TIME TO CONSULT: Fundraising consultants

Robert Gray

Fundraising consultants can provide charities with much-needed specialist advice. But when is it right to call in outside help? Robert Gray reports.

Victim Support is in the middle of a comprehensive fundraising strategy and staff development programme involving all 48 of the individual charities that make up its network across England and Wales. This major undertaking, which has a substantial budget of £175,000, began early in 2002 with the appointment of fundraising consultancy Craigmyle & Company and is due to be completed in November.

"We decided we needed consultants to help us, partly because there's an issue of capacity," says Ken Madine, head of fundraising and marketing at Victim Support. "We are a federal organisation with a small national fundraising team so we simply had to bring in external people. We couldn't have done it ourselves - it would have taken years. Also, we have been looking for them to give added value through the work they have done for other charities small and large."

But there can be almost as many reasons for turning to fundraising consultants as Victim Support has federal constituents. It might be to help with fundraising reviews or audits, to conduct feasibility studies or even donor research in the shape of database screenings, identifying possible donors or profiling prospective donors. Alternatively, it might be to advise trustees, mentor fundraising staff or because the charity is moving into a new area of fundraising.

Whatever the objective, a charity must first weigh up whether using consultants will add something in terms of skills, expertise and resources that it would be unable to match using its in-house team. There is still a widespread perception that consultants can be expensive and resistance in some quarters to spending charity money on their services.

"We are not a big user of consultants because clearly you are paying a lot more for a service than if you did it in-house," says John Chamberlain, director of fundraising and communications at John Grooms.

Chamberlain does concede, however, that consultants can be useful when charities are looking to develop fundraising areas in which they don't have knowledge or expertise. John Grooms has used consultancies to help it with database analysis and in particular to compare frequency of giving with that at other charities.

Yet many charities remain suspicious of consultancies and reluctant to use them. Why? Andrew Day, group chief executive of Compton International Fundraising, thinks he knows the answer: "There's a certain level of mistrust on occasion with consultants - are they going to threaten our jobs? Will they work with us? Are they a good fit?"

Linda Hams, head of funding development at RSPB, says that consultants must add value or else there wouldn't be so many of them. "They can bring a unique external perspective that you can't get if you are there inside a charity."

Indeed, one perennial difficulty for internal fundraising teams is that it is hard for them to measure their own achievements. Consultants can often set achievements in the context of what other charities have done.

Before a charity begins to search for a consultancy it needs to make sure that is has defined its fundraising objectives. If it is not possible to articulate concisely why further funding is needed, it is too soon to start the selection process.

Once there is clarity on why further funding is necessary, the search for the right partner may begin. Professional bodies such as the Association of Fundraising Consultants (AFC) and the Institute of Fundraising may be able to give some tips and guidance. Ask up to six firms that have a sound reputation and appear to fit the requirements of your organisation to send you their details - but only ask a maximum of four, and ideally just three, to make a presentation.

Carefully structure the interview to cover the most important selection criteria with each consultant. Criteria on which to base selection might include: integrity and general reputation of the consultant; quality of the written proposal; quality and professionalism of oral presentation; level and breadth of the consultant's expertise; depth and capability of specialist services; related experience; level of interest and eagerness; level of innovation versus "boiler plate" solutions; and qualifications and experience of the staff that will work on your project.

"Consultants don't perform on their own, they perform with the charity," says Mark Jefferies, managing director of Craigmyle. In other words, make sure that the chemistry is right.

The old gag that a consultant is someone that borrows your watch to tell you the time is funny because it is half true. Consultants work with the skills and talents already in an organisation, helping to improve them.

"You need consultants who can look at your organisation as it is and not just give you the same solutions that they have given to other charities," says Kate Brooks, a partner at Jane Kaufmann Associates.

The first step is usually some sort of initial survey or feasibility study which will examine the proposals, the costings, the possible funding sources including the charity's existing supporter base, trusts, local employers if there are any and statutory sources. In so doing a consultancy should be able to arrive at an experienced view of how much could be raised.

The next big question is how much will it cost to raise these funds. Most respectable consultancies shy away from performance-based remuneration, seeing it as unethical. Jefferies is among those who cautions charities to be wary of any consultancy touting performance-based pay, asserting it tends to be expensive.

Although every assignment is different, it is possible to provide some ballpark figures. Craigmyle says it charges between £3,000 and £10,000 for a strategic review or communications audit, while consulting on a major campaign might cost between £15,000 and £40,000 over a period of 15 months to three years.

