As the nonprofit environment be comes increasingly complex and sophisticated, more nonprofits are turning to outside advice and assistance from consultants and other service providers.
Growing pressure to raise more money, increasing competition for contributions, more discriminating donors, and awareness of the coming transfer of wealth have heightened nonprofits' need for greater fundraising expertise and services. For some, this means strengthening in-house development staff. But, many others rely on outside consultants and intermediaries.
Both consultants and intermediaries can be beneficial, but both also involve risks. Nonprofit managers need to know how to evaluate the potential benefits and costs and how to judge the quality of the services they purchase.
Consultants and intermediaries are usually for-profit or commercial enterprises offering services to nonprofits. Consultants generally provide expert, behind-the-scenes advice in aspects of organizational planning and development and the fundraising process, but generally do not conduct fundraising. Traditionally, they have been oriented toward capital campaigns.
Intermediaries are so called be cause they become a link between the nonprofit and the donor conducting fundraising activities. They generally provide services the non profit does not have the capacity to carry out on its own.A consultant might advise your organization on its direct mail solicitation. An intermediary may conduct your direct mail activity on your behalf, receive and deposit checks, even generate thank- you letters to donors.
Today's consultants provide expertise from strategic planning to outcomes assessment.They help with mission, case and fundraising program development. They assist in board development and goal setting. And, of course, they assist with annual funds, major gifts, capital campaigns and planned giving program development.
How do you know when you need a consultant? While
consultants provide a wide range of services,
there are four common cases in which consultants can be particularly helpful:
Seek requests for proposals from several consultants or firms to gather good comparative data on the scope of services proposed to do the work and on the price for those services. Be certain you have bids on comparable services and ask bidders to give you prices for "add-ons" and "deducts" to make the bids comparable.
How does a nonprofit determine whether an
intermediary project may be right for that organization? Intermediaries may be helpful in
the following circumstances:
To supplement or complement in-house fundraising efforts, such as using a gift planning expert to contact planned gift prospects;
Often, small nonprofits see intermediaries as a quick way to raise funds without developing an infrastructure for doing so. Some nonprofit managers may view them as a way to avoid engaging directly in fundraising tasks they dislike. But recent revelations about different approaches to used car donations demonstrate how careful nonprofits have to be when considering using an intermediary.
For example, some nonprofits have used intermediaries to solicit donations of used cars in their names, sometimes receiving little back compared to the value of the contributed car. More careful analysis and negotiation for a fair share based on costs of services provided can protect both the donor's and the nonprofit's interests.There is a big difference between a contract that gives the charity a flat fee for each vehicle regardless of its value and one in which the charity pays the intermediary a flat or graduated fee for disposing of or selling the car. The second allows the nonprofit, rather than the intermediary, to be the primary beneficiary of higher value contributions.
The Internet also promises a host of new intermediary services. For organizations that lack the ability to solicit contributions or promote their cases via the Internet, there are commercial and nonprofit organizations that will represent nonprofits through their Web sites.While the success of these sites is still unproven, they will no doubt tempt many who fear being left behind by the technological revolution.
Before stepping blindly into cyberspace, ask what constituents you are not now reaching that the Internet will bring to your organization. What success has the intermediary had with organizations similar to yours? What are the costs of such services versus other fundraising opportunities or services, what benefits are projected? How will you have access to the donors?
The health of many nonprofits depends to a large degree on the expertise and services consultants and intermediaries provide. As nonprofit managers and executives, we must educate ourselves about how these services can best complement our work and develop methods for evaluating them. By doing so, we increase the likelihood that our organizations will reap the intended benefits.
Eugene R. Tempel is executive director of the Indiana
University Center on Philanthropy in Indianapols, IN