Do you want a way to assure your board of directors that your capital campaign will work? Nonprofit feasibility studies are the best way to determine whether you will meet your fundraising goals. Nonprofit feasibility studies are one of the best-kept secrets of a successful capital campaign.
This article will walk you through the benefits of a feasibility study, the steps your organization must take, and FAQs to ensure you’re prepared for your next big campaign.
- What is a Nonprofit Feasibility Study?
- The 5 Benefits of a Fundraising Feasibility Study
- 8 Steps to Conducting a Successful Feasibility Study for Your Nonprofit
- Frequently Asked Questions (FAQs)
What is a Nonprofit Feasibility Study?
A nonprofit feasibility study is said to be the best tool for a nonprofit organization to analyze and determine the possibility of success with a capital campaign or other large projects.
Nonprofits may assume they can perform a feasibility study on their own, but it is best to hire an outside consultant to perform most of the required tasks. Consultants can interview major donors, stakeholders within the organization, and other potential funding sources and learn more about how your campaign will be received by your donor base and the community at large.
Your organization will have a better idea of who your greatest assets will be during the actual campaign through the consultant’s efforts. A feasibility study should be conducted at least 3 to 4 months before asking for any donations, but they should be done after you have decided on an overall funding route to meet your goal.
Before starting your feasibility study, you’ll need to determine the cost of the campaign. You’ll also need the full support of your board of directors.
The 5 Benefits of a Fundraising Feasibility Study
If your organization conducts a feasibility study before you start on a campaign, you are more likely to find success for several reasons.
1. Determines the success of your fundraiser
The primary benefit of conducting a feasibility study is the knowledge of whether your next big campaign will be a success. Campaigns and fundraisers can be expensive, and no nonprofit can afford to spend money without a return on their investment. Feasibility studies give you and your board a better idea of the likeliness of a campaign’s success before it is started.
2. Chooses the best leaders for the project
Another benefit of a feasibility study is the list you’ll have of people most interested and capable of helping you meet your goals. Capital campaigns and large projects include many steps and various people. A feasibility study will give you a better idea of who you can turn to for networking and project-based activities within or outside the organization.
3. Develops a case for support
Your nonprofits must have a case for support or case statement ready before starting a capital campaign. Case Statements provide a detailed explanation to donors of your organization’s purpose and impact. Donors clearly understand the problem your organization hopes to solve and how and why your nonprofit can solve this problem better than everyone else.
4. Creates awareness of the project
Capital Campaigns depend on word of mouth. A feasibility study gets publicity for your campaign started right away. When a consultant shares your nonprofit’s vision for the project and campaign, donors get excited and begin to talk to their communities about your organization.
5. Makes a detailed plan for campaign success
The final benefit of a feasibility study is the opportunity to create a detailed plan for success. Before the feasibility study, you should have a financial goal for the project, but after the study, you’ll have a better idea of how you’ll meet that goal. Feasibility studies can give you a clear path to follow and a fundraising strategy that includes events, online campaigns, and major donor plans.
8 Steps to Conducting a Successful Feasibility Study for Your Nonprofit
Despite all its benefits, you need to ensure that you follow the right steps to get success with a nonprofit feasibility study.
1. Hire a fundraising consultant
As we’ve discussed, hiring a fundraising consultant is necessary for a feasibility study. The reason for this is two-fold. First, outside consultants do not have personal biases that could get in the way of an honest assessment. For example, you and your board want to start the project right away. This desire can get in the way when determining whether now is the best time.
Second, the consultant likely has more experience conducting feasibility studies than you. Nonprofit fundraisers and board members are passionate but, in most cases, have limited background when it comes to capital campaigns. Your organization should find a consultant who has performed feasibility studies before and has experience working with organizations in your sector.
2. Research past fundraising success
New nonprofits rarely run capital campaigns, so if you’re ready to start a significant campaign, you probably have a history of fundraising experience to study. You’ll hopefully also have a quality donor database you can use.
Thanks to this information, you’ll have access to the best campaigns and events for your donor base, examples of success stories that drew the best responses, and an overview of how you can meet your fundraising goals.
Now is the time to look for major donors interested in similar projects. In addition to their interest in the project, you’ll need to give the consultant an idea of how much each donor can provide.
Pro tip: Conduct prospect research. For you to be able to find success with a big project, it is essential that you know your existing and potential donors’ wealth, their affinity to give, and their preferred modes of giving.
3. Build a team
If you’ve ever run a fundraising event, you’ll know how vital an event committee can be. Creating a team like this for your feasibility study is equally important.
After hiring a fundraising consultant, you’ll want to connect with board members, volunteers, and other staff to build a team that can help identify donor prospects, give feedback on campaign marketing pieces, and share their fundraising ideas and strategies.
