Fundraising for a specific project? Why it pays to carry out a feasibility study

By Andrew Rainsford

When you need to fundraise for a specific project, it may seem counterintuitive to begin by spending money. That’s the thinking that holds a lot of organisations back from carrying out a fundraising feasibility study. They see the process as time consuming, unnecessary and costly. So, why bother?

Years ago, I worked for the finance house that provided hire purchase and leasing facilities for Mercedes-Benz Trucks. They, when compared to some of the equivalents on the market, were expensive and they did not have the cachet of one of the Swedish manufacturers. However, they were extraordinarily reliable and drove well. Someone (not me!) coined the slogan “meticulous engineering does not cost: it pays”. This was backed up with data and the market share grew.

It is instructive to view a fundraising feasibility study within the context of that phrase. “It does not cost: it pays.” After all, before embarking on a major development, you would have full business planning in place. Surely, part of that suite of business planning is knowing how you are going to fund the thing!

Study the detail
A fundraising feasibility study involves more than just looking at funding directories and seeing what is available. Some sense of alignment must be ascertained with this, including timeframes, as well as cash value and deadlines. It is very tempting to make assumptions without considering the details of each funder’s criteria. For example:

• There are many funders that have a maximum period in which you can spend the money awarded. But how does this fit in with any other constraints that you may have? Statutory funders are very rigid on timeframes and it is increasingly common to see grant offers being withdrawn because they are out of time. This is because demand for funds is far greater than ever before. The money is reallocated to a project that is ready and able to proceed.
• “They give grants of up to £x so they will give that to us.” Will they? What does the average grant awarded look like? How will you find that information? Is a potential award affected by deprivation data – and where do you find that information?
• Many funders set deadlines for application. This helps them and enables all applications to be assessed against each other. A feasibility study will explore how deadlines mesh (or don’t) and account spend time frames as well.

Explore all funding sources
The feasibility study should do more than just explore funding bodies. There should be discussion around the appetite for borrowing too. This is more than just saying “yes we will” or the opposite. Work needs to be undertaken around the ability to repay, the opportunity cost of regular repayments, the opportunity cost of not proceeding now.

This is all in addition to thinking about the effect of inflation or the escalating costs of not doing something now. Almost certainly, deferring work to a building because it is beyond current resources will not result in a reduced cost in two years’ time. You could be playing a never-ending game of catch up.

Read the story behind the data
Often overlooked is the ability of members/supporters to make contributions. Currently I am working with a church in the 22^nd most deprived community in England. The expectation there is somewhat lower than another of my clients – a church in the top 10% wealthiest communities in England. So be realistic and drill down to ascertain why there may be variances to what the external data says. Data should inform the study. It does not drive the way forward. Driving is the job of people!

Appeals beyond known supporter bases vary from cause to cause. The sectors in which I major have a law of rapidly diminishing returns. Others are different. Use your sector knowledge to inform this element of your study.

So who is going to do it?
There is no reason why an organisation, large or small, could not undertake its own fundraising feasibility study. It takes an investment of time, it takes a certain amount of funder knowledge beyond that shown in directories, and it entails an element of engagement with your project aims and objectives.

If there is a team within your organisation who can do this, by all means use them. However, I do urge an investment of some money into an external “look over” of what you have produced. Such outside involvement should challenge assumptions, impart fresh knowledge and may even provide some suggestions as to what else could be available.

To expand upon my initial point, a fundraising feasibility study should not be viewed as a cost but as an essential component in bringing funds in. If you would like to find out more, speak to us about our support for capital appeals and fundraising campaigns.

Think you need a fundraising feasibility study? Call us on 01737 814758 or email office@actionplanning.co.uk