“Feasibility Studies: the Crack Cocaine of Nonprofit Consulting” is just one of the provocative chapter titles in Jimmy LaRose’s forthcoming book, which is beginning to get some attention.
The studies, which many colleges, hospitals, and other nonprofits often use to assess whether their donors will support a campaign, are outmoded and a colossal waste of money, says Mr. LaRose, co-founder of the National Association of Nonprofit Organizations & Executives. He founded (National Association of Nonprofit Organizations & Executives (NANOE) to help improve the management and fundraising skills of the organizations donors support.
“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,” he said in an interview with The Chronicle. “If you do perform a feasibility study, you should not hire the same consultant to run the campaign.”
But too many organizations do exactly that, Mr. LaRose said. In many cases charities pay consultants $50,000 for a feasibility study and then get charged fees that typically amount to 5 percent of whatever the charity raises in its campaign. “So if it is a $10 million campaign, the consultant could earn $500,000 over a two- or three-year period,” he said. “It can be hard for a consultant to be as transparent as possible in doing a feasibility study when they stand to gain $500,000.”
Jimmy LaRose, “Feasibility Studies Are a Waste”
Mr. LaRose is still writing his book, Re-Imagining Philanthropy, but it’s already attracting interest. CineVantage, a film company founded by Honnie Korngold, a former executive of Campus Crusade for Christ, who has known Mr. LaRose for a decade, is making a documentary about his work, using the same title as the new book.
“I have known Jimmy for years and watched him communicate these principles, and it became apparent to me that this was a story that needed to be told,” said Ms. Korngold. “I am interested in stories that are not sensational but reflect a truth that isn’t being talked about.”
Fundraising consultants are sure to disagree with Mr. LaRose’s views on feasibility studies.
“I don’t spend my day calling nonprofits and selling them a study,” said William Krueger, president of a Louisville, Ky., campaign consulting firm. “We are not convincing groups to do campaigns, they are coming to us. If you do a feasibility study as a planning process and develop a solid case and cultivation, then it is incredibly valuable.”
For example, he said, to be effective nonprofits need to give more attention to donors who support their work than they do to the people they serve. “Money,” he writes, “is more important than mission or ministry. Money is oxygen: Without it, you can’t breathe.”
Mr. LaRose said his goal is helping charities do a better job of preventing and solving tough social problems like world hunger, teen pregnancy, and high incarceration rates. “It is ridiculous that we’re not more effective.”
For more provocative articles like Jimmy LaRose, “Feasibility Studies Are a Waste” VISIT HERE
It should also be noted that Jimmy LaRose, “Feasibility Studies Are a Waste” was first posted at Chronicle of Philanthropy.
The author is right about not allowing the feasibility study consultants to be the campaign consultants. It’s a plain ol’ conflict of interest. When I did a study for a client that I knew very well, I received several offers of major gifts, a large endowment gift, and a legacy in three days just by asking the right questions about the purpose of the capital campaign, its proposed case for support, and the ways of giving to it. The non-profit was clueless about how to establish their capacity or the will of their donors to make major gifts for the first time of ever really being asked. Doing feasibility in-house is almost as daft as doing it with consultants who are after the main gig.
I’ve been CEO of a largest foundation in our community for 25 years. Virtually every capital campaign conducted in that time frame during that time frame has hired a consultant to do a feasibility study. They have all met with me.
After explaining their case, which I already knew, they would ask where our foundation might fit on their capital campaign gift pyramid. I’ve always given them my best guess; knowing this was a trustee decision. They also ask who I thought would be good leaders for their campaign and who might make lead gifts. For what it is worth, everything I say in those meetings, I would have said to the nonprofit board or staff leadership, for free.
Having conducted a number of feasibility study interviews when I was a consultant, I think the process is less valuable by far than it is with individuals. In that setting, donors are truly free to say what they might give and also, more important, express reservations about leadership or vision that they might not want to share for fear of damaging relationships. Further, the feasibility process itself it part of cultivation: it does bring people into a campaign early and allow them to own and shape the vision. I think it’s valuable.
