Consulting With Nonprofits: A Practitioner's Guide

Fieldstone Alliance

An imprint of Turner Publishing Company

445 Park Avenue, 9th Floor

New York, NY 10022

Phone: (212)710-4338 Fax: (212)710-4339

200 4th Avenue North, Suite 950

Nashville, TN 37219

Phone: (615)255-2665 Fax: (615)255-5081

www.turnerpublishing.com

www.fieldstonealliance.com

Copyright © 1998 by Fieldstone Alliance. All rights reserved. Worksheets may be reproduced by purchasers of this book for use in their consulting practice; for other uses, contact the publisher. No other part of this work may be reproduced without the prior written permission of Fieldstone Alliance, except for the inclusion of brief quotations in a review.

We hope you find this book useful! For information about other Fieldstone Alliance publications, please see the ordering information on the last page or contact:

Fieldstone Alliance Publishing Center

60 Plato Boulevard East

Suite 150

Saint Paul, MN 55107

800-274-6024

www.FieldstoneAlliance.org

Edited by Vince Hyman

Illustrated by John Berry

Designed by Rebecca Andrews

Manufactured in the United States of America Third printing, September 2010

Library of Congress Cataloging-in-Publication Data

Lukas, Carol Ann

Consulting with nonprofits : a practitioner’s guide / by

Carol Ann Lukas.

p. cm.

Includes bibliographical references and index.

9781618588906

1. Consultants. 2. Community development consultants.

3. Nonprofit organizations--Management. I. Title.

HD69.C6L85

1998 98-21983

001’.068--dc21

CIP

Acknowledgments

It took a community to write this book. I put the pen to paper, but many of the experiences and lessons belong to others. Many people provided support and encouragement during the writing. Thank you . . .

The David and Lucile Packard Foundation provided funding and are strong advocates for capacity building in the nonprofit sector. Barbara Kibbe encouraged and guided me and facilitated reviews by Bay Area consultants.

The Wilder Publishing Center, Vince Hyman, Becky Andrews, and Kirsten Lukens, are tremendously patient and skilled miracle workers with authors and publications. Vince gently and firmly hounded me, motivated me, and helped me organize my thinking. Cynthia MacLeod did great research on resources.

Many consultants across the country reviewed the manuscript and contributed rich stories from their combined four hundred-plus years of experience. You gave the book life: Mike Allison, Emil Angelica, Carol Barbeito, Bryan Barry, Diane Brown, Paul Connolly, Barbara Davis, Terry Donovan, Michael Garcia, Michael Groh, Larry Guillot, William Hall, Grace Hammond, Bette Huntalas, Jill Janov, Robert Kardon, Rolfe Larson, David Martin, Pixie Martin, John B. McHugh, Carter McNamara, Kathryn Merchant, Patty Oertel, Matt O’Grady, Greg Owen, Vijit Ramchandani, Karen Simmons, Somly Sitthisay, Sally Smith, Gary J. Stern, Jim Thomas, Jeanne Toms, Patti Tototzintle, Robert Walker, and Ruth Yellow Hawk.

My colleagues in Services to Organizations and Communities at Amherst H. Wilder Foundation, as well as the many consultants and organizations in the community I’ve worked with over the years, continue to teach and challenge me.

A major source for the material is from my reading of countless books and professional articles over the years. An early consulting mentor once told me that the best way to get good and stay good as a consultant was to read at least a half hour every day. Just keep reading, he told me. I’ve tried to honor that advice. After many years and the hundreds of consulting projects I’ve done, I may have confused what I’ve learned from other authors and what I’ve learned from practice. I’ve tried to reference, at least generally, work from other sources. If I’ve not referenced someone’s work appropriately I beg forgiveness.

My support system backed me up, covered for me, fed me, and made me laugh: Emil Angelica, Michael Gause, Kate Murphy, Barb Rose, Kay Tellekson, and Carol Zapfel. Brenna Barrett and Christopher Barrett hung through it all with me down to the finish line.

