When is it the right time to do a capital appeal feasibility study?
A lot of our clients struggle with this.
An appeal for a major capital project is not an everyday occurrence for most organisations, and if this is outside the experience of all the key people (eg trustees, senior management team) it can be very difficult to know where to start.
Probably the most common example of a major capital project is a building – whether that be purchase, new build, conversion, or major renovation. So we will use that as the example for this article. But the same principles apply whatever the situation.
People love talking about buildings - what type of windows to have, where the doors should go, whether there will be enough cupboards, or car parking. Some people even get excited about gas electric and water supplies – even drainage! But the person who raises the subject of “Yes, but what can we afford?” is in danger of being seen as something of a spoilsport.
A fundraising feasibility study is an essential component of planning for any major project beyond the normal revenue capacity of an organisation. It provides a valuable steer on
- how much might be raised (thus providing valuable budgetary guidance to the architect)
- the principal sources and fundraising methods (thus helping to quantify the resources that will be needed for a successful appeal)
- an indicative timescale for fundraising (which can then feed into the overall project planning process).
But the really difficult question is – when should such a study be carried out? Here are some options:
- When the concept is first explored? A feasibility study at this stage will give an idea of potential scale, but what exactly are we researching about?
- When initial designs are done, and ballpark guesstimate identified? Better, but it costs money to get to this point. And the guesstimate may prove to be way out (especially when building inflation costs are taken into consideration). Yet people may already have internalised this figure as the target, leading to disappointment.
- When the full specification has been developed, and Quantity Surveyor costings prepared? The costings will now be much more accurate now, but a lot of money will have been spent and you will feel even more committed to this course. But can you afford it?
- When planning permission has been obtained? This is a significant hurdle to overcome – you won’t be able to proceed without planning permission, even if you can easily raise all the money.
- When builders tenders are received? This can change the target again, but will give the most accurate costings. But this is much too late in the day to decide you can’t afford it.
Stage 2 is probably the best time, with the fundraising feasibility study being refreshed at stages 3 or 4 if the numbers, or basic concept, change dramatically (because people may respond differently to a significantly larger or smaller target, or a more or less ambitious project).
If you would like to talk with Action Planning about a fundraising feasibility study for your capital project, contact David