Feasibility Studies . . .

Table of Contents:

Understanding the Feasibility Study

Purposes

Methodology

Who Does What

Results

Common Practices To Beware Of

Terms

Timing

Other Conditions

Conclusion

Feasibility Q&A

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Understanding the Feasibility Study . . .

     The  feasibility study is one of the most important and misunderstood of the tested ways to  successful  fund  raising.   We  hope this writing will help clear  the  way  for  sound  decision making  for  you,  should you need this service.  Having correct expectations is a  real  key  to making the study work for you.
 

PURPOSES -

     The  study is first intended to test the various publics of an organization, regarding  perceptions  of  the organization, and to determine willingness to support a specific campaign  and  at what  levels.   To accomplish this, a process has evolved over the past half century  and  more.  The methodology has been developed to obtain the most candid and (where possible)  objective data,  which is one reason such studies must be  conducted confidentially by  impartial,  outside   counsel and not by staff or Board (the other  issues obviously being experience and competency).  When properly conducted, these  studies  are seldom wrong in conclusions drawn.  

     The  second  agenda  in  such a study is to persuade (where possible)  for  the  case  and  to secure  leadership  pledges in an informal fashion.  This is yet another reason that  such  interviews are conducted by outside counsel rather than by staff and/or Board.   

     The  third and perhaps primary function of the feasibility study is to guard voluntarism  and to  protect  the  board and the institution from conspicuous public  failure  resulting  from  well-intended but ill-founded endeavors.  This means that every feasibility study should include a component to test the abilities of an institution to even wage in a campaign. 
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METHODOLOGY -

     It  is  usual  for  counsel to conduct about 5O  face-to-face  interviews.   This  number  has proven over the years to amount to "critical mass".  

     It  is  also  usual to interview only best prospects.  We depart from the norm  in  this  latter aspect  in  that  we  believe the opinions of detractors (if any exist) can also  be  valuable  to  a serious-minded organization.  

     There are two basic methods of questioning:

     One  method  calls for the exact same questions to be asked of each individual,  most  questions  being  closed-ended (answers being yes, no or a quantity).  This method  is  effective  in basic opinion research polls, but not in feasibility studies.

     The tested and true method  is more flexible, calling for basic required information to be  sought,  but without the limiting exactitude of simple polling.  We hold to this because the entire process is  only  partly  objective, and relies heavily on the quality of the  interviews,  the  position  and relationship  of those interviewed, the personality/ability of the interviewer, etc.  In the "opinion poll"  method,  there  are usually many raw statistics reported which are, more often than not,  misleading to  anyone  not present at the interviews.  We believe only statistics which are  necessary,  and which bear on the interpretation of the report should be offered.

WHO DOES WHAT -

      The feasibility process is in three basic phases:

1. Case clarification and drafting, internal assessment, goal setting, prospect targeting, and interview  scheduling. 

2. Confidential interviews by counsel with prospects.

3. Written (and sometimes verbal) report, with strategic recommendations.

     The first phase relies heavily on your Board and staff, assisted by counsel. An area of frequent confusion pertains to prospect lists.  List development cannot  come  from counsel.  There  are  several logical reasons for this.  First, no consultant, no  matter  how  experienced, talented  and/or  informed, can possibly know everyone who will give to every cause  in  every community,  in every state.  Perhaps more important is the fact that there is a  rather  universal ethical  prohibition (very understandably) against lists leaving the charity via  any fund  raising  professional.   Counsel  can sometimes assist in some  very  limited  areas,  usually connected  with foundations and/or corporations.  The most important reason  is that the feasibility study is, in large part, designed to test the ability of the organization's officers  and  volunteers to correctly target gifts.  "Do they really know their  constituents?"   Lists should be developed by you, with target amounts for each prospect -- very important!

     Case  Development  is  also  a  most misunderstood facet of  fund  raising.   While  a  Case Statement (The Case for Support) can be and often is written by one person,  the best way is to have  sufficiently  diverse  participation (including Board, staff,  volunteers,  donors,  etc.)   to ensure that each participant is "imprinted" with ownership of the Case.  This should be a  most convincing, living document about an organization and its endeavors.  This is the internal and external road  map for the organization.  This, too, is an internal responsibility of the officers, staff and Board.  It is of the greatest importance to successful campaigning.

     The  second  phase is the work of counsel.  Counsel conducts personal,  confidential  interviews with about 5O of your constituents.  These interviews are the key to unfolding the riddle of  success/failure for your campaign.  This is where the objectivity, professionalism,  training, and experience of the consultant are key.  

     The  third phase of the study is completed by counsel, with limited Board and staff  input  - input which would not change the findings or recommendations of the study.  First, notes from the  interviews  are  complied,  opinions evaluated and  weighed,  and  findings  are  measured against  the collective experience of the profession.  A full, candid written report is  submitted, including strategic recommendations (where they emerge) and  findings regarding the  feasibility of the campaign as illustrated in the Case Statement.  A verbal review usually follows.

RESULTS -

     If planning and case development are part of the first step toward a campaign, the  feasibility study is the first step in a campaign.

     A proper feasibility study should help Board and staff answer at least the following questions:

• How do current public opinions/issues affect the project?

• How is our organization viewed by our various constituents?

• Are we doing a good job, and how can we improve?

• Is the project at hand a good idea?

• Is the project budget appropriate?

• How is our Board perceived?

• Is our thinking regarding volunteer campaign leadership on target?

• Are there sufficient donors properly profiled with appropriate targets?

• Should we wage a campaign?

