Expert view: Consultants - are they good value?

External help is useful, but trustees must be sure to keep an eye on the cost of such services.

With many senior staff, especially chief executives, being recruited from outside the traditional pools of talent in the sector, boards may be faced with strategic decisions about the possible use of external consultants and the additional expenditure involved in using them.

Consultants have worked in and for the sector for years now, and there are many examples of such specialist support having led to success. Initially, die-hard sector boards saw little value in such arrangements, but time has proved that they can lead to more lateral thinking and to enhanced profitability - words that would have been unacceptable at one time.

Many moulds have been broken since then, and a number of senior figures in the sector have themselves become consultants. Help from this new breed of advisers can be particularly valuable in the sense that they understand the ethos of the sector as well as its limitations. In certain cases, however, there is something to be said for fresh, neutral advice from outside the sector when an organisation needs a new lease of life. It also opens up the way for innovation from outside the sector.

Insiders or not, the number of consultants offering services to the third sector is growing. Many are long-established and successful, and can provide invaluable guidance to charities on issues ranging from increasing income and improving management and leadership skills to devising a public relations strategy. Nothing is more damaging to the success of a charity than bad publicity surrounding a delicate situation, and the use of a specialist can be reassuring and a good use of charitable funds.

Expenditure on such consultancy should always be closely monitored, however, because it can easily get out of hand. Consultants specialising in the not-for-profit sector tend to offer sensible rates and commercial outlets generally tailor their charges accordingly, but the board should keep a watchful eye over such expenses.

It is when senior members of staff are recruited from the commercial world in particular that problems can arise. They are used to calling in outside specialists, and these firms may well be keen to break into what could be a large and lucrative market.

Trustees can't get too involved in the day-to-day running of a charity, but it would be their right to question or to caution against an over-indulgent use of consulting services.

So if your new chief executive suggests using external consultants, perhaps they can at least be persuaded to speak to several firms, if only to get a balanced view of the services available and the costs they will incur. This will ensure your charity gets the best value for its money.

- Judith Rich is the chair of Charity Appointments and the Diabetes Foundation, and a trustee of Relate and Reach.

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