On a separate note, and while I’m sure the quote needs context, I was appalled to read LaRose’s statement, ” ‘Money,’ he writes, ‘is more important than mission or ministry…’ ” There are a lot of effective organizations that are volunteer driven, for instance, and achieve their missions on tight budgets. Can there be no donation revenue? Of course not. But neither can there be no “mission or ministry.” Jeanne Bell et al.’s “Matrix Map” explains this all perfectly, much better than LaRose’s apparent dictum seems to.
Exactly. Quite frankly, feasibility study reports are canned and always filled with comments about the philanthropic climate from the usual suspects. What they generally do not contain are any actionable items to bring and organization closer to campaign readiness.
It’s a difficult topic. I agree that such studies can be and often are used as sales tools, not real assessments of potential. I wouldn’t want to be hired to implement and be accountible for another consultants study. To conduct an in-house study can be done in terms of knowledge and expertise, but staff and volunteers can’t/won’t be able or willing to say the hard truths that leadership needs but may not want to hear nor may those interviewed be as candid knowing the interview may not be completely confidential. When done correctly and with integrity, they can help an org set a realisthc and acheiveable campaign goal. Even with their flaws, they have proven to be effective. Without a better solution I’d hesitate to advise entering into a campaign without this advanced planning, even understanding the limitations and considerations.
The non profits that we work with do not have the staff capacity to interview their donors and prospects before a campaign or the will to make it a priority. In fact, we are cultivating their donors for them. For senior staff who are willing to conduct interviews, we are prepared to train them how to do so but most are not willing to invest the time and energy. My model offers a combination of in person, phone and focus groups to help non profits get the information efficiently and quickly so that they can move into the campaign phase informed. There’s room for experimentation and new ideas here but feasibility studies will continue to be necessary as long as non profits are unwilling to spend the time talking to their donors one on one. And yes there is a place for confidential interviews to ask questions about leadership and staff that Development staff can not ask.
This is exactly why the Larose model works. Development directors need to be doing the one-to-one meetings with donors for the organization to survive. I am a development director for a nation wide non-profit that does wonderful things but my focus and job is to cultivate donors. My previous occupation was in sales and I would never sale a thing if I did not consult with my client, find out what their needs were and assure them that my product or services could meet their need. I have been to numerous development seminars but when I attended my first NDI event lead by Larose this past summer, I knew within the first 10 minutes that this model was right on. If development directors would embrace this model of truly being donor centered, then they would be successful in having the resources for their non-profit to flourish.
Having been a campaign consultant in New York City for thirty years–just retired–, this is the first I have ever heard of a consulting firm taking five percent — or any percent — as a commission on the funds raised in a campaign. This is not standard practice. Nonetheless, long ago, when I was a Director of Development, I also wondered about the value of feasibility studies. After experiencing a number of campaigns, both those where we carried out both the ultimate campaigns and the studies, as well as those where others did the feasibility study, several things became clear to me. One is that ultimately outside counsel was needed so that interviewees could give their honest, unvarnished views of the organization and its vision. We always asked to interview some who had reservations or unhappiness with the organization’s direction. We have seen gifts as high as seven and eight figures from those discussions. Second is that feasibility studies are efficient. Someone has to put the finger to the wind and judge the environment and enthusiasm for a campaign, as well as to assess the level of potential giving. A feasibility study provides this quickly. This saves time and money. It also provides a logical early point for go/no go decisions. Further, experienced campaign consultants can gauge readiness better than insiders and are not swayed by boards who are either overly ambitious or too timid. They can also suggest ways to strengthen the goals, making the various elements more appealing to donors. As to changing consultants in mid-stream: the wisdom gained from conducting the feasibility study is frequently called on at decision points throughout the campaign. Clients often call on consultants (for no fees!) after the fact to clarify or confirm a feasibility study point and to ask advice. Finally, campaign consultants often provide needed continuity through changes in executive, volunteer and board leadership. In a multi-million dollar campaign, a relatively modest investment in a feasibility study should provide good information, a path to success and thoughtful counsel. It also is a kindness to current and future donors who care deeply about a nonprofit and its mission. To equate professional work with crack cocaine does a disservice to those who with care and discipline stabilize and enhance the the finances of the fine nonprofit organizations that are the glue of our society.
