A fundraising consultant can be an enormous asset to a nonprofit, but, like almost all good things, consultants come with a cost.
Don’t let these costs deter you! The benefits of working with a fundraising consultant who truly fits your nonprofit are priceless. In fact, building a strong relationship with a fundraising consultant can set your nonprofit up for long-term success that goes beyond the scope of your contract.
That said, you must be able to afford a nonprofit consultant in the first place. With this article, we’ll cover everything you need to know about the costs of a fundraising consultant so that you can properly budget your expenses.
Specifically, we’ll answer these frequently asked questions:
- How much do nonprofit consultants cost?
- How do you calculate consulting rates?
- Why shouldn’t we pay our consultant a percentage of the funds raised?
- What additional fees can arise when working with a consultant?
To set your organization up for success and continue growing your fundraising efforts year after year, you’ll need the guidance of a fundraising consultant to help steer the ship.
When you find the right partner for your organization, you’ll be able to maximize your return on the investment required to hire them. Let’s take a look at each question in more detail!
How much do nonprofit consultants charge?
Fundraising consultant fees will vary depending on the scope and complexity of your nonprofit’s project. It’s hard to pinpoint exact numbers because the range is so wide, but most charge between $100-$250 an hour and up to $1,000-$2,500 per day.
The more intensive your project is, the more expensive it will be. For example, hiring a nonprofit consultant for a one-day board retreat will cost much less than hiring one to plan and guide your team through a capital campaign.
Your fundraising consultant fees will also depend on the needs and experience level of your organization. The more complex your nonprofit’s needs are, the more expensive your fundraising consultant will be. On the other hand, if your nonprofit has relatively straightforward needs, you’ll likely spend less on services.
Even if you hire a consultant for a specific task (such as a feasibility study), it’s important to anticipate your expenses by thinking realistically about all the areas where your nonprofit may require support. This is where having a good partner makes all the difference.
After all, what’s most important is that you find a nonprofit consultant who’s the right fit for your organization: someone who can work well with your team, understand your nonprofit’s unique needs and offer sustainable solutions to your problems.
It’s always a good idea to investigate and talk to a handful of potential consultant partners to get an idea of how they propose addressing your needs as well as what they would charge for the work. You may find that, even if a consultant charges more, you may be more comfortable with their approach and understanding of your mission than any other prospective partner.
In Summary: Nonprofit consulting fees will vary depending on the scope of the project you’d like to pursue. The best way to anticipate costs is to think realistically about the support you need and have a conversation with potential consultants.
How do you calculate consulting rates?
There are three general ways that a nonprofit consulting firm may bill your organization for a project. Let’s look at each in detail:
- Flat fee: A flat fee is a fixed payment for a project within a defined time period, with specific deliverables. For example, a nonprofit may pay a flat fee for a consultant to create a case for support or to execute a board retreat.
- Retainer: A retainer fee is an upfront, recurring charge for larger, long-term projects. A nonprofit may pay a monthly retainer fee for a consultant’s help throughout a capital campaign, for example.
- Hourly: An hourly fee is usually paid to consultants for simple projects that don’t require a lot of time or involvement from the consultant. For example, a nonprofit may pay an hourly fee for weekly check-ins or coaching.
It’s important to understand how you’ll be billed before you hire a nonprofit consultant and sign a contract. After all, the better you can budget for your nonprofit consulting fees, the easier you’ll be able to justify the expense to the key figures who matter most (i.e., your board, your development committee and even your donors!).
In Summary: Fundraising consultants will usually charge either a flat, retainer or hourly fee, depending on the type of project. Understand the fundraising consultant’s fee structure before you sign a contract.
Why shouldn’t we pay our consultant a percentage of the funds raised?
If you’re hiring a nonprofit consultant for a long-term project, like a capital campaign, you may be inclined to offer an incentive-based payment system. For example, some nonprofits wonder if they should pay a consultant a percentage of the funds raised from a campaign.
However, doing so can put your nonprofit in murky ethical waters. In fact, the AFP ethical guidelines advise against it.
Organizations shouldn’t pay a nonprofit consulting firm a percentage of the funds raised because doing so can mislead donors.
Donors want their contributions to go directly to your cause. Using a percentage of their donations to pay a consultant can discourage and alienate your donors, regardless of how much you raise overall.
Plus, your consultant should aim to build sustainable systems and processes that will benefit your organization in the long run. An incentive-based payment system could encourage practices directed toward short-term rewards at the expense of deeper relationship-building.
Focus on sustainable fundraising throughout your organization and pay for a nonprofit consultant through careful budgeting.
In Summary: Paying a nonprofit consultant a percentage of the funds raised from a project can frustrate donors who want their donations to go directly to your cause. Use a traditional payment model instead of compromising your donors’ trust.
What additional fees can arise when working with a consultant?
When budgeting for your nonprofit consultant, it’s important to consider additional fees. These fees will fall on your nonprofit as they occur, so being prepared is the best way to anticipate these expenses.
Additional costs might include:
- Consultant travel: This could include airfare if your consultant has to travel to attend one of your organization’s events or transportation to and from your facility or headquarters.
- Incidentals: This might include fees for meals or other hospitality services for your consultant.
- Design and printing: The consulting process might reveal that your organization needs to up its game regarding its marketing strategy. This could result in fees for design services (whether digital or print design) and printing costs.
- Event or retreat fees: Part of your consultant’s process might include hosting a retreat or event with a large group of stakeholders, which could both require considerable planning and execution costs.
- Implementation costs: Other recommendations made by your consultant might be associated with some fees. For instance, your consultant might recommend a transition to a new CRM system, which would require an expense to purchase and migrate to the new platform.
If all of these costs are making you sweat, don’t worry. A nonprofit consulting firm is an investment in your organization, and there are several ways that you can stretch your budget to afford one.
If your organization needs the help of a nonprofit consultant, find room in your budget by discussing funding priorities with your board. Explain how a consultant can help your nonprofit run more efficiently and effectively so that every dollar you spend is furthering your mission as much as possible.
You may also want to consider whether you have key donors who would be interested in supporting the project in question. This strategy is especially applicable if you’re considering a new case for support, a strategic plan or a board retreat, as these are aspects of your organization in which high-profile donors have a vested interest.
The key is to prioritize, plan ahead, anticipate costs and frame nonprofit consulting fees so that your board and high-level donors understand the importance of these expenses.
In Summary: Additional nonprofit consulting costs can occur throughout the project. Knowing what costs to expect can help you budget for them in advance and seek out supplementary sources of funding if necessary.
Now that you understand everything there is to know about fundraising consultant fees, it’s time to apply that knowledge to find the consultant who’s right for you.
Don’t be afraid to take your time with the process. It’s a major investment for your organization, so it’s well worth it to reach out to multiple options, request proposals and take a careful look at your budget to determine the right partner for your strategies and goals.
Looking for more information about how your fundraising consultant can optimize your nonprofit’s strategy? Check out these additional resources:
- Hiring a Fundraising Consultant: 12 Essential Tips. The fundraising consultant hiring process involves much more than assessing fees. Use these 12 tips to make the full process a success.
- The Complete Guide to Nonprofit Strategic Planning. Need to revamp your organization’s strategic plan? Find out how a consultant can help you craft an effective guide to lead your organization.
- 20+ Nonprofit Consulting Firms For Your Philanthropy Needs. Different fundraising consultants specialize in different areas, from branding to prospect research. Use Double the Donation’s comprehensive guide to find the right one for your organization.
