Here are some answers to common questions about fundraising consultants:
What is a fundraising consultant?
A fundraising consultant is a person or an agency (a partnership or limited company) which advises not-for-profit organisations on, and sometimes helps with, fundraising tasks. A genuine fundraising consultant has many years of experience in their field and may work independently or with other fundraising consultants to deliver fundraising support and expertise to clients.
What sort of assignments do fundraising consultants undertake?
This varies from one consultant to another, but they will typically offer to undertake reviews or audits of an organisation's current activities (with report and recommendations); fundraising strategies; research into sources of funds and preparation of materials. Most consultants also specialise in one or more areas (such as capital appeals or legacy fundraising), as today no one can be an expert in all things.
Do fundraising consultants raise funds directly?
This depends on the assignment. Sometimes they do, but not for example if a strategy or research is required. In other circumstances, a consultant may help an organisation make approaches to funders and donors. In fact, capacity building through training and mentoring is an important function of a good consultant.
What is the main difference between a fundraising consultant and a freelancer?
Consultants tend to give advice and strategic input, while freelance fundraisers tend to work in the same way as employees, only on a self-employed basis. In practice, the differences are blurred and most will do some of each.
Are fundraising consultants insured?
Today the reputable consultants carry professional indemnity insurance, as well as public liability cover. You should ask what cover your consultant has arranged.
What should a charity look for when selecting a fundraising consultant?
They should seek evidence of relevant experience and a good track record. Other questions to ask are: How long has the consultant been practising? What was their experience beforehand? Which other clients have they worked for? Can they provide references? Are they insured? It is also important to select a consultant with whom you can build a strong rapport, as you may be working closely with them and you will need this to get the best from them. Finally, it is important to select a consultant with the capacity to deliver the work within your timescales.
How to find the right fundraising consultant?
Begin by preparing a written brief describing your situation, the amount of money you need to raise, the timeframe and the type of help you think you need. Clarity at this stage will give you the best chance of success later. Then choose three firms of consultants and send them your brief. Ask around to see which firms other charities have used. Be prepared to answer questions and to meet with them if they ask, so both you and they can get a proper feel for the task in hand. Ask for a costed proposal and make your decision based on a combination of experience, “fit”, chemistry (you need to be able to work well with whoever you choose) and value. Take up references if you need to. Avoid the temptation to send out your brief to 20 or 30 consultants, in the hope this will attract the best proposal. It won’t, as many firms will not waste time on open tenders and the chances of picking the most suitable firm that way are slim. Instead, spend time engaging with a few good candidates and be willing to provide feedback to those you do not appoint. By taking this route, you have a good chance of finding the right consultant for your task.
Do we need a consultant contract?
Yes. It is a legal requirement for charities to have a written contract in place with any
external party which is helping it to raise funds. This needs to set out the scope and terms
of the assignment, including the nature of the work and the way it will be charged. All
consultants should be able to provide a standard contract for you to review and agree. The
consultant contract need not be a lengthy document, but must cover the key points above. If
you have any questions about consultant contracts, please call us on our hotline on 01785
663600. When signing such a contract, do ensure you retain the copyright in any work which
results and also ensure your organisation’s confidentiality is protected.
How do fundraising consultants charge?
Most consultants charge for work done, either by a fixed fee (e.g. to develop a strategy
or conduct research), or by a daily rate. Reputable consultants will not accept work on a
commission basis and for good reasons - it can lead to disputes, is arguably unethical and
has historically been frowned upon by the Charity Commission and Institute of Fundraising.
It is also difficult to measure for work with a longer term impact and makes it hard to prepare
accurate budgets. Critically, it also leads to short term thinking, rather than taking a long
term, strategic approach. We understand that commission based payments are typically
15%, which is more than you will normally pay in fees and money that cannot be taken from
monies raised, unless specifically declared to the grant maker.
How much do fundraising consultants charge?
Charges vary enormously, according to the type and scale of work, as well as the level of expertise required. Daily rates range from £250 to over £1,000 per day, often with VAT on top. It is important of course not just to buy on price, but to get the right consultant for the job and to see the fees you pay as an investment for the future. Fundraising consultants could not continue to operate if they did not give a good return on funds invested in their expertise.
Why do consultancy fees seem expensive?
A common assumption is that consultancy fees are expensive. This is based on a misunderstanding of what costs are actually involved and also a failure to recognise the cost of alternatives (e.g. to do the work in-house, or the consequences of not doing it at all). In fact, fundraising consultancy is an investment which should repay itself many times over. Please see our case studies for examples of this.
When employing a consultant, most charities pay for support based on a daily rate. Some groups assume that these fees are the consultant's salary! In fact the consultancy has to cover a wide range of costs, before paying its staff. It is also the case that most consultants can only bill half of their working time, as they must also spend time winning new business, running the consultancy and maintaining their knowledge (e.g. by attending courses and by reading widely). Consultancy fees actually cover the cost of the following:
- Tax (corporation tax, income tax, Employer's National Insurance, VAT)
- Insurance (Professional Indemnity and Public and Employer's Liability)
- Travel Costs (unless charged separately)
- Training Fees
- Subscriptions to directories, journals, magazines, professional memberships
- Accreditation costs and memberships of professional bodies
- Office costs (telephones, IT, heat and light etc)
- Stationery and promotional literature
- Advertising and website costs
- Accounting, book keeping auditing and compliance costs
- Staff salaries, sick pay, holiday pay
Any more questions?
If you have any other questions about fundraising consultants, please do give us a call on 01785 663600 or email us at firstname.lastname@example.org.