Capital Campaigns: The Benefits of a Feasibility Study
(July 28, 2009) Conducting a feasibility study for a capital campaign offers rewards far beyond simply assessing risk. If well executed, such a study can provide focus and momentum for the entire campaign.
Below is an excerpt of the book, The Fundraising Feasibility Study: It’s Not About the Money, by editor and lead author Martin Novom, CFRE. The following passage, from a chapter written by Betty Ann Copley Harris, FAHP, explains the many benefits of a capital campaign feasibility study.
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Benefits of a Feasibility Study—Gaining Internal Consensus
Because the feasibility study interview process takes your campaign vision and plan to the public, you must first ensure that there is strong internal consensus on the case for giving. The feasibility study tests the validity of the projects around which the campaign is centered. It helps determine whether your community understands the importance of the proposed projects, whether it is for capital improvements, endowment growth, or other special projects. Because the study presents the case for giving to people outside the organization, there must first be absolute agreement inside about the proposed plans and the need for a campaign to fund the plans.
Once your organization has successfully achieved consensus and support about the project development components for the campaign from those on the inside, you are in a better position to test the community’s support by conducting the feasibility study. The study is going to tell you what key donors think of the case for giving. It gives you a measure of how “donor centered” your campaign appeal is and provides clues as to how well the projects and priorities match the interests and priorities of key donors whose support will be critical to the campaign’s success.
Board Members Begin Thinking of Their Own Commitments
The feasibility study brings the reason for a campaign into focus for both internal and external constituents. It allows volunteer and staff leaders to seriously evaluate their own commitment to a campaign and enables the organization to start getting its house in order from an operations perspective. Included in this phase is a careful internal evaluation of infrastructure and staffing needs, discussion of whether or not full-time resident or nonresident campaign counsel is needed, and an honest appraisal as to whether the organization is ready for such a major undertaking.
The cultivation value of a feasibility study is immense. 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. The study can be the “excuse” you need to have an opportunity to get to potential donors who otherwise might not have a reason to get involved and learn about your organization.
Donors Are Asked for Advice
The study provides you with an opportunity to seek the advice of philanthropic leaders in the community. The essence of the feasibility study is asking potential donors to provide a measurement of their acceptance of the plan for your capital project. The community should be in a position to support the proposed capital campaign, which includes being receptive to the idea of having a capital campaign for the projects that are proposed in the case.
Most people appreciate being valued for their views and opinions. I once heard some sage advice about soliciting donors that speaks to the importance of asking donors what they think. The saying goes: “If you want advice, first ask me for money. But, if you want my money, first ask for my advice.”
The Fundraising Acumen of Leaders and Staff Is Tested
The feasibility study process tests the fundraising acumen of senior management, board leaders, and other leadership sources. You want your feasibility study to provide an assessment of your board’s ability to raise funds. Ensuring that those who will be involved in all steps of a campaign have had proper training and that each and every personal face-to-face solicitation is rehearsed and tailor-made will be the keys to success. Staff and board members who are well-informed about major-gift fundraising are often pleasantly surprised to learn that asking for a gift of $100,000 or $1 million does not involve that much more work than asking for $10,000. While the stakes are higher, the same essential steps—prospect identification, research, cultivation, solicitation, and follow-up—must be carefully followed. Your board members must be willing to solicit gifts from major donors. The number one reason most campaigns fail is that people were not asked to give to the campaign.
The “Feasibility” of Your Campaign Goal Is Tested
How much money realistically can be raised? Focusing on major gifts is the hallmark for capital campaign success and beyond for every nonprofit organization. More than 75% of the funds raised in any campaign will come from pledges of $25,000 or more. Studies of philanthropic trends document that contributions from individuals make up the majority of charitable gifts, and individual major gifts in a capital campaign can account for as much as 90% of the dollars raised from as few as 5% of all campaign donors. Because of the early momentum, excitement and confidence that a truly awesome lead gift can generate, striving for generous campaign leadership gifts at the highest possible amount in the top of the gift chart are principles that should not be compromised. Focusing on the small pool of individuals who have both the capacity and interest in the organization’s mission is the only way to achieve campaign success. The feasibility study must provide important clues to confirm that you have the right sources of support lined up for your campaign.
Benefits Beyond the Dollars Raised
A successful feasibility study sets the stage for a capital campaign, which yields benefits to the organization long after the campaign has ended. Aside from helping to gather the funds necessary for time-limited “bricks and mortar” projects, successful capital campaigns can have a transformative effect on the fundraising culture of nonprofit organizations. Many nonprofits find that their first capital campaign is the force that finally brings the definition, commitment, and organization to support an ongoing major-gift program. Too often, overcoming inertia or an organization’s history of relying on the “safe,” smaller-scale approaches (e.g., special events, direct mail, annual fund) can be real obstacles to implementing a major-gift program. A capital campaign focused on major gifts provides everyone—senior management, board leadership, and loyal donors—with their own personal experience and firsthand proof that seeking large gifts is not only possible for your organization, but in many cases hugely exhilarating.
Reprinted by permission of the publisher, Wiley, from The Fundraising Feasibility Study: It’s Not About the Money by Martin L. Novom. Copyright (c) 2007 by John Wiley and Sons Inc. All rights reserved.
Martin L. Novom, CFRE, is managing consultant at the Charlotte, N.C. office of Skystone Ryan Inc. Betty Ann Copley Harris, FAHP, is senior counsel at Copley Raff Inc. in Woburn, Mass. This and many other valuable books on fundraising can be purchased in the online AFP Bookstore.