New Group Works to Sort Out the Growing Field of Philanthropy Consultants

IN THE TRENCHES

Just about anyone can call him or herself a consultant. And, as many nonprofit veterans can attest, just about anyone does.

Ask Joanne B. Scanlan, who served for 22 years as an officer at the Council on Foundations, in Washington — where she was often required her to pass on advice to grant makers about hiring outside help.

She recalls one example of a foundation leader who, she says, “was notorious for abusing grant seekers with rude remarks” and for treating colleagues similarly, but whose “arrogance didn’t included superior intelligence or grant-making skills.” When the executive, who she declined to name, was dismissed by the group’s board, Ms. Scanlan says, the person hung out a consulting shingle and demanded assignments from former co-workers and grantees.

“I shudder to think of the advice they would have received,” she says.

Now a nonprofit-management consultant herself in Bethesda, Md., Ms. Scanlan observes that a lot of other advisers are simply marking time between full-time jobs, and do not necessarily have the skills or experience to give others guidance.

On the other hand, she says, demand for that guidance is growing. “An awful lot of people, when they are forming foundations, look for advice,” she says. “We know consultants do a critical job in getting them started on the right foot and in developing grant programs.”

The need to sort out the field of advisers to grant makers is becoming more urgent, Ms. Scanlan notes, since both the number of foundations and the consultants who serve them has exploded over the past decade. Although no concrete figures exist for the number of consultants currently serving the U.S. nonprofit field, the Alliance for Nonprofit Management, in Washington, an umbrella group for consultants, pegs the population at between almost 5,000 and just over 10,000. The number of grant makers, by contrast, is more than 105,000, according to the Internal Revenue Service.

But the challenge for the Council on Foundations and others may lessen due to the creation two years ago of the National Network of Consultants to Grantmakers, a group that aims to be the first to provide standards for philanthropy advisers.

Thus far, the network has hammered out a code of ethics for philanthropic consultants, but many of its programs are still in development. And some consultants who have joined the network say they are taking a “wait and see” attitude about whether it can deliver on plans to foster integrity in the field and encourage consultants to swap information.

Learning and Service

Lee Draper, leader of a philanthropic advisory service in Santa Monica, Calif., who sparked the network’s creation in 2005, says the idea for it to came after she had participated in failed attempts by grant-making associations to bring consultants together to discuss their roles and evaluate the state of the foundation-consulting field.

Consultants, she says, “have unique views of the philanthropic sector and experience, and now the field is changing, and many skills are needed to help in the expansion of philanthropy and for donors to do their work well.”

According to Ms. Draper, who serves as the network’s chairwoman, the group is intended to be “part ‘learning community’ and part service organization.” The network, she says, will highlight trends consultants see emerging in philanthropy, and allow them to exchange information with each other and other organizations that provide services to grant makers.

Currently, the network, which began a membership campaign last summer, has approximately 108 members and includes such prominent organizations as Rockefeller Philanthropy Advisors, in New York, and the Philanthropic Initiative, in Boston.

Levels of Membership

To receive full membership in the National Network of Consultants to Grantmakers, individual consultants and consulting firms must have worked for at least five grant makers during the past three years.

Consultants who don’t meet those requirements are offered associate membership in the network, says Ms. Draper: “We didn’t want to create an exclusive club; we didn’t want to be inaccessible and not engage with newcomers in field.”

Associate members can enter into mentor-type relationships with full members, she says.

The group also offers affiliate membership for people who work in the grant-making field but who aren’t and don’t intend to become consultants. Memberships for individuals cost $350 each year, and organizations pay $1,000 annually for up to five employees to receive network benefits.

Money to start the network has been provided by the David and Lucile Packard Foundation, in Los Altos, Calif., and the Wallace Alexander Gerbode Foundation, in San Francisco. Packard is providing $50,000 over two years, which has enabled the network to hire a part-time project manager. A $5,000 grant from Gerbode is being used to help the network increase its membership and develop its programs.

