What is a Feasibility Study for Nonprofits?
Many of us who have worked in the for-profit sector may be familiar with the term Feasibility Study, and in the nonprofit realm, it shares some of the same characteristics, but the process and outcome don't quite fit the definition thrown around in the typical business setting.
A for-profit feasibility study is a detailed analysis that considers all of the critical aspects of a proposed project in order to determine the likelihood of it succeeding. (Source: Investopedia)
In the nonprofit world, a Feasibility Study is a detailed analysis for a proposed project or fundraising campaign to determine how much can be raised in donations, what initiatives a donor base would support, and who to solicit for gifts to support the project.
The general goal in both cases is the same: conduct a thorough assessment of a particular project before investing time and energy in starting that project. Businesses do this in the hopes of guaranteeing success in the project's completion or goals, and nonprofits do this to make sure they will reach their fundraising campaign goal (and even determine what the goal should be in the first place!)
Most nonprofits conduct a feasibility study over a few months before launching into a campaign or capital funding initiative to make sure the donors are willing to support the project, but there are several other significant pieces of information that come from conducting a feasibility study:
The overall fundraising goal - what is the floor and ceiling for what we can raise?
How long will the campaign take to raise the money?
Who are our lead gift donors, and how much will they likely give to the project?
Who are our best prospective volunteers to support the operations of the campaign?
How do we structure our campaign in terms of time and resources?
What are the critical components of our Case for Support?
What projects and initiatives is our donor base willing to support financially?
Knowing all of that before launching the silent phase of your upcoming campaign gives you a massive advantage over your local competition, who are also out in the community raising money. If you can first answer all those questions before you begin, you have a goal, a plan, a timeline, and better yet, you know exactly who to ask for lead gifts and beyond. If you need cash in the door quickly to green-light your project, this may be the option for you.
What does the process typically involve?
A series of confidential one-on-one interviews with an unbiased third party/outside firm. Depending on the size of the charity, there can be as few as 15 interviews or as many as 100+, tending to last 30-60 minutes each. The promise of anonymity allows your donors and constituents to open up more honestly about their opinions of your organization and what they'd like to see to keep the donations coming. Donors and organization leadership don't always agree, but a feasibility study finds the common ground upon which to build a campaign or project.
Broad based surveys to the organization email database. The best way to know what your constituents want is to ask! Keeping the survey short (under 3 minutes) will encourage a ton of people to respond with what they would support and what they think your community needs.
Qualitative and quantitative analysis of the organization's current fundraising efforts/data. To know how to optimize a campaign, it's best to start with taking a close look at where we are now. What components of our program can we keep the same, and what do we need to adjust to be in campaign mode? Sometimes it means taking a year off of fundraising events to focus on campaign revenue, and it usually means asking our current supporters to do a little extra for us to meet our expanded financial goal.
Packaging all the raw data together into specific recommendations with a timeline and plan to meet the suggested goal. The information is only valuable if we use it to understand how to plan for our campaign season. The study puts together the perfect playbook and case for support, but it's up to us as the charity to execute the work, raise the money, and fund our mission.
Depending on the situation, there are dozens of other components fundraising firms use to put together a feasibility study report and presentation, but after conducting thousands over the years, those are the components we at PRIDE have seen be consistent for all them.
Considering starting a fundraising campaign? You may want to consider a feasibility study as a way to ensure its success. Schedule a free call with us to see if it might be a good fit for your nonprofit!
