Assessing your institution’s capacity to undertake the project
Figuring out whether your group is ready to embark on a major capital project is an essential and often-overlooked step in the feasibility analysis process. It requires honest introspection and a willingness to make significant institutional modifications in order to serve the project’s mission.
If the institution can’t make the changes required by the project, the project concept needs to be adjusted.
Key Questions to ask (among many others):
- Is there strong leadership on the board and staff that can direct a multi-year project with energy, credibility, and stamina?
- Is the composition of the board adequate to lead a capital fundraising effort of the projected magnitude?
- Are your stakeholders enthusiastic about a project’s outcomes?
- What could be the impact to operations while the project is under construction?
Understanding the economic context and results of the project
A market analysis looks outside the organization to assess the market’s size, trends, segmentation, and success factors that may impact a new facility project. For projects that contemplate minor facility improvements, this work may be fairly simple. For a project that adds significantly to the cultural infrastructure of a community, detailed surveys, demographic analyses, and market-penetration assessments will be required, taking a team of consultants many months to gather and analyze the relevant data.
Understanding the project’s impacts on your business
A business and operational plan, by contrast, focuses on internal factors that are affected by a new facility. The plan should include:
- Operating budget and projected cash flow models
- Projected staffing and operating costs for the new facility
- Possible effects on annual giving from a major fundraising effort
This work will likely be led by in-house financial staff with the assistance of consultants.
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