Conduct a Fundraising Feasibility Study: 7 Steps to Success

Planning a major fundraiser is exciting, and the potential payout can provide the funding to launch your nonprofit’s mission forward by leaps and bounds. But is your nonprofit ready to run such a large-scale fundraising campaign? To find out, conduct a feasibility study.

As the name implies, this study essentially determines whether your fundraiser is feasible, making sure your nonprofit is equipped to launch a successful fundraising campaign. These studies not only inform you whether your campaign is viable but also help nonprofits cultivate a fundraising strategy based on direct feedback from key stakeholders.

Due to the important role these studies play in nonprofit management, we’ve provided a list of seven steps that will help your organization conduct a successful fundraising feasibility study:

Set clear goals for your fundraising campaign
Understand the true purpose of the feasibility study
Consider outside assistance
Prepare your case statement
Determine key stakeholders
Be open to the feasibility study’s results
Implement strategies based on the fundraising feasibility study’s results

But before jumping straight in, let’s do a bit of preparation of our own and review a few feasibility study basics.

Fundraising Feasibility Study FAQ

What is a feasibility study?

A fundraising feasibility study is a tool nonprofits use to determine whether a fundraising campaign is viable. Most often, feasibility studies are enacted in preparation for large public initiatives like capital campaigns.

The study itself involves interviewing key stakeholders to determine their perceptions of a nonprofit’s reputation, the need for a proposed project, and the level of support they would be willing to offer. These stakeholders vary depending on the nonprofit’s connections and proposed project the major campaign is meant to fund but often include:

Community leaders. Is there a need for the project you intend to fund through your proposed fundraising campaign? Speak with beneficiaries, organizations you work with, and potentially your town or city’s political leadership to determine if your campaign is needed and will have community support.

Organizational leadership. Does your nonprofit have the internal infrastructure, experience, and stability to run a major fundraiser? Speak with board members, your organization’s executive director, the head of your fundraising team, and other relevant parties to determine your nonprofit’s internal capabilities.

Sponsors. Corporate sponsors can be essential for providing the financial backing nonprofits need to host events, maintain a sustained campaign, reach new audiences, and hit their fundraising goals.

Major donors. Major donors already provide significant support to your nonprofit, and many of them may have the capacity and affinity to increase their financial backing during a major campaign.

Through these interviews, the feasibility study essentially determines if the nonprofit’s proposed fundraiser is likely to find success and will ultimately be a worthwhile endeavor for the nonprofit and its beneficiaries.

When should a feasibility study be conducted?

Feasibility studies are useful tools, but there is no need to conduct one prior to every fundraiser. While it’s upsetting when a routine fundraiser falls short of its goal, most nonprofits can ultimately move past the disappointment and pledge to donors and beneficiaries alike to do better in the future with little fallout.

However, sometimes nonprofits need much more funding than normal, often to launch new initiatives, construct new buildings, or significantly expand operations. In these situations, it makes sense to call for a capital campaign.

In contrast to small fundraisers, these large fundraising endeavors failing poses distinct risks. The possibility of failure for a major campaign wouldn’t just be detrimental to a nonprofit’s mission, but a public affair that could undermine the organization’s legitimacy to donors.

For instance, let’s say a nonprofit only manages to collect half of its target from major donors by the campaign’s deadline. At that point, what action should the nonprofit take? Attempt to fulfill the project despite lacking startup funds? Return the gifts to the donors? Extend the deadline and try to find new fundraising sources? All of these options are less than ideal and can harm a nonprofit’s relationships with its donors and beneficiaries.

Who conducts feasibility studies?

Nonprofits will need to look internally for part of the feasibility study, but ultimately, these studies should be conducted by a trained third-party representative. For your feasibility study, hire an experienced capital campaign consultant. This consultant can provide an objective perspective on your nonprofit’s current fundraising capabilities, ensuring you receive an honest answer as to whether your proposed campaign is possible.

