Consultants: the Cause of Problems

To the Editor:

“Putting It All Together” (July 29) provides an excellent primer on pitfalls for non-profit groups to avoid in crafting campaign budgets. However, in my 25-plus years as an in-house fund raiser for educational, health-care, and cultural institutions (both large and small), I have consistently found that the most common cause for miscalculating campaign budgetary needs, for going over those budgets, and for causing campaign failure due to budgeting issues can be summarized in one word: consultants.

From the feasibility-study phase through campaign-ending celebrations, leaders of non-profits often insist on ignoring in-house talents and experience in the misguided belief that total strangers — so-called experts — know more about and are better able to deliver accurate and efficient campaign budgeting and execution. Nothing could be further from the truth.

More than 10 years ago, a moderate-sized charity asked me to prepare a comprehensive, in-house-directed, multiyear campaign plan to compare with a proposal received from one of the nation’s leading fund-raising-consulting firms. Some of the budget projections for the first year of the campaign, extracted from those proposals, can be summarized as follows:

The salaries for personnel in the in-house campaign (director, researcher, and clerk) amounted to $75,000, while the salaries for personnel in the consultant’s campaign (director, associate director, and clerk) amounted to $196,000. Similarly, the cost of materials in the in-house budget amounted to $46,500, while the materials’ cost in the consultant’s plan came to $65,000. Thus, even before the campaign had begun, the consultant-led effort was projected to cost more than twice as much as the in-house effort, for the first year alone.

The great budgetary differences can be accounted for in good part by the longer investment value for the charity’s ongoing fund-raising operations of full-time staff; the great ability that staff has to negotiate for competitive prices on goods and services to be purchased from local venders; and a clearer understanding of the research and other needs of the organization.

As it turned out, during the feasibility study, the consultant failed to accurately gauge the extent of potential business participation in the campaign due to an “inadequate budget to conduct more interviews,” so the charity wisely decided to take the campaign in-house. Five years later, the entire successful campaign’s costs actually came in under the in-house budget.

In sum, fund raisers should remind charities that campaigns can usually be best planned — and conducted most cost-effectively and successfully within budget — by in-house fund-raising staff. Charity leaders would also do well to remember the definition of a consultant: someone who lives far away and is out of work.

Richard J. Gerber
Fund Raiser
Ossining, N.Y.