The Essentials: fundraising - Trust me, I'm a consultant

Fundraising specialists don't come cheap, but with a combination of effective planning and the right focus, charities employing them can reap huge benefits. Ruth Smith introduces a step-by-step guide to getting the optimal result.

Employing a fundraising consultant can be expensive, so charities need to think carefully before taking the plunge. But a consultant's expertise can bring huge benefits, allowing charities to improve their fundraising significantly. Whether or not the relationship works depends on knowing what you want to achieve from the start, appointing the right person, negotiating the right price and reviewing the contract regularly.

This step-by-step guide shows you how to make the right decision.

1Do you actually need a consultant? Fundraising consultants offer a range of services, from fundraising audits and devising strategies to database design and crisis management. But before you employ a consultant, you need to check you don't already have the skills in-house.

"Ask yourself some questions before you make any decisions," advises Mark Atkinson, a partner at the fundraising, feasibility and strategy development specialist New Leaf Consultancy.

"First, where in-house expertise is lacking, ask yourself if it could be acquired through an appropriate training course," he says. "Second, where there are capacity issues, could the proposed activity be factored into future work plans? And third, is the need for independent advice purely symptomatic of a lack of faith in the existing fundraising team?

"Where the answer to any of these questions is 'yes', the organisation should take steps to resolve the matter internally. This will invariably be more cost-effective than appointing a consultant."

One way to do this is to write yourself a brief that defines the issues and consider circulating it internally for comment. "Even if it's bad, it helps focus the mind," says David Coe, managing director of consultancy at charity marketing agency Cascaid.

2Pinpoint what you need to achieve Consultants are not mind readers, so it's vital you are clear about what you want to achieve from the start - a comprehensive brief with specific outcomes is essential.

"Very often, voluntary organisations approach fundraising consultants without a clear idea of what it is they want them to do," says Maggie Taylor, a member of the Institute of Fundraising's consultants' group and a director at Kelly Consultancy.

There are many things consultants can do. They can act as project managers, trainers, problem solvers, planners, advocates, independent observers or influencers.

"Increasingly, I get asked to mentor fundraisers," says Taylor. "I'm there to keep them on track because I've got the experience to do that.

Otherwise, I might get asked to develop a fundraising strategy for the organisation as a whole, which is a very different type of work because it involves liaising closely with the board of trustees and developing the strategy alongside the business plan."

This is why investing time in preparing a written brief, which sets out clearly what you want to achieve, is vital. The document will vary in detail depending on how complex the organisation's needs are, but, says Atkinson, some basic details must be there. These include a short description of the organisation, with a link to a website if available, a detailed account of what activities the consultant is needed for, timeframes for achieving the work, a deadline for the submission of tenders and, finally, contact details.

3Find potential consultants Finding a consultant who can satisfy your organisation's needs might seem like a daunting prospect, but there are a number of places to look.

Several directories of consultants and suppliers are available (see box overleaf). Looking up potential consultants at sector conferences and exhibitions or looking out for adverts in the trade press can also bear fruit. Word of mouth is another good starting point. Asking peers to recommend someone can result in some useful leads.

Debate rages over how to ensure the consultant you choose is bona fide.

"I was once phoned up by a charity that was worried because its fundraising consultant was not delivering," says Taylor. "I asked how the consultant was recruited and the answer was 'at a dinner party'. The charity deserved what it got - the person knew nothing about fundraising."

This is why Taylor believes ensuring the consultant is a member of the Institute of Fundraising is essential. "All consultants that go on the website are vetted," she adds.

Atkinson, who is involved with the institute but is not a member, argues that being in a directory doesn't necessarily imply excellence. "A consultancy firm may make it onto the database, but only two or three of the consultants might be members of the institute," he says. "The consultancy might use freelancers to do much of the work, which is why it's important to remember that the person you meet when you're at the shortlisting stage might not be the person who does the work."

4Draw up a shortlist and conduct interviews Once you have identified several prospective candidates, you can draw up a shortlist of consultants to interview. Asking for company brochures and examples of past work to demonstrate a track record in the area can help you narrow down your choices, says Coe.

He recommends asking no more than three consultants to interview and preparing as if for a job interview by drawing up a list of questions to ask beforehand. "Probe around experience," he advises. "Most importantly, consider the chemistry. You might interview someone who comes across at being good at lecturing when perhaps what you want is someone who is approachable, someone you feel comfortable asking anything and someone you will enjoy working with."

