Carolyn's Nonprofit Blog

From Wikipedia

“Feasibility studies aim to objectively and rationally uncover the strengths and weaknesses of an existing business or proposed venture, opportunities and threats present in the environment, the resources required to carry through, and ultimately the prospects for success. In its simplest terms, the two criteria to judge feasibility are cost required and value to be attained.” 

The topic of feasibility studies incites a variety of responses, from frustration to deeply felt conviction regarding their efficacy. I have mixed feelings. If they accomplished exactly what Wikipedia suggests in the quote above, I would endorse them wholeheartedly.

“Feasibility Studies” are a mainstay of nonprofit fundraising consulting. Professional firms large and small rely upon the prescription that organizations must conduct feasibility studies prior to embarking upon a major gift campaign, and many nonprofit fundraising support organizations enforce this idea. Feasibility studies are a major source of income for the consulting sector. By challenging this assumption and suggesting new ways of looking at feasibility studies, I put myself at odds with many consultants. But, I feel compelled to do so based upon my personal experiences.

I have been helped teach the CFRE Review Course for the Association of Fundraising Professionals in Texas on two occasions. The course is designed for those studying to take the lengthy and comprehensive examination. To teach it, one must study as hard as the students taking the course! While feasibility studies can be helpful, if they are not thought through well in advance, they can throw a perfectly good campaign off track. Nonprofits need to consider feasibility studies carefully before moving forward with them.

Why?

I have seen some feasibility studies peg a proposed major gift campaign as an impossible failure, and the organization subsequently go on to attain stellar fundraising success. I have seen feasibility studies predict outrageous success – which the organizations themselves did not believe – and they wisely curtailed their fundraising goals to better match reality. Last but not least, I have seen consulting firms that did not have the hoped-for rapport with the civic leaders they interviewed for a feasibility study, and the final results were therefore inconclusive.

In the above instances, consulting firms were paid large sums to conduct the studies, when those funds might have been better spent paying an experienced campaign coordinator to get into the trenches with nonprofit staff, review the organization’s immediate fundraising situation, conduct advanced research on existing and future potential donors, and develop and implement their campaigns accordingly.

On occasion, you will find a nonprofit organization will decide to forge ahead with a major gift campaign, knowing in the end they may not reach the ultimate fundraising goal. But they want to try, anyway. Knowing the risk (and only then), why not give them the green light? They might be able to economize in certain ways on the final project and achieve their goals in new ways. I personally would not stop this entrepreneurial way of thinking.

A Different Concept

I would like to share a successful feasibility study concept I helped devise, working as a volunteer for a national nonprofit organization with numerous chapters across the United States. I know this is a special case, but it does apply to a large number of nonprofits nationwide. I suggested they hire their own people from another region to conduct the feasibility study.

By internalizing the process, this helped ensure those conducting the study had the nonprofit’s interests foremost in mind. Yet, because they did not know the donors and civic leaders in this particular community, the interview team could still be objective (an essential aspect of conducting a meaningful study). They were also well-versed in the organization’s mission and success stories, being employees of the nonprofit but in an entirely different region. Last but not least, they were more conservative about their expenditures in conducting the research. This worked extremely well. The predicted fundraising goal was attained, and right on the mark.

Feasibility Studies As Protection

Having pointed out a new approach to feasibility studies, there is one key way that a good, old-fashioned feasibility study can help protect a nonprofit from community pressure to embark upon a campaign the staff knows will be unsuccessful and potentially even harmful. This is not a reason promoted very often, but it is an excellent one.

By investing in the formal feasibility interview process – whether conducted by insiders or outsiders – nonprofit organizations can provide “proof” that professional experts agree that conducting a major gift effort is inappropriate at the present time. This can be invaluable ammunition when pressure is being put on a nonprofit from the community or the nonprofit’s own Board members. And the study can suggest how the situation might improve so that the major gift campaign can eventually move forward.

In Closing

Whatever you and your nonprofit organization decide to do in preparation for a major gift campaign, think the project through with the above considerations in mind.

If you do choose to hire a consulting firm, my advice is to be absolutely sure the individuals with the firm who will actually undertake the feasibility study have rapport with those they interview. Be sure to ask members of your Board and inside donors to help interview the consultants. Do not allow the firm to assign “anyone on staff” to do the job. Ask for specific, individual consultants to work with your nonprofit, those with whom you and your team are comfortable. And, make sure they know whom they are interviewing. Receiving a final report back after an expensive study has been conducted in which the names of the individuals interviewed are routinely misspelled is telling.

In closing, here is a blog article that includes the text of my presentation in 2018 to ADRP: Association of Donor Relations Professionals. It provides additional information and advice. I continue to believe the business report I propose prior to embarking upon a campaign can have much of the same positive effect as a feasibility study. Having run into a variety of major gift fundraising challenges myself over the years, I have discovered an honest “business” evaluation can be a marvelous tool for engaging donors and potential donors, and healing any past wounds that may linger.

This discussion was originally follow-up to, “Are You Ready for a Capital Campaign.” Follow the link to read it.