After the feasibility study is conducted, your capital campaign consultant can help you in one of two ways:

If your nonprofit did not pass the feasibility study, your consultant can suggest an alternate, more attainable goal or offer recommendations for how to improve your operations to position your nonprofit for a successful campaign in the future.

If your nonprofit passes the feasibility study, the consultant will provide a roadmap for your campaign moving forward. Note that nonprofits usually hire separate consultants to assist with the campaign itself and purchase feasibility studies as a stand-alone service to avoid potential conflicts of interest. After all, a consultant who knows that they’d be hired for the duration of a campaign may be more inclined to gloss over issues and suggest that the campaign moves forward.

We’ll explore how to find the right consulting service for your nonprofit later on. But for now, let’s hit the ground running and jump into the first step of your fundraising feasibility study.

1. Set clear goals for your fundraising campaign

Before you can determine whether a project is feasible, you need to know exactly what hope to achieve. The more specific you can be about what your fundraising campaign will achieve for your organization and mission, the better.

The amount of work you’ll need to put into this step depends on the nature of your fundraising campaign.

For example, let’s say you’re looking to grow your endowment or earn major gifts on your nonprofit’s anniversary. In this case, you simply need to determine whether financial stakeholders are supportive and how best to market your campaign to them. As such, your goals can simply be a target fundraising amount or a percentage of donor engagement.

In contrast, if you’re planning a capital campaign, you need an in-depth understanding of the associated costs and logistical details for completing the project. These specifics allow you to set an accurate fundraising goal and better explain your case for support to donors.

Let’s take a look at an example of how to outline your capital campaign’s purpose:

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Nonprofits should follow this example and perform the needed legwork to outline the details of the project their major fundraiser will support before the feasibility study is conducted.

In this example, the nonprofit would likely consult with construction firms or contractors to determine how exactly the kitchen areas would be expanded, as well as the costs and challenges that the project would entail. These initial details are helpful for informing the following feasibility study, which would determine the best course of action for raising funds to make this project happen.

2. Understand the true purpose of the feasibility study

A truly successful feasibility study will do more than determine your fundraising goal. While these studies can and should be used to outline your campaign’s logistics, they are also a support cultivation and planning tool.

Think of it this way: a feasibility study is a formalized opportunity to ask donors and key community leaders for their thoughts and opinions on your nonprofit and cause. By asking them for their reactions and feedback to your proposed campaign, your nonprofit showcases how much you value these leaders, increasing the odds they will support you during your fundraiser.

Nonprofits who use feasibility studies strategically can reap huge rewards, regardless of the results of the study. For example, a fundraising feasibility study can actively help you:

Excite major donors prior to the campaign so that they’re eager to contribute.
Incorporate stakeholders’ feedback into your proposed project so that they feel trusted, engaged, and valued.
Strengthen your infrastructure by identifying weaknesses in your organization.
Take your marketability to the next level by meeting donors where they are.
Develop your nonprofit’s case statement or case for support (which we’ll discuss in more depth later on).

These benefits can help you build sustainable relationships and stronger messaging, not just for the campaign in question but for your nonprofit as a whole.

3. Consider outside assistance

A feasibility study involves interviewing key stakeholders and asking questions to gauge their perception of both your nonprofit and your proposed fundraising campaign.

As mentioned, nonprofits should seek fundraising counsel in the form of a fundraising consultant or consulting firm. These experts can help you approach your feasibility study strategically to get the information you need and set up a framework that will strengthen your campaign.

Since hiring outside assistance is another expense, you may be wondering whether a feasibility study can be conducted in-house. While nonprofits can oversee their own feasibility studies, there are a few reasons why they should seriously consider opting for third-party assistance:

There’s value in hiring someone who has deep experience interviewing donors, analyzing the results of those interviews, and reporting to a nonprofit board.
A trained expert may offer unique insight into your community if they’re local (e.g., these Indiana-based consultants would have considerable knowledge of the fundraising climate in Indiana’s primary cities) or a fresh perspective if they’re remote.
Your nonprofit’s team may be biased. Just as you would want to avoid hiring the same consultant to conduct your feasibility to also assist with your capital campaign, you should be cautious of your own conflict of interests. If you begin your in-house feasibility study with a strong desire to launch a capital campaign, that may sway the results of your study.