4. Decide who to interview
The first thing your team should do is help decide who to interview. Before sending a consultant out to interview fundraising prospects, you’ll need a list of people for them to use. Getting your team involved in this step can help create a significant list of:
- Former and current major donors
- Planned gift donors
- Board members
- Volunteers in leadership positions
- Business owners and vendors you’ve worked with
5. Finalize the best questions to ask
Experienced fundraising consultants will start with a few basic questions to understand the donor’s or stakeholder’s interest in the organization and project.
Here are some questions to consider:
- What is their history with the nonprofit and other organizations?
- How do nonprofit programs affect their day-to-day life?
- How confident are they in the nonprofit’s leadership?
- Do they have confidence that the organization will reach its goals?
- Is the project worth it?
- Are they inspired enough to get involved?
Fundraising consultants may have more experience with this type of campaign, but you have the personal and professional information that will help get donors to open up. With this list, your consultant can create a targeted list of questions to ask each donor type.
6. Have your consultant meet in person with prospects
Now your consultant is ready to start the interviews. In some cases, attending interviews with the major donor will be necessary, but most interviews should be done by the consultant. Remember, the individual you hired has experience with this type of study and donor prospect, so let them do their job.
For major or principal gift donors or meetings with businesses, encourage your consultant to set up in-person interviews. Provide them with necessary information and equipment.
7. Go over the results with the consultant
Next is the fun part! After the consultant is done interviewing all your prospects, you’ll have a whole host of information to pour through. Get ready to hunker down with your team and learn whether now is the right time to hold a capital campaign. Be open-minded to the results and keep personal biases aside.
8. Determine the next steps
If the feasibility study determines that your organization and donor base are ready for the campaign, you can get started! But it is never a one-word answer: yes. Your consultant will come back with a number of strategies for you to make the campaign successful.
These may include recruiting more volunteers or staff, strengthening relationships with prospective major donors, choosing a suitable online fundraising tool, launching specific campaigns and events, offering specific benefits to sponsors, and more.
Usually, for bigger projects, a nonprofit will need to run smaller online fundraising campaigns leading up to a capital campaign. These campaigns may include crowdfunding campaigns, peer-to-peer fundraising, event fundraising, and more.
Donorbox Premium helps nonprofits unleash their full donation potential by offering expert coaching services, a dedicated account manager who will help you along the way, high-performance tools, and adept tech wizards. Our expert fundraising coaches will help you choose the right tools for the big campaign and set up check-in calls to ensure you’re meeting your fundraising goals. Contact sales to discuss your project and learn about your personalized pricing.
Here’s a great example of a capital campaign being run online and rather successfully by AMBUCS. They’re using the Donorbox-hosted free fundraising page and the recurring donation form. The team has also enabled peer-to-peer on this campaign to encourage their supporters to fundraise for them and successfully meet the fundraising goal.
If your consultant thinks you shouldn’t conduct a big campaign right now, it is time to see where you can make a change. Work on building stronger relationships. You can also start training staff and board members to network and connect with new donors. Find new board members with better personal relationships within the community.
Feasibility studies may take extra time and money, but the benefits outweigh your board’s concerns. Whether you’re hoping to excite your major donors, strengthen your infrastructure, or market your nonprofit to a larger audience, feasibility studies can walk you through the steps and contacts needed for a successful campaign.
If your nonprofit is planning a capital campaign or other significant project in the future, you’ll need a way to collect online donations and a donor management system that will help you maintain strong donor relationships. Donorbox has helped over 50,000 nonprofits across the globe create a bigger impact with simple-to-use online fundraising features and an efficient donor management system. Some of our most-loved features include Crowdfunding, Peer-to-Peer fundraising, Events, Memberships, Recurring Donations, Donorbox-hosted Donation Pages, QuickDonate, Text-to-Give, etc. Know about all the features here.
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Frequently Asked Questions (FAQs)
1. What pieces of information will the feasibility study reveal?
A feasibility study gives your organization a better idea of how donors perceive the proposed project. There are a few pieces of information you’ll receive from a feasibility study:
- Whether your organization should continue with a capital campaign.
- Are your major donors interested in funding the project?
- Problems you may have finding enough funding for the project.
- Specific areas your organization can improve.
2. What is the right time for your nonprofit to conduct a feasibility study?
Nonprofits should start a feasibility study at least 3 months before their capital campaign. The information your organization receives from this study can help you plan your campaign and address any issues that may appear.
3. Why should you hire an outside consultant for the feasibility study?
Nonprofits will have better results in conducting a feasibility study if they use a nonprofit consultant. Consultants have no biases that can color the study results, so it’s best to leave the interviews to them. Your nonprofit will receive in-depth information that gives a truthful overview of your campaign plans.
Consultants with experience running feasibility studies will be prepared to answer any questions a donor or board member may have. This experience will help walk you through preparing for your campaign and addressing any potential issues.