September 5, 2002 | Read Time: 9 minutes
JOB MARKET
By Marilyn Dickey
When the executive director of a Pennsylvania nonprofit group needed to devise a strategic plan, she hired a consulting company. Two months later, she knew she had made a big mistake.
What Leeann R. Younger, head of Summerbridge Pittsburgh, got was a plan that was “full of fireworks but not enough substance,” she says, one that had great aspirations but no realistic way of getting there. She had hoped for an “operational plan” — a hybrid of a strategic plan and a business plan that would encourage grant makers and donors to increase their support. “It was clear we weren’t all on the same page,” says Ms. Younger, whose organization is an academic-support program for middle-school students. “The folks we were working with were stuck in their paradigm, which was that nonprofits don’t build business plans.”
When the contract ended four months later, she discovered that other nonprofit organizations had been similarly disappointed with the consulting company. In retrospect, she says, if she had made a few extra phone calls before hiring the consultants, it would have saved her a lot of time and expense.
Charities hire consultants to help with all sorts of things — fund raising, designing a Web site, setting up a budget, or leading a retreat. The impetus may come from the executive director or a grant maker, but regardless of why help is hired, say consultants and charity leaders, getting the most from a consultant requires researching the field to find the right person for the job, setting clear objectives from the start, and getting the details of the agreement in writing.
Last year, David S. Birdsell, a professor at the School of Public Affairs at the City University of New York’s Bernard M. Baruch College, conducted a study with two colleagues to find out what makes relationships between consultants and charities tick. They held a series of 10 focus groups with executive directors and consultants to share their experiences and raise issues that troubled them. Among the findings was a near-universal complaint about well-meaning grant makers who force their grantees to hire consultants.
“It is not unusual for a funding organization to recommend a consultant or even to insist on a consultant to either fulfill a contract or as a condition of receiving a grant,” says Mr. Birdsell, who plans to publish his study this month on the Web site of the Alliance for Nonprofit Management.
“Executive directors almost to a person think of this as meddling in what they do.”
When the impetus for hiring a consultant comes from a foundation — and especially when the foundation actually handpicks the consultant — executive directors have trouble accepting the consultant’s advice, and the consultant has a tough time accomplishing anything, says Mr. Birdsell. “It creates problems in disclosure,” he adds. “Executive directors, knowing the consultant works with the foundation, will be much less likely to air their dirty laundry that perhaps very much needs to be aired and are much less likely to provide the kind of full cooperation that undergirds real institutional change.”
Determining Needs
Consultants come in all varieties, says Carol Lukas, director of national services at the Amherst H. Wilder Foundation’s Center for Communities, in St. Paul, which offers advice to grassroots charities. Generalists take a global look at nonprofit organizations, but don’t delve deeply into any one particular area. Specialists may offer expertise in certain skills, such as fund raising, or in a particular field, such as the arts. And within those groupings are subspecialities: An arts consultant, for instance, might work only with museums, or with community arts groups but not performing-arts groups. A charity might hire one consultant to evaluate a program, another to help with marketing or technology or accounting.
Sometimes it is obvious what kind of consultant is needed. Other times, it isn’t. “It can be very difficult for agencies to know what they need when they’re in a crisis,” says Shawn Kurrelmeier-Lee, executive director of the United Way’s Center for Nonprofits, in Chattanooga, Tenn., which offers management training and advice to charities under the United Way’s umbrella. A group might think it wants a consultant to help raise money, but before it can focus on raising money, it may need to iron out other problems, such as issues with inactive board members, she says.
A generalist can help diagnose a charity’s fundamental weaknesses, and nonprofit organizations can often get this initial advice without spending a penny, says Ms. Kurrelmeier-Lee. Many consultants put in a few hours with an organization for free before the contract is drawn up. she says. “A generalist can help talk you through your needs and help you understand whether you need a generalist or specialist.”
Free outside advice also can come in the form of pro bono consultants. Richard W. Reed, director of the Pressley Ridge Foundation, in Pittsburgh, a health-care organization that serves children with behavioral problems, has had success with both paid and pro bono consultants, but he has different expectations for each. With a volunteer, a charity doesn’t have much leverage, he says, so if the consultant falls behind or doesn’t live up to expectations, there is little accountability. It’s worse when the consultant is also a board member, he adds.
