STEP 1: Long before the study and the campaign, develop a major gift prospect list.

It’s a startling statistic: As much as 80 – 95% of capital campaign revenue will come from 10  – 40 donors.  That’s why you need to know who they are.

In the Capital Campaign Tutorial I teach you how to develop that list and track them in your database.  

STEP 2: Once you have identified your top prospects, engage as many as possible in a preliminary conversation months before the formal feasibility study.

The sooner you identify your top prospects, the better.  If you know your ‘top 40’ prospects well in advance of a campaign, you can engage them in preliminary conversations long before you conduct a formal Feasibility Study.

It’s wise to invite your top prospects to be part of various planning committees.  For example, they may have expertise in construction, design, finance or banking.  A lot of talent must come together to complete a $15M construction project.

These conversations can be game-changers.  When people give time and talent, their commitment to the project grows.  The end result is bigger gifts.  You’ve treated them like friends, giving them a voice in the project.  They helped plan how they would spend their money.

Months later, when it comes time for a formal Feasibility Study, the conversation will be easy.  They understand why the project is needed, are likely to say they’ll support it, and will estimate their best gift.

STEP 3:  Do the math. Determine the goal you might reasonably test in a Fundraising Feasibility Study.

Let’s summarize so far.  You’ve spent considerable energy identifying your top major gift prospects.  With more than a few, you’ve had preliminary conversations telling them a capital campaign was under consideration, “at some point on the horizon.” Other major gift prospects have helped with needs assessments, construction planning and preliminary cost estimates.

Now it’s time to conduct a feasibility study to see how much you might be able to raise.  How much of the Master Plan can you accomplish in the upcoming campaign?  Just the science building, or can you include a new gym as well?  

Now comes the tricky part.  The first questions interviewees ask are (1) what do you need? (2) what will it cost?

If you ‘test’ a goal that is too low, you might leave money on the table.  For example, let’s say you have identified enough major gift prospects to possibly complete a $10M campaign, but you are risk adverse.  So you set your sights low, and tell feasibility study interviewees, “We would like to raise $5M for a science building.”  In this scenario, you might be leaving money on the table.  

Conversely, suppose you have only identified enough prospects to reasonably make a $5M campaign possible. But the architect tells you the science building and gym will cost $10M.  So in the feasibility study you tell your handful of major gift prospects “We hope to raise $10M for a science building and a new gym.”  

In this case you are setting yourself up for failure and a PR problem with your best supporters.  It’s irrational to ‘test’ a $10M goal with only $5M worth of prospects.  The study results are a foregone conclusion.

This begs the question: How do you determine an initial goal to ‘test’ in the feasibility study?

Do the math.

The table below represents the path to a typical $5M campaign.

Gifts Needed	X Gift Amount	= Value		Running Total
1	$1,000,000	$1,000,000		$1,000,000
2	$500,000	$1,000,000		$2,000,000
3	$250,000	$750,000		$2,750,000
5	$100,000	$500,000		$3,250,000
15	$50,000	$750,000		$4,000,000
20	$25,000	$500,000		$4,500,000
50	$10,000	$500,000		$5,000,000

• Notice that the top 26 donors with gifts of $50,000 and above account for $4M of the total, or 80% of the goal.

• In order to have some hope of reaching a $5M goal, you must have enough prospects at each of these top levels.

• If you need one lead gift of $1M, you need to identify at least three or four people with whom you might have that conversation.

• That is true for the six-figure gifts as well.

• THEREFORE: Ask yourself: “Have we identified enough major gift prospects to make this table a reality?”

• Then adjust the table so that it reflects your ‘known’ number of major gift ‘suspects.’

That done, you can determine the goal you want to test via the Feasibility Study. It must be a reasonable goal supported by the data generated through your prospecting efforts. 

STEP 4: Once you decide to move forward with a formal feasibility study, do the interviews yourself.  You might want a fundraising consultant to accompany you, but don’t send him alone.

Think of major gift donors as friends.  You have known many of them for years.  Despite the fact that you have developed the relationship, fundraising consultants will tell you they have to be the one conducting the feasibility study interviews “to ensure objectivity.”

Don’t buy it.

At a critical time when your organization is about to do something big and bold, would you really send a stranger to visit with them?  That’s not how you treat friends.  If these donors can only be honest with your fundraising consultant, then something is wrong with the relationship.  Fix the relationship.  Don’t send someone else to do the work only you can truly do.

Consider this analogy: Imagine dating someone for years.  It’s time to talk about marriage.  Would you send a third party to pop the question, “to ensure an honest answer?”  

Of course not. 

You can conduct your own Fundraising Feasibility Study with proper training and guidance.  And you can do it better. 

