Recently I had an interesting call. There was a young church that found a building that they wanted to buy. Up until that time, they had been meeting in a local school gym.
As you can image, this young church was super excited and began to dream. Big dreams. This church was only a few years old and had lot of families with small children. They had all the passion and energy that one would expect from a community of young people who cared passionately about changing their piece of the world.
But as their dreams grew, so did some concerns—especially from some of the older and wiser members of their community. The question that was gnawing at them was, “Can we afford this?”
If you’ve ever seen a family struggle with a house payment that was too big, you’ll understand the concern. A large house payment seems okay until your car breaks down and you’re maxing out your credit card to get your car fixed so you can get to work.
The church had put the cart before the horse, so to speak. Before they went through the process of figuring out how much they could afford, they found a building.
So, this member called me to ask, “Do you think we can afford this?”
This is what a feasibility study is all about. A feasibility study is an in-depth study looking at multiple factors to help determine how much money a charitable organization can raise over a set timeframe for a capital campaign. Can you raise any money? Can you raise millions?
Because this church needed to quickly decide if they should move forward or pull the plug, I offered a rule of thumb. Most churches when properly conducting a capital campaign with a paid consultant can raise 2-3 times the annual giving over the course of three years. If you move forward without professional help, plan on 1.5 times annual giving over three years.
This church’s annual giving was about $400,000 per year. Using this number, this church would raise about $1 million over the next 3 years.
There are some risks to using this metric, however. Imagine one church member gives 25% or more of all giving and dies, moves away, or leaves the church? Or what if you have several members who have the capacity to give huge gifts, but haven’t because they haven’t seen the need for a significant gift yet? Or what if the plans are somewhat controversial and some members don’t want to give?
These situations (and others) are uncovered during a feasibility study. Moving forward on a capital campaign is like building on a property without doing soil testing or buying a home without having a home inspection done first. No one would dream of moving forward without the necessary precautions first. It’s the same with a feasibility study.
When Jesus told his followers to consider the cost of discipleship, he uses this example:
For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation, and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build, and was not able to finish.’ Luke 14:28-30.
It is wise to carefully study your fundraising potential before beginning a capital campaign. It is money very well spent.