Fundraising Consultants E-Book

E. A. Scanlan

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: The AFP/Wiley Fund Development Series
• Sprache: Englisch

Seitenzahl: 337

Veröffentlichungsjahr: 2009

Beschreibung

Fundraising Consultants

Lowering net costs, realizing more money, and securing larger donations are just a few of the advantages to hiring a professional fundraising consultant. But how can you know you're picking the right consultant for your organization?

Filled with invaluable information to help you identify, select, retain, and work with development/fundraising consultants, Fundraising Consultants includes practical advice, tips, guidelines, possible outcomes of consulting, exemplary stories, and other useful information for nonprofit organizations of any size considering the use of development/fundraising consultants.

Author Eugene Scanlan—a leading fundraising consultant—offers step-by-step guidance and resources to help you in your decision to use consultants, and then shows you how to go about getting the right one for the job. Its numerous case studies and practical tools—including sample invitation letters to consultants, sample requests for proposal, sample consulting budgets, samples of reports, and recommendations—equip you to implement the concepts introduced in the book.

Part of the AFP/Wiley Fund Development Series, this guide covers everything you need to know to make critical decisions for selecting and working with fundraising consultants and explores:

• The request for proposal
• Where to find the best consultant
• Using the Internet and other sources in your search
• The proposal for services
• Pre- and post-proposal interviews
• Selecting the right consultant
• Drawing up a contract
• Working with your consultant

Brimming with ideas, concepts, and information that will help you and your organization through the consultant selection and working process, Fund-raising Consultants reveals what your nonprofit should look for when considering hiring a consultant or firm.

Intended as a guide for any nonprofit organization considering hiring a consultant—to help the organization see if it is ready to raise money, to assist it in raising money, and/or accomplish the goals a good fundraising consultant can help the organization achieve— Fundraising Consultants is your insider guide to using fundraising consultants effectively.

Leseprobe

Table of Contents

Title Page

Copyright Page

The AFP Fund Development Series

THE ASSOCIATION OF FUNDRAISING PROFESSIONALS

2008-2009 AFP PUBLISHING ADVISORY COMMITTEE

Dedication

Acknowledgements

About the Author

Introduction

BUSBOY’S HOLIDAY

ABOUT THIS BOOK

GROWTH OF THE CONSULTING FIELD

A VARIETY OF CONSULTANTS AND STYLES

SUCCESSFUL CONSULTING

BREAKING NEWS: LAWS TO GIVE YOU PAUSE

CHAPTER 1 - No, We Don’t Need a Consultant!

SUMMARY

CHAPTER 2 - Yes, We Really Need a Consultant!

SUMMARY

CHAPTER 3 - What Should We Do First?

STEP ONE: KNOW YOUR ORGANIZATION

STEP TWO: IDENTIFY YOUR ORGANIZATION’S REAL NEEDS

THE NEXT INTERNAL STEPS

SOME POSSIBLE ALTERNATIVE ARRANGEMENTS

SUMMARY

CHAPTER 4 - The Request for Proposal—A Short Introduction

THE WRITTEN EXTERNAL RFP

THE WRITTEN INTERNAL RFP

THE UNWRITTEN CONSENSUS RFP

ADVANTAGES OF THE INTERNAL RFP AND RFP CONTENTS

SUMMARY

CHAPTER 5 - Finding Consultants—Where Are They?

THEY’RE EVERYWHERE, THEY’RE EVERYWHERE!

USING YOUR OWN ORGANIZATION AS A SOURCE

ASKING OTHER ORGANIZATIONS

USING WORKSHOPS, SEMINARS, AND CONFERENCES AS SOURCES

PROFESSIONAL ORGANIZATIONS AS SOURCES

PROFESSIONAL ORGANIZATIONS OF CONSULTANTS AS SOURCES

USING THE INTERNET

SUMMARY

CHAPTER 6 - Information, Please!

