Conduct a Fundraising Feasibility Study: 7 Steps to Success
A fundraising feasibility study is a tool to determine whether a fundraising campaign is viable for your organization. They’re usually enacted for large, public initiatives like capital campaigns.
In a feasibility study, a third-party representative interviews key organizational and community leaders to determine their perceptions of a nonprofit’s reputation and the need for a proposed project.
With this information, a nonprofit will be better equipped to launch a successful fundraising campaign. After all, a large fundraising endeavor poses distinct risks. The possibility for failure wouldn’t just be detrimental to a nonprofit’s mission, but a public affair that could undermine the organization’s legitimacy to donors.
As such, feasibility studies are often pivotal aspects of strategic planning, and there can be immense pressure to conduct a successful study — one that not only informs the organization of whether or not the campaign is viable, but one that also cultivates a fundraising strategy based on direct feedback from key stakeholders.
That’s why we’ve provided 7 steps that will help ensure a successful fundraising feasibility study:
- Set clear goals for your fundraising campaign
- Understand the true purpose of the feasibility study
- Consider outside assistance
- Prepare your case statement
- Determine key stakeholders
- Be open to the feasibility study’s results
- Implement strategies based on the fundraising feasibility study’s results
Let’s get started with the first step!
1. Set clear goals for your fundraising campaign
Before you can determine whether a project is feasible, you need to know exactly what you’re hoping to achieve.
Though this step may seem obvious, its execution is crucial. The more specific you can be about what the campaign will achieve for your organization and mission, the better.
The amount of work you’ll need to put into this step will vary depending on the nature of your fundraising campaign.
For example, if you’re looking to grow your endowment or leverage an anniversary for major gift fundraising, you’ll simply need to test whether stakeholders are supportive and how best to market the campaign. As such, your goals can simply be a fundraising amount or a percentage of donor engagement.
In contrast, if you’re using a feasibility study for a capital campaign, you’ll need an in-depth understanding of the associated costs and logistical details for completing a project.
Let’s take a look at an example of how to clearly outline a capital campaign’s purpose:
In this example, the nonprofit’s legwork takes place even before the feasibility study is conducted.
To determine the specificities of the solution and results, the nonprofit would likely consult with construction firms or contractors to determine how exactly the kitchen areas would be expanded, as well as the costs and challenges that the project would entail. Then, a feasibility study would be used to determine the best course of action, as well as the logistical details to make it happen.
In summary: Before you begin your feasibility study, you need to set clear goals so that the study can best help you refine the results you want. The scope of the goals you set will depend on the complexity of your fundraising campaign.
2. Understand the true purpose of the feasibility study
A truly successful feasibility study will do more than determine your fundraising goal. While these studies can and should be used to help you outline the logistics of your campaign, they are also cultivation tools and essential aspects of planning.
Think of it this way: a feasibility study is a formalized opportunity to ask your donors and key leaders in the community for their thoughts and opinions on your nonprofit and cause. Many people are honored to be selected for these interviews — and they should be.
By asking them for their reactions and feedback to your proposed campaign, your nonprofit is showcasing how much you value these leaders.
Nonprofits who use feasibility studies strategically can reap huge rewards, regardless of the results of the study.
For example, a fundraising feasibility study can actively help you:
- Excite major donors prior to the campaign so that they’re eager to contribute.
- Incorporate stakeholders’ feedback into your organization so that they feel trusted, engaged, and valued.
- Strengthen your infrastructure by identifying weaknesses in your organization.
- Take your marketability to the next level by meeting donors where they are.
- Develop your nonprofit’s case statement or case for support (which we’ll discuss in more depth in the fourth section).
All of these benefits can help you build sustainable relationships and stronger messaging not just for the campaign in question, but throughout your entire organization.
To further show these leaders how much you value them, send them personalized invitations for the interviews.
In summary: A feasibility study is a cultivation tool that can help you build stronger relationships with key stakeholders. Use it as an opportunity to show your donors how much you value their opinions.
3. Consider outside assistance
A feasibility study involves interviewing key stakeholders, asking questions to gauge the perception of your nonprofit and the fundraising campaign overall.
Often, nonprofits will seek fundraising counsel in the form of a fundraising consultant or consulting firm. These experts can help you approach your feasibility study strategically so that you’re not only getting the information you need but also setting up a framework that will strengthen your campaign.
Nonprofits usually purchase feasibility studies as a stand-alone service to avoid potential conflicts of interest. After all, a consultant who knows that they’d be hired for the duration of a campaign may be more inclined to gloss over issues and suggest that the campaign moves forward.