I can see how some feasibility studies might not be valuable and how some who do them might not be the best consultants for the ensuing capital campaign. But I think to generalize in the LaRose (and some of the commenters) have done does a disservice to nonprofits interested in doing capital campaigns. As CEO of my organiztaion, I oversaw a capital campaign in the 1990’s and we’re in the midst of one now. We did feasibility or planning studies both times and both were incredibly valuable. We didn’t spend time talking with foundations. Our focus was on individuals. In the 90’s we learned that the way we were articulating the mission and focus of the new project had some problems with it. We corrected those and ended up with a campaign that was far more successful. In that instance we did not use the feasibility study consultants to help us with the campaign. With our current campaign we were able to use the mechianims of a “planning study” to begin to get long-time donors invested and to bring some newer folks along to greater levels of involvement. We also learned other valuable information. And, we decided to use the same consultants to help us with the campaign. We did so after reviewing their RECORD of success or failure on every campaign they had ever done–those for which they had done the planning study and those for which they had not. Not every consultant was willing to share that info, but they arrived with it in hand. Their record was incredibly impressive. I don’t see using the same consultants as a conflict of interest. It IS possible that consultants could inflate feasibility studies to try to get business, but it only takes an examination of their records to see whether they can deliver the goods. In our case, our consultants had a record of success in 100’s of campaigns (achieving or exceeding the goal they set on the campaign) that was greater than 98%. Their expertise has been invaluable to us and our current campaign is the most successful not only in our organization’s history but in our entire sector. The most critical piece in all of this: finding the right consultants.
Yes, Jimmy LaRose, “Feasibility Studies Are a Waste” maybe a little overstatement by LaRose, but I wasn’t appalled by anything said, didn’t take any of it as a cheap shot, and I agree. With over 30 years in the development business, including 15 years as CEO of two granting organizations, I can’t count the number of times I wasted my oxygen encouraging agencies to spend more time and effort developing resources in order to serve more people in the future. The professional leadership of too many charities fail to invest adequately in the development of future resources (oxygen for their mission), and thus fail to deliver on their promises. And too many charities hide behind the idea of a feasibility study when they should know that their first job is to honestly analyze their organizations commitment and readiness to run a campaign, and to develop a thorough, donor centric case for support. That doesn’t mean that donor feedback shouldn’t be sought and woven into the process, but it’s a step that should occur much later in the process, and it’s a step that should be a part of the fabric of the agency’s ongoing development work rather than a one-time opening gig for a consultant.
Wow! I have been a fundraising professional for over 30 years and worked both as staff and consultant. Feasibility studies have proved invaluable to me and the organizations I worked for, whether as staff or
consultant. Before trashing feasibility studies, I suggest considering that they be seen as a way to determine the scale of the goal (not just if it is feasible to have a campaign) and and excellent way to hear directly from individual donors what they are interested in supporting, which helps to shape messaging and solicitations. I always encourage clients to reach out to foundation supporters and prospects directly, rather than interviewing with the consultant. They see too many consultants and want to deal with the staff. And, keep in mind that consultants are usually asked to conduct feasibility
studies by organizations. They are not something that is automatically pitched as a way to get the campaign assignment. Having a consultant conduct the study means the organization is enabling the donors to develop confidence in and a relationship with the consultant. But, the confidential donor prospect information gathered in a study is lost if the organization has a different consultant provide counsel for the campaign.
After reading this weeks comments it seems like most of the donors & nonprofits agree with the author’s premise. If you read closely it’s the consultants (who sell feasibility studies) who are in a tizzy.
This article shows that it’s still possible to get publicity by calling out your colleagues as scoundrels, especially if you use extreme language. The foundation community as well as AFP members, Giving Institute members and many others and have long debated the value and temptations of “feasibility” studies, and as a result, the field has responded with many ethical tools that best suit the situational needs of capital campaign clients.
Are there still consultants out there who inflate the potential for a campaign in their study to get the consulting gig? Are there doctors who order unnecessary tests? But ultimately, failed campaigns do not yield good references for continuing business, so unethical consultants tend not to last. If Mr. LaRose were serious about his professed concerns, he would be helping nonprofits research the integrity of their prospective consultants, not just shouting “crack cocaine!” or “the emperor has no clothes!”
I just read the story in Chronicle of Philanthropy about your upcoming book and your opinion of Capital Campaign feasibility studies and I applaud you for saying what you are reported to be saying.
