Episode 44: Campaigns - Feasibility Keys

Welcome to another edition of “Around with Randall;” Your weekly podcast on making your nonprofit more effective for your community. And here is your host, the CEO and founder of Hallett Philanthropy, Randall Hallett. 

I really appreciate your time again, hopefully again, on this edition of, “Around with Randall”. We're going to take another deep dive for the month and talk about Capital Campaigns and in doing so, we're going to look at it kind of in four chunks. Number one, and really these are issues that are related to challenges within campaigns, but one will be some issues involving feasibility studies, so that's this edition. Then the second one, we'll take a look at case development and some challenges with that. The third will be the aspects of a mini campaign or a series of mini campaigns versus a comprehensive campaign. And the fourth of the month and the final one will be a discussion about a new model of campaign council that I have believed in for a long time and am beginning to implement that. It’s lower cost and higher value and delivers more for the client, and at the end of the day is what consulting should be all about. So those will be our journey for the month and to campaign. 

So today, we start with feasibility and some challenges that go along with doing feasibility studies. So, just as a level setter. What is a feasibility study and a campaign? I'm going to kind of pick the high points. There's about 51 different sub points that can be made on each one of these bigger areas within a feasibility study. When I do feasibility studies, I've built out a project management software program that monitors every step, who's responsible, the dates, things of that nature and has places to put documents. But really what we're talking about is in a feasibility study first and foremost, can what you want to do actually be accomplished. That's kind of the big goal. And to do that, you talk about what the case development is, what are the things you're looking to accomplish, and most importantly, the costs involved with those. We'll keep case development out of this conversation for the most part, because we will handle that specifically in the second podcast of the month on the special conversations around campaigns. Then there's data gathering and that's both quantitative and qualitative and we'll talk a lot about that today. The third is pulling all this data together and synthesizing it to create a report. And then the final piece is delivering the report. 

So, in this edition, we want to talk about data gathering and some differences that I think have become more and more critical as technology has allowed us the opportunity to really do a deep dive and get really critical information that your organization can be using to better your opportunity for campaigns. Then the last piece is kind of the aspect of how and why you deliver and the different models that go along with doing a feasibility study that produces a report at the very end. 

Let's start with data, there's qualitative and quantitative. Qualitative by definition is things that aren't hard data set and really what we're talking about here is interviews and surveys. And one of the things that you do in an interview, if you're doing a capital campaign feasibility study is you sit down with a number of key constituents, hopefully most are donors and have a conversation about the organization. Do they like what the organization's doing? Do they understand it? Do they believe in its leadership? But maybe the most important is to begin a detailed discussion of the case that was probably pre-sent. Here are the things we want to do. Here are the details of why we're there doing them. What are your thoughts? And then the hard part, which is having a very direct couple of question discussion around could you see yourself supporting it? And at what level? Because, more organizations want to use a wider lens to get information qualitative, at least I find it to be very helpful is to include a survey which can be sent out to however many people you want -- thousands of people, but it's very limited in terms of the value, but it may add some openness to the organization, to the community in terms of what the community feels at a very high level, but it's really those individual interviews that occur. We're going talk about more about those in a few minutes when we talk about the different kinds of ways to do a feasibility study. 

That's how very qualitative interviewing has been done and it's very standard for many, many years where I think the new conversation in campaign feasibility study work needs to be is in this idea of quantitative, which is data-driven, which means you are giving someone like Hallett Philanthropy, your data out of your CRM and what we do is we go through it in some pretty remarkable ways to get at some information that most feasibility study consultants don't want to deal with, in part, because it's hard and there's an investment. The other part is that you've got to be able to explain why there's value in all of this. And really what we're talking about is using hard data to better understand is this office ready for a campaign? Other than just the verbal, yes, gosh, this is great. We need this. Gosh, we love the case. This comes down to the ability for numbers to prove that it's ready. So, what am I talking about? Well, there's two major pieces of quantitative data analysis that I think really help guide the conversation about readiness.