Since hiring outside assistance is another expense, you may be wondering whether a feasibility study can be conducted in-house. The answer is yes! (See below.)
However, there are a few reasons why organizations may opt for third-party assistance:
- There’s value in hiring someone who has deep experience interviewing donors, analyzing results of those interviews, and reporting to the board.
- A trained expert may offer unique insight into your community if they’re local (i.e. these Indiana-based consultants would have a knowledge of the fundraising climate in Indiana’s primary cities) or a fresh perspective if they’re remote.
A fundraising consultant can assist you with nearly every aspect of the study, from conducting interviews to using the results to develop strong strategies.
However, there are other ways to conduct a feasibility study and test your campaign plan, which are much less expensive and can be even more effective.
And, if you value building relationships with your donors, why would you send an outsider (consultant) to speak with them before your big campaign?
If that’s you, consider working with The Capital Campaign Toolkit. As the only fully online capital campaign service, the Toolkit gives nonprofit professionals the knowledge, resources, and support they need to effectively navigate their next capital campaign in a cost-effective way.
The team of campaign experts behind the Toolkit has created a Guided Feasibility Study.
With this, campaign directors can work with one of the Toolkit’s expert advisors to:
- Prepare for the study, including choosing donors to interview and requesting interviews.
- Train for the study and learn essential skills for conducting open and honest conversations.
- Analyze the results of these conversations and prepare a report for the board.
The Capital Campaign Toolkit empowers these leaders to build relationships before the campaign begins, encourage early donor engagement, and even secure early gift commitments. Further, the Guided Feasibility Study is just one of many features of the Toolkit. For more capital campaign insight from the Capital Campaign Toolkit team, check out this comprehensive guide.
In summary: Bringing in outside assistance, whether a consultant or online resource, is the best way to ensure your feasibility study is a successful effort.
4. Prepare your case statement
Remember the soup kitchen example that we discussed in the first point? The nonprofit that outlined those goals knows exactly what they need to do, but none of that matters if it’s not communicated to donors.
A case statement, or a case for support, will take a nonprofit’s goals and outline them clearly for stakeholders.
Often your capital campaign leadership and marketing staff are the ones that initially develop your case statement. This document is generally created soon after you’ve set your campaign goals and directly affects the rest of your planning.
In order to convey your campaign’s goals, a case statement will need to contextualize the specific campaign within the organization’s larger purpose and vision.
Specifically, a case statement should include:
- Why the organization and mission are needed.
- The organization’s impact (the more specific, the better!).
- The benefits of the project and the problems it seeks to solve.
- The specific challenges and potential solutions that are likely to occur during the campaign.
- An estimated fundraising goal or budget.
- A branded document to showcase the case for support, including the nonprofit’s name and logo, as well as relevant photos and testimonials.
This case for support will be sent to interviewees so that they can review the information prior to the interview. Then, they’ll be able to provide feedback and react to the project you’ve proposed.
Keep in mind that a case for support can (and should) be refined based on the feedback that you receive during the feasibility study. That way, your case for support is as strong as possible when it’s time to release it to the public.
If you’re interested in learning more about creating a persuasive case statement, check out this guide that provides several examples.
In summary: A case for support should explain the purpose of your campaign to organizational leaders so that the interviewer can assess their reactions to the proposal.
5. Determine key stakeholders
One of the most important aspects of a successful feasibility study are the interviewees.
When considering candidates to interview, think about people who’ve actively contributed to your campaign. These candidates should “walk the walk”; avoid figures who are spread too thin or who tend to gravitate toward any and all community campaigns.
To put it simply, candidates should have a strong, genuine connection to your cause and organization. Look to those who are actively involved in membership programs, or who have led past events to success.
You also want a good mix of candidates. Think about those who are incredibly supportive of your nonprofit’s initiatives and those who may be more critical; both can provide valuable insight.
Specifically, you should consider these key figures:
- Current and former board members
- Current or former major gift donors
- Planned gift or legacy donors
- Key volunteers
- Community stakeholders (community foundations, trust offices, etc.)
- Business owners and vendors
- Recipients of your services (grateful patients, alumni, students, etc.)
These leaders have the insight into your nonprofit that can help you build a successful campaign.
Plus, they’re the most likely candidates to contribute to your campaign once it’s launched. The feasibility study is the perfect time to start cultivating challenge grants or other opportunities for corporate philanthropy, as well as major gifts.
Even further, a fundraising feasibility study can help you determine who’s best to lead the campaign. It’s common to ask interviewees whether they’d be willing to take on a leadership role and for their recommendations for vital positions.
Take their feedback seriously and consider the possibilities to excite these leaders during the interview process.