First, if the president, principal, pastor and/or board agree to help conduct visits, you are more likely to secure appointments with six and seven figure prospects.  

Second, there is greater availability to set the appointment. You don’t have to work around a consultant’s limited schedule or force the interviewee to come to the school or church.

Third, prospective donors want to talk with those who will decide how the money is spent.  No fundraising consultant has that authority.  

That brings us deeper into the purpose of the feasibility study.  One reason is to estimate income.  The other is to engage prospective major gift donors in a heart-to-heart conversation about a project, and to do so with those who have authority to shape the plan.  

Lead gift donors want to talk to the people with authority to make decisions. That would be you.  A consultant can tag along to help shape the conversation and ensure that all the right questions get asked.  But it is you that the donor wants to see.

Finally, the Feasibility Study interview will be more fruitful and engaging if you ask donors for feedback and advice. In presenting the plan, nuance is required.  You can’t go to major gift prospects and say, “We want to put up a new building” without some sense as to what it might look like or cost.  

On the other hand, I’ve seen nonprofit organizations spend $30,000 or more on detailed construction blueprints, and then go talk to donors.  They were depressed to find their plans vastly outstripped the money people were willing to provide.  It was an incredible waste of time and money on detailed architectural plans that had no chance of being built. 

In preparing for the Feasibility Study, we’re looking for the sweet spot between the two extremes.  For a few thousand dollars an architect will draw up some basic plans and cost estimates.  That’s all you need to have an initial conversation with your top prospects as part of the Fundraising Feasibility Study.

STEP 5: Analyze the data and set a realistic campaign goal.

To recap: You’ve identified your top major gift prospects, used that data to determine a preliminary goal to test in a Feasibility Study, then met with most of them to determine there interest. After each visit you wrote up notes regarding the conversation.  If the person was willing to estimate his or her gift, you noted that as well.

Now it’s time to analyze that information.  

• Gather together all those who conducted the study interviews—the president, development director, board members, etc.

• In a confidential setting, work your way through the top of the prospect list, one by one.  Ask the group: “Given the conversation with Mr. Smith, what might we expect concerning his gift or pledge?”

• It might be a range.  It might be something as vague as Mr. Smith commenting, “I’ll do something, but I can’t give you a number right now.”

• Work your way from the million dollar prospects down through the $50,000 prospects.  On a flip chart, put a number or range beside each name.

• Total the numbers you estimated for each major gift prospect.  Are you ready to launch a $10M campaign?  Are there enough ‘qualified’ prospects to expect that outcome?  Or does the evidence point to a $5M campaign?

This is how the sausage is made.  Fundraising consulting firms may talk about “proprietary algorithms” used to estimate a campaign goal.  Don’t buy it.  Algorithms only work with large data sets, and you are dealing with about 40 individuals.  The eyeball-to-eyeball conversation is the best you can do to project a reasonable campaign goal.

You can do this, and do it better. 

After all, these are not major gift prospects.  These are your friends.

Summary

Five Steps to a Better Fundraising Feasibility Study

I’m trying to dispel the myth that a Feasibility Study is the first step leading to a capital campaign.  It is not.  It is the last step before the campaign.

• STEP 1: Identify major gift prospects.
• STEP 2: Engage top prospects in preliminary conversations and involve them in the planning process.
• STEP 3: ‘Do the math.’  Determine a preliminary goal that you want to test in the feasibility study.  This number is based upon the prospect list you developed and the informal conversations you’ve already had with top individuals.
• STEP 4: Conduct a formal Fundraising Feasibility Study. 
• STEP 5: Analyze the data and set the campaign goal. 

Important Takeaways

Involvement of Major Gift Prospects 

• Do create a major gift prospect list before thinking about a Fundraising Feasibility Study.  It is the very first step in a long process.

• Do have preliminary, informal conversations with major gift prospects long before the formal Fundraising Feasibility Study.

• Do involve major gift prospects in needs assessment and planning committees that lead up to the Fundraising Feasibility Study.

• Do put yourself in the shoes of a major gift donor.  In making decisions on how to proceed, ask yourself, “How would I treat a friend?”

• Do allow major gift prospects to have a balanced say in shaping the project.

• Don’t bring them into the process only when it’s time to pay for it.

Planning

• Do.  If the capital campaign is for construction or renovation, you only need rough estimates and a few conceptual drawings to share with prospective major gift donors as part of the Feasibility Study.

• Do. Explain to Feasibility Study interviewees that the concept “is in its earliest stage.”  That signals to them an openness to shape the plan based upon a wide cross-section of opinion.

• Don’t be surprised.  If you give major gift prospects some say in the planning, their vision and gift might be bigger than you expect.  After all, wealthy people got that way by dreaming big.