Atkinson adds: "It's always a good idea to find out who will actually do the work if the consultancy is appointed. It may well be the senior partner who turns up for the interview, but this does not necessarily mean he or she will be the one who does the work. This might not be a bad thing, because the work might require specialist input from another individual in the consultancy - no one is an expert in everything. But it is still good to be clear from the start."

References are another area not to forget. "It's amazing the number of times I've done a piece of work and not been asked for a reference," says Taylor. "Always ask for references, and follow them up."

5Don't be put off by price Consultants can be expensive, but Taylor says: "Don't be put off because you don't think you can afford to employ a fundraising consultant. One of the things a consultant can do is raise the money to pay for their own work."

Going for the cheapest consultant is not always the best option - someone who is highly experienced will cost more than someone who is new to consultancy, she argues.

However, Atkinson believes using the most expensive consultant won't necessarily result in a better job being done. "Once credibility, experience and an acceptable work plan have been established, there is little point in spending huge sums on a daily rate if you can get the same job done for significantly less," he says.

The Institute of Fundraising says fees can range from about £150 to £2,000 per day. This should reflect expertise, track record and the difficulty of the work required - not the overheads of the consultancy.

However, Coe says £150 is incredibly rare and cites £250 to £300 per day as a good guide. If a consultant is being used to run a capital appeal, he advises charities to expect to spend up to 10 per cent of their target income on the whole process, including materials and consultancy.

According to the Institute of Fundraising, it is vital that the method and amount of payment for the consultant's work is clearly defined in a written agreement before any fundraising starts. Its website has downloadable standard formats for different types of agreement.

The institute also advises against payment on a commission-only basis.

6Agree the contract Once you've chosen a consultant, a contract must be drawn up. The Institute of Fundraising advises that the following are included: a brief for the work to be carried out or service provided; details of the fee to be paid; any reasonable and agreed costs; methods of payment; length of contract; and a confidentiality clause. It's also vital to include a review mechanism in the contract - how often depends on the size and the importance of the piece of work.

You should even include details such as how many paper copies of the final report will be produced, whether there will be a draft version first and whether the consultant will present the report to trustees, says Cole.

Issues such as who owns the intellectual property rights must also be clarified at this stage.

Finally, if you're not happy with any of the terms and conditions set by the consultant, say so. "Nip problems in the bud," says Coe. "The worst thing that can happen is for the consultant to think that everything is fine, only to find out months later that you're not happy."

CASE STUDY - CRUSAID

Crusaid works to make a difference to the lives of people living with and affected by HIV and Aids. At the beginning of last year, it started looking for a fundraising consultant to help improve its fundraising team's capacity and develop a comprehensive fundraising plan.

"We had relationships with various organisations, so we went through all our contacts, admitted that we'd never done this before and asked if they could suggest anybody," says chief executive Robin Brady. "In the end, we got a shortlist of two and asked both organisations to tender for the work."

Maggie Taylor of Kelly Consultancy got the job. "What was important for us at the beginning of the relationship was to set the ground rules," says Brady. "We discussed and agreed what each side could expect from the other." Taylor was employed for a set number of days over an agreed period of time, with phone conversations an option between meetings. "This gave us time to do the work, which was really important," explains Brady. "We didn't want this to be about bringing in a fundraising consultant to do the work and them taking their skills away when they finished. At the end of the process we wanted a new set of skills for the team." Crusaid still has two half-days of consultancy left, but the benefits are clear. "We have a much clearer focus for our fundraising," says Brady.

As a result of staff training by Taylor, income has already started to increase. "Income from our Walk for Life fundraising event this year was up by £100,000," Brady adds.

WHERE TO FIND A CONSULTANT

The Institute of Fundraising's free online directory of consultants allows you to search by geographical region, sector (from arts and heritage to rescue services) and area of expertise (for example, strategic planning or capital campaigns). You can also specify whether you want an individual or an organisation, and can search for key words or consultant name. See www.institute-of-fundraising.org.uk

- The Association of Fundraising Consultants provides a directory of members and a short paper on choosing a consultant. Members sign up to a code of practice. See www.afc.org.uk

- The National Council for Voluntary Organisations publishes an annual directory of approved consultants. The 2005 edition is available, priced £15 (£10.50 to NCVO members). See www.ncvo-vol.org.uk

- Third Sector publishes an annual suppliers guide, which contains useful contacts including fundraising consultants. Details are available at www.thirdsector.co.uk.

The 2006 guide will be available in December

- The UK Fundraising website also has links to consultants. See www.fundraising.co.uk

- Many consultants advertise in the trade press

- Word of mouth is a good starting point. Asking your contacts to recommend someone might result in leads.

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