Hiring Nonprofit Consultants: Is It Worth it – 6 Scenarios
Wondering if a nonprofit consultant is worth the cost? I’ve been there and have helped other leaders think through the same question.
In general, Nonprofit consultants can be worth the cost in one or more of 6 specific types of engagements: coaching, interim leadership, problem resolution, expertise, pilot projects, and assessments. The success of a nonprofit consulting engagement depends on the qualifications and skills of the consultant matching the nonprofit’s engagement needs and the readiness of the nonprofit to accept change and implement recommendations.
Now that you have a blunt idea of when they might be worth it, let’s look at the details of both how a consultant can benefit your nonprofit, the common types of nonprofit projects they help with, and the typical consultant process.
Why Nonprofits Hire Consultants
Nonprofits hire consultants because they have a problem to solve, or an opportunity to evaluate. There are 6 categories of consulting that are most prevalent: coaching, interim leadership, problem resolution, knowledge and expertise, pilot projects, and assessments/evaluations.
In my experience, and those of my colleagues, friends, and peers, I break the reasons to hire a nonprofit consultant into 6 categories.
Have you ever thought about using a consultant to provide coaching and performance management to yourself or other leaders in your organization? This is something that nonprofit consultants provide. Executive Coaching is an area of practice that helps Executive Directors, and other key employees, continue their path of learning and professional development.
“It’s lonely at the top” is a saying that you may be familiar with. There is some truth in it. An executive coach can be a valuable sounding board who can be brutally honest with you behind closed doors. They may never interact with your team but instead rely on your characterization of situations.
Some will perform 360 reviews and give you full-unfiltered feedback along with ways to improve your leadership, strategic thinking, financial acumen, and many more areas of discussion.
2. Interim Leadership
Sometimes what you need is someone with tons of experience, knowledge, and expertise to lead, strategize, or shape a particular area in your nonprofit. Often referred to as “Fractional Services”, you are hiring a nonprofit consultant to partially fill a particular role in your organization.
This may be in the interim after losing a key employee. But, it may also be a situation where a new endeavor or team is formed and you want to ensure it is started well while searching for the right candidate to take over the reins in 12-18 months.
You’ve likely heard of a “Fractional CIO” in the sense of hiring a part of a seasoned CIO for a specified length of time. You may not need to full-time attention of a CIO but need the experience and expertise they bring. Fractional services are one way of filling this need until it becomes a full-time role. While we used the example of a CIO, any executive or senior leadership role could be a potential option.
3. Problem Resolution
A very common approach to hiring a consultant is that there is a problem to fix and you have not yet been able to fix it. It is easy to believe that a consultant should be able to come in and find the silver bullet that fixes every problem. Unfortunately, that may not be the case.
While a good consultant with experience in the area of need should be able to provide recommendations to help most situations, you need to first be ready to actively listen to what they have to say. Sometimes, we as the executives are part of the problem and we need to be willing to accept responsibility and change.
A great consultant will help you and your team come up with the solutions while using their expertise and experience to shape the direction of potential solutions and the specifics of implementation.
Resolving a problem usually requires assessing the situation before providing recommendations.
Sometimes, we need technical expertise. Technical may mean technology, but it can also mean other technical areas such as finance/accounting, purchasing, CRM administration, social media marketing, online donation optimization, and many more areas.
This is where many nonprofit consultants shine. They are technical experts in their fields and love helping solve problems or get things running like a well-oiled machine.
These engagements also tend to be particularly precise in scope and length. It is an excellent use of an outside service provider for many nonprofits.
5. Pilot Projects/Expansion
Perhaps your nonprofit is looking to expand into a new geographic region, a new program market, or a new direction for fundraising. As the executive, you are asking yourself how to staff this new initiative with existing staff without taking away from your existing operations that are successful.
Enter the nonprofit consultant. They can do the research and develop the programs. A nonprofit consultant can reach out to industry experts and other organizations to gather intelligence and insight. They can help select the team and communicate the changes. Finally, a nonprofit consultant could lead the new initiative to get it kicked off well and ready to transition to a full-time team member.
Arguably, the most common initial engagement with a nonprofit consultant is an evaluation or assessment. Typically you have an area of concern and want to understand what is holding you back.
The consultant can come in, review the situation, conduct interviews, apply their knowledge and research and deliver an assessment. The assessments typically include a set of recommendations that they may be able to assist in implementation as a second phase of the engagement.