THREE WAYS TO FIND CONSULTANTS: A QUICK REVIEW

USING THE CONSULTANT’S WEB SITE OR PRINTED MATERIALS

USING EXAMPLES OF THE CONSULTANT’S WORK

REFERENCE CHECKS AS CRITICAL SOURCES

USING INFORMAL CONTACTS WITH COLLEAGUES

USING COLLEAGUES ACTIVE IN PROFESSIONAL ASSOCIATIONS

USING AN ONLINE SEARCH ENGINE

SUMMARY

CHAPTER 7 - The Proposal for Services

OVERVIEW OF PROPOSALS

OBJECTIVES OF PROPOSALS

A SAMPLE PROPOSAL OUTLINE

ANALYZING THE PROPOSAL’S CONTENT

WHO DOES WHAT

CONFIDENTIALITY

FEE AND EXPENSE STRUCTURES IN PROPOSALS

TIMELINES

WHO WILL DELIVER THE SERVICES?

REVIEWING AND EDITING MATERIALS

REGISTRATION AND CONTRACT FILING ISSUES

LEGAL OR ETHICAL DISCLOSURE

SOLICITOR REGISTRATION

PRODUCT/OUTCOME DEFINITION

SEEKING A REVISED PROPOSAL AND NEGOTIATING

SUMMARY

CHAPTER 8 - The Interview

OVERVIEW OF INTERVIEWS

FOCUS OF PREPROPOSAL INTERVIEWS

FOCUS OF POSTPROPOSAL INTERVIEWS

ALTERNATIVE INTERVIEW METHODS

SUMMARY

CHAPTER 9 - Selection and the Contract

IMPORTANCE OF GROUP PROCESS

CONTRACT PREPARATION ALTERNATIVES

CONTENTS OF CONSULTANT-PREPARED CONTRACTS

REVIEW OF CONTRACTS BY ATTORNEYS

SUMMARY

CHAPTER 10 - Working with Your Consultant

KEEPING FOCUSED ON THE PROJECT

CONSULTING PARTNERSHIPS

THE STAFF TRAP

THE FIRST DAY AND FIRST STEPS

MATERIALS FOR REVIEW

SHARING UNWRITTEN INFORMATION

WORKING ARRANGEMENTS

TIMELINES AND MEETING REVIEW

PROCEDURES DEFINED

DEFINING A PROCESS FOR WRITTEN MATERIALS REVIEW

THE CASE

LETTER OF INVITATION TO PROSPECTIVE INTERVIEWEES

INTERVIEW QUESTIONNAIRE

CAMPAIGN MATERIALS

POLICIES AND PROCEDURES

MEETING MATERIALS

TRAINING MATERIALS

PROSPECTING MATERIALS

OTHER WRITTEN MATERIALS

CONSULTANTS AS CREATIVE RESOURCES

EVENTS

GENERAL ADVICE AND COUNSEL

SOME GENERAL CONSIDERATIONS

KEEPING THE CONSULTANT INFORMED

PLANNING AND SCHEDULING

MEETINGS AND CONFERENCE CALLS

YOUR CONSULTANT’S OTHER SKILLS

DEALING WITH ISSUES

PAYMENT ISSUES

SOME BACKGROUND POINTS

SUMMARY

CHAPTER 11 - Wrap-up and After

THE CONSULTANT ALWAYS LEAVES

DELIVERING THE REPORT AND RECOMMENDATIONS

WHAT’S NEXT?

WHEN NOTHING HAPPENS

ENSURING FOLLOW-THROUGH

END-OF-CAMPAIGN DEBRIEFINGS

SUMMARY

CHAPTER 12 - Conclusions

SOME FINAL THOUGHTS

WHO GETS THE CREDIT?

THE BEST FUNDRAISING CONSULTANT

Additional Selected Readings

Index

This book is printed on acid-free paper. ♾

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 permitted 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 [phone], 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, Hoboken, NJ 07030, 201-748-6011, fax [phone], 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 completeness 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, incidental, consequential, or other damages.

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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.

eISBN : 978-0-470-46752-7

1. Fund raising. 2. Nonprofit organizations—Finance. I. Title. HG177.S293 2009 658.15’224-dc22 2008045554

The AFP Fund Development Series

The AFP Fund Development Series is intended to provide fund development professionals and volunteers, including board members (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 information on fundraising, charitable giving, and related subjects. The Association 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 States, Canada, Mexico, and China, working to advance philanthropy through advocacy, research, education, and certification programs.