Gerbode provided the grant because officials recognized that the use of consultants had increased sharply in recent years, says Tom Layton, the grant maker’s president.

“Many consultants bring significant expertise and valuable expertise to foundations, although some more than others,” he says, adding that the grant was intended to “encourage professionalism and self-regulation” among philanthropy advisers.

Following a Code

The network’s code of ethics, which is posted on the network’s Web site, includes 15 principles related to issues such as charging reasonable fees, avoiding conflicts of interest, respecting the intellectual property of professional peers, and placing the client’s and public’s best interests first.

One network member — Melissa A. Berman, president of Rockefeller Philanthropy Advisors, in New York — hails the code as a critical step.

“It’s very important that as philanthropy becomes such a centerpiece of American life, and more and more people turn to philanthropy advisers, that we have a real set of professional standards the way lawyers, doctors, and accountants have,” says Ms. Berman.

But other network members remain skeptical that its idealism will automatically translate into good professional behavior.

“The consultant field is so anonymous,” says Bill Somerville, founding president of Philanthropic Ventures Foundation, in Oakland, Calif., and a consultant to grant makers. “Just because they have a piece of paper doesn’t make someone good.”

In response to such criticism, Ms. Draper says that the network’s membership includes many consultants who had already instituted ethics standards that they promise clients they will follow. “The question of policing the ethics of members has been brought up by a steering group,” she says, “but we felt it is better to defer that to a little bit later.”

Although most consultants are for-profit, Ms. Draper doesn’t see competition as a threat to the collegial network she and others are building. “Although we compete with each other in certain circumstances,” she says, “consultants have differing styles, methodologies, and locations.”

As a result, she says, “competition isn’t intense,” because clients are usually seeking consultants who fit a particular niche.

“What I have found is that the vast majority of my colleagues are anxious to share information, and that the benefits of establishing a learning community of professionals far outweigh concerns about competition,” she says. “They are willing to discuss everything.”

The network’s five meetings so far have been held over the past two years in conjunction with gatherings of foundation employees, such as the Council on Foundations’ annual conference. Currently, committees of network members are studying information-technology issues, developing programs and services for members, and investigating ways to make the network more diverse.

The group also plans to publish an online directory of consultants in late fall.

Chances to Collaborate

Some nonprofit groups see potential for collaboration in the network’s emergence.

Kathleen Enright, executive director of Grantmakers for Effective Organizations, in Washington, a coalition of grant makers working to build strong and effective nonprofit organizations, says she considers members of the National Network of Consultants to Grantmakers “potential allies in moving our agenda.”

Says Ms. Enright, “There are some grant-maker practices that get in the way of nonprofits achieving what they must, and practices that are really supportive. And sometimes those assisting funders with these positive practices are consultants.”

To help consultants with their work — as well as to advance the work of her organization — she has made her group’s publications on topics such as grooming nonprofit leadership available to network members at no cost.

Some members have their own hopes for the network.

Denise Cavanaugh, a consultant in Washington, says she persuaded her firm to sign up for the network because there are so few opportunities for people in her profession to share ideas.

“Consultants are usually independent,” she notes.

She’s “interested in joining a “learning community,” she says, that can potentially help speed up innovative practices in the field.

“I was willing to join the group for a year or two and see if that’s what would develop or not,” she says. “Foundations are quite an idiosyncratic field. They have many different ways of conducting their business. I’m looking for ways for foundations to become more effective.”

Some observers say that the network’s creation is very timely.

“A lot of alliances need to be built among social-sector organizations and foundations to think strategically to solve issues,” says Marianne Hughes, a network member and executive director of Interaction Institute for Social Change, a consulting group with offices in Boston, San Francisco, and Belfast, Northern Ireland. “We want to help build the capacity to do that.”

She adds, “Being part of a group who is learning together and from one another is terribly appealing. My hope is that we consultants use it for learning and evolving and new ideas and innovations, because that’s what it’s going to take in the next 10 years. We’ve just gotta move it.”