The first is capacity. In one way, it's a capacity study. Does your database have the capacity in very general numbers to be able for us to discern whether or not you're capable of raising that amount? And so, what we know is that when we look at it, we have the opportunity to understand that using some algorithms that have been developed by us for many years to know that so many donors who have given so much, and so often at certain levels have likelihoods and you put a likelihood against what, maybe a capacity, and that gives you some indicators when you add it all together. It sounds complicated. It's taken some time to figure out what works. In the end, it puts a capacity on it. I think the other part of quantitative is that organizational readiness and really what we're talking about are things like pipeline analysis. Do the gift officers have a pipeline of known entities, people, organizations, that are going to substantiate the level of campaign that's being discussed. Does that pipeline or that portfolio really have the gift sizes that are necessary to make that happen? Is there a year over year analysis, looking at hard numbers regarding whether or not, this is even reasonable? The example I use here is if you're an organization raising $2 million a year, and somebody says we want to do a $50 million campaign over five years. 2 million to 10 million over five years -- that's a leap. How do you look at that data? Are the donor opportunities there to raise people's sights? Do the gift officers understand that? Also, we want to look at that portfolio analysis. How do gift officers take advantage of the people that are currently known to them? Which means we're looking at effectiveness and efficiency. Are they making the calls? We get into the details at a very deep level regarding how many calls are people making per month. And how long does it take for someone to get them from identification or a qualification to actual solicitation at different levels -- $50,000 versus a million?  

The last is kind of a constituency analysis. We all break our databases down into different constituencies in education. There's alumni in there by maybe by school and maybe there's people geographically you can look at, maybe it' people that are staff. Most organizations find a way to break out their donors in a way that allows them to look at them in different opportunities. All of that should be a part of a process in terms of quantitative research. When I have access to that data, what I find is that the opportunity to really have an understanding of what the organization is currently doing both at a high level overall, but also individually become so enlightening in making recommendations about what a campaign might look like. Most places don't do the quantitative. They really fall on that qualitative and it's certainly a part, but I would argue that data should really drive a lot of the conversations we have. And if you do the quantitative, the data before you do the qualitative, what you can get is a verification process. You can begin to know that if a gift officer has a certain bent in really over-achieving their goals, being able to ask the couple of donors you might be speaking with in the qualitative piece, in the interview section about that gift officer. Why are they successful? Or if maybe one is struggling -- why is that? It might illuminate and allow a lot of detailed discussion. So, feasibility studies in this idea of quantitative analysis are really important, both from a capacity standpoint, what's possible as well as an analyzing organization, really foundation development office efficiency in whether or not they're ready to jump into a campaign, particularly if it's a large jump.

The other part we want to spend just a minute about is talking about how one might do a feasibility study. And there's kind of three models that I think are fairly well agreed upon by most people in the industry. One is the idea of a consultant led feasibility study. The second would be a DIY, meaning the organization does it themselves. The last is this hybrid model, which can be defined as taking the two, consultant led and DIY and putting them together in some way. Let me walk you through some thoughts on each one of them and why I think consulting at either leading the way 75, 25 and a hybrid model or all the way are critically important. The number one reason people choose to do a “do it yourself” feasibility study is cost. There is an expense that comes from hiring consultants to do a feasibility study. I always find it interesting when I have these conversations about, well, gosh, it's a lot of money. Let's take an example. You want to raise the goal may be to start off $10-$15 million and somebody is screaming about, well, it's a $75,000 cost to do a feasibility study -- just making up numbers. The reason that I always find this interesting is I've sat through a lot, particularly in healthcare and also a little bit in education, a lot of meetings where the organization would hire a large accounting firm who would come in and help the organization become more cost-efficient, cost-cutting. They were making recommendations, and no one blinked at spending, if the goal was to cut $25 million to spend $3 million on this particular project. Yet a $25 million capital campaign, if that's kind of a general goal may only cost $75,000 or hundred thousand dollars for a feasibility study that has the elements of capacity, data, interview and then the report. But somehow that's not acceptable, but if we pay $3 million to have $25 million cut costs, instead of increasing revenue, I understand where we are at in philanthropy, but I argue all the time, kind of on that plane. Have you done a cost analysis? If you're in healthcare or education, how much did you spend on that? How much did you save? My guess is it's never the same ratios to the benefit of philanthropy that we do. The reason why it happens most often is cost. 

So, what are the advantages of having consultant? Well, there's a couple of right off the top. Number one, if the consultants any good, they're bringing you best practice. They have done this before. Number two is there's probably a pretty good chance if they're a good interviewer, that they're going to have a more robust open conversation with your constituents then you can, because what we do is we hold that in confidence. I can't tell you how many times I've had donors tell me something that they also then admit, well, I'm glad you're the one taking the information and synthesizing it so that it doesn't come out as being quoted by John Smith to help the organization get ready because I would have never said this if someone internally had been there. I had a recent example where the CEO of an organization had been very distant during COVID, in fact had moved out of town to a more traditional home that they had maintained and they probably were going to retire at, but it'd become very noticeable that the CEO was not around. And as things began to open up after the pandemic, it was very evident to individuals that this person wasn't around. They didn't feel comfortable telling the foundation office that. It came through me, the consultant, which then I had to figure a way to say to the CEO, it's noticed, and it's a problem. I can deliver that message. 