The association fosters development and growth of fundraising professionals and promotes high ethical standards in the fundraising profession. 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, CFREPrincipal Consultant, Your Nonprofit Advisor

Linda L. Chew, CFREDevelopment Consultant

D. C. Dreger, ACFRESenior Campaign Director, Custom Development Solutions, Inc. (CDS)

Patricia L. Eldred, CFREDirector of Development, Independent Living Inc.

Samuel N. Gough, CFREPrincipal, The AFRAM Group

Audrey P. Kintzi, ACFREDirector of Development, Courage Center

Steven Miller, CFREDirector of Development and Membership, Bread for the World

Robert J. Mueller, CFREVice President, Hospice Foundation of Louisville

Maria Elena NoriegaDirector, Noriega Malo & Associates

Michele PearceDirector of Development, Consumer Credit Counseling Service of Greater Atlanta

Leslie E. Weir, MA, ACFREDirector of Family Philanthropy, The Winnipeg Foundation

Sharon R. Will, CFREDirector of Development, South Wind Hospice

John Wiley & Sons, Inc.:Susan McDermottSenior Editor (Professional/Trade Division)

AFP Staff:Jan AlfieriManager, New Product Development

Rhonda StarrVice President, Education and Training

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.

Acknowledgments

Somewhat 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 Fundraising 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 Washington, 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.

About the Author

Eugene “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 president 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 development 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 International Affairs, George Washington University; and as a member of the advisory council for the George Mason University Nonprofit Management 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.

Introduction

BUSBOY’S 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. Jimmie Alford, the founder, had a long history of work with the Boys and Girls Clubs of Chicago, including most recently serving as the chief development 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) organization to a small, one-year-old consulting firm was seen by some colleagues 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 organizations 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 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 proceeded 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 consulting 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, 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 fundraising 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 & Associates, 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 consultants serving nonprofit organizations in other ways. You will also get my opinions about consultants, the process, and some possible roadblocks 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 experiences, 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 conversations with colleagues in the consulting business, but also specifically out of a then-National Society of Fund Raising Executives (NSFRE, now the Association of Fundraising Professionals, or AFP) workshop I did in 1994 for the local NSFRE chapter in Washington, D.C. The session was entitled “Consultants: The Good, the Bad, and the So-So” and focused on two major areas: “When you should consider using a consultant” 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 nonprofits look for or should look for when considering hiring a consultant 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 aggressively into nonprofit consulting, including fundraising. The other extreme 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 Washington, D.C., area alone there are probably hundreds of individual consultants; small (one- to three-people) firms; a few larger firms, including 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 informally 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 conferences 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 organization’s progress. They can become part of “the family” and true partners, 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 consultants, 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 consulting relationship, some operate under broad principles but are more flexible 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 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 tagging 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 consulting 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 involvement 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 presented 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 organizations can take major jumps, if they want to, with or without the help of consultants.

BREAKING NEWS: LAWS TO GIVE YOU PAUSE

Did you know that many states have laws regulating fundraising consultants? 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 meeting 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 register, the roles the consultant can and cannot play within your organization, 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 consultant 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 review 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 executive director on foundation fundraising strategies. I was very impressed 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. However, a program for the reception was printed and on the back listed recent contributors, including my consulting company. Shortly afterward, 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 conducting 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 requirements 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 very comprehensive and complex rules and procedures for consultants and “solicitors,” including possibly registration and fees, bonding requirements, 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, definitions, 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. Enforcement 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 consultant functions as staff to manage the campaign (sometimes called “onsite 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 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.

CHAPTER 1

No, We Don’t Need a Consultant!

When 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 fundraising 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 fundraising 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 question 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 unwelcome answer). These simple questions and answers may conceal the real needs your organization has—some of which a consultant or consulting 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 leadership 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 consultant 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 fundraising is the issue. In this case there is not really a partnership with the consultant or firm. The organization hands the consultant the 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 solution 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 organization. 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.

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. Everything 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 negatively 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 relations 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 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 recommendation 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 apologized for how the meeting had gone. Later, I and other members of our consulting team at the meeting got together for a postmortem . 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 process, 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 possible 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 nonprofit 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 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 campaign 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 organizations 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 consultant.” 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.