Hiring Help
Whether a charity employs a volunteer or paid consultant, it should be sure it is using outside help for the right reasons, says Ms. Lukas. A consultant should be hired, she says, when an organization lacks the expertise to solve a problem, is having trouble reaching a goal, needs to design a new management process, or troublesome staff dynamics could benefit from a third party’s perspective. A consultant shouldn’t be hired, she says, if a charity doesn’t know what it wants, or if it only wants to hand off an unpleasant task, such as eliminating a staff position.
Consultants act as guides, says Karen B. Davis, executive director of the Arts & Business Council of Greater Philadelphia, which connects volunteer consultants from the private sector with local arts and cultural organizations. They don’t do an executive director’s work, she says, but instead educate him or her about what goes into making a decision.
It is important when hiring consultants to consider not only their expertise but also their personality and general approach, says Jeffrey J. Forster, director of technology services at the Bayer Center for Nonprofit Management at Robert Morris University, in Pittsburgh. “If your board is very data-driven and you end up with someone who is warm and fuzzy and inspirational,” he says, “it’s going to be a bad fit.”
Charity leaders should hire consultants using the same considerations they do when hiring staff members, says Ms. Lukas: Figure out what role the person will play, then conduct interviews and check references.
An organization should calculate upfront how much it can afford to pay, but shouldn’t forget to include the cost of putting in place the plans that result from the consultant’s work. “People can pay anywhere from $7,500 to a high of $60,000 for a strategic plan,” says Terrie Temkin, of Hollywood, Fla., a consultant who works with charities. “If you’re going to set it on a shelf, even at the low end, that’s lot of money to throw out.”
Once a charity has had a successful experience with a consultant, it may be tempted to hire him or her again. Whether it should depends on a number of factors, says Mr. Birdsell.
“Every consultant has a learning curve,” he says. “So you’ve got to assume that when you start a relationship with a consultant, you’re going to be paying to a certain extent for the investment that that consultant makes in learning about your organization. At a certain point, it becomes more efficient to hire people over the longer haul.”
Consultants prefer repeat business because the income is steadier, says Mr. Birdsell. Nonprofit leaders do, too, because consultants often lower their fees if they anticipate a longer-term relationship. On the flip side, he says, the relationship could go stale. “You clearly need to make sure you’re getting what you need from that consultant and, from time to time, may want to have other consultants in — if for no other reason than to know you’re still keeping up with best practices.”
Get It in Writing
In Mr. Birdsell’s focus groups, one thing nearly everyone agreed on was the need for a contract — or at least a written, detailed scope of work.
“Every executive director and every consultant we talked to underscored the importance of these documents,” he says. “But at the same time, almost all of them said that this was a practice honored in the breach, that people would do what they did on a wink and a handshake.” This seat-of-the-pants approach is dangerous, however: Not having everything spelled out makes it more likely that the two sides will harbor different expectations.
A contract between a charity and a consultant should include the fees involved, the length of the agreement, and an escape clause in case either party decides to terminate the relationship, says Bruce Hopkins, a Kansas City, Mo., lawyer who specializes in nonprofit groups.
Maria Gutierrez, vice president for organizational development at the Local Initiatives Support Corporation, in New York, which invests in the revitalization of neighborhoods, prefers contracts that reward the consultant for results rather than for simply writing a report. In this arrangement, consultants are paid a base amount for doing the work, but if they achieve certain goals, they’re entitled to more.
In the end, consultants should not only provide one-time service to the charities that hire them, says Lillian Rodriguez Lopez, vice president of the Hispanic Federation, in New York. They should also leave behind some new knowledge or skills.
When she began her job at the federation, she says, she didn’t know how to read the data tabulations from surveys that the organization conducts. Then a consultant showed her how, and now she teaches her interns how to analyze the data. Thus, for example, if she wants to know what Puerto Ricans in the Bronx think about abortion, the interns tabulate the statistics on their own.
“Good consultants don’t just come in, do a job, and then leave and leave you clueless,” she says. “Good consultants teach you something new.”
Got advice to share about hiring a consultant — or about what a charity should do to make its relationship with a consultant run smoother? Share your thoughts in the Job Market online forum.