About 25 years ago I met a fundraiser from Colorado whose name escapes me at the moment (same name as a well known planned giving expert from Tennessee) who explained to me that he did feasibility studies and solicited first round major gifts in the same meeting. In other words when it came time to discuss theoretical gifts, he went one step further and asked for the gift they said they would consider.
Since then I have often wondered why waste the money. Fortunately, having spent the last 18 years in legal aid soliciting lawyers, I have had far more elemental issues to worry about. Yes, Jimmy LaRose, “Feasibility Studies Are a Waste” is an accurate assessment of this outdated product.
Director of Development
Legal Aid of NorthWest Texas (since 1996)
Professional Charitable Fundraiser (since 1976)
As a consultant to philanthropy who is committed to strengthening non-profit organizations, I believe it is always important to examine ourselves in a transparent and intelligent manner. The “Kardashian Style” direction Mr.LaRose has taken is not the answer. Rather than opening the discussion to philanthropic consultants and sincerely promoting stronger service to good causes, Mr. LaRose has chosen to insult the integrity of philanthropic consulting with a superficial pop culture, self -promoting broad brush. It is unfortunate. Bottom line: ethics matter. Jimmy LaRose, “Feasibility Studies Are a Waste” IS OVER STATEMENT.
I am an Organizational Development consultant who has worked in the nonprofit sector for nearly 40 years. During that time, we have all seen the transformation in nearly every aspect of business operations in the private sector… marketing, human resources, finances, inventory control, distribution, customer service, etc. Technology in the digital age has brought an unprecedented level of productivity and performance enhancement to all industries in the US. Meanwhile, many in the nonprofit sector still limp along with old, outmoded and clearly inefficient systems and processes that include how they raise funds from donors.
Jimmy LaRose appears to be a much needed, long overdue positive “disruption” in the nonprofit sector. YES, feasibility studies may still have a role to play in an overall major gifts capital campaign… but the approach to capture the same data from donor prospects needs a major overhaul. The cost, time and energy required of nonprofits by some fundraisers to conduct such studies is no longer worth the investment. Many nonprofits and the consultants who serve them need to step up their game, step out of their comfort zones and consider conducting business based on a 21st century business model which includes evaluating the value, role and cost-benefit analysis of traditional feasibility studies. Kudos to Mr. Larose for sparking this conversation.
I met Mr. LaRose at a MGRU conference. I was working at a local ministry. This event looked like a great way to learn about philanthropy, and it was within my budget. I was completely blown away and received far more value than my entrance fee. My husband, who is a seasoned fundraising consultant, was unable to attend, but even I could tell that he needed to hear what Mr. LaRose had to say. So, later I brought him to another NDI Conference, and he also realized that Mr. LaRose was on the cutting edge of how philanthropy has changed since 2008. Jimmy LaRose, “Feasibility Studies Are a Waste” IS ALL TRUE.
Not only does Mr. LaRose make thought-provoking statements, but he can back it up – if one is willing to listen. This man did not just enter the field, and in 25 years has raised hundreds of millions of dollars. He is a visionary, and I admire his passion to explore new approaches to fundraising and to improve the status quo. Change agents are often under appreciated. Rather than bash him for his comments and his upcoming book’s chapter titles in one article, I challenge the reader to attend a conference and get the explanations and supporting evidence to these bold statements. I firmly believe it will change your tune.
And to refute one comment that I read, Mr. LaRose does not make it any secret that he has several companies and NDI is a GuideStar Exchange Gold Level Participant. http://www.guidestar.org/organ…. Please do research before making comments. Just because it’s always been done a certain way does not mean that it’s the best way. I am honored to have met this gentleman and his team. I can’t wait for his book to come out!
I agree with Mr. LaRose that there is a conflict of interest when a feasibility study is conducted by the same organization hired to implement the recommendations of the study. So, let’s not do that, but let’s also not throw the baby out with the bathwater. Do organizations really already know if some capacity building measure is feasible or not? Probably, but how can they be sure and therefore responsible to their funders? It’s time for a simple checklist or a series of questions that set a standard for being able to trust the knowledge that an organization already has about feasibility.
