The time-honored practice of conducting a feasibility studyin which nonprofits hire consultants to visit potential donors to help gauge the likely success of a major fundraising campaignis being questioned. Are such studies worth the expense?
Those speaking against feasibility studies include James LaRose, who writes in his forthcoming book, Re-Imagining Philanthropy, "Eighty percent of nonprofits don't need to spend $25,000 to $50,000 to find out what they already know, that they aren't ready," the Chronicle of Philanthropy recently reported.
Also, Tom Suddes, blogging on forimpact.org, focuses on the failure of feasibility studies to involve and engage donors. Instead, as he puts it, internal leaders enlist external consultants for justification, CYA and backup.”
The Case for Feasibility Studies
Reasons to consider undertaking a feasibility study include the following:
You dont know your donors very well... and truly have no idea how they will respond to the campaign.
Prospective donors are more likely to tell outside consultants what they really think. How do people feel about the organization? Do they care about his project? Do they have pent-up frustrations or specific concerns?
Being included in the study is part of the donor cultivation process. Donors are flattered to be asked. The conversation gets them thinking about making a gift.
The prospect of a campaign falling flat is scary. Well done feasibility studies provide a measure of assurance about how much you can raise and from whom.
Find out if the necessary volunteer leadership is in place. Is the board ready and are there campaign co-chairs in the wings? You are not ready” if you do not have campaign leadership.
Discover if there are external events that should be taken into consideration, e.g., a competing campaign.
Even if you have to replace the roof or move to a new spaceno matter what the study saysthere is the opportunity to engage your donors and discover which campaign elements still need work. If you are not going to be able to raise the money, you need to know that.
Rationale Against Feasibility Studies
On the other hand:
If you already know the answer, the study is a waste of money.
Involve your donors early on and you will find out what they think. Engage them more deeply and there will be no need to have an outsider "study" them.
In this day and age, a small number of donors typically account for 90% to 95% of the campaign. If you have them lined up, then you are good to go.
Consultant bias: If the consultant knows that a lucrative campaign gig is riding on a positive outcome, there is unconscious bias in play. Think of the studies of physicians who have financial ties to test facilities compared to those that don't. Physicians with the ties order more tests; their patients do not have better health outcomes. That said, the consultant will know your organization well by the conclusion of the study. Be aware of the dynamics in play but make the decision that makes sense.
How to Proceed
To determine your readiness for a feasibility study, ask yourself if you can name at least three donors with the potential to give 10% to 20% of the campaign goal; identify at least 20 qualified prospects you could send a capital campaign consultant to talk to; and identify two volunteer campaign co-chairs who are well-known in your community, would likely commit to making a major gift, and solicit other donors. If the answers are negative, you are not ready and, in fact, need to develop your board and/or your donor base
Finally, know that feasibility studies and deep donor engagement need to work hand-in-hand. As Suddes suggests, it makes sense to involve your donors early on. Include key stakeholders in the preliminary conversations about the need, the project, and the messaging #147; a leadership consensus building” model he calls it.
Skip the feasibility study and go for it if you know your donors well, have multiple potential donors for each of the top spots on the gift chart, can engage a core group in leadership consensus building, and witness enthusiasm for the project.
Otherwise, use leadership consensus building to get key stakeholders involved and refine your messaging and case. Then, test the case with a wider group of donors as part of a feasibility study.
Diane Remin is the founder and president of MajorDonors.com, which focuses on non-capital major gift revenue streams and campaign readiness for small-to-mid-sized nonprofits. Email her at firstname.lastname@example.org. 2015 RemRol Computer Services, Inc. dba Major Donors.com. All rights reserved.
SUBSCRIBE FREE – Keep current with the Wednesday Report emailed to you free each week. Click here.