Getting to the Ribbon Cutting Ceremony : The Feasibility Study
So your nonprofit decided to embark on a capital campaign. While you're dreaming of cutting the ribbon on your new building that will house all of your staff, allow you to serve 30% more people a year and open the clinic you've been thinking about for years, the amount of work that has to be done is looming in the (very close) distance.
A capital campaign will change an organization permanently. It will either launch the organization to a new level of excellence and impact, or it will initiate a downward spiral that will eventually lead to the quick or (agonizingly) slow death of the organization.
In other words, a capital campaign is a risky investment.
If an organization is going to risk the history, reputation, previous stakeholder investments and current client reliance on services; they have an obligation to do so in a thoughtful and carefully planned manner. But the question is how.
A feasibility study is one of the first steps in the careful planning of a campaign. It accomplishes several objectives:
Assessing the community need for the new, expanded or improved programming that will result from the campaign;
Assessing the organization’s image among community leaders and stakeholders;
Assessing the organization’s capacity (either current or potential) to plan, launch, manage and steward the campaign from start to finish - generally studied through a SWOT analysis of both the organization AND the campaign;
Identifying current and future stakeholders that may support the campaign;
Assessing stakeholders’ level of commitment toward the planned campaign;
Creating a giving strategy and fundraising targets (such as a giving pyramid or table);
Promoting or “pre-selling” the campaign to stakeholders;
Identifying unanticipated barriers to success, how much impact they will have on the goal and how they can be overcome. This may include competing campaigns in the community, economic downturns or other barriers.
What steps are involved in the feasibility study?
Strategic plan for the campaign and resulting project(s);
Development of a written draft case statement for the project, outcomes and realistic budget;
Enthusiastic buy-in from current key staff, board members and major stakeholders;
Identification of the study sample - staff and board members must be involved;
Development of a survey tool to be used in interviews;
Scheduling of interviews with targeted stakeholders;
Completion of confidential interviews of stakeholders by a disinterested third party;
Creation of a report of findings - draft first reviewed by CEO and campaign chair, then shared with the board;
Revision of plan, based on the findings of the study - vital that this be done quickly or the project is likely to die on the vine;
Executive summary of the report shared with all interview participants.
How long does a feasibility study take?
How long a feasibility study will take depends on a number of elements:
Size and scope of the campaign - a $2 million campaign study with one key objective will take less time than a $50 million, multi-faceted campaign study;
Distribution of the community - A community in a small geographic area will take far less time to study than a nationwide community;
Attention and resources of key leaders - many feasibility studies drag along because the organization cannot dedicate time and resources to developing the draft case statement, identifying potential donors or responding to requests for information in a timely manner;
Number of potential donors to interview - generally relative to the size of the campaign.
Capacity of the consultant during the study timeframe.
An ideal timeline for a feasibility study is 16-18 weeks, with the assumption that the organization is able to prioritize the study.
What deliverables can the organization expect to receive?
The consultant performing the feasibility study should first work with the organization to define a clear scope of the project, including a timeline, a list of tasks to be completed, assignments of who will complete which task, and the fees associated with the study. At the end of the study, the organization should have the following:
A description of the research process used;
An explanation of the measurement tools used and justification for their use;
A report on the SWOT analysis of both the organization and campaign;
A statistical report - including charts and graphs - that describe the findings;
An explanation of each finding;
Recommendations and likelihood of campaign success and potential money raised;
If a campaign is feasible, a gift table or pyramid showing the number of gifts and giving levels needed to reach the goal;
If a campaign is feasible, a confidential list of potential major donors - not published but given to the key leaders of the campaign.
What will the feasibility study cost?
Again, the scope of the study will determine the cost. Nonprofits should never engage with a consultant who requires a percentage of the resulting campaign - this is not only unethical for fundraising professionals, but can skew the consultant’s findings.
Some consultants charge a percent of the overall campaign - generally 5-10%, while others base fees on the number of hours and resources the study will require.
We at Sharpshooter Communications use the estimated time and resources needed as a basis of cost for the feasibility study. Upon completion of the project scope, SSC will produce a cost proposal, based on the number of man-hours required and the additional resources needed (travel costs, printing costs, etc.) to complete the project.
The biggest question remains: why do a feasibility study?
A capital campaign is a risky venture for any nonprofit - including the multi-million dollar organization. When preparing for such a huge project, it makes the most sense to have the best tools at your disposal in the form of concrete research and data. But it is larger than research. A campaign requires full participation of the entire staff, not just the leadership and development team.
“A major-gift capital or endowment campaign will test every seam within the nonprofit agency that is about to engage in this activity...the success of the campaign has a direct impact on the credibility and self-image of key volunteers as well as on the agency’s future fundraising.” - Elliott S. Oshry, CFRE
Feasibility studies are one of the many services we provide at Sharpshooter. With our expertise and training, we can help your nonprofit reach your capital goals (and make your ribbon cutting dream a reality).