A fundraising consultant can assist you with nearly every aspect of the study, from conducting interviews to using the results to develop campaign strategies.

However, while you should hire an external consultant, your team can and should still be part of the process.

An example of seeking expert advice

Capital Campaign Toolkit’s campaign experts have created a Guided Feasibility Study that campaign directors can use to improve their donor relationship-building skills. Specifically, campaign directors can work with one of the Toolkit’s expert advisors to:

Prepare for the study, including choosing donors to interview and requesting interviews.
Train for the study and learn essential skills for conducting open and honest conversations.
Analyze the results of these conversations and prepare a report for the board.

The Capital Campaign Toolkit empowers these leaders to build relationships before the campaign begins, encourage early donor engagement, and even secure early gift commitments.

4. Prepare your case statement

Once you know the details of your project, you need to communicate them to donors in a cohesive, brief, and persuasive manner. A case statement, or a case for support, takes a nonprofit’s goals and outlines them clearly for stakeholders.

Often, your capital campaign leadership and marketing staff will develop your case statement. This document should generally be created soon after you set your campaign goals as it directly affects the rest of your planning.

To convey your goals, your case statement contextualizes your proposed campaign within your organization’s larger purpose and vision. Essentially, it explains why your campaign advances your mission, is necessary for your work, and needs to be conducted at this time.

Specifically, a case statement should include:

An example statement for support promotion image for a hypothetical nonprofit, Cat Rescue Club.

Why the organization and mission are needed
The organization’s impact (the more specific, the better!)
The benefits of the project and the problems it seeks to solve
The specific challenges and potential solutions that are likely to occur during the campaign
An estimated fundraising goal or budget
The nonprofit’s brand, name, and logo, as well as relevant photos and testimonials

Send your case for support to interviewees prior to your meetings with them so that they can review the information thoroughly in advance. Then, when you sit down to interview them, they’ll be ready to provide feedback and ask questions about your project.

Keep in mind that a case for support can (and should) be refined based on the feedback that you receive during the feasibility study. That way, your case for support is as strong as possible when it’s time to release it to the public.

5. Determine key stakeholders

Feasibility studies largely revolve around the interviewees’ feedback, questions, and concerns. Ensure these interviews are core stakeholders whose opinions have a meaningful impact on your nonprofit.

When considering candidates to interview, think about people who’ve actively contributed to your campaigns. These candidates should “walk the walk.” Avoid individuals who are spread too thin or who tend to gravitate toward any and all community campaigns.

To put it simply, candidates should have a strong, genuine connection to your cause and organization. You also want a good mix of candidates who can provide insight into various aspects of your proposed project and fundraising campaign.

Specifically, you should consider these key types of individuals:

A list of nonprofit stakeholders, written out below.

Current and former board members
Current or former major gift donors
Planned gift or legacy donors
Key volunteers
Community stakeholders (e.g., community foundations, trust offices, etc.)
Business owners and vendors
Recipients of your services (e.g., grateful patients, alumni, students, etc.)

Along with having the necessary insight into your nonprofit to provide useful advice, these candidates are also highly likely to contribute to your campaign once it’s launched. The feasibility study is the perfect time to start cultivating corporate giving opportunities such as challenge grants, as well as major gifts from individual donors.

6. Be open to the feasibility study’s results

When you receive the results of your fundraising feasibility study, there are three likely outcomes:

The study reveals that your project is feasible, and your donors are eager and willing to support you. Start your project right away to capitalize on the excitement.
The study reveals that the project is feasible, contingent that problems are addressed. Before moving forward, resolve these problems or come up with a plan for tackling them during the course of your campaign.
The study reveals that your project is not feasible. Your organization will need to build a stronger infrastructure before tackling a project of this degree. Though disappointing, it’s better to accept these results and use the information you’ve gleaned to strengthen your organization than attempt a fundraiser that may damage your relationship with donors if unsuccessful.

