E1FTOC_1 01/31/2009 3 Fundraising Consultants A Guide for Nonproﬁt Organizations Eugene A. Scanlan, PhD, CFRE John Wiley & Sons, Inc.
E1FTOC_1 01/31/2009 4 This book is printed on acid-free paper. 1 Copyright # 2009 by Eugene A. Scanlan, PhD, CFRE. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. 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, scanning, or otherwise, except as per- mitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hobo- ken, NJ 07030, 201-748-6011, fax 201-748-6008, or online at http://www.wiley.com/go/permissions. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or com- pleteness of the contents of this book and speciﬁcally disclaim any implied warranties of merchantability or ﬁtness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of proﬁt or any other commercial damages, including but not limited to special, inci- dental, consequential, or other damages. For general information on our other products and services, or technical support, please contact our Customer Care Department within the United States at 800-762-2974, outside the United States at 317-572-3993 or fax 317-572-4002. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. For more information about Wiley products, visit our Web site at http://www.wiley.com. Library of Congress Cataloging-in-Publication Data: Scanlan, Eugene A. Fundraising consultants: a guide for nonproﬁt organizations/Eugene A. Scanlan. p. cm.—(The AFP fund development series) Includes index. ISBN 978-0-470-34015-8 (cloth) 1. Fund raising. 2. Nonproﬁt organizations—Finance. I. Title. HG177.S293 2009 658.15 0224–dc22 2008045554 Printed in the United States of America 10 9 8 7 6 5 4 3 2 1
E1FTOC_1 01/31/2009 5 & The AFP Fund Development Series T he AFP Fund Development Series is intended to provide fund development professionals and volunteers, including board mem- bers (and others interested in the nonproﬁt sector), with top-quality publications that help advance philanthropy as voluntary action for the public good. Our goal is to provide practical, timely guidance and infor- mation on fundraising, charitable giving, and related subjects. The Asso- ciation of Fundraising Professionals (AFP) and Wiley each bring to this innovative collaboration unique and important resources that result in a whole greater than the sum of its parts. For information on other books in the series, please visit: www.afpnet.org. The Association of Fundraising Professionals The Association of Fundraising Professionals (AFP) represents over 30,000 members in more than 197 chapters throughout the United v
E1FTOC_1 01/31/2009 6 vi the afp fund development series States, Canada, Mexico, and China, working to advance philanthropy through advocacy, research, education, and certiﬁcation programs. The association fosters development and growth of fundraising pro- fessionals and promotes high ethical standards in the fundraising profes- sion. For more information or to join the world’s largest association of fundraising professionals, visit www.afpnet.org. 2008–2009 AFP Publishing Advisory Committee CHAIR: Nina P. Berkheiser, CFRE Principal Consultant, Your Nonproﬁt Advisor Linda L. Chew, CFRE Development Consultant D. C. Dreger, ACFRE Senior Campaign Director, Custom Development Solutions, Inc. (CDS) Patricia L. Eldred, CFRE Director of Development, Independent Living Inc. Samuel N. Gough, CFRE Principal, The AFRAM Group Audrey P. Kintzi, ACFRE Director of Development, Courage Center Steven Miller, CFRE Director of Development and Membership, Bread for the World Robert J. Mueller, CFRE Vice President, Hospice Foundation of Louisville Maria Elena Noriega Director, Noriega Malo & Associates Michele Pearce Director of Development, Consumer Credit Counseling Service of Greater Atlanta Leslie E. Weir, MA, ACFRE
E1FTOC_1 01/31/2009 7 the afp fund development series vii Director of Family Philanthropy, The Winnipeg Foundation Sharon R. Will, CFRE Director of Development, South Wind Hospice John Wiley & Sons, Inc.: Susan McDermott Senior Editor (Professional/Trade Division) AFP Staff: Jan Alﬁeri Manager, New Product Development Rhonda Starr Vice President, Education and Training
E1FTOC_1 01/31/2009 9 This book is dedicated to my consultant and life partner, Joanne. It is also dedicated to the memory of my parents, who taught me the importance of ethics and fairness in all that I do.
E1FTOC_1 01/31/2009 11 & Contents Acknowledgments xv About the Author xvii Introduction xix CHAPTER 1 No, We Don’t Need a Consultant! 1 Summary 24 CHAPTER 2 Yes, We Really Need a Consultant! 25 Summary 54 CHAPTER 3 What Should We Do First? 55 Step One: Know Your Organization 55 Step Two: Identify Your Organization’s Real Needs 57 The Next Internal Steps 59 Some Possible Alternative Arrangements 61 Summary 69 CHAPTER 4 The Request for Proposal—A Short Introduction 71 The Written External RFP 71 The Written Internal RFP 72 The Unwritten Consensus RFP 72 Advantages of the Internal RFP and RFP Contents 73 Summary 76 CHAPTER 5 Finding Consultants—Where Are They? 77 They’re Everywhere, They’re Everywhere! 77 Using Your Own Organization as a Source 79 Asking Other Organizations 81 xi
E1FTOC_1 01/31/2009 12 xii contents Using Workshops, Seminars, and Conferences as Sources 81 Professional Organizations as Sources 84 Professional Organizations of Consultants as Sources 85 Using the Internet 87 Summary 87 CHAPTER 6 Information, Please! 89 Three Ways to Find Consultants: A Quick Review 89 Using the Consultant’s Web Site or Printed Materials 91 Using Examples of the Consultant’s Work 99 Reference Checks as Critical Sources 100 Using Informal Contacts with Colleagues 103 Using Colleagues Active in Professional Associations 103 Using an Online Search Engine 104 Summary 104 CHAPTER 7 The Proposal for Services 107 Overview of Proposals 107 Objectives of Proposals 108 A Sample Proposal Outline 109 Analyzing the Proposal’s Content 112 Who Does What 114 Conﬁdentiality 115 Fee and Expense Structures in Proposals 116 Timelines 120 Who Will Deliver the Services 121 Reviewing and Editing Materials 121 Registration and Contract Filing Issues 123 Legal or Ethical Disclosure 123 Solicitor Registration 124 Product/Outcome Deﬁnition 124 Seeking a Revised Proposal and Negotiating 125 Summary 126 CHAPTER 8 The Interview 127 Overview of Interviews 127 Focus of Preproposal Interviews 127 Focus of Postproposal Interviews 135
E1FTOC_1 01/31/2009 13 contents xiii Alternative Interview Methods 137 Summary 138 CHAPTER 9 Selection and the Contract 139 Importance of Group Process 139 Contract Preparation Alternatives 140 Contents of Consultant-Prepared Contracts 142 Review of Contracts by Attorneys 143 Summary 144 CHAPTER 10 Working with Your Consultant 145 Keeping Focused on the Project 145 Consulting Partnerships 146 The Staff Trap 148 The First Day and First Steps 150 Materials for Review 151 Sharing Unwritten Information 154 Working Arrangements 155 Timelines and Meeting Review 155 Procedures Deﬁned 157 Deﬁning a Process for Written Materials Review 158 The Case 159 Letter of Invitation to Prospective Interviewees 160 Interview Questionnaire 161 Campaign Materials 162 Policies and Procedures 163 Meeting Materials 164 Training Materials 165 Prospecting Materials 165 Other Written Materials 166 Consultants as Creative Resources 166 Events 167 General Advice and Counsel 168 Some General Considerations 169 Keeping the Consultant Informed 171 Planning and Scheduling 172 Meetings and Conference Calls 173 Your Consultant’s Other Skills 174 Dealing with Issues 176 Payment Issues 179
