Should Your Nonprofit Conduct a Feasibility Study? 10 Reasons to Prioritize This Crucial Step

If your organization is planning a capital, endowment, anniversary, or major gifts campaign, a feasibility study is an essential part of your campaign planning process.

What Is a Feasibility Study?

A feasibility study is an assessment of your nonprofit’s ability to raise funds for a specific project. It typically includes stakeholder interviews, donor feedback, and an evaluation of your organization’s philanthropic readiness. The goal is to test your fundraising capacity before launching a campaign, helping to set realistic goals and avoid financial strain.

I know many organizations feel hesitant to invest time, money, and energy into a feasibility study; it's tempting to trust your instincts about how much your organization can raise and jump right in. However, in most cases, we recommend that our clients take this important step to avoid common pitfalls.

10 Reasons a Feasibility Study Is Worth the Investment

Feasibility studies can help your nonprofit:

1. Determine the best use of funds – Gain insight into what donors are willing to support, creating priorities for the campaign.
2. Test campaign messaging – Ensure your case for support resonates with key stakeholders.
3. Cultivate relationships – Engaging donors early helps build investment in your campaign.
4. Assess readiness – Evaluate whether your organization has the internal capacity to execute a major campaign.
5. Identify key leaders – Find campaign chairs, volunteers, and major donors who can champion your cause.
6. Engage major donors – Make donors feel like insiders by involving them in early discussions.
7. Gather feedback from key influencers – Seek advice from respected community leaders and potential funders.
8. Understand your nonprofit’s reputation – Learn how donors and stakeholders perceive your mission.
9. Refine your case for support – Define the project scope and create a compelling campaign narrative.
10. Set realistic fundraising goals – Most importantly, avoid overpromising and under delivering by basing campaign goals on real data.

Why Work with a Fundraising Consultant?

Many nonprofits hire a fundraising consultant to conduct their feasibility study. We find that donors often feel more comfortable sharing candid feedback with an external consultant than with the organization itself. A consultant is able to gather valuable, sometimes anonymous, insights to help shape the campaign strategy while maintaining donor trust. Organizations who conduct feasibility studies on their own tend to emerge frustrated with the amount and quality of the information they collect. Donors sometimes feel they are being asked to make an early pledge to the campaign when the study is conducted by the organization's development director, CEO, or board member, and therefore may be hesitant to respond to questions about a potential gift amount. Partnering with a consultant allows the process to remain objective, confidential, and professional, and it provides an opportunity for continued relationship and trust building with your donors. Often, institutional funders insist that the study be facilitated by an objective third party, and they may even fund the project.

In Conclusion: Plan Before You Build

One of the biggest fundraising mistakes nonprofits make is setting campaign goals based on what they want rather than what they can realistically raise. This can lead to unfinished projects, financial strain, costly facility re-designs, volunteer and donor frustration, and never-ending campaigns.

Before getting too attached to ambitious plans, take the time to conduct a feasibility study. This critical planning step ensures your nonprofit is set up for long-term fundraising success.