The Truth About a Bankable Feasibility Study: 4 reasons nonprofits don’t need one

The Truth About a Bankable Feasibility Study: Do Nonprofits Really Need One?
When nonprofits decide to launch a capital campaign, the idea of conducting a bankable feasibility study often comes up as a mandatory first step. On the surface, it seems like an essential piece of the puzzle, offering data-driven insights, donor feedback, and a roadmap to success. But is it truly necessary? And does every nonprofit benefit from this expensive and time-consuming exercise?
This question deserves more than a surface-level response. To uncover the real value of feasibility studies, we must explore their pros and cons, question their necessity, and identify when they’re worth the investment—or when nonprofits are better off reallocating their resources elsewhere.
Understanding the Bankable Feasibility Study
A bankable feasibility study is more than just a fancy term. It’s a comprehensive analysis designed to determine whether a nonprofit’s ambitious project—usually a capital campaign—is achievable. This process examines donor capacity, organizational readiness, financial projections, and even external economic conditions to provide a green light (or a red flag) for the campaign.
Nonprofits typically hire consultants to conduct these studies, which include interviews with major donors, surveys of the broader donor base, and internal assessments. The goal is simple: to ensure the organization isn’t embarking on a campaign destined to fail.
But let’s be honest—while feasibility studies sound like a safeguard, they’re not without drawbacks.
Do Nonprofits Truly Need a Feasibility Study?
The idea that a bankable feasibility study is the holy grail of campaign planning is not without controversy. Critics argue that nonprofits often spend tens of thousands of dollars on studies that confirm what they already know: their supporters are willing to give. On the other hand, proponents claim that skipping this step is akin to diving into unknown waters without a life jacket.
So, who’s right? The answer lies somewhere in between.
The Benefits of a Bankable Feasibility Study
When done well, feasibility studies can offer undeniable advantages:
1. Strategic Clarity: They help nonprofits refine their campaign goals and messaging by identifying donor interests and capacity.
2. Reduced Risk: A feasibility study can uncover hidden roadblocks, ensuring the campaign doesn’t fall apart mid-way.
3. Donor Insights: Engaging donors during the study provides valuable feedback that shapes the campaign strategy.
4. Organizational Readiness: Feasibility studies evaluate whether the nonprofit’s infrastructure is ready to handle a large-scale campaign.
These benefits are particularly crucial for organizations with limited fundraising experience or those embarking on ambitious, first-of-their-kind projects.
The Downsides of a Bankable Feasibility Study
Despite their advantages, feasibility studies are not without flaws, and nonprofits need to weigh these carefully.
For starters, the cost can be prohibitive. With professional studies often costing upwards of $30,000, smaller organizations may find themselves struggling to justify the expense. Add to that the time commitment, and you’re looking at a process that can delay campaign launches by several months—time that could be spent actively fundraising.
But perhaps the biggest criticism is that feasibility studies can sometimes feel redundant. If a nonprofit already has a deep understanding of its donor base and a proven track record of campaign success, the study may simply confirm what the leadership team already knows.
Finally, there’s the issue of over-reliance on external consultants. While expertise is valuable, outsourcing such a critical step can sometimes distance the organization’s staff and board members from the campaign process, leading to less internal ownership.
A Bold Take: Not Every Nonprofit Needs a Bankable Feasibility Study
Here’s the controversial stance: not every nonprofit needs a bankable feasibility study.
When a Feasibility Study Is Essential
While not every organization needs a feasibility study, there are scenarios where it’s a non-negotiable tool:
- First-Time Campaigns: Newer nonprofits or those conducting their first capital campaign benefit significantly from the insights a feasibility study provides.
- Uncharted Territory: If the campaign involves complex projects or unfamiliar donor demographics, a feasibility study can provide much-needed clarity.
- Board Uncertainty: When leadership is hesitant or divided, a feasibility study can provide data-backed reassurance.
In these cases, a bankable feasibility study is less about checking a box and more about laying a solid foundation for success.
The Alternative: Internal Feasibility Studies
For nonprofits that balk at the high cost of professional feasibility studies, there’s another option: conducting an internal study. While not as exhaustive, this approach can still provide valuable insights without draining the budget.
Here’s how to approach an internal feasibility study:
- Engage Key Donors: Schedule one-on-one conversations with major donors to gauge their interest in the campaign and uncover potential concerns.
- Survey the Community: Use online tools to survey your broader donor base about their priorities and willingness to give.
- Assess Internal Readiness: Evaluate whether your team has the capacity and infrastructure to manage the campaign.
- Define Clear Metrics: Set realistic goals based on the information gathered, ensuring alignment with your nonprofit’s resources and mission.
How Feasibility Studies Impact Donor Relationships
One of the most under-discussed aspects of feasibility studies is their impact on donor relationships. Engaging donors during the study process can strengthen connections and create a sense of shared ownership in the campaign. However, nonprofits must tread carefully—donors may feel disillusioned if their feedback isn’t reflected in the final campaign.
This is where nonprofits must strike a delicate balance. Transparency and follow-up are key. If donors feel their input has been valued and acted upon, the study can enhance trust and loyalty. Conversely, failing to acknowledge their contributions can do more harm than good.
The Final Word: Should You Conduct a Feasibility Study?
The decision to conduct a bankable feasibility study should never be automatic. Instead, nonprofits must carefully consider their unique circumstances, weighing the costs and benefits against their goals and existing knowledge.
For some organizations, the insights gained from a feasibility study will be transformative, laying the groundwork for a successful campaign. For others, those same resources may be better spent directly engaging donors and launching the project.
Ultimately, the question isn’t whether a bankable feasibility study is good or bad—it’s whether they’re the right fit for your nonprofit at this moment.
How Nonprofit Freelancers Can Help
Whether you’re conducting a feasibility study or diving straight into a campaign, having the right support can make all the difference. NonprofitFreelancers.com connects nonprofits with experienced consultants and strategists who can provide invaluable guidance, from campaign planning to donor engagement. Visit NonprofitFreelancers.com to access the expertise you need for your next big initiative.