The simple checklist that you ask for already exists in many books and is available in workbook format in “Preparing Your Capital Campaign.” That workbook also spells out a variety of other, cost-wise ways to gain the confidence needed to embark on something as major as a capital campaign. And by the way, while it’s true that you don’t need to pay a consultant to learn what a foundation official will tell you outright, an organization does need to know how to prepare for such a conversation.
Guest • 20 days ago
I conducted research at Clemson University that was used by Mr. LaRose in portions of his book.
I agree with Mr. LaRose that it is clearly a conflict of interest to hire the same people to implement the recommendations of a feasibility study as those that write those recommendations… so let’s just not do that. But let’s also not throw out the baby with the bathwater. A feasibility study can clarify whether or not the campaign is worth the effort, and can reveal the best partnerships, the best organizational framework, technological platforms, etc. for return on investment to the stakeholders…. for organizations that truly do not already know.
Two issues come to mind. First, if the feasibility study is wasteful then local foundations and grants makers should cap the amount they are willing to pay for that service and should consider a flat fee rather than a percentage. The price the market will bear is determined by the buyer. Consultants need to deliver value commensurate with their fees. This means being honest about the value of the study.
This brings me to the second point. A feasibility study is valuable only in so far as it tells an organization what they don’t know. Consultants can demonstrate whether or not an organization needs a feasibility study by either a quick evaluation of their readiness, or by discovering how much they DON’T know about their readiness. There ought to be a common standard, a set of questions to answer that might reveal this.
Although this is very simplistic, in order to keep a feasibility study from being a waste, I suggest something like the following be given to organizations that are considering a feasibility study:
Circle the number along the continuum between agreeing and disagreeing that best reflects your response to the following statements.
- Categorize your active donors into four levels of support. Then, using the lower end of the giving range for each category, respond to this statement:
This organization has enough financial supporters to achieve our campaign goal
Disagree 1 2 3 4 5 Agree
- This organization has enough volunteer leaders (who will partner with staff) to make this campaign a success.
Disagree 1 2 3 4 5 Agree
- Donors are committed to the success of this organization
Disagree 1 2 3 4 5 Agree
- Donors feel connected to this organization’s leaders
Disagree 1 2 3 4 5 Agree
- There are no issues or challenges standing in the way of our donor’s willingness to give
Disagree 1 2 3 4 5 Agree
- The success of this campaign will set the stage for the organization’s continued growth (more than maintaining the status quo)
Disagree 1 2 3 4 5 Agree
If the average response (the total divided by 6) is a 3 or 4, a feasibility study is in order. If the answer is a clear 5, you probably already know that the campaign will be successful. If the answer is a 1 or 2, you have work to do before you are campaign ready.
In regard to feasibility studies, my experience as a consultant has proven to me that Mr. LaRose is making a valid point. Having conducted feasibility studies and utilizing the work of others as a board member, I now realize that the dependence on them is an outdated practice. The technology that allows us to manage information today has greatly decreased the demand for using this to postpone making a decision. One still needs to do the research, but to spend thousands of dollars to determine the capacity of the organization to align itself with the market seems wasteful.
What’s more important, in my opinion, is to make sure the organization has fiscal accountability and that the track record of the organization is in order, so that prospective donors feel confident that their money is well spent. I agree with Mr. LaRose that the great majority of the time, such efforts are just an attempt to validate what the powers that be want to do anyway. Granted, they have their place in due diligence, but can be a manipulative tool to warrant action at an unnecessarily high cost. It seems to be a self-serving methodology to excuse decision makers from moving forward. The time and money would be better spent in cultivation of personal relationships with prospective donors.
I look forward to reading Mr. LaRose’s book and I truly believe that nonprofits need to take a fresh look at philanthropy and eliminate many of the old practices coming out of the Reagan years. I truly believe that Mr. LaRose is onto something of great value to the philanthropic world.
Pre-campaign studies need to evolve to reflect the more advanced training and skills development professionals have now. Development staff do need support and expert guidance (not to mention additional capacity) when preparing and running a campaign, but perhaps not in this 1980’s format. We need to consider what one respondent said, they receive these calls from multiple organizations, diluting their effectiveness. However, I believe organizational leadership still often listens more to consultants than staff, especially based on their experience in the for-profit world, so we shouldn’t discount the feasibility study’s value altogether.