E1FTOC_1 01/31/2009 14 xiv contents Some Background Points 180 Summary 182 CHAPTER 11 Wrap-up and After 183 The Consultant Always Leaves 183 Delivering the Report and Recommendations 183 What’s Next? 184 When Nothing Happens 185 Ensuring Follow-through 185 End-of-Campaign Debrieﬁngs 186 Summary 189 CHAPTER 12 Conclusions 191 Some Final Thoughts 191 Who Gets the Credit? 192 The Best Fundraising Consultant 193 Additional Selected Readings 197 AFP Code of Ethics for Professional Philanthropic Fundraisers 203 A Donor Bill of Rights 204 Index 205
E1FTOC_1 01/31/2009 15 & Acknowledgments S omewhat like the Academy Award acceptance speech efforts, there are many people who should be acknowledged for their help, both direct and indirect, with the preparation of this book. The following people played a signiﬁcant role in encouraging me to write the book: Jan Alﬁeri and Cathy Williams at the Association of Fundrais- ing Professionals headquarters, and Barbara Ciconte of Ciconte and Associates, Inc. Special thanks are also due to my publisher, John Wiley & Sons, especially to Susan McDermott and Judy Howarth for their patience during our four-month process of selling our house in Wash- ington, D.C., and moving to British Columbia. Finally, thanks are due to all of my colleagues and friends in the consulting business and to all of the organizations that I have worked with over the past 25-plus years as a consultant. xv
E1FTOC_1 01/31/2009 17 & About the Author E ugene ‘‘Gene’’ Scanlan, PhD, CFRE, is president of eScanlan Company. He has spent over 25 years as a consultant to nonproﬁt organizations, including serving as vice president and senior vice presi- dent of the Alford Group, a national consulting ﬁrm. He has also served as a grant-making foundation program ofﬁcer and ﬁscal manager, the foundation ofﬁcer for the Brookings Institution, the director of deve- lopment for Defenders of Wildlife, and as an independent consultant to several organizations. Prior to his career in nonproﬁt consulting and development, he spent 10 years as a college and university administrator and teacher. In addition to his consulting work, Gene holds or has held several academic appointments, including serving as adjunct associate professor at the University of Maryland University College; associate professorial lecturer in International Affairs, Elliott School of Inter- national Affairs, George Washington University; and as a member of the advisory council for the George Mason University Nonproﬁt Manage- ment Program. He also is a certiﬁed online instructor. He chaired the Association of Fundraising Professionals’ (AFP) Research Council, served on the steering committee for the Professional Advancement Division, and served a third term as a board member of AFP’s D.C. chapter, after serving as chapter president in 1994. He continues to serve on several AFP committees and task forces. He has published several articles and a book on corporate and foundation fundraising and is a frequent presenter. He received the 2003 Professional Fundraiser of the Year award from the Washington, D.C., chapter of AFP. He now lives in Sechelt, British Columbia, with his wife, Joanne. xvii
E1FTOC_1 01/31/2009 19 & Introduction Busboys Holiday It was my ﬁrst day on the job as vice president of Alford & Associates, a relatively new small fundraising consulting ﬁrm based in Chicago. Jim- mie Alford, the founder, had a long history of work with the Boys and Girls Clubs of Chicago, including most recently serving as the chief de- velopment ofﬁcer for the citywide organization. I was joining the ﬁrm as the third professional staff member after spending about four years as a program ofﬁcer and ﬁscal manager at The Chicago Community Trust, Chicago’s large community foundation. Making the move from a large, established (and prestigious) organiza- tion to a small, one-year-old consulting ﬁrm was seen by some col- leagues as strange at best. And, after meeting other fundraisers, it became obvious that their ideal move would have been the other way. But for me the challenge was to continue helping nonproﬁt organiza- tions with something more than just money—and maybe help them also acquire more funding. The big question in my mind was ‘‘Do I have what it takes to be a fundraiser—and especially to serve as a fundraising consultant?’’ Here I was working for a highly skilled professional fundraiser, and now was vice president of a consulting ﬁrm, but I had never raised a dime! Did I have any skills that could be applied to this new job? I arrived at the ofﬁce on my ﬁrst day. Actually, it was also the ﬁrst day for the ofﬁce itself—Jimmie had just signed a lease and purchased the ofﬁce equipment after working out of his home for a year. I was nervous xix
E1FTOC_1 01/31/2009 20 xx introduction about starting a new job and my possibly questionable skills to do it; Jimmie was nervous about committing to the expenses of a long-term lease, the newly purchased ofﬁce equipment, and, although he did not mention it, the cost of his new employee—me. Nancy, the other vice president, had a way of cheering us up and calming us both down. Jimmie told us that we had a corporate lunch meeting with a client that day; the purpose of the lunch was to acquaint several companies’ senior staff members with the organization as part of cultivation for a planned major fundraising effort. We needed to arrive early to ensure that the caterer had everything set up for the lunch meeting, and to keep the organization’s board chair on track with his roles there. We left the ofﬁce about 11:00 A.M., arrived at the client’s ofﬁce at about 11:15, and walked into the area where the lunch was to be held. Right away it was obvious something was wrong. The tables and chairs for the lunch were folded and stacked against the wall, there were boxes containing the utensils and the tablecloths, and the caterer was nowhere to be found. Nancy and Jimmie were very upset. I, however, at least knew I had one skill that was useful for this consulting business— I had worked two summers as a busboy in a very busy seafood restaurant in New Jersey. I knew how to set tables up—and fast! I quickly pro- ceeded to set up the 10 tables while Jimmie tracked down the caterer and Nancy helped me. The caterer arrived back with the appetizers and the deserts, and then left again, just as the guests were arriving, to get the lunch food. The appetizers and desserts were almost totally consumed, and the main course arrived about 12:45 P.M. The program part of the lunch went off smoothly, although slightly delayed. As we were leaving, I said to Jimmie and Nancy, ‘‘I was wondering if I could do this consult- ing thing; now I know I have at least one usable skill, even if it’s busing tables!’’ About This Book This book is about using fundraising consultants. It is intended as a guide for any nonproﬁt organization considering working with a consultant,
