Fundraising Consultant FAQs
Here are the 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 charities and not-for-profit organisations on, and sometimes helps with, fundraising. A genuine fundraising consultant has many years of experience in their field and may work independently or with other fundraising consultants to deliver fundraising advice and support to their clients.
What sort of assignments do fundraising consultants undertake?
This will vary from one consultant to another, but they typically undertake reviews or audits of an organisation's current activities (with report and recommendations); appeal feasibility studies; fundraising strategies; research into sources of funds and preparation of materials. Most consultants also specialise in one or more areas (such as major gifts, capital appeals or legacy fundraising), as today no one can be an expert in areas.
Do fundraising consultants raise funds directly?
This varies according to the assignment. Sometimes they only give advice (for example if a strategy or research is required) but in other circumstances (where skills are lacking on the client side) will also help charities to raise funds. In some circumstances, a consultant may help an organisation make direct approaches to funders and donors.
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 carry out practical tasks. In practice, the differences are blurred and most will do some of each.
Are fundraising consultants insured?
Today reputable consultants carry professional indemnity insurance, as well as public liability cover. You should ask what cover your consultant has arranged and who with.
What should a charity look for when selecting a fundraising consultant?
It should seek evidence of relevant experience and a sound track record. Other questions to ask are: How long has the consultant been practising and specifically in the field in which you are looking to use them? 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 good relationship, 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, what 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 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 whomever 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, invest some 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 assignment.
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. Today, it also needs to spell out how the consultant will protect the rights of vulnerable people and how the charity can monitor this. All consultants should be able to provide a standard contract for you to review and agree. The consultant contract need not be lengthy, but must cover the key points above. 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. For further information, see https://www.fundraisingregulator.org.uk/code/third-parties
How do fundraising consultants charge?
Reputable consultants charge for work done, either by a fixed fee (e.g. to develop a strategy or conduct research), or by a daily rate.
Do fundraising consultants work on commission?
No. Reputable consultants will not accept work on a commission basis and for good reasons - it can lead to disputes, is arguably unethical and is frowned upon by the Charity Commission, the Fundraising Regulator and the Institute of Fundraising. Section 9.6 of the Fundraising Code stipulates:
a) Organisations MUST NOT use commission payments unless the following conditions are met:
- other sources of fundraising investment have been explored and exhausted;
- payments are subject to approval by the fundraising organisation's trustees, or senior executives when power has been delegated; and
- safeguards are in place to ensure excessive remuneration is not permitted.
It is not possible to use commission or payment by results for many consultancy assignments, such as developing a fundraising strategy, conducting a feasibility study, delivering prospect research, legacy campaigning etc. Payment by results 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 donor (which is likely to deter a donation).
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.
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 need to cover the cost of the following:
Tax (corporation tax, income tax, Employer's National Insurance, VAT)
nsurance (Professional Indemnity and Public and Employer's Liability)
Travel Costs (unless charged separately)
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
Accounting, bookkeeping, auditing and compliance costs
Staff salaries, sick pay, holiday pay
Any more questions?
If you have any questions about fundraising consultants or how they work, please do give us a call on 01785 663600 or email us at firstname.lastname@example.org.