How to Test the Feasibility of Your Nonprofit’s Capital Campaign

By Stan Hutton and Frances Phillips from Nonprofit Kit For Dummies, 3rd Edition

A nonprofit organization’s capital campaign starts a feasibility study, research testing the hypothesis that you can raise the amount of money you need. Four feasibility study test points are

How much money does this organization have the capacity to raise?
For this particular need?
At this location and at this time?
Is that enough money to pay for what the campaign plans to do?

The accuracy of the feasibility study is important to the capital campaign. Whoever conducts it must be able to speak honestly about the organization’s position and listen carefully to the direct and indirect messages conveyed in the interviews.

The person conducting the study must interview key leaders in the organization along with its current supporters and others whose involvement in supporting the project is critical to its success.

Nonprofits often use a consultant for feasibility studies because she’s a step removed from the organization and, therefore, interview subjects are more likely to be frank with her.

How to lead the way with the board contributions

All the organization’s board members should contribute to the campaign. The board’s willingness to support the campaign is an indication of its being feasible. Also important, potential donors who aren’t board members are likely to ask whether you have 100 percent board participation.

A charismatic executive director may be able to stir up enthusiasm about a capital project, but to succeed, such a project usually requires broad-based support and the assistance of all levels of leadership in the organization.

Also, people asking other people to make contributions are in a much better position to ask if they, themselves, have given. Board members must be willing to be involved in the campaign fundraising.

How to go through feasibility study interviews

A typical feasibility study interview opens with an overview of the proposed project, emphasizing why the nonprofit selected the project, and how it can enhance the organization’s programs and better serve its constituents. Next, the interviewer describes how much money the project needs and how, in general, the organization plans to raise it.

If any major donors are already involved, the interviewer mentions their levels of support. Finally, the interviewer suggests a possible donation to the potential contributor and makes note of whether that person is likely to give to the campaign and how much the contribution may be.

The interview should be a conversation among the parties in the room rather than a one-sided presentation. The more the interviewer can engage the interview subjects in discussion, the more the interviewer finds out about how outsiders view the organization and about the fundraising potential.

In these conversations, most contributors aren’t making promises, but they’re suggesting their probable levels of support. The study, therefore, is important for two reasons:

It gathers information that helps the organization estimate whether its capital campaign goal is feasible.
It begins the process of “cultivating” contributions to and leadership for the campaign.

If the feasibility study suggests that you can raise more than you planned, you may consider increasing your capital campaign goal to include more scholarships or a cash reserve for building maintenance.

If the feasibility study suggests that you can’t afford a “champagne” version of your plans, you may have to settle for a serviceable “house wine” edition. If your plans already were of the house wine variety, you may want to break the campaign into phases.

You also may find out that you need to wait. Perhaps your potential major donors recently gave to another campaign, and although they like your project, they were recently tapped. You may be able to come back to them in two years and receive major contributions.

Or maybe your board has dwindled in size or your executive director just accepted another job. When you organize, recruit, and hire anew, your campaign can proceed.

You may find out that undertaking the project isn’t a good idea at all. Period. At that point, it’s time to start over and plan to address your goals in a different way.