E1FTOC_1 01/31/2009 21 introduction xxi either an individual or a ﬁrm, to help the organization see if it is ready to raise money, to assist it in raising money, and/or accomplish a lot of other things a good fundraising consultant can help the organization achieve. This book is also intended as an ‘‘insider’s’’ guide to using fund- raising consultants. It is written from my perspective as a consultant (and sometimes busboy) to the nonproﬁt sector for over 24 years. And, yes, I was ‘‘on the other side’’ as a ‘‘real’’ fundraiser for several years after I left the Community Trust and after my initial time with Alford & Associ- ates, and had relocated to Washington, D.C. In this book you will read about ideas, concepts, and information that will help you and your organization make critical decisions for selecting and working with fundraising consultants, as well as working with con- sultants serving nonproﬁt organizations in other ways. You will also get my opinions about consultants, the process, and some possible road- blocks to successful consulting relationships. Consulting, like so much of what happens in the nonproﬁt or third sector, is still an art and not a science. Like good fundraising, it is often about relationships as well as skills and knowledge. Good consulting is also about honesty and ethics, and understanding that each organization has its own culture and uniqueness, and that a ‘‘one size ﬁts all’’ approach is no more successful in the consulting business than it is in the fundraising business. At least that is what I believe. Also in this book I will include stories about my own consulting ex- periences, and the experiences of others, including both consultants and organizations. I believe that stories are a very important part of the learning process. Stories, if properly used, can help bring down to earth many principles, concepts, and ideas while at the same time using the ‘‘lessons learned’’ to help others stay on the right path. Besides, stories can break up the long list of bullets, steps, goals, and objectives that can make the reader forget we’re talking about people and relationships, not mathematical formulas or physics equations. This book grew not only out of my own experiences and many con- versations with colleagues in the consulting business, but also speciﬁcally out of a then–National Society of Fund Raising Executives (NSFRE,
E1FTOC_1 01/31/2009 22 xxii introduction now the Association of Fundraising Professionals, or AFP) workshop I did in 1994 for the local NSFRE chapter in Washington, D.C. The ses- sion was entitled ‘‘Consultants: The Good, the Bad, and the So-So’’ and focused on two major areas: ‘‘When you should consider using a consul- tant’’ and ‘‘When you should not consider using a consultant.’’ As I recently read over my outline for the session, I realized there is not much I need to change in my key points under each of those two topics. Because of several additional years of consulting experience since I put together the session, I may have a deeper understanding of what lies behind my points, but the points themselves remain important. There is also another audience for this book: the person considering becoming a nonproﬁt consultant or the person new to the consulting ﬁeld. While not intended as a ‘‘how to’’ book for consultants, this book can serve as a useful guide for better understanding what non- proﬁts look for or should look for when considering hiring a consul- tant or ﬁrm. It can also help one understand at least some of the critical factors in the hiring process and in the working relationship with a consultant or ﬁrm, as well as some of the success factors and pitfalls of using consultants. Growth of the Consulting Field The number of fundraising and nonproﬁt consultants and consulting ﬁrms is growing rapidly. Some of the larger consulting ﬁrms that have traditionally worked only with the corporate sector are moving aggres- sively into nonproﬁt consulting, including fundraising. The other ex- treme is the people who are ‘‘consultants’’ until they ﬁnd a new position within an organization. In between are many individuals, small ﬁrms, and some larger ﬁrms that are fundraising and nonproﬁt consultants. Some are innovative and creative, while others follow more traditional approaches. Overall, the nonproﬁt consulting ﬁeld, like the nonproﬁt sector, is characterized by its diversity, numbers, and approaches. In the Wash- ington, D.C., area alone there are probably hundreds of individual
E1FTOC_1 01/31/2009 23 introduction xxiii consultants; small (one- to three-people) ﬁrms; a few larger ﬁrms, in- cluding branch or regional ofﬁces of national ﬁrms; and ‘‘virtual’’ ﬁrms, where consultants come together to work on particular projects when more than one person is needed or special skills are required. Despite the competition among ﬁrms for business, many consultants have collegial relationships and often get together formally or in- formally to share experiences, get ideas, and bemoan the occasional problem client. Consultants are frequently active board members in professional organizations, such as AFP, and are often speakers at con- ferences and workshops. Many are willing to share their expertise through presentations, publications, and the informal exchanges and networking that happen around meetings and conferences. In short, fundraising consultants are much like their development and other nonproﬁt colleagues. They are part of a complex, growing, and changing sector that is as varied as snowﬂakes. A Variety of Consultants and Styles Fundraising and other nonproﬁt consultants may help organizations move forward, may only cause confusion, and may even hinder an orga- nization’s progress. They can become part of ‘‘the family’’ and true part- ners, remain helpful outsiders, or just be seen as people who create fear and dread. I’ve seen all of these things happen when nonproﬁts use con- sultants, and, at times, have myself been a part of each of these types of relationships. And what of the consultants themselves? They, too, are as varied as snowﬂakes. Some use a systematic, step-by-step approach to the consult- ing relationship, some operate under broad principles but are more ﬂex- ible about how they proceed, and a few are unfortunately dogmatic, with a ‘‘you do it this way’’ approach to everything. Some have years of solid experience in the nonproﬁt sector, including extensive fundraising experience, while others move into consulting after only a few years of work in the sector. There are also those who come out of the corporate
E1FTOC_1 01/31/2009 24 xxiv introduction world after years of experience, and seek to apply their understanding of essential business skills to the nonproﬁt sector and fundraising. There are also the former ‘‘professional volunteers’’ who decide that, after years of helping organize fundraising events, heading up major campaigns, and serving on committees and boards of nonproﬁt organizations, they can establish a business to continue to help while receiving fees for their expertise. In one interesting trend some of the larger fundraising consulting ﬁrms are seeking to ‘‘grow their own’’ consultants by hiring younger people with a few years of nonproﬁt experience to become ‘‘program associates’’ (or other titles) who initially help with internal preparation of reports, analyzing data, and other tasks, while at the same time tag- ging along with more senior-level consultants. The arrangement is much like the apprentice model of learning a profession, a system that was common for hundreds of years until higher education and graduate programs became more available. Successful Consulting As we shall see, much of the determination of how successful a consult- ing relationship will be can depend on many factors, including the real needs of the organization, the experience of the consultant(s), the ‘‘ﬁt’’ of the consultant with the culture of the organization, the level of in- volvement of the organization and its board in the consulting process, the methods used, expected versus actual outcomes, the achievability and realism of the recommendations, and other factors that will be pre- sented in this book. In short, when one person asked me to describe what the fundraising and nonproﬁt consulting process is like, I replied, ‘‘It’s like moving an elephant. If you get it to take one step forward, maybe you have achieved something!’’ Of course, there are more dramatic examples of elephants moving forward (beware of leaping elephants), and organiza- tions can take major jumps, if they want to, with or without the help of consultants.
