Is it possible to test the wrong amount in your feasibility study?

David Malone

By Dave Malone, President

When a small group of conservation advocates told us they wanted to build a special exploration center, we thought: so far, so good.  When they told us it would cost $68 million, our eyes grew wide and we privately gasped.  While campaigns do succeed at that size and more all over the country, this was a small startup venture that was just an idea at the time.  Fortunately, the group agreed a feasibility study would be a good first step before committing to a substantial campaign of that size.

As we prepared to conduct the study, we grew concerned about how participants would feel about the project and in particular, the projected cost.  But as objective and impartial exercises, feasibility studies aren’t about pre-judging outcomes; they’re about measuring existing donor feedback to the nonprofit’s vision and dream.  On several occasions, we’ve seen campaigns with ambitious goals succeed, sometimes even going over goal!

We started the study as we would any other but by the time we got to the fifth interview, we noticed a concerning pattern was developing.  Participants were floored by the projected cost.  With that early feedback, limited as it was, we recognized that the feasibility study was doing more harm than good and that the high project cost was creating serious credibility issues with the very people that would be needed to make the project succeed.

We hit the brakes and discussed the challenge with our client and recommended that the overall project be divided into smaller distinct phases, each with a lower price tag.  Instead of swinging for the fences and presenting the project as a huge single project, we conducted the remaining study interviews by presenting an incremental project with progressive steps that could culminate in the entire campus being built, eventually.  This strategy was effective at helping study participants see the project as achievable if completed in less expensive stages.

Even with this new strategy, the feasibility study revealed there was not enough donor support to proceed with the project at that time.  Was the study a failure?  Not at all!  The feasibility study did exactly what it was designed to do by revealing that the fundamentals for a successful campaign were not in place and the young organization was not ready for a project of this magnitude.  The study likely saved this organization years of struggle, frustration and discouragement (and a lot of fundraising expense) with a campaign that was never likely to succeed.

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Are you sure you want to hear if your campaign will succeed?

David Malone

By Dave Malone, President

When a small conservation and environmental education organization asked us to help them raise $5 million for a new education center, we asked them if they had considered a feasibility study.  They were new to capital campaigns and had not.  When we explained the value of a feasibility study, they agreed it would be prudent.

During the study, we tested donor interest in funding a new ultra-green environmental education center.  But donor opinions on the project were mixed.  Constituents asked several important questions that would pose serious challenges to a successful campaign.  When we analyzed the study data, we concluded that under the current circumstances, the organization would likely raise as little as $1 million, and raising $3 million would prove challenging.  They were disappointed.

But the study did not permanently close the door on a campaign.  Instead, our report made several recommendations that would address donor concerns and explained that it might take as long as a year to implement the changes needed to properly position the organization for a successful campaign.  The nonprofit leadership was discouraged and impatient; they wanted to start fundraising now!  To their credit, the executive leadership and board committed to implementing the recommendations, even if reluctantly.

About one year later, they were ready!  Although we initially tested $5 million, and our feasibility study concluded $3 million would be the most they could raise, after investing the time and energy to address donor concerns, the campaign went on to raise $8.25 million!  That was 65% more than their original goal.

Whether your feasibility study gives your campaign a green light, yellow light or red light, it is an invaluable exercise that will significantly improve the probability of a successful capital campaign.

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