Carol Lukas

July 1998

About the Author

Carol Lukas, president of Fieldstone Alliance, has over twenty-five years consulting and training experience with neighborhood, community development, health care, education, environment, arts, and human service organizations, as well as government agencies, foundations, collaborations, small businesses, and major corporations. Carol focuses on building connections between the public, private, and nonprofit sectors, and working with citywide and regional coalitions to revitalize the central neighborhoods of Saint Paul. She specializes in helping organizations and collaboratives plan and manage change in services, organizational structure, dynamics, and systems, and assists with strategic planning, community planning, coalitions and mergers, organizational assessment, restructuring, governance, and conflict management. She managed Wilder Foundation’s community forums and publication of Community Matters and is former director of Wilder Foundation’s consulting and training services.

Table of Contents

Title Page

Copyright Page

Acknowledgments

About the Author

Preface

CHAPTER ONE - The Environment Consultation and the Nonprofit Sector

CHAPTER TWO - The Process Stages of Consulting

CHAPTER THREE - Artistry Consulting Roles, Dynamics, and Ethics

CHAPTER FOUR - Nuts and Bolts Managing Your Consulting Practice

Appendices

Index

More results-oriented books from Fieldstone Alliance

Preface

The job of running a nonprofit organization or successfully managing a community–or neighborhood-based agency is becoming increasingly complex and competitive. Strapped for resources and buffeted by economic and political forces while trying to address growing needs in the community, these organizations face enormous challenges, as well as opportunities. Many have the resources to hire consultants, planners, trainers, technical advisers, researchers, and facilitators to assist them in this enormous task; many do not.

This book is written for the growing numbers of consultants who provide various kinds of help to nonprofit and community organizations. It’s also written as a guide for those who haven’t yet started consulting but who, after retirement, education, or job changes, may begin. But behind those people are the thousands of nonprofit and community organizations who need highly skilled practitioners to assist them in addressing the formidable needs in our communities. The real goal of the book is to strengthen the quality of consulting available to these organizations to help them do the work of meeting human needs, educating and enriching our society, and building stronger, vital communities.

More than thirty consultants from across the country contributed ideas and stories and challenged my thinking during the development of this book. The final book is immeasurably enhanced by the participation of these people. Collectively, these contributors have over four hundred years of nonprofit consulting experience.

This book can be used in several ways:

Those who have chosen the field of nonprofit consulting as a profession will find the book useful as a reference or a way to organize what they are already doing, whether they learned it through professional training or experience.

People with technical specialties such as performing arts, accounting, education, social work, or housing will find the book provides a perspective on organizational and process issues encountered while consulting.

Those who are new to the field of consulting may use the book as orientation to the field and a step-by-step guide through a particular consulting project.

Consultants in the for-profit or public sectors can use the book to develop the skills and sensitivities needed when working with nonprofits.

Funders can learn more about what to look for when funding consultation or technical assistance to their grantees.

Students in public administration, nonprofit management, organization development, or related fields may find it a useful guide for fieldwork, service projects, or future career search.

The book is divided into five sections:

CHAPTER ONE

The Environment Consultation and the Nonprofit Sector

When I started consulting in the early 1970s, few nonprofits knew what a consultant did, and there were few of us around. In the last twenty-five years the field has exploded. Most large cities have organizations that manage groups of consultants or broker consulting services to nonprofits. Many funders and United Ways regularly support the cost of consultation to nonprofits. Consultation has become part of doing business in the nonprofit sector.

This chapter is intended to orient the reader to the field of consultation in the nonprofit sector. It will provide basic information on the nonprofit sector and the current environment; define consulting and explore the most common kinds of consulting provided to nonprofit and community groups; and orient the reader to some unique elements of consulting with nonprofits.