E1FTOC_1 01/31/2009 25 introduction xxv Breaking News: Laws to Give You Pause Did you know that many states have laws regulating fundraising consul- tants? Did you know that there are legal deﬁnitions in some states of what fundraising consultants are, what they can and can’t do, and their roles with your organization? Did you know that a consultant who asks for gifts, handles money, or is even part of an ‘‘ask’’ or cultivation meet- ing may be considered a solicitor, and that a whole separate set of rules apply to that type of consultant (in some states)? Did you know that, depending on what they are doing, some fundraising consultants might have to register in several states? This book is not intended as a legal guide, but any nonproﬁt should be sure it understands the applicable laws in the state or states where it operates, when it may be necessary for the fundraising consultant to reg- ister, the roles the consultant can and cannot play within your organiza- tion, what fees and possible bonding requirements might be involved, and many other factors that can cause both your organization and the consultant great difﬁculties if the laws are not followed. For example, some states require that any nonproﬁt agency contracting with a consul- tant submit a copy of the consulting contract to the state (often to the attorney general’s ofﬁce), sometimes before work begins. Minimally, in states where it is required, the consultant needs to be registered. A cautionary example: Registration of the consultant and a contract re- view can have some pitfalls for both the organization and the consultant. I once heard a story from a colleague who reached agreement with a nonproﬁt organization on a contract, had the contract duly submitted to the state, and received surprising news: the organization itself, while it had its tax-exempt IRS 501(c)(3) status, had never registered with the state. The results were ﬁnes both for the consultant (for contracting with an unregistered nonproﬁt) and for the organization (for not registering with the state). Another example: Many years ago I contracted with a small national organization headquartered in Washington, D.C., to advise the
E1FTOC_1 01/31/2009 26 xxvi introduction executive director on foundation fundraising strategies. I was very im- pressed with the organization and made a small contribution to them. At one point the Board decided to have a reception at the home of one of the members in New York City. The reception was for members and spouses only, had no fundraising purpose, and was fairly informal. How- ever, a program for the reception was printed and on the back listed recent contributors, including my consulting company. Shortly after- ward, I received a notice from the New York attorney general’s ofﬁce that I needed to register my ﬁrm in New York State, since I was con- ducting consulting business there. I argued by letter that I was not doing so, that my client and my ﬁrm were both based in D.C., and that I had done no fundraising in New York for or with the client. After several months of correspondence back and forth, and upon the advice of my attorney, I gave up and sent my registration fee of $900 to the New York attorney general’s ofﬁce (and renewed the next year). One more example: A consulting ﬁrm I was working with submitted a contract to the attorney general’s ofﬁce in the state where both they and the client organization operated. The proposed contract indicated in one phrase that the consultant would assist the organization in meetings with potential foundation and corporate funders to determine their interests in a possible future request from the organization. The attorney general’s ofﬁce said that this phrase needed to be removed from the ﬁnal contract, as it opened the possibility of a solicitation (asking for a gift or grant) with the consultant in the room, thus putting him or her in the role of a solicitor. How do you ﬁnd out about the laws and regulations that might affect your working relationship with a fundraising consultant? First, check with your organization’s attorney. A caution is that sometimes attorneys for nonproﬁt organizations, especially those who aren’t very familiar with the nonproﬁt sector’s nuances, may not know about the require- ments in your state for working with consultants. The next step would be to check with your state’s attorney’s ofﬁce or other appropriate ofﬁce to get a copy of the applicable laws and procedures. Remember, some states have no regulations for fundraising consultants, while others have
E1FTOC_1 01/31/2009 27 introduction xxvii very comprehensive and complex rules and procedures for consultants and ‘‘solicitors,’’ including possibly registration and fees, bonding re- quirements, and other instructions. If your organization works in more than one state, you may have to deal with each state individually and ensure that both your organization and the consultant or consulting ﬁrm meet each state’s requirements. While there have been efforts to develop standard requirements, deﬁni- tions, and registration procedures that could be used by several states, each state still has its own laws and procedures, with some states having extensive regulations and others having few or no regulations. Enforce- ment procedures and actual enforcement can vary considerably, with some states being considered as ‘‘tough’’ and others less so. Also remember that, at least according to some attorneys I have met, the registration requirements and rules for a consulting ﬁrm you contract with may depend on what speciﬁc service you are to receive. According to one attorney I spoke with, a consultant contracting to carry out a feasibility study may not need to register in the state where the organization is located, while a consultant or ﬁrm managing a capital campaign might be required to register and possibly even post a bond. Many of the differences in state laws appear to be based on exactly what the consultant is doing for the organization. Is he or she or the ﬁrm just doing a feasibility study or development assessment? Is the consultant or ﬁrm providing advice and guidance for a capital campaign? Is the consultant or ﬁrm actually carrying out the campaign where the consul- tant functions as staff to manage the campaign (sometimes called ‘‘on- site campaign management services’’)? Is the consultant or ﬁrm actually soliciting for money? Does the consultant or ﬁrm handle any gifts received? In each of these situations and in each of the variety of states that have laws pertaining to consulting services, there may be different requirements. These will be based on the speciﬁc roles of the consultant or ﬁrm and their contract and arrangements with your organization. Where can you ﬁnd a comprehensive summary of state-by-state requirements and regulations for fundraising consultants and solicitors? There are many sources available, and you should always check with a
E1FTOC_1 01/31/2009 28 xxviii introduction knowledgeable attorney and your organization’s state before contracting with a fundraising consulting ﬁrm (or before ﬁnalizing any contractual arrangements with a consultant). One summary of all state regulations I have found very useful is the Giving USA Institute’s (formerly the AAFRC Trust for Philanthropy) Annual Survey of State Laws, now published as an e-newsletter and available through their site at www .givinginstitute.org.
