The Capital Campaign Feasibility Study: Always a Good Idea
Is your nonprofit considering a capital campaign in the next two to three years? That is, will you be purchasing a building, renovating a building, acquiring land or purchasing large pieces of equipment? If so, you must do a feasibility study before you decide to launch the campaign.
Why bother with a feasibility study? Why not simply announce the campaign, raise all the money you can and the devil take the hindmost? There are five critically important reasons to conduct a feasibility study:
1. It offers an opportunity to determine how your organization is viewed in the eyes of prospective donors and other important “players.”
2. It helps you determine whether your community understands the importance of the proposed capital improvements.
3. It provides an assessment of your readiness to undertake the campaign, the amount that might be raised and the time that will be required to raise the funds.
4. It “lights a fire” under prospective donors. That is, prospective donors are flattered to be interviewed for feasibility studies, and the right interviewer asking the right questions will subtly encourage the prospect to begin thinking about her or his gift. This is not to be confused with a solicitation, but it is a significant cultivation opportunity.
5. It provides an assessment of your staff and volunteer capacity to mount a campaign successfully. Assuming the donors are there, you still require a dependable infrastructure to solicit contributions, conduct cultivation activities and record pertinent data.
How do you conduct such a study? Most nonprofits hire outside consultants to conduct feasibility studies. Consultants are viewed by all parties as disinterested participants, and interviewees are thus more likely to be candid with them than they might be with a nonprofit’s board or staff members.
The consultant meets initially with top administrative staff and the chair of the board to discuss the organization’s history and the particulars of the proposed campaign. The consultant then reviews the client’s promotional and fundraising material, including grant proposals, annual reports, special event programs and so on.
The consultant next drafts the questions to be asked at the interviews. The draft is circulated among the client’s staff, board and other volunteers for their input. The consultant then prepares the final version of the interview questions.
Most consultants interview betweeen 35 and 40 individuals selected by the client. This normally includes board members, staff members, past donors, other major gift prospects and other volunteers. The interviews determine participants’ levels of familiarity with the organization and its programs, their willingness to give (and at what dollar levels) and their willingness to serve as solicitors for the campaign.
Understand finally that the completed feasibility study will recommend one of three courses of action:
1. Proceed with the capital campaign at the proposed dollar level.
2. Proceed, but at a lower dollar level than originally proposed.
3. Postpone the campaign until the organization has addressed certain important issues (e.g., expanding the board to include more people with money and clout).
Bob Zimmerman and Ann Lehman are partners in the San Francisco-based fundraising consultancy Zimmerman Lehman. Find this and other articles on fundraising, and sign up for the free ZimNotes e-newsletter, at www.zimmerman-lehman.com.