But, warns Andrew de Mille, of Andrew de Mille Fundraising Consultants and chair of the AFC, there is no "typical" fee. "A few years ago I signed up two clients each seeking £1 million for building or property-related needs within a week or two of each other. One, Lodge Hill Trust in Sussex, raised its million in 12 months at a total cost of £17,000. The other, the Cancer Care and Haematology Unit at Stoke Mandeville, raised its million in 18 months at a cost of £36,000. Stoke Mandeville then asked me to help with an MRI Scanner, raising £1.5 million at a cost of £25,000."

In the case of parish church projects, says de Mille, the final cost of consultancy is somewhere between 7 per cent and 12 per cent of the total amount raised but occasionally more, particularly in smaller projects.

The economies come through pursuing major gift strategies - a lead donation of 30 per cent or 50 per cent of the target encourages the next major donor to give 15 per cent or 20 per cent. When these levels of leadership giving are achieved the target can be very quickly completed - success breeds confidence and further success. "There is nowhere near 10 times the amount of work involved in raising £10 million as in raising £1 million," adds de Mille.

It is crucial that there is some degree of evaluation in place so that the effectiveness of the consultancy can be assessed. Goals and benchmarks should be agreed at the start of the assignment so that the consultant's progress is carefully monitored against agreed milestones.

Common benchmarks are whether the consultant delivered what it promised and on time; whether it was able to relate well to the cause and the charity's trustees, donors and staff; and whether there was evidence that it added value.

But it cannot be emphasised enough that working with a consultancy is a collaborative effort. "It should be remembered that the client, too, must deliver in most cases, to enable the consultant to complete their task," says Marion Allford, managing director of Marion Allford Associates.

CASE STUDY - ST MARY THE VIRGIN TURNS TO THE PROFESSIONALS

St Mary the Virgin, the 750-year-old parish church of Horsham, appointed Molineux Fundraising to help it raise £1 million to pay for restoration work. The consultancy was hired after a "beauty parade" featuring three consultancies.

"We realised we needed professional help," says church member Norman Webb who took on the role of co-ordinator of the appeal, overseeing PR and communications. "We felt we were tapping a source of rich experience. Here was somebody, in the shape of Richard Molineux (the head of the company), who had an empathy with what we were doing."

Webb concedes there was some initial unease among members of the congregation and trustee board over bringing in an external consultant, with some worried about the cost. But they were reassured once it had been explained that the consultancy was receiving a flat fee, rather than a share of the funds raised, together with travelling expenses.

"In relation to the overall size of the revenue project, the fee was extremely modest and well worthwhile," says Webb. "We couldn't imagine achieving what we did without the advice and back-up we had from using a consultant."

Molineux helped establish committees to deal with different audience segments such as local businesses and grant-making trusts. A professional restoration appeal brochure was produced containing calls for support, which included a testimonial from the then Archbishop of Canterbury Dr George Carey.

"He provided the drive and focus and kept us disciplined with revenue targets against project costs," adds Webb.

General donations accounted for the largest proportion of funds raised, followed by a £140,000 award from the Heritage Lottery Fund.

CASE STUDY: CONSULTANCY PUTS CHILDREN'S HOSPICE ON RIGHT TRACK

Children's Hospice South West is a charity based in Barnstaple, Devon, that provides care for terminally ill children. Its first hospice opened in 1995 to care for children with diseases that will lead to death in childhood, such as certain types of cancer and progressive neuro-degenerative or metabolic disorders. But with more than 850 children in the region with life-shortening conditions of this kind, it has become clear that a second hospice is required.

The charity has launched a capital fundraising programme with the objective of securing £10 million to develop a second hospice near Bristol that it hopes will be fully operational by the end of 2006. The hospice had expertise in regional community fundraising but had not undertaken major capital fundraising before, so a decision was taken to bring in outside expertise. Following a three-way pitch, the trustees chose Charity Consultants, which began to work with the charity towards the end of 2001.

Charity Consultants worked with the hospice to put together a fundraising plan and helped it to recruit additional members of the team. A detailed campaign timetable was drawn up identifying the number of prospects required to achieve the fundraising target. A campaign board has been put together and specialist working groups are being set up to cover areas such as major gifts, corporate support, trust funding and legacies.

"We have already had two seven-figure pledges through two major trusts," says Simon Pearson, head of fundraising. "And from corporates we have had lots of offers of charity of the year and cause-related marketing initiatives. We're very encouraged already."

The majority of Charity Consultants' work has now been done. Pearson intends to hold an evaluation and debriefing meeting with the consultancy soon, probably in April, after which the trust will go it alone.

"It's important that the charity makes a clear judgment on when to break from consultants," says Pearson. "Over-dependency is a problem, you have to go it alone with your own team."

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