Ahh, the great disparity between academia and practitioner. A thirty-thousand foot view of the comments posted in this thread carry an all too familiar pattern. As a twenty year veteran of both the for-profit and not-for-profit sectors, these debates never cease to provide any level of entertainment value. I personally find the amount of “buzz” generated by those boasting the greatest credentials mildly sardonic, considering not one of us has actually read the manuscript.
Do the titles to Mr.LaRose’s book lack a penchant for the excessive? No, certainly not. Yet, if the focus becomes the chapter title and not the content, we are no better for treading upon the proverbial “slippery slope”, we so vehemently appear to be standing against. See the following example by Mr. Doug White: “Charities, even though there’s lots to improve, are hardly suffering from the effects of snorting crack cocaine.” Where does Mr. LaRose claim that charities “snort crack cocaine”?Furthermore, I believe the message here is that it is very irresponsible for any of us in the field to hire a consulting professional predicated upon a pitch made via the feasibility statement. Yet, we all know it happens. And worse, it continues to happen. So, have we truly addressed the issue as an industry?
It is also hilarious that another contributor attempts to discount Mr. LaRose’s legitimacy by citing a website appearance. See the following:
Without swiping a broad brush stroke; how many of us would like to have our businesses or the charities we work with judged solely upon the appearance of our websites?
We all speak about taking a “deeper dive” and internalizing great knowledge, but how many of those rebutting Mr. LaRose have actually attended a Jimmy LaRose (NDI) seminar?
I can at least say that I have, and as a young development professional, I can truly appreciate the value add Mr. LaRose delivers each and every time.
As technology and generational values change at an alarming rate in our society, I am finding the “philanthropic” sector to be one of least welcoming to these changes. Mr. John Curtis, I applaud your recognition of these issues, and remain open-minded to the conversations and content yet to come by way of this book.
Frankly, I am at a loss to understand how this article is “news” or “analysis”–this is more the Chronicle of Philanthropy trying to make news than report it. Kudos to LaRose’s publicist.
What’s double infuriating about this article is that is seemingly reproduces LaRose’s bombast without providing the detail or analysis that we hope will eventually show up in the book. So, how are we to have a meaningful and professional dialog about this storm cloud?
As a former consultant and current vice president of development/alumni relations in higher education, I would note the following:
- Many of us have known for a long time that feasibility studies of almost all flavors are poor tools for campaign forecasting or “goal prediction”, but they can be a good methodology for unearthing actionable intelligence to position more effectively the organization’s campaign in front of major philanthropists;
- A number of us have developed more robust forecasting tools and approaches using statistical approaches (e.g., risk-weighted simulation modeling.) that are more suitable for campaign prediction–one hopes Mr. LaRose doesn’t cast all of these more nuanced approaches into the dust bin of history; and
- I may be slow in the uptake, but I am not sure exactly why several respondents have assumed that there is an automatic conflict-of-interest if a consultant conducts a feasibility study and then later serves as the campaign consultant. I would expect the development leadership to be smart enough to assess whether or not a consultant who conducted a feasibility study has the right skills and chemistry to serve as a campaign consultant. In short, this is a highly individualized call to make–not one to be made by a shallow fiat.
I am not sure I have ever seen as many comments as this article has generated. This discussion is a good one. It is so important for organizations to consider options and decide if a feasibility study is the right path.
As head of our family’s foundation I have first hand experience of this topic. If you have a group of committed community fund raisers who get energized and excited about the project enough to PERSONALLY PERFORM a real initial set of preliminary visits and interviews, then you have great awareness and momentum and commitment. Reminds of a 1970’s book title I loved: if you meet the Buddha on the road, kill him. If you meet a feasibility study from an outsider, run. The most passionate, committed insiders, with skill and a great case for support, are those that can effectively launch a campaign. Jimmy LaRose, “Feasibility Studies Are a Waste” is actually an understatement.
For more provocative articles like Jimmy LaRose, “Feasibility Studies Are a Waste” VISIT HERE
Jimmy LaRose, “Feasibility Studies Are a Waste” and other Development Systems International content and comments are for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing on this site constitutes professional and/or financial advice, nor does any information on the site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto.