The time has finally come to build a new museum! First it was leaks in rusted pipes that caused extensive damage to ceilings and floors, then the antiquated heating system failed in the dead of winter. And now the forty-year-old roof must be replaced! You're spending more money to maintain an archaic building than you are for the acquisitions of dynamic new exhibits. Attendance at the museum has dwindled and patrons are grumbling about the deterioration of the facilities.

After a long and heated debate, the board decided to endorse a $25 million capital campaign to build a new museum complex. The board grappled with many questions but one caused them to lose sleep: Will the community support this project? To bolster their enthusiasm and allay their fears, a feasibility study was suggested to precede the campaign.

One third of the board agreed that a study should be conducted prior to the building campaign, one third felt a study would be a huge waste of time and money, and the final third didn't know what a feasibility study was.

"It's market research," explained George A. Brakeley, III, President of Brakeley, John, Price, Jones of Stamford, CT, a national fundraising consulting firm. "If you were in the business of manufacturing consumer products you wouldn't dream of introducing a new razor blade technology without testing it in the marketplace and seeing whether it will fly. We're doing the same thing here of testing the fundraising attractiveness of a given institution or organization in its marketplace. This testing may be local, regional or national and it may involve all three of the normal sectors of foundations, corporations and individual donors."

Feasibility studies have traditionally preceded capital campaigns and more often than not have been conducted by an outside consulting firm. A study generally consists of an internal audit of the fundraising operation, followed by a series of interviews with influential and knowledgeable community members. The results from the audit and interviews are presented to the Board of the organization. "It's a rare campaign, a very rare campaign, that is launched without some kind of evaluative exercise ahead of time to determine what may be achievable," stated Brakeley. "It's equally rare that an institution conducts its own study for the primary reason that people tend to be less candid in an interview with an insider than they are with an objective and professional outsider, particularly when they have strong linkages to the institution."

Susan B. Franklin, MSW, Executive Director of the Camp Ronald McDonald for Good Times, in Los Angeles, was very much in favor of conducting a study prior to her $7 million building campaign. "We're going to conduct a feasibility study for a number of reasons. First, because our organization has a long history, people have a variety of different perceptions about us. We're really not sure how we're perceived. We feel that an outside person can help us clarify that perception. Secondly, we want to have some validation that we're going after the right number. We picked $7 million because that's what our architects and planners think the buildings will cost. But we need an endowment and other things. Perhaps a feasibility study will tell us that we have the capability of doing a $10 million campaign. I think it would be ridiculous for us to ignore that opportunity if that opportunity is there. At the same time I want to make sure that we're going to be successful. If a feasibility study tells us that the support is only out there for a $4 million campaign then we better do a $4 million campaign, retrench, and come back later and do the rest of it."

Not everyone agrees that a feasibility study is absolutely necessary prior to a capital campaign. "Our campaign raised about $75 million for buildings and an endowment. We didn't conduct a study, and we didn't use consultants. We just rolled up our sleeves and did it on our own," explained Mack McKinzie, Director of Institutional Advancement for the Indianapolis Museum of Art. "In the seventies we had used counsel for a small, rather unsuccessful campaign. I don't know if it was counsel, or the board, or a combination of the two, but no one was particularly pleased at the results. At that time there was a feasibility study done at considerable expense. When we looked at the next campaign the board felt they had been down that road before and they didn't want to do that again. The board was confident the community would support the museum."

"We've had a good fundraising program for a long time. We have strong board commitment, we know our constituency, and we were pretty well focused in on what we could do. We just felt it was our time. There were indications and feelings, you might call them gut feelings, that there is a time in an institution's life when everything seems to be moving ahead and this is your opportunity. What we did was far more than we ever dreamed we were capable of doing."

Kevin McGrath, President of McGrath & Company of Westmont, IL, has been conducting feasibility studies for direct-mail fundraising program for over 16 years. He's seen the demand for studies wane over the years. "Feasibility studies used to be very much in vogue. It was just a matter of course that a study would be conducted. At one point in time the study became a sales tool for certain consulting organizations rather than a good look at the whole picture of the institution. At one point in time every feasibility study was a good feasibility study. I think that's changed now. I believe many organizations have gotten away from that concept. I don't think as many are done, and I think those that are completed are done for different purposes. The growth of professionalism among institutions and development people has certainly made a difference."

Feasibility studies are expensive. When consultants are utilized you can plan on paying substantially more than if the study were conducted by in-house staff. However, consulting fees will vary considerably depending on the nature and complexity of the organization. Brakeley explained his company's philosophy on fees. "A study can range anywhere from $15,000 to $75,000. We happen to believe that a smaller number of higher quality interviews is far more effective than a much larger number of superficial interviews. The cost can also be based on geography. If you have a community hospital its catchment area can be drawn as a circle twenty miles around it. There's a considerably greater efficiency to that than there is to a liberal arts college whose board of trustees and whose leading alumni are scattered about the country; where you have to make a flight to Seattle to do one interview. Another factor of cost is the seniority of the people doing it. We're not in the habit of assigning junior people to do studies."

Costs of a feasibility study can be daunting to an organization. Susan Franklin explained, "There's no question that some board members might say, Oh my God, it's going to cost $25,000 to do a feasibility study! Just think how many kids we can take to camp for $25,000! There's that shock moment. Fortunately, our board feels that a feasibility study is a part of the infrastructure necessary to be successful. They also understand that you have to invest in the right advice. Whether it's an accountant for a new business or a lawyer for legal issues, you need sound advice. A feasibility study protects you from making mistakes."

McGrath agrees that many organizations are not conducting studies because of exorbitant costs. He also believes there's another reason. "Cost is certainly a factor why more studies aren't being done. However, I also believe a certain amount of pride is involved on the part of development people. They're saying I can do this just as easily as XYZ consulting firm -- why spend the money on it. I can do it. "

One of the most frustrating aspects of a feasibility study is the time involved. The board has made the decision to conduct a study, they've hired a competent fundraising firm, then are told by that same firm it will take months of preparation before the study can begin. The Board clamors "what's the deal?"

"There was a time when we said we could get the study done in three months," explained Brakeley. "But studies bog down in two areas. One is the institution or organization is not always as ready as it thinks it is for this exercise. They come to us totally unprepared then wonder why we've put them to work for three months preparing for the study. Some have no sense at all of the strategic view of where they're heading or where they want to be in 5 or 10 years. There's homework and preparation that needs to be done and sometimes that can stretch out."

"The other place a study can bog down is people you need to see aren't always available when you're trying to see them. So we find a study is going to take anywhere from four to six months to complete."

No organization is perfect. There are always going to be people and other organizations who, for one reason or another, don't like the way you run your business. One of the reasons for conducting a study is to determine your well-being in the community and to ascertain your chances for a successful campaign. But what happens if two months into your study your consultant comes to you with the bad news that you have major external problems? What can you do? What happens next?

Brakeley described how his company would handle this type of situation. "If we're a third or a quarter of the way into the external interview schedule and the interviews are surprisingly and decidedly negative, we'll stop the study right there and go back to the organization and say, folks you've got a big problem. Let's either stop the study completely and fix the problem or let's just stop the whole thing because this is not an effective use of your resources. Negative results don't necessarily mean you shouldn't have a campaign, it may mean the goal that was tested isn't right and the goal should be something else. There are times when we have to say we think a campaign would be ill-advised at this time, and here's why, and here are the things you need to do to get ready for a campaign."

McGrath takes a similar tact with clients. "I'll tell them to correct problems and explore other avenues for obtaining the funds they're looking for. However, I've never seen a completely negative study because there are certainly people who support the cause of the organization. There is always some hope and optimism for an institution."

If your organization chooses not to conduct a study prior to a building campaign you should have the following: 1. A high degree of self-confidence, 2. Extensive knowledge of your market and your constituents, 3. A successful track record of campaigns, 4. A strong indication that the top ten gifts are predictable, 5. A very clear indication of the availability of volunteer leadership, 6. A commitment from the board and staff to the campaign, 7. The capabilities to go out and get the job done.

McGrath agrees there must be plenty of work done if a campaign is conducted without a study. "An organization should be well prepared. You must have a well defined mission statement that's relatively brief and understandable to lay people and the public at large. You must also have the support of people close to your organization: board members, supporters, and friends. You can learn an awful lot from the people who are already committed to your organization. Most importantly your organization must be totally committed to the success of the campaign."

Feasibility studies have been successfully conducted for many years. They have their benefits and short-comings like any other aspect of a development program. As in any major financial investment by a not-for-profit organization, studies must be very carefully considered, and if utilized, must be meticulously monitored, and enthusiastically supported by the board and staff.

George Brakeley has conducted many feasibility studies and is convinced of their value. "Most organizations and institutions realize they better have someone outside and objective look at what they want to do and decide if it's achievable. Sometimes the exercise is an insurance policy where counsel says, you're doing fine, go right ahead, everything is as you think it is. But the other end of the spectrum is counsel turns out to be a genuine change-agent where they say, what you're doing is a mistake. Here's some other things you should be doing instead."

Susan Franklin is also convinced studies are critically important to the success of a campaign. "As well as you think you know your community you can often find surprises. It's really better to be prepared. More often than not I hear of organizations who found out they can raise a great deal more than they originally thought. Don't be worried that a feasibility study is necessarily going to tell you can't do a campaign. More often it tells you -- you can do it and maybe even do more than you thought. Even if all the study tells you at the end is what you thought in the beginning, what that means is you thought it through well. It doesn't mean you wasted your money."

END