Counterpoint: Feasibility Studies and Other Reasons Outside Counsel Can Help Small Nonprofits

In the recent article “9 Fundraising Myths Shattered,” published here on NonProfit PRO, one of the myths the author sought to debunk was that you need an outside consultant for your capital campaign. It’s true that not every nonprofit needs to have an outside consultant in order to conduct a successful capital campaign. But many clearly do—and even those who don’t might have good reason to consider using outside counsel.

Some Nonprofits Have No Choice

Nonprofits that clearly need outside counsel are those that simply do not have the internal resources, experience, expertise or manpower to pull it off on their own. Capital campaigns are a massive undertaking. Many nonprofits don’t even know where to start, and once they do, they can quickly become overwhelmed. Any organization in this situation should, obviously, seek outside counsel.

Benefits to Hiring Counsel Even If Not Absolutely Necessary

However, many other nonprofits have the luxury of assessing and choosing whether or not to retain outside counsel for their capital campaigns. For these nonprofits, there are pros and cons to be weighed in deciding how to proceed. Here are some of the benefits to be aware of when deciding whether to bring in outside counsel:

1. Maximizing results. Good capital campaign consultants can bring to the table best practices, national perspective, extensive experience and expertise, valuable tools, proven process, and focused effort in maximizing your campaign results. Convergent, for example, was brought in to help an organization in Elmira, N.Y., that had conducted six straight in-house capital campaigns over the years. Average campaign pledges in the campaign we assisted with increased nearly 60 percent. Another nonprofit in Burlington, Iowa, conducted a couple of campaigns on its own before subsequently tripling its resources with outside help from our organization. In other words, even when a nonprofit has proven it can implement a campaign successfully on its own, bringing in the right consultant might simply lead to a lot more funding.
2. Minimizing burden. Even with outside counsel, a major capital campaign requires a lot of staff and volunteer time and focus. Without outside counsel, that can be a crushing burden. Sometimes, nonprofits outsource part or all of the campaign management function simply because they don’t want to do it themselves. Nonprofit staffs already are notoriously stretched without having to take on a major capital campaign on top of their other full-time duties. Nonprofit board members typically have their own full-time jobs, too. Bringing on outside counsel to help minimize the workload burden can be an appealing option, even if an organization technically could do it itself.
3. Opportunity costs. Nonprofits should also consider the opportunity costs of taking on a big campaign in-house. If senior executive staff for a nonprofit divert a substantial portion of their time and attention to fundraising for the better part of a year or longer, they necessarily aren’t doing as much of the substantive work stakeholders and donors (or what we at Convergent like to call investors) are actually investing in. Outsourcing campaign management and implementation can free up key nonprofit leaders to focus on the more substantive work investors value, enabling them to deliver better outcomes for the communities and constituencies they serve.

Feasibility Studies Are the Most Important Thing to Outsource

Even if you do your own campaign, it is probably wise to outsource the feasibility study (the usual and appropriate first step as a prelude to launching any major campaign). Feasibility study interviews with stakeholders and potential investors should be confidential third-party interviews, in order to garner candid input and feedback on the organization, its personnel, its track record, its proposed plans and its funding potential. Good study consultants can elicit “straight scoop” information and opinions that might not be shared with a peer, friend or staffer, but that the interviewee will need to continue dealing with beyond the study and campaign. This candid input and feedback from potential funding sources is critical to determining whether to launch a campaign, what a realistic funding goal would be, and how to position a campaign for maximum success. For a feasibility study to have credibility, third-party professionals should construct it.

One of our repeat clients is an organization in Dubuque, Iowa, that conducts its own capital campaigns. It has the requisite internal resources, experience and expertise. And it does a fantastic job at it. But as a prelude to each campaign, the organization brings us in for a professional third-party feasibility study to garner candid input and feedback, to establish credible findings, and to make expert recommendations on how to maximize campaign success.

(Incidentally, although there are outliers, most feasibility studies are only a fraction of the $100,000 cost indicated in the “9 Fundraising Myths Shattered” article. One-fifth to one-third of that amount is far more typical.)

It’s true that not every nonprofit needs to bring in an outside consultant for a capital campaign. However, some clearly do, and those that don’t can benefit in a variety of ways by doing so anyway. Either way, a professional feasibility study is a smart first step.