Do I really need to do a capital campaign feasibility study?
“We know we need to do a capital campaign. What do I do first?” “How do I start a capital campaign?” The answer to these questions is simple: the capital campaign feasibility study is the critical first step for any successful campaign.
Think of the successful oil companies. They generally know where they can find oil. They generally know how to extract it. They certainly know they intend to do so. However, before proceeding, they are going to do some geological work to determine the exact location, the depth of the deposits, the proper equipment needed, and if there is enough oil to warrant the investment.
Much like the oil companies, who know they intend to drill, the reality is that most organizations conducting a feasibility study are certain they will conduct a campaign. The study is designed to help them fine-tune the message, goals, prospect pool, and potential leadership. Since these are the critical areas that will define the success of a campaign, it is important to know if they are “feasible” as-is, or if any adjustments can be made to increase the chances for success.
One way to think about feasibility studies is to view them as what they really are: a critical pre-planning step for a successful campaign. In addition to many other benefits, a well-designed study will help the organization analyze each of these areas and provide helpful recommendations.
The Case for Support
A capital campaign case for support is the proposed project or proposal that the campaign will fund. Whether it is building a new building for a Humane Society or a campaign to increase the number of families served by a Habitat for Humanity affiliate, prospective donors will need to believe the project is worthwhile before being willing to fund it. Prospective donors will also need to believe the organization has demonstrated the capacity and track record to successfully deliver on its promises.
A feasibility study questionnaire will test this topic by asking a range of questions about the organization’s track record, status in the community, understanding of the organization’s work in the community, and reaction to the proposed project and goals.
The information uncovered in this section might help the organization realize that a part of their project is concerning to a certain pool of prospects. They may discover that they need to be ready to address questions about how they plan to handle increases in future operational costs. Regardless of the study, there will undoubtedly be information uncovered that will help the organization shore up some areas of the case or prepare for future questions that will come up as they navigate the campaign.
The Donor Pool
Whether it is Harvard raising $1 billion or Habitat for Humanity in rural Tennessee raising $2 million, the vast majority of money will be raised from 100 individuals or less. The difference in totals is a difference in donors. Who are your donors and what capacity and interest level exists?
It is likely that 75% of the funds raised will be raised by gifts of $25,000 and up. Look at your current donor pool. Are there enough major donors in that pool to support the goal you have in mind? If not, does the community have a group of donors who are not currently donors but may have an interest in this project?
In addition to major donors, there will need to be a large enough pool of donors to support the levels of giving needed to make up the other 25% of the pie. How many donors have given the organization $500 or more in the last 12 months? Will they support this effort?
The feasibility study consultant will likely evaluate this topic from two angles. First, they will look at the metrics from the organization’s database (i.e. number of current donors, number of major donors, etc.). In addition, as part of the feasibility study they will be talking with potential donors in both categories to gauge their interest in the project and their capacity to give.
The Leadership
Chances are that 5 donors will make up 20% of the total goal. Who are those donors and do you have access to them from the available leaders in the organization? If not, can we get the right leadership in place to earn their trust and support?
Capital campaigns most often operate with an “executive committee” in place to provide the leadership for the campaign. The largest gifts to the campaign will come from this group or their peers. In most cases, the study will reveal who should be on this committee. If a working group exists, the study will help evaluate the group and their ability to provide or connect the organization to the largest donations required for success. It may suggest the need to augment the existing group with additional leaders who will raise the level of potential.
The Organizational Capacity
Capital campaigns can be hard. They often cause an organization to experience discomfort and stretch in ways they have not previously experienced, because they put pressure on the entire system. Therefore, it is vital that the organization have the foundation in place to move forward.
Can the organization plan and execute a successful capital campaign? Does the necessary internal support exist and is there a willingness to move forward in a way that will produce results? Are the leaders “bought in” to the need to conduct the campaign and willing to move forward as one voice?
Recommendations
Experience shows that these are the four areas that will dictate the success (or not) of a campaign. The feasibility study should evaluate them and provide recommendations for improvement, where necessary. A well-designed study will likely provide a list of recommendations that will benefit the organization as they move forward with the campaign.
The feasibility study should always be the first step in a campaign because it helps you identify your strengths and plan to minimize your weaknesses, as well as providing a roadmap to move forward successfully. If you’re ready to get on the pathway to a successful campaign, let’s talk about how I can help.