It’s much better to refrain from conducting a campaign than to conduct one that fails. An unsuccessful fundraiser can bring negative publicity to your organization, undermining your legitimacy to donors.

No matter the outcome, the next step is to share the results with your board. Be fully transparent about the study to ensure your board members have a thorough understanding of the results.

You can also share your findings with other stakeholders if you deem it necessary, though you’re only obligated to do so with your board. For example, a major donor who was excited about your campaign may need to know if the initiative doesn’t launch, or they may be thrilled to learn that you’re moving forward.

7. Implement strategies based on the fundraising feasibility study’s results

Now that your fundraising feasibility study is complete and your team has assessed the results, you’re ready to start implementing smart strategies to make your next campaign your best one yet.

As discussed, there are two major paths you will take depending on whether your study determined if your organization is able to launch your fundraiser at this time.

If your study finds that it’s not the right time to move forward with your campaign, your consultant may suggest:

Holding a series of smaller campaigns to grow your annual fund. The larger your annual fund, the more equipped your nonprofit is to meet an ambitious campaign goal. Without a proven fundraising record, it’s unlikely you will reach a major fundraising goal.
Stewarding more major donor prospects for necessary gifts. Your organization can’t reach your fundraising goal without having great relationships with multiple major donors. Your team may need to focus on connecting with high-capacity supporters before kicking off your capital campaign.
Investing in fundraising software or other internal resources. Without the right tools on hand or the right individuals supporting your organization internally, you may not be able to carry out your campaign.

If the study shows that a few strategic areas need to be addressed before the campaign kicks off, your consultant can also help your team identify how to implement these adjustments. For example, these strategic shifts might include:

Adjusting your fundraising goal, timeline, or project. It’s possible that your team has the resources and capacity to fundraise for a less ambitious campaign. Instead of putting the campaign off entirely, shift expectations to allow your team to start collecting donations for a smaller-scale project.
Realigning your gift range chart to more strategically distribute necessary gifts. Your consultant may determine that your gift range chart isn’t feasible. They could suggest soliciting higher donations from major givers or more low-level gifts from donors in general when your campaign goes public.
Putting a greater emphasis on donor stewardship tactics like fundraising events, solicitations, and more. During your feasibility study, your consultant may discover that your supporters aren’t being sufficiently stewarded. In this instance, they may recommend ways to better connect with high-value donors and steer them toward giving, such as by promoting matching gifts or helping individuals understand their impact via storytelling.

Remember, your nonprofit consultant can offer your organization unique insight into how to prepare for the campaign you envision, even if that means heading back to the drawing board.

Now that you know how to conduct a successful fundraising feasibility study, you’re ready to tackle this beginning stage in your next campaign!

Fundraising Feasibility Studies Wrap-Up

Major fundraising initiatives like capital campaigns can give your nonprofit the boost it needs to propel its mission forward by leaps and bounds. However, before getting wrapped up in the excitement of future fundraising, feasibility studies make sure your organization is ready to accomplish your goals.

One way to shore up fundraising support and keep your organization financially healthy is through corporate giving. From sponsoring your campaigns to providing support throughout the year through matching gifts, philanthropy is an untapped source of revenue that helps many nonprofits better position themselves for future fundraising.

To discover more about corporate philanthropy, check out these resources:

The Ultimate Fundraising Guide to Corporate Giving Programs. Is your nonprofit new to seeking corporate partners? Get an inside look at corporate giving programs and what your nonprofit can do to earn from them.
16 Impactful CSR Statistics Charitable Companies Should Know. Interested in learning more about the current state of corporate social responsibility and how it might impact your nonprofit? Check out these up-to-date statistics.
Nonprofit Marketing: How to Spread Awareness & Win Support. Marketing is essential for driving needed donations ahead of and during your capital campaign. Hone your outreach strategy with these tips.