Just last week, Valley Christian Counseling Center in Fargo, North Dakota hit their $3 million capital campaign goal for a new counseling center that will open this fall! To many, this was a seemingly impossible goal. Prior to this campaign, the most they had ever raised was $250,000. There were many factors that led to the campaign’s success. However, they would never have hit the mark without the capital campaign planning (feasibility) study.
What Is a Capital Campaign Planning Study?
A capital campaign planning study, commonly known as a feasibility study, is a consultant-led research project aimed at understanding:
- how the campaign case resonates with donors
- who should lead the campaign
- what is the capacity of the nonprofit’s community to fund the project
It is generally comprised of 25-50 in-person interviews with key donor prospects and surveys of others in the community. A typical study takes about 90 days. (Read about Five Ways a Feasibility Study Can Make or Break a Campaign)
What Valley’s Campaign Study Told Them
In Fargo, the study identified a key and significant problem: five prospective donors—each with the capacity to make a “Top 10 Gift”—were philosophically against nonprofits owning property!
This was a startling finding and one that could have derailed the capital campaign completely. The finding was also a surprise to the Valley leadership. Think of it: a group of donors with the collective capacity to give over half the goal was opposed to a building Valley wanted to own!
These five individuals felt that nonprofits should stick to their business and leave the property management to professionals (aka landlords). The only challenge was that commercial rental property in Fargo was more costly than purchased property to operate.
My Recommendation for The Capital Campaign
Thus, my recommendation was to temporarily pause the launch of the campaign and analyze what made the most sense: buy and build new, buy and retrofit, or lease and retrofit. Soon Valley formed a building task force consisting of a real estate agent, property developer/manager, builder, accountant, and banker and the team began its work.
They looked at real estate throughout the region, toured buildings for sale and for lease, requested quotes for construction, negotiated with landlords and sellers, and carefully documented their findings. In the end, it became clear that leasing a facility was not financially efficient or wise.
Our next step was to meet with the prospective donors to seek their advice and perspective given the hard data from the building task force. Donor meetings were carefully orchestrated to ensure the right task force member and Valley representative met with the right prospective donor. The analysis was compelling. Four of the five prospective donors gave their blessing to move forward with a property acquisition. Those four also either gave or secured over $2 million of the $3 million goal. Needless to say, the campaign result would have been very different if Valley did not invest in the study.
My colleagues and I frequently come across clients, mainly pushed on by a thrifty board member, who does not want to invest in the capital campaign planning study. In an effort to save money, they end up sacrificing a significant return. (Read How Spending More Can Make You a Better Steward.)
The study in Fargo “cost” less than 1% of the total campaign goal. While the study unearthed other important revelations, without that one finding, over $2 million would have been at significant risk. The thing is, you don’t know what you don’t know. That is why a capital campaign planning study is a critical tool to getting a more complete picture of the fundraising landscape and almost always reaps a healthy return on investment.