Other times you need a third party to review the effectiveness or impact of a program in order to communicate to the outside world while also understanding where you can improve the service delivery. The assessment/evaluation engagement is a great opportunity to do both.
One common tactic nonprofits can take is to use the assessment engagement as a way to try out a consultant before committing to the implementation phase, which is typically the more costly.
Nonprofit Consultants Can Help With A Myriad Of Project Types
I have heard this question asked in many different ways. “What can a consultant help me with?”, “A consultant costs too much for this simple problem, right?”, “Do you know anyone who can help us fix X?”.
Consultants have a place in providing help to nonprofits. Not every case should mean you need to spend money on a consultant, but if you are failing in a critical area or need to start something new, the right consultant can give your organization the lift it needs to take the next step in its growth.
Below is a shortlist of potential ways nonprofit consultants help. Here are the most common types of help consultants provide to nonprofits.
- Capital campaigns
- Annual campaigns
- Event campaigns
- Planned giving
- Broad appeal campaigns
- Donor acknowledgment / Thank you processes
- Donor prospecting
- Website/Online donations
- Social media (Strategy, Content, Management, and Measurement of ROI)
- Annual reports
- Executive Coaching
- Board Management
- Organizational Development (Org Structure)
- CRM Implementation
- Strategic planning
- Technical Assistance
- Risk Management/Insurance
- Special Events
- Follow-up efforts
What Does A Nonprofit Consultant Do? [Process]
A nonprofit consultant brings the power of knowledge, experience, and specific expertise to an organization to solve a problem or act on an opportunity. Consultants may be called upon to assess, advise, or execute a plan. This may come in the form of assessment and creation of plans to grow the nonprofit, review and develop financial goals with a strategy to achieve them, technical assistance in the areas of finance and technology, plans and strategy for expansion into new markets, coaching of executive directors and board management, or development and assistance in marketing campaigns and fundraising.
In the world of consulting there is a typical 5 step process used for engagements. The steps cover the initial contact and continue to repeat or terminate at the end of the engagement. The 5 step consulting process is:
- 1. Entry and Contract: Every consulting engagement starts here. This is where you are the client need to make sure you are ready to hire a consultant and that you know the 6 types of consulting fees in order to negotiate a contract that works for all parties. This is also the stage where expectations need to be clarified and documented so that there is a clear picture of what success looks like in step 5.
- 2. Discovery and Discussion: This is the research phase of the engagement. While you have already provided a lot of information in step 1, now the consultant goes to work, interviewing staff, donors, partners, and constituents. They may reach out to other experts or conduct surveys of current or prospective clients, staff, or partners. Consultants will spend a lot of time gathering information, and documenting what they learn in order to proceed to Step 3.
- 3. Feedback and Action: In the Feedback and Action step, the consultant prepares an assessment that provides what has been learned and recommendations on what to do about it. It is important that you understand what the consultant is presenting. Ask lots of questions. If you feel confident presenting the findings to your Board, then you likely understand the information well. If you are not that confident, keep asking questions. The final part of this step is to decide on which actions if any, you plan to execute with the help of the consulting firm.
- 4. Implementation: This is where the agreed-upon actions are implemented. While in most cases the client is responsible for implementing the solutions, the consulting firm is highly engaged and involved in the process offering their expertise and insight to refine and alter the strategy as needed. You paid them to assess a situation and to offer recommendations. Now, it’s time to get the return on the investment. In some cases, an implementation consultant will actually be the one to implement the solutions. Know ahead of time what you need and what you are getting.
- 5. Extension or Closure: In this final step, you and the consultant can evaluate the process and the results. It is the time to do the post-mortem review and identify both strengths and opportunities. As a client, do your consultant a favor and provide both types of feedback while being equally willing to hear the same in return. If there is a need to take the next step in a phased project, this is the time to decide to continue the relationship or to terminate it.
Now, different types of consulting may have slightly different processes. Fundraising consulting engagements might look different than the 5 step management consulting process.
When interviewing consultants, have them describe their process. Add those process steps to the engagement timeline as milestones as a way of ensuring no step is missed. It is accountability for you both.
When Is A Nonprofit Management Consultant Work It?
Overall, hiring a nonprofit management consultant is most beneficial in two situations: 1. Coaching a highly relational leader to become a highly effective executive; 2. Need to create or improve processes for organizational effectiveness.