Consultants get more into the weeds and more honest dialogue than most “do it yourself.” There's also an argument from a downside that consultants don't allow the organization to get closer to their donor. I'm not sure that I totally agree with that. And with the number of feasibility studies I've been involved with, I am very honest and get a ton of information and say, look, the organization wants to get to know you better and wants to spend time with you. I can share people's thoughts, generically like Bob and Cindy Smith would love to know more about X, but I'm not going to go into detail about what that conversation is about that we had. I keep that very close to the vest. I can help the organization guide them without breaking that confidentiality and so there is a way to develop that. DIY also has a challenge in that if you don't have a really good staff, they don't have the background or the experience to know what to ask or what to look for. The other thing is, if we look at the quantitative data piece that we spoke about earlier, if the numbers don't look that good, and you're doing it, DIY there's a chance it gets buried. Outsiders will probably have a more robust conversation and present a more accurate portrait of the organization and its readiness.

In the hybrid model, if you can find ways of pulling the best from the consultant, the quantitative, the reporting, the interviews. I've done this before, let's say the organization says we need a hundred people interviewed, but we're really only going to pay for 60. Well, there's nothing says that they can't do the other 40 interviews. Maybe the consultant would get the more complicated ones or the more important ones or the ones that with the belief that it'd be more tied. There's nothing that says the organization can't be an active part of the feasibility study, the foundation or development office. I just get a little nervous when one of two things happen. When number one, the foundation does its own analysis, presents it to some leadership. It's not accurate and puts the organization in a real hole or number two, they don't even do a feasibility study.  

I haven't even talked about that, but if you're walking into a campaign of anywhere from $3 to $5 million or more, and you're not doing a feasibility study in some way, shape or form, you're really setting your organization up for failure because there's one thing worse than a bad feasibility study and that's no feasibility study. Whatever goal was set out and you aren't able to raise those dollars, and everybody looks bad. The foundation looks bad because they're not delivering. The organization looks bad because whatever was promised, can't be done. The community looks bad or looks at the organization in a negative way, like, why aren't you getting this done? Feasibilities are a protection mechanism. If there are deficiencies, part of that is being able to address them before an organization jumps into maybe the largest opportunity to do fundraising in their history that can have incredibly negative consequences if not done correctly.

So, a couple of thoughts, number one was talking about what are the elements, really about that quantitative piece, the data and the analysis that goes along with it. Number two, what kind of a manner in which you might conduct a feasibility study and utilize a consultant as a part of this process?

Next time as mentioned we'll be glad to cover the idea of case statements. We're going to delve into that, which was certainly not discussed here. We're going to cover the entire process in one whole podcast, because it's really that important and some of the challenges that come with that, that might be helpful to you and your organization.

Again, if you'd like to communicate with me, don't forget, podcast@hallettphilanthropy.com, or  if you have a complaint or concern, it's reeks@hallettphilanthropy.com. Don't forget to check out the blogs on the website, 3-4 a week, 90 second reads covering all kinds of stuff. I am writing a piece, 300-400 words on the tragedy of Doctors Without Borders, losing physicians in a foreign country, serving their nonprofit, and most importantly, serving humanity and the tragedy that is -- just thought-provoking things for you to keep in mind. 

I conclude every time, the same way. My favorite mantra, Gaelic saying, “Some people make things happen. Some people watch things happen. Then there are those who wondered what happened.” We are people who want to make things happen. We're looking for people to build relationships, to make things happen for those who are wondering what happened and whether it's healthcare, education, social service, arts, museums, or zoos, wherever it is. It's important that we all realize that we're really doing work to better humans. Philanthropy doesn't mean money. It means love of mankind, love of humankind. And that's what we have to keep in mind as we do our job every day. You're doing it effectively, if you're using best practice and taking some of the things, maybe I even say here and other places that you can find information, what I think of as a 21st century classroom to really make what you do more effective, to make your community a better place.

I look forward to seeing you next time on part two of the four, as we talk about campaigns this month. I can't thank you enough for your time. Share it with a friend. Maybe there's someone out there that could use a little bit of assistance as well. I'm glad to know that maybe one or two people might be listening, and we'll see you next time right here on “Around with Randall.” Don't forget, make it a great day!