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FREQUENTLY
ASKED QUESTIONS: SHOULD WE HIRE A CONSULTANT?
Introduction
Nonprofits live and operate within a complex interconnected
world. The expertise necessary to successfully navigate organizations
relative to the operations, as well as relationships with
multiple constituents is beyond most organizations regardless
of size and resources. It is a fact of life that everything
from family units to governments need to reach outside themselves
to garner some of the necessary skills to successfully operate.
Those reviewing the topics in the Frequently Asked Questions
in the ASU Lodestar Center's Web site will observe areas where
nonprofits may be well advised to seek outside advice and
assistance. Therefore, it is not a question of whether or
not to hire a consultant, but rather how to do it maintaining
control of the process, cost, and product.
This FAQ attempts to define a good consultant relationship
as well as give guidance to hiring, supervising and paying
consultants.
What are valuable areas of consultant expertise?
- Institutional Development
- Annual Campaigns
- Capital Campaigns
- Planned Giving
- Communications/Marketing/PR
- Prospect Identification
- Board/Staff Training
- Special Event Planning and Execution
- Strategic (Long Range) Planning
- Technical Assistance (Finance, Information Technology,
Human Resources, Risk Management, etc.)
- Staff Leadership Transition
- Organizational Development
What is a consultant?
For the cynics, the following definition resonates: "A consultant
is someone who comes in, borrows our watch, tells us what
time it is, keeps the watch, and charges us an exorbitant
fee." This is not the definition of a good consultant. A bad
consultant is bad for the organization and he/she can threaten
the mission and future of the organization. On the other hand,
a good consultant can provide a tremendous lift to a nonprofit
organization.
A good consultant learns about the organization
and brings expertise to the project that complements and expands
the client's knowledge and experience base with a clear deliverable
that is reflected in an agreed to price. The key elements
are:
- The client's organization is used as the base
- The consultant is first a student of the client
- The consultant understands the organization's mission
- The consultant and client continually evaluate the progress
of the project.
- The consultant delivers an understandable product using
the "language" of the client.
- The project is concluded on time and on budget.
What Makes Up a Typical Consultation?
Setting the stage:
- The organization becomes aware of the need for outside
assistance.
- The organization takes the time to define the issue/project.
- The organization's leadership shares in the decision to
seek consultation.
The engagement:
- Ideally, the organization sends out a request for proposal
(RFP) to more than one prospective provider.
- The prospective consultants prepare and present proposals
to the customer.
- The customer selects the proposal that best addresses
the needs outlined in the RFP.
- The two parties (utilizing interviews and references)
negotiate the process, cost and desired outcomes
- A formal contract is signed that includes:
- A list of deliverables
- Completion date
- Payment schedule
- Check points for evaluation and adjustments.
- A “bail out” clause
- Authority person representing each party, clearly
identifying who is doing the consulting.
- Agreement on reimbursable expenses
Is it possible to have a sole prospective provider? It is quite
common for this to occur. When this is the case it is critical
that extra care be taken in references, arms length ethical
positioning and correctly pricing the service to reflect market.
For example, if anything becomes public or goes "wrong" can
the organization respond without embarrassment?
During the project:
- Scheduled communication about all aspects.
- Frequent communication to appropriate staff and governance
of the organization (progress reports).
- The organization remains open to an honest and transparent
view with the consultant.
- Both parties maintain confidentiality.
- Consultant develops the deliverables and shares with
organization leadership in draft form.
- Appropriate feedback is integrated into the final deliverable
report.
The conclusion:
- The consultant provides the deliverable report in writing.
- The organization takes up the deliverable and supports
it within an aggressive timetable.
- Action plans are formulated and presented to all appropriate
constituents.
- The consultant fees and expenses are paid in a timely
way.
- The consultant continues to be available where helpful
in implementation.
Note: These final steps are important for the success of a consultant
relationship. The consultant can be helpful if an organization
has difficulty developing and implementing these steps.
Individual versus Organizational Use of Consultants.
While the majority of consulting relationships for nonprofits
are between the organization and consultant, there are times
when the CEO or other key person in the organization desires
outside assistance in development of skills such as strategic
planning. While the engagement is primarily one of teaching
the individual, it clearly has a major effect upon the organization.
The principles that guide the organization's relationship with
the consultant are the same in these cases.
What are differences between nonprofit consulting and for-profit
consulting?
Harvey Bergholz of Jeslen Corporation highlights three issues:
Governance, passion and money.
Governance: The board influence in the nonprofit
is much greater. Generally, nonprofit boards are much more
independent and they reflect their own "ownership" and advocacy
for the organization's mission. One of the dangers is slowing
down the decision-making. The situation may not be conducive
to such a slow pace of decision-making
Passion: The passion of the board pales
before the passion of the staff. The corporate culture that
reflects, “This is not the right thing to do; it doesn’t
fit our mission,” can undermine required actions on
behalf of the organization. The organization’s passion
can become “its greatest strength and its greatest weakness.”
Money: The number of times we hear an organization
say, “We need an attorney, an information technology
expert, an accountant, a fund raiser but we don’t have
the money,” is extraordinary. It freezes the organization
at the very moment it needs to examine itself and move forward.
Therefore, the influence of money and cost is far greater
in the nonprofit world. Literally millions of precious resources
have been wasted because the organization would not commit
financial resources when needed. On the other hand, extraordinary
resources have been spent irresponsibly without any good outcome
for the organization.
Finally, nonprofits, due to their passion and mission, can
be more closed as organizations. They often suffer from the
mistaken perception that “we are unique.” The
consultant without proper introduction and support can be
seen as “tainting our precious and unique culture by
bringing too much pragmatism, capitalism and cynicism.”
Concluding Comments
While parents turn over daily education to school systems,
good parents never relinquish their parenting role, including
education of values and more. In the same way an organization
that does not continue to control the consultative process
forfeits the value of an outside consultant. Used properly,
consultants can provide protection for the organization (audits,
legal issues) and new directions (strategic planning and future
vision) to name a couple of arenas.
Additional
Resources
Publications:
- "Consulting With Nonprofits: A Practitioner's Guide"
written by Carol A. Lukas, published by Amherst H. Wilder
Foundation. 1998. (Recommended by The Johnson Center, Grand
Valley State University)
- "Field Guide to Consulting and Organizational Development
with Nonprofits" written by Carter McNamara, published
by Authenticity Consulting, LLC.
Websites:
(This list of questions regarding Should We Hire a Consultant
has been developed by the many persons and organizations
seeking assistance from the ASU Lodestar Center for Philanthropy
and Nonprofits Innovation. We invite you to add your questions
and reactions through the”Ask the Nonprofit Specialist”
section of the Center’s Web site so that we might
improve and expand these FAQs.)
Please note that websites frequently change
and while we endeavor to keep links current, some might not
work. When you encounter such a problem you can help us by
sending an e-mail to robert.duea@asu.edu so that we might
investigate and make changes to our information and links.
Copyright © 2010
Arizona Board of Regents for and on behalf of the ASU Lodestar
Center for Philanthropy and Nonprofit Innovation, College
of Public Programs, Arizona State University. All rights
reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted in any form
or by any means, electronic, mechanical, photocopying,
recording or otherwise, without the express written permission
of the ASU Lodestar Center, except for brief quotations in
critical reviews.
Last updated: 05/10/2010
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