E1C01_1 01/28/2009 1 chapter 1 & No, We Don’t Need a Consultant! W hen I work with smaller organizations that are looking to hire their ﬁrst development staff member, I often caution them to not assume the development person’s chief role is to take all of the fund- raising responsibility on his or her shoulders, thus releasing the other staff and board from this ‘‘onerous’’ responsibility. The same caution can be applied to the process of seeking a consultant. The operating attitude on the part of some nonproﬁt staffs and boards is that hiring a fundrais- ing consultant will bring in more money, thus solving the organization’s cash ﬂow problems, meeting its capital needs, or enabling it to expand its services and programs. This approach—to see money as the solution or end—can be very limiting, both for the organization and the consultant. Often, fundraising issues are complex and they can be related to many other organizational issues and even the external environment. In most of my consulting experience the ‘‘get more money’’ solution simply is not the single answer to an organization’s problems. Nonproﬁt organizations also, at times, tend to see a single simple ques- tion that will be answered by hiring a consultant: ‘‘Can we raise X dollars for our capital needs?’’ or ‘‘Is our fundraising operation as effective and efﬁcient as possible?’’ or ‘‘Can our annual campaign show better results?’’ The answer expected is usually also simple: ‘‘Yes’’ (often the expected outcome at the end of the consulting process) or ‘‘No’’ (often an 1
E1C01_1 01/28/2009 2 2 chapter 1 no, we dont need a consultant! unwelcome answer). These simple questions and answers may conceal the real needs your organization has—some of which a consultant or consult- ing ﬁrm can help with, and others that are best addressed either internally or by someone other than a fundraising consultant. These needs might involve getting more contributed funds (see above), internal and leader- ship issues, perceptions of the organization and its effectiveness by others, or a whole range of other issues that cannot be answered simply. Does your organization really need a consultant? Let’s turn that around for a moment and discuss several reasons not to consider using a consultant. In my consulting experience, the preceding simple types of questions can sometimes conceal other reasons why a fundraising con- sultant is seen as being needed. The consultant may not be made aware of these underlying reasons or may be given a little information about them, once hired. Rarely is such information shared before the hiring process is completed. At other times, those selecting the consultant are not themselves aware of the issues or the depth of the issues faced by the organization. For example, board members may be involved in the hiring process but may not be aware of deep divisions at the staff level. The good consultant will ﬁnd out these issues during the consulting process. The better consultant may be able to recommend and facilitate ways to resolve them, but also may recognize them as possible major roadblocks both to the consulting process and to better fundraising. Let’s get a little more speciﬁc. Here are some reasons I outlined in my paper, ‘‘Consultants: The Good, the Bad, and the So-So,’’ for not hiring a consultant: When you want someone else to resolve organizational problems There is a tendency sometimes within organizations that have major problems to throw up their hands and seek an outside ‘‘expert’’ to come in and resolve these problems for them. This is just another version of the ‘‘we won’t do it—you do it’’ approach often applied to development staff by other staff and board members when fund- raising is the issue. In this case there is not really a partnership with the consultant or ﬁrm. The organization hands the consultant the
E1C01_1 01/28/2009 3 no, we dont need a consultant! 3 problem and expects an answer as to what to do. The organization no longer takes responsibility for its problems—maybe someone outside can take the responsibility, or the blame if things don’t work out. In effect, the organization can say it is taking action when it really is passing the ball off to someone entirely outside. That person or ﬁrm is then tasked with coming back with a solu- tion to the problem. The organization can get on with its business and not worry until the consultant presents recommendations that may or may not be what they wanted to hear. Decisions are made, but the problem’s underlying root causes may not be addressed at all. Or if the root causes are addressed in the recommendations, the organization’s leadership may believe these are not the real causes or issues, and may simply shelve the report—especially if they themselves are part of problem. When you want justiﬁcation for one point of view in an internal organizational dispute This is a more speciﬁc variation of the ﬁrst reason above. Sometimes there is a dispute within an organization that does not get settled easily. Examples might include a dispute between the board of directors and the senior staff over some issue, a conﬂict between management and development staff over fundraising issues and plans, or problems between two operational areas of the organiza- tion. Again, the tendency can be to seek outside help to get the ‘‘answer’’ to the problem or dispute. The difference here is that one side is seeking justiﬁcation for its point of view versus the point of view of the opposing side—an ‘‘I’m right and you’re wrong’’ solution that does not involve consensus but rather an ‘‘I win, you lose’’ outcome. Does this happen in consulting relationships? Yes, as I will illustrate through an experience the consulting ﬁrm I was working with and I had several years ago. I’ll go into some of the details of this example, because it can represent a ‘‘worst-case’’ scenario for a consultant or ﬁrm.
E1C01_1 01/28/2009 4 4 chapter 1 no, we dont need a consultant! Our ﬁrm was hired by a statewide human services agency to carry out a feasibility study for a possible major capital campaign. The study involved a team of consultants from our ﬁrm; the process included an extensive series of interviews and focus groups around the state, a review of past campaigns and donors, and frequent meetings and progress reports with the senior staff and board leadership. Every- thing seemed fairly straightforward; the people we met were nice, the organization had a good case, and the recent capital campaign had been successful. As we continued our interviews and the consulting team discussed what we were hearing, especially from major donors to the past campaign, we began to see the outlines of something else; what it was we weren’t sure. Several of the major donors talked very nega- tively about how they had been solicited by the executive director for the recent capital campaign. During the interview, one person said to me, ‘‘If he comes here and asks for money again, I’ll pick him up and throw him out the door!’’—not what you want to hear from a major donor and prospect for a large campaign gift. But, despite what we heard, we still did not ‘‘get it’’ about what was going on behind the scenes. We ﬁnished our process, reached consensus on the recommendations, and concluded the report with the basic recommendation that the organization not proceed with the campaign but rather rebuild re- lations with the past campaign’s major donors. I was to present the report to the board meeting. At the board meeting the executive director sat next to a female board member none of our team had met. As I started to present our recommendations, which, at the most basic level, concluded the organization should not proceed with a capital campaign but should make considerable speciﬁc efforts to rebuild bridges to major donors, she began to raise a series of questions. First, she asked, ‘‘Why wasn’t I interviewed for this study?’’ I explained that the interview list had been put together by the staff based on
E1C01_1 01/28/2009 5 no, we dont need a consultant! 5 criteria our consulting ﬁrm provided. She next asked, ‘‘Why were so few (about 60) people interviewed for the study when over 300,000 people in the state were the organization’s constituency?’’ I explained that this was the number agreed to by the staff and that we sought a fairly representative sample of the organization’s key stakeholders. After attempting to discredit the study process, she then proceeded to try to discredit each speciﬁc recommenda- tion and our overall conclusion that the organization should not move forward with a new major capital campaign. It quickly became obvious that something more was going on in this organization. At the end of the board meeting, the board chair came over and apol- ogized for how the meeting had gone. Later, I and other members of our consulting team at the meeting got together for a postmor- tem. We had noticed that the executive director was mostly silent during the entire session and had not bothered to point out that the senior staff had been directly involved in the entire study pro- cess, including selecting interviews, determining the sample size, and so on. He and other senior staff had previewed the full report and recommendations, almost without comment. One of our pos- sible conclusions was that we had been ‘‘set up’’ by the executive director, who may have expected a primary recommendation that the organization proceed with the capital campaign but did not hear what he wanted. A few years later, I went to another organization to make a marketing call. It turned out that one of the former senior staff members of the problem organization was now a vice president of this non- proﬁt agency. After the initial interview, I asked if he was willing to share what happened at the board meeting described earlier. He conﬁrmed that the executive director had indeed wanted to do the campaign, but the board had been neutral and therefore decided to hire a consulting ﬁrm to get an outside assessment of the situation and prospects for support. He further conﬁrmed that
E1C01_1 01/28/2009 6 6 chapter 1 no, we dont need a consultant! the female board member had speciﬁcally been there to discredit our report and recommendations. He also pointed out that, despite our recommendation not to proceed but rather to take other steps for a possible later campaign, the executive director had managed to convince the board to proceed with the campaign, but that it had fallen short of its goal by a considerable amount. In this case we were unaware that we had been brought in to justify the executive director’s view that they should proceed with the campaign, versus the board’s more or less neutral view of the cam- paign question. We had learned a hard lesson. When you want a lot of money raised in a short period of time but have not had much success raising it using existing resources Over the past years as a consultant I’ve had many calls from organiza- tions saying they need to raise X dollars over a short time span. One example was an organization that had received a major matching challenge grant from a foundation and needed to raise an equal amount within ‘‘one year’’ from the date of the grant. I received this call in early September; I asked when the grant had been made and the person on the phone replied, ‘‘In early January.’’ I asked what had been done so far to meet the challenge, and the person said, ‘‘Well, not much. We did decide at our June board meeting to hire a consul- tant.’’ I asked several other questions about their fundraising program, which turned out to be fairly minimal and with nothing like the major gift history or prospects needed to achieve the match in the short time remaining. I also expressed my view that the organization did not seem to be taking the challenge requirement very seriously, and concluded I would not be able to come in and rescue them at the last minute, as they seemed to be expecting. Such challenges and matching requirements are increasingly common and can be daunting to an organization, especially when there is not much success meeting the challenge using existing internal re- sources. Yet organizations continue to pursue these ‘‘opportunities’’
