $200 million in campaigns run over the past few years, here is my personal breakdown of when you need a feasibility study for your capital campaign, and when you don’t.
You may not need a feasibility study if…
…It’s not a real capital campaign. Many folks think any investment in “capital” - that is to say equipment, new construction, rehabilitation, launch of a new program, etc. - requires a capital campaign. Not in my experience. Typically, we’re only putting together the infrastructure of a capital campaign for raises of more than $1M. Raises up to $1M are considered “growth campaigns” and do not require a feasibility study, and capital needs up to $500K can usually be folded into existing fundraising programs.
…You’re going to have limited funding sources. If the entirety of your project is being funded by a handful of already-identified sources, then you likely do not need a feasibility study.
…You constantly operate in capital campaign mode. Some fundraising models are built to sustain capital raise after capital raise. If this is the case, your donors are conditioned to giving to capital as a fundraising program, and you likely do not need a feasibility study.
Everyone else needs a feasibility study. No, really. If a client doesn’t meet one of those three criteria and they are dead set against a feasibility study, then our company isn’t going to be a fit for their campaign. The failure rate for these folks, with or without professional representation, is greater than 50%, and these campaigns tend to lament and last long past the energies of the people initially involved. This is, in short, the most painful, least effective way to raise millions of dollars. Is it impossible? No. Would I recommend it? No.
The information we gain from donors in the feasibility study, even if it’s constructive criticism (and sometimes ESPECIALLY if it’s constructive criticism) sets us up for success in the campaign. Here are some of the pieces of information we’re gathering:
How much total funding (typically a range) key donors are willing to contribute
When donors will be able to entertain an ask of this significance
What other capital campaigns donors have already or are considering contributing to
How donors prioritize your organization and cause when compared to other organizations, causes, and campaigns
The extent to which donors trust your staff and board leadership
How urgent donors perceive the need for your campaign to be
Something amazing happens in a feasibility study that occurs nowhere else in fundraising: Before the donor actually writes a check, they are going to tell us how much that check is going to be for and precisely the steps we need to take to get them to write that check. Done and done, my friend! Can you imagine if the same could be said of direct mail or galas?!
Now, sometimes those steps take a little time, such as developing a stronger program curriculum or providing five-year financial projections to show how your project is sustainable. BUT! The feasibility study provides us with an exact roadmap to six- and seven-figure gifts. Whereas those who are making asks without this information are setting themselves up for a very pleasant decline letter, because they never stopped to ask the donor what they really wanted.
I call this setting up the dominos. If we do our job well in the planning phase, then moving into the active (private or quiet) phase of fundraising is just a matter of knocking those dominos down. The feasibility study and planning phase components will represent 25-40% of your total campaign fundraising costs. However, in the grand scheme of your campaign, when total fundraising costs (with Write On, anyway) are less than half of a percent of what you raised, the funds spent on your feasibility study won’t feel like a gamble. They will feel like the jackpot.
Gearing up for a capital campaign? Need to convince a board member that the feasibility study is worth the investment? Let’s chat! Email info@writeonfundraising.com or call 888-307-0087. Our capital campaigns are literally award-winning and we would love to explore if there is a fit with your organization!