Both of these scenarios can come from the same consultant, but likely would be served best by different specific individuals or firms. Sometimes a management consultant is called an operations consultant.
An executive coach can be invaluable and may simply be hired for a particular executive. We’ve already described this a bit above, but give it some thought. Sometimes learning if you have blind spots that you were not aware of can skyrocket your effectiveness as a leader.
When Is Hiring A Nonprofit Technology Consultant Worth It?
As a rule, hiring a nonprofit technology consultant is most worth it when implementing new technology systems or migrating from one piece of software to another.
Implementing a new technology system is an excellent time to bring in a technical expert. Let’s use the example of a donor tracking system, also known as a Constituent Relationship Management (CRM) system. When non-experts try to self-implement a CRM, there is a high likelihood that they will end up redoing some significant portions of work because of a lack of knowledge about the selected CRM or a general lack of expertise in the field of donor management.
Using a skilled professional who both knows the specific CRM and has a wealth of donor management experience will them to implement the system in a way that will serve your organization well from the very start without making costly mistakes.
Another example may be moving from Google Workspace to Microsoft 365. While it is easy to start a new instance of service in either platform, moving email, cloud storage, sites, and such is not a simple task. Doing it with minimal impact on your organization and your constituents is an art and a science.
There are consultants that work solely in this space and finding them is not difficult. The price you pay for these services may well be worth the cost, compared to the loss of important documents, email no longer working, and staff having to figure out mixed account usernames and passwords.
When Is A Nonprofit Marketing Consultant Worth It?
Generally speaking, hiring a nonprofit marketing consultant is most worth it in 4 scenarios; branding or rebranding, social media influence, story brand/messaging, campaign strategy, and components.
Think about it. Are you really the best person to come up with a name, a logo, a tag line, or a brand promise? Sure, you know better than anyone what your nonprofit is about and the impact you dream it to have. But, wouldn’t it be nice to have the best when it comes to what people see and first hear as the lasting impression of who your nonprofit is.
I highly recommend using professionals when it comes to marketing, messaging, and branding. Yes, in time, your team and learn how to apply the brand standards, the brand promise, and that spanking new logo. But creating what is the face of your organization, will serve you best by having it professionally done.
Is Hiring A Nonprofit Fundraising Consultant Worth It?
Now the big question. As a whole, hiring a nonprofit fundraising consultant is valuable in the following 7 scenarios: donor prospecting and retention, capital campaigns, starting a planned giving program, annual giving plan creation, moves management plan, interim leadership, and donor acknowledgment processes.
The ability for a nonprofit to operate often comes down to its ability to raise funds. A critical need for current operations and future growth is establishing excellent fundraising activities. In time, these will become the muscle memory of the fundraising team. But we want to start with the best processes and systems so that we learn to do things the right way, and not have to relearn them later.
A fundraising consultant can provide tangible benefits in the short term, but also their impact may be felt for many years to come in the form of highly-effective fundraising efforts.
According to the Q4 2020 Fundraising Effectiveness Project survey, donor retention rates are down to 43.6%. But don’t just blame it on what we’ve been through recently. A big portion of that number is the fact that first-time donor retention is a mere 19.2%. A highly capable fundraising consultant can help you beat the odds.
How much should a nonprofit consultant charge? In general, nonprofit consultants charge an average of $85-$152 per hour with highly sought consultants charging up to $300/hour and new consultants charging as little as $50/hour. The type of consulting being done may vary the range of charges.
[ALSO READ] – How much do nonprofit consultants charge?
Do management consultants add value? As a rule, great nonprofit management consultants do not work alone which means you get the aggregate value of many individuals’ knowledge, experience, and expertise to address your needs. Your consultant may be one of the voices that collates the best thinking from many sources to provide intriguing insight and recommendations.
Keep Learning About Nonprofit Consultants
- FEP Reports for AFP members – https://afpglobal.org/FundraisingEffectivenessProject
- Salesforce Nonprofit Cloud CRM – https://www.salesforce.org/nonprofit/
- Heller Consulting – CRM Implementation Services – https://teamheller.com/what-we-do/implementation/salesforce
Disclaimer: This post may contain affiliate links. These links, if used and purchases made, we may earn a small commission. These affiliate programs do not impact the recommendations we make or the resources we refer you to. Our focus is on providing you the best resources for your nonprofit journey.