E1C01_1 01/28/2009 7 no, we dont need a consultant! 7 and hope somewhere, somehow, they can meet the challenge. Grantmakers can be equally at fault for making such requirements without a better understanding of the past fundraising experience and capacity of the organization to meet the funder’s requirements and timelines. Other examples of the ‘‘we need it now’’ situation might include budget shortfalls, a desire to expand a program area, or a decision to create a new program without having the needed ﬁnancial and other resources in place. In all these cases a quick infusion of new funds seems to be the answer, and hiring a consultant seems to be the way to achieve the goal. Underlying issues might be a lack of strategic planning, failure to effectively manage ﬁnancial resources, or stretching a fundraising operation beyond its limits. Despite these issues, which are often not acknowledged, a quick infusion of money is believed to be the answer. Now this is not to say that there are not other situations where there is a real need for a major increase in funding. Examples might include a sudden need to rehabilitate or repair an existing facility, a cutoff of public money for an agency, or other such events such as natural or other disasters. In these cases, the strength of the case for support might overcome a low-intensity fundraising program or other inter- nal and operational issues. A consultant might be able to help im- prove the ability of the organization to respond and provide advice on ways to rally both current and potential donors to the cause. When your organization is committed to raising funds but wants someone else to do it for you This might also be described as the ‘‘we’re too busy’’ syndrome. An organization wants to raise additional money or initiate a fundrais- ing program, but it does not want to take the time or commit the staff resources to do so. Yes, the organization is committed to rais- ing the money. It’s just that they don’t want to do it. Handing off the responsibility to an outside consultant seems like the easy way
E1C01_1 01/28/2009 8 8 chapter 1 no, we dont need a consultant! to make things happen—just pay the person or ﬁrm to do the fundraising, get the reports, and watch the money come in. The consultant will supply the needed expertise and do the asking, rarely needing to call on board or staff members. As was pointed out earlier, there may be legal issues, and the consul- tant or ﬁrm may in fact be classed as a solicitor depending on your state laws. But there are also strong philosophical differences among consultants and consulting ﬁrms over this approach. ‘‘On- site campaign management’’ is one of the services offered by many reputable ﬁrms and some individual consultants. In these arrangements the consultant or ﬁrm basically functions as a deve- lopment staff member for the organization. The arrangement is usually utilized for capital or other major campaigns and fre- quently involves a commitment by the organization to the con- sulting ﬁrm or consultant for on-site campaign management for a period of years. The assumption may be that the on-site person will take care of the entire campaign and there will be minimal involvement from staff and the board. The better ﬁrms that provide these services carefully lay out the expectations of the staff and board, as well as their own roles and responsibilities, in performing this service; often, this is done in the contract with the organization (see later chapter on contracts). However, other consultants may say that the organization needs to have minimal involvement in the effort—‘‘Don’t worry, we’ll take care of everything.’’ If you’re a consultant marketing to an organization that is reluctant to take on a major role in the fundraising effort, and another consultant or ﬁrm is marketing with the ‘‘don’t worry . . .’’ approach, it’s hard to compete. The one factor that may deter an organization from going the route of on-site campaign management is the often high cost of this service. This can be countered by on-site cam- paign management consultants who may point out that the costs represent only a small percentage of the campaign goal and
E1C01_1 01/28/2009 9 no, we dont need a consultant! 9 that they can be recovered through inclusion of the costs in the campaign budget. My belief philosophically is that an organization that is committed to raising the money but equally committed to not being part of the process or having only minimal involvement is usually not ready to carry out an effective fundraising effort. Yes, board members can be reluctant to ask people for money, and yes, the current development staff might see themselves as already pressed and overworked or might actually be in this situation. But, in my view, on-site campaign management can be a very easy way for an organization to wash its hands of fundraising and the necessary organizational work it entails. As an organization, you cannot have it both ways—you cannot commit to raising X dollars but opt out of the very real and important work an organization must carry out both to meet the goal(s) and to become even more effective overall. If your organization is headed in the direction of on-site campaign management, or even if it is just reluctant to commit to the work of a campaign, here are some key questions to consider: How cost effective in terms of the campaign goal will on-site campaign management be? If the consultant or ﬁrm promises they will handle almost every- thing related to the campaign, what do they really mean? What will be the actual roles and expectations of your board, your sen- ior staff, and your development staff? How much actual fundraising experience does the ﬁrm’s staff member or the consultant assigned to your organization to do the day-to-day work have? Is the experience with organizations similar to yours? Have you interviewed this person, or is some- one else from the ﬁrm doing the marketing to your organiza- tion? Who from the ﬁrm will manage this person? What is his or her experience, and how accessible will he or she be if you need to deal with an issue or problem?
E1C01_1 01/28/2009 10 10 chapter 1 no, we dont need a consultant! Has the ﬁrm/consultant generally been successful with its other projects? What do their other past clients have to say about their work, including the speciﬁc person to be assigned to your organization? Will the person assigned as on-site campaign manager actually be doing the gift solicitations, and if so, who from your organi- zation will also be involved with these solicitations? How will information and records be kept and conveyed to the organization? How will these be integrated with your systems and procedures, including your internal accounting and public reporting requirements? Aside from the dollars raised, what will be the other ‘‘leave- behinds’’ for your organization? How will your organization’s overall fundraising program be enhanced by this arrangement? What will staff and board learn from the process that can be carried forward and applied when the consultant or ﬁrm is no longer engaged? Will your board be any more engaged in fundraising at the end of the process? Will the fundraising carried out during the process be tactical (focused only on the campaign goal) or strategic (focused on the campaign goal as well as longer-term donor relations and orga- nizational needs)? For example, a consultant/solicitor might meet with a potential campaign major donor who expresses two options he or she is considering: a campaign gift now, or inclu- sion of the organization in his or her estate plans with a signi- ﬁcant portion of the estate to go to the organization. The consultant/solicitor may focus on the campaign gift so that it can be counted toward the goal; the best interests of the organi- zation might be served by the planned gift. Does the ﬁrm that offers on-site campaign management services also offer to do a feasibility study, and does it offer to package these two services? In my view, packaging these two services or connecting them in other ways might remove some objectivity
E1C01_1 01/28/2009 11 no, we dont need a consultant! 11 and prejudice the study to show a campaign should proceed, as it means continuing business for the consulting ﬁrm. My belief, which is tempered by the knowledge that there are very effective on-site campaign management ﬁrms, is that the best con- sulting relationship is a partnership, and the organization is com- mitted to working with the consultant as part of the process; it is not handing off work to others. I’ll continue to explore this belief throughout the rest of the book. When there is no commitment by the organization to follow through on the products and recommendations prepared by the consultants I am always amazed when an organization spends considerable money, time, and energy on a fundraising consulting process, such as a feasibility study, and then takes no action on the recommenda- tions and other materials prepared by the consultant or ﬁrm. Yet most of us who have been in the consulting business have experi- enced the ‘‘shelved’’ report and recommendations. This is not to say that my colleagues and I expect every single recommendation to be accepted by the organization. But we do expect action to be taken and organizational decisions to be made once we have done our work. One of my more positive experiences on this topic was working with a women’s organization and presenting my recommendations to its board of directors. Rather than thanking me for my work and re- port, and then going on to the next agenda item (a frequent occur- rence elsewhere), the board chair directed the board to discuss and vote on the acceptance or rejection of each speciﬁc recommenda- tion. As I remember it, most all of the recommendations were accepted as presented. Ideally, from my perspective, the organization’s volunteer leader- ship should both review and act upon the recommendations, as well as have the opportunity to meet in person with the con- sultant or ﬁrm representatives to hear and discuss the report.
