The Nonprofit Leaders Guide for a Capital Campaign Volume 6: Feasibility Study Results
The capital campaign feasibility results are in! (If you are unsure how we got to this point you can read the beginning of the series by clicking here). Does it show that you can have confidence in raising your $9.3 million dollar goal or do you have to alter your plans to fit your budget? Will your board want to move forward with a campaign? Did your community support your case for giving?
The results of the capital campaign feasibility study should clearly have an impact on your next steps, after all, that is why you conducted a feasibility study. But there is not always an obvious path to follow. Even if two organizations get similar results, the road forward might not be the same because every community is different. Let’s break down some of the decisions you will have to make.
The dollar amount that the capital campaign feasibility study predicts your organization can raise, based on the current case for giving, is the primary indicator for your nonprofit to examine.
If the amount listed in the results is equal to or greater than the amount required for the project, your community will support this endeavor and it is clearly worth moving forward. Not much of a decision, in most cases.
If the amount listed in the results is less than the goal that was tested during the study, take a look at the verbatims from the interviews. There are usually trends that emerge:
- Your community does not support the project described in the case
You are looking for clues to what people are really saying. Are you suggesting a building overhaul but most people don’t notice any problems with the current structure? Is the case supporting too much infrastructure and not enough exciting improvements? Is there interest in increasing the endowment or paying for specific programs much greater than building renovations?
One of the questions we ask is whether there are other factors that would increase an interviewee’s gift. Answers may include, “a more defined vision of the building,” “Organization X would have to improve their fiscal management so I can have confidence that money will go where I want it to go,” or even, “I would have to understand how this campaign would improve our community.” These very different answers show that the case did not resonate. Now it is time to decide whether you should revise the case and interview a portion again, clarify your vision and assume the support will come, or decide that now is not the time for a capital campaign.
- Your community is not used to giving capital campaign gifts and the amount of money that needs to be raised would be unachievable with your donors.
If your community is not used to contributing major gifts—10 to 15 times their annual support, if they have never participated in a capital campaign, or they have neither the income nor the wealth to allow them to donate what is required, a capital campaign might be beyond your reach. Sometimes the lack of major donors arises when we recommend a feasibility study of 30 people and the organization cannot name 30 people who could be major donors to the campaign. Other times, it surfaces when individuals who the nonprofit believed had potential, indicated otherwise during the study (or through prospect research prior to the study). Still other nonprofits don’t know who on their list has potential. No matter how you slice it, a capital campaign requires major donors. It requires a lot of them. With the results in hand, it is time to consider whether or not your community has the wherewithal to support this endeavor.
- Your community does not have the means to support the project described in the case
Sometimes there is a question as to whether there is enough money in the community. You know some donors have potential but you need to find out what is realistic. If the results include many responses like, “I wish I could give more,” a capital campaign might not be on your horizon in the near future. Instead, use those same volunteer hours to increase your annual fund and donor base and reassess the situation in a couple of years.
Will you move forward with the campaign? Update the case for giving? Research your donor base to find hidden gems? So many questions and I will add one more. If you know you need a capital campaign, will you hire a fundraising consultant?
Why should your hire someone like Mersky, Jaffe & Associates? Consider the costs of undergoing a campaign with your current staff and volunteer leadership. What will not get done while attention is shifted to a capital campaign? The question is is particularly important for staff. If a campaign will result in reduced stewardship with current donors, a switch of focus from annual giving to capital giving or overworked staff that leave, the cost will be too high to the nonprofit. Then, consider that the projected costs of the new building will increase each year. So if it takes you an additional year and a half to run your own campaign (assuming you have some experienced development volunteers willing to donate a significant amount of time for three years or more) it could cost an additional 10-15% of your current project budget.
A nonprofit consultant will not do the work for your organization. There will still be staff and volunteer time that is needed. But once you eliminate a large portion of the learning curve and the missteps, the time will be well spent.
You have the capital campaign feasibility study results in hand. What are you going to do with them?
Last Month: The Capital Campaign Feasibility Study
Read the rest of the series:
Volume 1: The Overview
Volume 2: Defining your Dream
Volume 3: How to Determine Capital Campaign Goals
Volume 5: The Feasibility Study
Volume 7: Capital Campaign Marketing Materials