In summary: Key stakeholders can help you lead the campaign and contribute once it’s launched. Additionally, their valuable insight will help you guide the course of your campaign.
6. Be open to the feasibility study’s results
When you receive the results of your fundraising feasibility study, there are three likely outcomes:
- The study reveals that your project is feasible, and your donors are eager and willing to support you. Start your project right away to capitalize on the excitement (you don’t want donors to lose steam!).
- The study reveals that the project is feasible, contingent that problems are addressed. Before moving forward, it’s important to solve these problems or come up with a plan for tackling them during the course of your campaign.
- The study reveals that your project is not feasible. Your organization will need to build a stronger infrastructure before tackling a project of this degree. Though disappointing, it’s best to accept these results and use the information you’ve gleaned to strengthen your organization.
It’s much better to refrain from conducting a campaign than to conduct one that fails — doing so would bring negative publicity to your organization, which could undermine its legitimacy to donors.
As such, it’s important to remain open minded! Even if the results aren’t exactly what you envisioned, you can still use them to build a stronger foundation for your organization, which will serve you well into the future.
Once you’ve captured your results, it’s vital that you share them with your board, no matter what they are. Be fully transparent. Your board members need to know the results in full.
You can also share your results with others if you deem it necessary, though you’re only obligated to do so with your board. For example, a major donor who was excited about your campaign may need to know if the initiative doesn’t launch (or, they may be thrilled to learn that you’re moving forward).
In summary: No matter the results of your study, take them seriously and be transparent about the findings. Use what you learn to strengthen your organization and strategize for your upcoming campaign.
7. Implement strategies based on the fundraising feasibility study’s results
Now that your fundraising feasibility study is complete and your team has assessed the results, you’re ready to start implementing smart strategies to make your next campaign your best one yet.
What’s the use of your fundraising feasibility study if not to inform how your nonprofit approaches fundraising for your upcoming campaign? After the study closes, work with your consultant to align a set of next steps.
Your study may present findings that reveal it’s not the right time to move forward with your campaign. In these cases, your consultant may suggest:
- Holding a series of smaller campaigns to grow your annual fund. The larger your annual fund’s dollar amount, the more equipped your nonprofit is to meet an ambitious campaign goal. Without a proven fundraising record, it’s not likely you’ll reach your goal.
- Stewarding more major donor prospects for necessary gifts. Your organization can’t reach your fundraising goal without having great relationships with donors; your team may need to focus on connecting with high-capacity supporters before kicking off your capital campaign.
- Investing in fundraising software or other internal resources like staff. Without the right tools on hand and without the right individuals supporting your organization internally, you may not be able to carry out your campaign.
If the study shows that your organization will be ready to take on your planned campaign, but that a few strategic areas need to be addressed before the campaign kicks off, your consultant can also help your team identify how to implement these adjustments.
For example, these strategic shifts might be prescribed:
- Adjusting your fundraising goal, timeline, or project. It’s possible that your team has the resources and capacity to fundraise for a less ambitious campaign. Instead of putting the campaign off entirely, shifting expectations may allow your team to start collecting donations for a smaller-scale project.
- Realigning your gift range chart to more strategically distribute necessary gifts. Your consultant may determine that your gift range chart isn’t feasible. They could suggest soliciting higher donations from major givers, or more low-level gifts from donors.
- Putting a greater emphasis on donor stewardship tactics like fundraising events, solicitations, and more. During your feasibility study, your consultant may discover that your supporters aren’t being sufficiently stewarded. At this stage, they can recommend ways to better connect with these individuals and steer them toward giving.
Remember, your fundraising consultant isn’t just there to get your team the data and to determine whether or not your nonprofit is ready to start fundraising.
Rather, your nonprofit consultant can offer your organization unique insight into how to prepare for the campaign you envision, even if that means heading back to the drawing board.
In summary: After your fundraising feasibility study ends, turn to your nonprofit consultant for next steps your team should take to prepare for your campaign.
Now that you know how to conduct a successful fundraising feasibility study, you’re ready to tackle this beginning stage in your next campaign!
Picking a Fundraising Consultant
Choosing a fundraising consultant is an important aspect of conducting a feasibility study. That’s why we’ve outlined the steps to picking the best person for the job!
Top Capital Campaign Consultants
To help narrow your search for a capital campaign consultant, we’ve provided our top 6 choices. These expert consultants can take your campaign to the next level and help you conduct your feasibility study, too.
Major Donor Fundraising Strategies
One of the most important aspects of a feasibility study is figuring out how you’ll secure major gifts. Learn more with our ultimate major gifts guide!