E1C01_1 01/28/2009 12 12 chapter 1 no, we dont need a consultant! This can help head off a lack of follow-through as well as help ensure that the needed next steps are taken and that the leader- ship is involved (see the more extensive discussion of this later in the book). My contracts for studies and development assessments usually include the step of presenting my ﬁndings, analysis, and recommendations to the board of directors for their action. I try to make it clear that part of their responsibility is to take action, including, minimally, a vote to accept the report. At least this helps ensure the report becomes part of their agenda and that something happens with it. Yet many organizations often don’t have a top-down commitment to the consulting process and its outcomes. Sometimes there are vol- unteer and/or staff leadership who are skeptical of the consulting process. At other times the recommendations may not be what the organization or its leadership expected or wanted to hear; this is often the case when a feasibility study recommends not proceeding with a campaign effort (this can be one of the hardest messages to deliver). Occasionally, the decision to hire a consultant in the ﬁrst place originated with one person or only a few people and others only reluctantly agreed to it. And sometimes the organization is not clear from the start about what the process will be, the out- comes and products produced by the process, and the organiza- tion’s staff and board members’ roles and responsibilities. If your organization and its leadership is not committed from the beginning to being fully engaged in the consulting process, and if there is not a clear expectation of action on the results of a study or assessment, it is probably best not to engage a consultant or ﬁrm. When the organization or parts of it feel threatened by the use of outside consultants Bringing in an outsider, especially to carry out services such as assess- ing a development operation or conducting a feasibility study, can be very threatening to an organization. Development assessments,
E1C01_1 01/28/2009 13 no, we dont need a consultant! 13 in particular, may be seen by development staff as threats to their jobs, especially if they were not involved in the decision to retain a consultant or ﬁrm. Campaign consulting services might appear to be less threatening to development staff, especially if they see these services as not signiﬁcantly adding to their workload. At other times, especially when a board has decided to retain consul- tants with little input from the senior staff, the staff itself might feel uncomfortable or threatened with the process. This can be even more true when staff do not have a clear idea of why the consul- tants are ‘‘really’’ there or feel there is a ‘‘hidden agenda’’ underly- ing the consulting process. At the end of the process, the organization or parts of it may also see themselves as threatened by the outcomes. This is often true if the recommendations for action include major operational changes or reorganization, or are seen as adding to the workload of staff who feel they are already overburdened. Sometimes the number of re- commendations for action can itself seem overwhelming and im- possible to achieve and the reaction is ‘‘we can’t possibly do all that.’’ As most consultants will readily acknowledge, organizational change itself can be threatening, especially when there is a long history of doing things a certain way. The better consultants can help an or- ganization that generally resists change by easing them into the change process and ensuring that the steps recommended are in keeping with the general culture of the organization, while at the same time being achievable. When everyone is already too busy to work with the consultants Hiring a consultant involves more than just selecting a person or peo- ple to do the work and receiving reports or a ﬁnal report. The bet- ter consulting contracts outline both the work of the consultant or ﬁrm and the expectations of the organization’s staff and board dur- ing the consulting process (see Chapter 9). These expectations may include: meetings at speciﬁed intervals; providing access to and/or
E1C01_1 01/28/2009 14 14 chapter 1 no, we dont need a consultant! setting up meetings with key individuals; preparing and/or sending correspondence along with selected materials to individuals (such as letters inviting people to be interviewed for a feasibility study); providing access to reports and records; writing or editing descrip- tive materials on the organization (such as a case); and ensuring that the consultant or ﬁrm can report to the organization’s board. All of these, of course, involve time commitments from the organiza- tion’s staff and, usually to a lesser extent, the board. At times the staff and board of an organization seem to treat the consultant or ﬁrm as more of an imposition than someone who is there to help. In part, it is up to the consultant or ﬁrm to be very clear and spe- ciﬁc up front about what is expected from the organization. But it is also up to the organization to follow through. Consultants usually operate within a deﬁned time frame spelled out in the contract. The time frame may be directly related to speciﬁc events at the organization, such as a scheduled board meeting when a ﬁnal report from the consultant or ﬁrm is expected, or the planned implementation of a capital campaign effort. Or the time frame may be related to other projects and services being provided elsewhere by the consultant or ﬁrm. So when the organization’s staff and/or board are ‘‘too busy’’ to re- spond to the needs of the consultant in a timely and often agreed- to manner, the entire process can be disrupted. For example, the consultant may need approval of a case document before it is sent out along with an invitation letter or e-mail to prospective feasi- bility study interviewees. I’ve had some clients who were ‘‘too busy’’ take six to eight weeks to turn around a draft case; this same client then asked why I could not meet their deadline for the draft ﬁnal report and recommendations. I had to explain that the three- to four-month time frame for the entire study process, which had been geared to their March board meeting, could not now be completed until late April or early May because of their delay with the case.
