Ever considered being a fundraising consultant?
Our experience is that quite a lot of fundraisers at some point in their careers think about how it would be to transform from being an employed fundraiser to working as a fundraising consultant. But the gap between daydreaming and really taking the step and going into business for yourself as a fundraising consultant seems to be quite a big one.
Regularly fundraisers with the ambition to become a consultant come to us for advise, because they are uncertain about what exactly they could expect and what their chances are as a fundraising consultant. Based on our experience as consultants for the last 15 years, we always ask them the same five questions. In this blog we would like to share these questions with you, so that you can decide for yourself if perhaps there is a bright future for you in fundraising consulting.
Question 1: Are you a fundraising expert?
It’s rare that a CEO or a fundraising manager will entrust their fundraising program to a fundraising consultant who has never raised a penny him/ herself, or to a consultant who doesn’t have a high level of expertise in a specific fundraising area. An expert is defined as having 10.000 hours of experience with the topic they claim as their expertise. If you use a traditional 40-hour workweek as your ruler, that means you need at least 5 years of full time experience with (a specific form) of fundraising in order to call yourself an expert.
And to stay an expert, you will have to be determined to continuously keep working on building your skills. You can charge higher fees when you have more knowledge and expertise. How do you pick your field of expertise? Don’t worry, usually it picks you. Go with what interests you, especially if little is known about it or if it can still use a lot of development. But make sure it isn’t so avant-garde that nobody needs it.
At the same time, it’s also good to realize that you don’t have to be the world’s foremost expert in your field. Being an expert means that you have more insights than your client does on a specific area of expertise. You will have to accept that there will always be someone who knows more than you about certain fundraising techniques and programs. You should not let your awareness of your shortcomings keep you from accomplishing all that you might be able to do for your clients.
In order to jumpstart your expert status, there are numerous things you can do, like teaching a course, having an article published in a fundraising magazine/ blog, writing a book or providing services to a high-profile client.
Question 2: What ethical rules will you follow?
Ethics are important for anyone in business. They’re particularly important to consultants and they are crucial to fundraising consultants. This is directly related to the fact that for fundraising organizations their trust is their most valuable economic asset, hard to create but easy to destroy.
As a consultant you often get access to the confidential and proprietary inner workings of the organization. Therefore it is logic that NGO’s only want to work with consultants that pass all integrity tests. To gain a high level of trust from your clients you will have to show them what ethics you follow.
When we started our consulting firm Nassau five years ago we immediately joined EUConsult. This is a European network of senior, highly professional, ethically-minded consultants serving the European not-for-profit sector. A key part of membership is the commitment to the EUConsult Code of Ethics. EUConsult Members agree they will comply with the EUConsult Code of Ethics in their services for and about not-for-profit organizations. They shall maintain good professional standards and financial integrity, protect and promote the reputation of the not-for-profit sector, protect and promote client interests and they shall provide good service for fair compensation.
No single code of ethics is appropriate for everyone, but some very basic ethical beliefs can and should form the basis for the code of ethics that you follow. You can write your own, personal code of ethics or you can chose to underwrite an existing code like the one of EUConsult.
Question 3: Do you want to be a consultant or a contractor?
A lot of people that say that say they want to become a fundraising consultant, actually mean that they want to become a contractor. What’s the difference? Well, it’s likely to get a different definition of consulting and contracting from every person you ask, but you can basically define each this way:
Consultants have technical expertise plus strong management skills. They define and lead projects with a defined outcome, and are expected to be self-directed in fulfilling their obligations. A consultant is brought in when the organization has a need and either isn’t able, doesn’t wish to, or doesn’t know how to take care of it, and doesn’t have time or desire to figure it out themselves. The consultant analyses the problem and decides how to solve it, often using methods or tools that the client hasn’t even thought of. The consultant is self-directed and does whatever it takes to deliver the solution that meets the client’s needs.
A contractor essentially acts as a temporary employee. The contractor has technical expertise, contributes as part of a larger endeavor, and is expected to be managed. He or she is told what to do, how to do it, and when it needs to be done.
How do you judge your own capabilities and how do you want to position your business? It comes down to whether you simply offer your time, or you offer solutions to problems.
There are lots of talented fundraisers that are very capable in doing what someone else tells them to do in order to create good work. But that’s something totally different from having the creativity, experience and initiative to assess a client’s needs, determine the best way to solve the crisis and implement and deliver the solution. Plus, a consultant does all this very independent. Be honest to yourself, what profile fits you best?
Generally, a consultant is paid higher fees than a contractor. Of course, this depends on a lot of factors, such as the demand in your market, your skills, and the client’s need.
Question 4: Do you truly enjoy bringing in new clients?
Consistently attracting new clients is the most challenging part of running your consultancy business. You need a constant stream of future clients to keep your consulting business healthy. We personally set aside 35% of our time prospecting for new clients. Since it is such an important part of the job, you really have to like selling your services and chasing new work. Especially the first few years as a consultant, you shouldn’t expect clients to come to you. Of course, it would be great if you would have to beat customers off with a stick after some years, but reality is that you have to keep working hard on getting new projects in.
This doesn’t mean that you should become a used car salesperson that never stops smiling and is patting the prospect’s back every few minutes. A clever sales pitch won’t bring in any consultancy jobs. Selling consultancy work is basically about starting the consulting process before you’re officially hired. Clients will hire you when they believe you fully understand their problems, you have the skills to help them, and the problem is worth solving. By structuring sales meeting so that you’re questioning your potential client about their problems and exploring the opportunities for solving them, you’re positioning your expertise far better.
Question five: How are you going to make money? And how much?
You might think that you will make a lot of money when you go into business for yourself. Well, reality is that a lot of consultants end up netting less money than they made as employees, especially the first few years. Don’t underestimate the fact that as a consultant you will have to set apart around 30% of your income for paying for all your own benefits (if you can even afford them): vacations, insurances, sick leave, maternity, pension, etc.
If you consider becoming a consultant, you will also have to ask yourself if you can deal with a high level of uncertainty. Every year you will start with zero and your total yearly income varies year to year. Financially, there will be good times and there will be bad times, and you need to learn to live through them both.
You will also have to think about how you will charge. By the hour, day, week, month, or project? Or will you require a retainer in addition to hourly? There are all kinds of arrangements for getting paid, and none is really superior to any other.
Customers often prefer fixed-bid projects, because they know in advance what they’re going to pay. For the consultant it can be problematic, because there is a reasonable chance that you will be working a long time for free. That’s why a highly detailed specifications is needed that list exactly what is expected.
Hourly billing is the easiest to manage: you work an hour, you invoice the customer for a hour. However, a billing per hour contract requires that you have earned a great deal of your customer’s trust.
Setting their consulting fees is a very difficult task for many new consultants. Typically, they price their fees too low, mainly because they underestimate their operating costs. Another reason to start with a lower fee could be to attract attention by competing on price. This is probably not a good strategy, since it will be hard to substantially raise the fees later.
We would advise you to spend enough time on a serious process of introspection and skill inventorying before starting as a fundraising consultant. Hopefully our five questions can help you in that process. The more convinced you are about why you could be a great fundraising consultant, the better you will do. To say nothing of long-term personal happiness. After all, making a chance in your career is an important part of life. Good luck!
About the authors: Ramses Man and Vera Peerdeman both founded Nassau, a Dutch fundraising consulting firm specialized in relationship-based fundraising and talent development of fundraisers.