Opinion
April 01, 2015

Fundraising Consultants Need to Debunk Misconceptions About Feasibility Studies

Feasibility studies to determine whether a nonprofit is ready to pursue a campaign are "a waste of money" and "the crack cocaine of nonprofit consulting," according to James LaRose, a nonprofit leader who is writing a book that caught the attention of Holly Hall, a Chronicle reporter. Her article on Mr. LaRose’s assertions ruffled the feathers of many fundraising consultants and filled my inbox with emails from colleagues who were furious about his assertions.

What’s interesting about most of those messages is that they focus on the fact that the author was someone none of us in the consulting world had ever heard of, rather than on the substance of his charges, hyperbolic though they are. Mr. LaRose calls the feasibility study "outmoded," and he’s right.

Most of the consultants I know, including myself, stopped using the term "feasibility" years ago. Many years ago one of the best consultants ever to work in the nonprofit world — the late Arthur Frantzreb — had come to the same conclusion. He advanced his argument cogently and without the drama.

Art’s essay back then resonated with me. We haven’t used the "f" word in at least two decades. In the mid 1990s or so I took a look back at 25 or 30 studies we’d done over a few decades and compared them to the campaigns that resulted (or did not).

So many of the variables were beyond our control that telling a client what might be "feasible" was a poor substitute for a sound plan based on an assessment of the case the nonprofit was making for support or its leadership, possible donors, timeline, and budget.

Among our findings:

  • The greatest variable of all was leadership. About half the time the best people a client could identify to lead a campaign just wouldn’t do it, wouldn’t make the money commitment or their degree of interest had been miscalculated by the client — more a hope than a possibility.
  • About a third of the time we were unable to conduct interviews with potential major donors whose support would be critical. They were either unavailable or allergic to consultants. Some gave to a campaign. Some did not. Some gave more than expected, others less.
  • We found that in several instances the two or three biggest gifts made to a campaign were not on anyone’s radar and wouldn’t have been uncovered from interviews with donors.
  • Unpredictable "black swan" events like CEO departures, board-leadership changes, complete reworking of preciously anticipated capital needs — and more — rendered any forecast of a campaign’s success moot. We advised clients not to proceed until the black-swan event was resolved.
  • More than half the time strategic planning was so poor, or non-existent, that no campaign could expect to succeed. Despite all the workshops, meetings, retreats, and other sessions to educate nonprofit leaders, that is still the case all too frequently.

While consultants have dropped the term feasibility, many clients have not.

That’s the consultants’ fault. Back in the day, we taught charities to ask for feasibility studies, and they still do. So Mr. LaRose may have a point when he objects to them as costly and wasteful if the focus is feasibility.

His assertion that precampaign studies, regardless of what we call them, create inherent conflicts of interest because the firm that does the study usually gets the long-term campaign contract is troubling. That there is potential for such conflict is true. In the past there have indeed been such abuses as low-cost or no-cost "feasibility studies." It may still occur, but I haven’t heard about any cases recently. Those of us who lead consulting firms know our name and reputation is on the line with every new endeavor. None that I know will risk either.

The consultants I know subscribe to the rules of ethical conduct established by the Giving Institute (whether they are members or not) or by the Association of Fundraising Professionals’ Code of Ethical Standards (again whether they are members or not). The obligation always to act ethically is a powerful disinfectant and from my perspective removes the taint of conflict by working with a client who has spent hard money upfront to educate us about every aspect of their mission, vision, and work.

My colleagues and I bear a responsibility to re-educate nonprofits so they completely understand the limitations of "feasibility" assessments and instead opt for a better approach: careful planning, an honest assessment of their ability to move on a campaign, and, most important, a full understanding of the conditions that must be met before a campaign is, uh, feasible.

Henry Goldstein heads the Oram Group, a fundraising consulting firm.