• For how much?

• When?

     Interviews must be scheduled with the three basic constituent groups: individuals,  corporations,  and foundations, with individuals usually representing the lion's share.  It is worth repeating that, other than  some possible  suggestions  from  counsel  regarding corporations  and/or   foundations,  the  list  of prospects  is your responsibility.  Your prepared Case Statement (and perhaps other materials) will accompany letters of appointment-request to the prospects.  Quickly following the letters, etc.,  a member of your staff or a volunteer will call to set the interview  appointments.   Dates will,  of  course, be agreed upon in advance.  It is usual to schedule an average  of  at least four interviews  per scheduled day (more if possible).  Interviews usually range from  about  fifteen minutes  to  over two hours - both cases being exceptional - with  average  meetings  running thirty to forty-five minutes.  All interviews should be face to face if at all possible.   In  addition to supplying prospect names with appropriate gift range targets, you should  be prepared to assist counsel by suggesting topics you wish to test in the study.

     If  a feasibility study is to indicate that a campaign should be waged, ready  prospects  with appropriate  gift targets should be confirmed by counsel for a major portion of the  goal  (from 3O%  to over 5O%).  Further, strategies for approaching some specific donors  and/or  appropriate timing of same should result.

          If  the  percentage  of interview refusals for a popular and publicly  known  cause  is  high, counsel  should become alarmed and inform the client.  Consequently, if at any time a  conclusion regarding the campaign can be drawn, options as to how to proceed should be offered.
 

COMMON PRACTICES TO BEWARE OF -

      There  are  some  pricing irregularities which abound in our industry, and  which  must  be explained.  

      One  frequent  and,  in our estimation, reprehensible practice is for a firm to  offer  an  extremely  low  price  for the feasibility study, in the hope of making the client dependent on  them  for  the management of the campaign, which is a much more lucrative type of work. 

      A  second  arrangement which makes no sense and saves no money for the client is  that  of pricing  the  study according to the size of the goal.   The process is at least as  demanding  for the small campaign as for the very large. In fact, it is often vastly more difficult to study for  a smaller campaign.  Usually, larger donors and the most influential leaders are attracted to large goals.  Organizations with large goals normally have the most sophisticated lists already  stratified  and  tested,  large development departments, solid Case Statements in  place,  and  great exposure, which make the study process easier.  We believe the goal, be it small or large, is  of the  same  importance to any organization seeking to raise it . . . in fact the  small  organization's goal  may well be more important to it than the larger goal is to the giant  charity.   Lastly, no client wants a "trainee" doing their study, just to save a little money while risking a lot.   In any event, the amount of work done by counsel is exactly the same, or should be.

      In  the  feasibility  study  process there is another pitfall,  related  to  money.    Frequently, counsel  will  discuss,  and/or contract for the management of a campaign at the same time a contract is considered for a feasibility study.  While there is some obvious continuity value in this,  it also provides the temptation for counsel to compromise unrealistically in favor  of  the feasibility  of the campaign (offering what the client wants to hear rather than what they need to hear).   We have seen this reach the septic pits of morality with a firm urging in favor of a multi-million dollar campaign in a small community with no fund raising history, for an institution with no donor list and no development staff!  This contemptible practice is aimed at securing  income for the fund raising firm from the longer-term, and profitable campaign assignment.  Campaign Management is where most firms make money and  cover large  overhead.   You should not contract for any campaign work prior to  the  successful  and satisfactory conclusion of the feasibility study.   We won't even discuss campaign work until a study is complete. 

        Last, there are some firms that own subsidiary firms and lead the client to them for campaign materials and creative work, without divulging the relationship and without competitive bids.  The profit margin here is often unfair to the client, as is the deception.
 
TERMS:

      Fees  for  feasibility studies run from nothing (always worth the price), to  over  $100,000 (occasionally  worth  the price), plus expenses.  We believe a sound study can  be done for about $15,000 in most cases.  It is usual to pay one third of the  applicable fee in advance (upon  contract signing), one third in mid-study, and the balance (including  expenses) upon receipt of the first report draft.  Expenses should consist of  normal meal  and  other out-of-pocket costs incurred in the process of conducting the interviews, plus travel.  The fee should include a reasonable number of copies of the report.  

TIMING:

     A  study  may take from a rare minimum of six weeks to perhaps three  months  (or  more, depending on availability of necessary information, appointments, etc.). 

OTHER CONDITIONS:

     If you need a formal working agreement it should include: a termination provision, a designated-consultant  approval/rejection provision, costs for extra interviews and/or report copies, expense approvals and time  limitations.  The smart firms also have clauses prohibiting your organization from hiring  away  their professional staff.   We provide assurance to our clients that, should there be solid evidence in mid study, either for or against a campaign, we will terminate the study at a lower fee.   We do not require contracts from our clients.   We only work for people we fully believe in and trust. 

CONCLUSION:

     A feasibility study is a must in properly preparing for a major campaign.   Studies are  best done by outside counsel, experienced in this specialty.  Your organization will benefit from the conclusions  drawn  and  can  base the plan for successful fund raising on  the  findings  of  the study.  Clearly, you can benefit most if you are prepared by knowing how a study works, what to expect, and what difficulties lurk for the unsuspecting.      

     The hallmark of good work is candor.  Along with objectivity and experience,  we  believe these are all that can be offered by any consultant.   We believe it is the job of counsel to tell a client what they need to hear rather than what they seem to want to hear.  Be sure you're really ready for this.
 

Feasibility Q & A . . .

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