E1C01_1 01/28/2009 15 no, we dont need a consultant! 15 When the use of consultants is seen as a liability rather than an investment Consultants cost money. Regardless of the background and experi- ence of the consultant or ﬁrm and your organization’s needs, there will be a cost associated with the services. Organizations can see the costs associated with a consultant as a liability rather than a cost-effective way to deal with an issue or help with planning. Is an investment of $25,000 to $30,000 (actual costs may be higher or lower, depending on a number of factors) for a feasibility study that presents a clear and doable plan for a major fundraising cam- paign with a goal of $1 million an effective use of organizational dollars? Is a $12,000 development assessment that results in the doubling of donated funds a good investment? Consultants cannot guarantee results (and beware of those that do). But seeing consultants only in terms of their costs rather than in terms of the potential beneﬁts to the organization and cost- effectiveness is akin to the tendency of some nonproﬁts to cut pro- ductive fundraising operations to save money. Consultants need to deﬁne speciﬁc expected outcomes but also need to be clear as to what the preconditions are for the organization to achieve these outcomes, as well as the basis for their conclusions. Several years ago I was asked to do a feasibility study for an organiza- tion that was exploring conducting its ﬁrst endowment campaign. As I interviewed current and potential major donors, it became clear that the executive director was frequently seen as remote and unresponsive to their concerns. It also became apparent that the development operation was not as effective as it could be, with some major donors not receiving thank-yous in a timely manner, too many and too frequent solicitations, and other concerns. My recommendations to the board had to be presented carefully and honestly, with my basic conclusion being that the much-desired endowment campaign should not proceed (this is a different case than the one presented earlier). The organization’s board decided
E1C01_1 01/28/2009 16 16 chapter 1 no, we dont need a consultant! to take the necessary and difﬁcult measures to correct these situa- tions; it was also, I believe, the ﬁrst time my report and recommen- dations received applause from the board as well as the comment, ‘‘You didn’t tell us what we wanted to hear—you told us what we needed to hear.’’ Was the expense of hiring me to do the study a liability, especially given that I could only recommend steps other than undertaking the endowment campaign? Based on the infor- mation I heard from many of the interviewees as well as the con- clusions of the board itself that the information was accurate, any attempt to carry out an endowment campaign at that point in time would have resulted in both failure of the campaign and setting back the organization a number of years in terms of its relations with its major donors. When the decision to hire will be made by one or two individuals Who should decide to hire a consultant? One strong sign of poten- tial trouble is one or two people in the organization making the decision to hire a consultant, especially when the decision is made without consultation with other stakeholders, such as the board or other staff. If I become aware of this situation, my usual tendency is to bow out of any further marketing. Hiring without the consensus of the organization’s leadership, whether it is the board or the staff, may indicate that a few individuals have their own agenda. I learned my lesson about having a few individuals making hiring decisions several years ago. The consulting ﬁrm I was working with informed me that we had a new major client and, since it was located near my ofﬁce in Washington, D.C., I was assigned as the client manager. I called the client’s ofﬁce to schedule an appointment to meet with the executive director and spoke with her administrative assistant to set the appointment. When I arrived at the client’s ofﬁce, I told the receptionist who I was, and was asked to take a seat in the waiting area. I could see the
E1C01_1 01/28/2009 17 no, we dont need a consultant! 17 executive director through her open ofﬁce door as she worked on some papers and made a few phone calls. About 45 minutes past my appointment, she came out of the ofﬁce and asked who I was and what I wanted. I again explained that I would be the primary consultant working with her and the organization. She did not seem to know much about our ﬁrm’s selection or what we had contracted to do with the organization, and appeared to be more than a little surprised that I was even there. As I tried to continue my explanation of our planned work, it also became obvious she had not seen our contract with the organization; I handed her a copy and went through it in detail with her, but she still appeared to be upset. It became increasingly obvious that she was never part of the decision to hire a consulting ﬁrm, had no in- volvement in the hiring process, and had no familiarity with what we were to do. All of that had been handled ‘‘elsewhere’’ without her being informed. The consultant–client relationship never really improved, especially between the executive director and us. She constantly ques- tioned what we were doing and why, wanted detailed reports on how we were spending our time, and threw up roadblocks to our work. At one point she demanded a complete detailed re- port on our use of time for her organization; our ﬁrm kept very accurate time records, and a short time later I presented her with a printout of about 70 to 75 pages showing how every member of the consulting team had spent time since the inception of the contract. Her only comment was, ‘‘I didn’t want all of the details.’’ Not long after, our ﬁrm terminated its relationship with the client. The lesson learned and its relevance to your organization? Ensure that as many of your volunteer and senior leadership as possible, as well as those who may be most affected by the work of the consultant (such as your development staff), are fully informed and involved wherever appropriate in the selection process. Leaving
E1C01_1 01/28/2009 18 18 chapter 1 no, we dont need a consultant! the decision to a few individuals may well cause both resentment and a lack of understanding of why consultants are being hired on the part of those not involved in the decision. Of course, the ﬁnal decision may be made by a few people, such as an executive committee, a senior staff group, or the full board. My preference is to always ensure that both the senior staff member (the executive director or CEO) and the board chair sign off on the contract. This helps establish that both leaders have agreed to the contract and, hopefully having read it, understand what the process, costs, roles, goals, products, and organizational involve- ment will be. I also prefer to market to the entire board or at least a subgroup of the board, as well as to the senior and other staff, whenever possible. Often, a standing committee or a special com- mittee will be heading up the interview and selection process at the start, and the ﬁnalists will be interviewed by a wider group from the organization. Once a consultant or ﬁrm has been hired, regardless of how the deci- sion was made, it’s always a good idea to have staff, especially those directly involved, and board members meet with the consultant. There should be ample opportunity for the consultant to explain his or her process and the products or outcomes, answer questions, and get to know staff and board members. Consultants often sug- gest this step, and some include it in their contracts as part of the expectations of the organization. When you’ve looked at only one consultant or ﬁrm and believe that’s the one for your organization Every individual consultant and every consulting ﬁrm has a particular style of working with clients. Some consultants and ﬁrms are very effective at marketing, while others might not be so effective in marketing but strong on the service delivery side. Interpretations of how to best meet your needs through consulting services can also vary considerably, as can other factors, such as the costs of the
E1C01_1 01/28/2009 19 no, we dont need a consultant! 19 services, the experience and backgrounds of the consultants, and the successes with other clients. Occasionally, I’ve been the ﬁrst prospective consultant ‘‘in the door’’ for interviews and, at the end of the meeting, have been asked, ‘‘When can you start?’’ I explain I’ll be a lot more comfortable working with the organization if I know they’ve also interviewed at least two other ﬁrms; I often suggest a few colleagues in other ﬁrms or independent consultants they should also talk to before making a decision. In fact, I feel much better knowing an organi- zation has interviewed other ﬁrms or consultants because I know they’ve at least learned there are different consulting styles and methods of carrying out the work. I also know that organizational cultures vary considerably and that it is critical for the success of the consulting process that the consultant’s way of doing things mesh with the organization’s purpose, stakeholders, and culture. If your organization is seeking to hire a consultant or ﬁrm, get some comparison basis among three or more possible sources for services before making a decision. I’ll talk in more detail later about some things to look for during the selection process, but here it is sufﬁ- cient to again point out that your organization needs to actively explore your options, meet with prospects, and discuss differences as well as pluses and minuses of each prospect in terms of your needs and their experiences. You also need to be sure your organi- zation does not avoid taking the following critical step. When you have not checked the references Here’s a good reason your organization does not need a consultant: you don’t know how effective the person or ﬁrm has been, except what you’ve been told directly by the potential consultant. As was mentioned earlier, some consultants and ﬁrms are masters of mar- keting. They can talk at length about how effective and successful they are, the many organizations they have worked with, and why they are cost-effective for your organization. A critical part of your