The Need for Consultants in the Nonprofit Sector

There are an estimated 1.4 million nonprofit organizations in the United States, with operating expenditures of approximately $500 billion as of 1993. Combined, these organizations represent approximately 6.5 percent of the U.S. gross national product and exceed the gross national products of all but a dozen countries worldwide¹. Most organizations working in the arts, education, health care, human services, environment, community development, faith-based, and civic arenas are nonprofit. In addition, countless unincorporated community groups and neighborhood and civic associations emerge to address community needs or the interests of their members.

Nonprofit organizations are tax-exempt, nongovernmental, self-governing organizations that, unlike for-profit corporations, do not distribute profits to their directors and do exist to serve a public purpose. The destinies of these organizations rise and fall with economic fluctuations, changes in federal and state administrations and policies, private funding trends, and their own ability to generate revenues. The environment is dynamic and challenging.

Nonprofit organizations and community groups (referring to unincorporated and informal groups, associations, and coalitions, some of which exist for long periods of time) are struggling to address increasingly complex social, cultural, environmental, and economic needs in the communities they serve. Poverty, violence, disengagement of youth, stresses on the family, changes in the welfare system, managed care, growing populations of immigrants and non-English-speaking people, the transformation of our industrial economy into a service and information-based economy, suburban migration, and environmental hazards, among other factors, are requiring innovative responses from the nonprofit sector, which historically has focused on social needs, cultural enrichment, community development, health care, and education.

Trying to do everything with tight resources has always been the prevailing mode for nonprofits. Competition for funding and customers is fierce, and those organizations with visionary leadership, strong networks, and solid management infrastructure tend to thrive. Collaboration, joint ventures, and alliances have become a primary strategy to extend impact on limited resources, but organizations struggle to lead those alliances and absorb the additional time and energy they require with already heavy workloads.

To effectively address these community needs in a turbulent environment, funders and nonprofits are looking for better evaluation of impact, greater accountability, and innovative, collaborative responses that test the mettle of even the strongest and most creative nonprofit organizations.

Responding to these trends is a challenge for any organization, whether a new, emerging grassroots group, a more stable organization that needs to adjust program focus or capacity, or a larger and older nonprofit that has well-established services and financial base. Few nonprofits have the management or technical specialists on staff to deal with the spectrum of development needed to run an organization. Most nonprofits and community groups occasionally, or regularly, turn to outside resources for information, counsel, expertise, support, or process assistance.

The good news is that the nonprofit infrastructure—those organizations that provide technical assistance and other resources to nonprofits—has grown rapidly over the last fifteen years. For the purposes of this book I will lump all of these resources that assist nonprofit organizations into one large category that I will call consultants. There is a big difference between the work of a researcher doing a neighborhood demographic study, a social worker designing an after-school program, a facilitator leading focus groups, an arts consultant advising a museum about accreditation standards, and a planner developing a strategic plan. But there are a lot of commonalities among them as well. Providing resources and tools that will help these people provide high-quality assistance to nonprofit and community groups is the goal of this book.

Definition of Consultation

Consultation is a temporary relationship to provide assistance to a person, group, organization, or community wanting to build their capacity, accomplish a task, or achieve a goal. The consulting relationship differs from an employee relationship in that it is time-limited and the consultant is free to determine how and when to work.

Two elements are key in this definition of consultation—the accomplishment of a goal or task, and the consulting relationship. Consultation involves the accomplishment of a goal or task. The consultant is hired to do something—facilitate a process, evaluate a program, or develop a plan. A consultant is chosen because the client² needs to accomplish a task or goal, and the consultant has skills or expertise that will assist the client in accomplishing this work. As the consulting project is developed the second element becomes important. A relationship is formed, usually temporary, that contributes to success in accomplishing the task. Key aspects of a successful consultant-client relationship are trust and reciprocity. Trust is needed to allow the client to speak freely about the organizational situation or dynamics and to help the consultant feel free to challenge, probe, and explore alternative choices. Reciprocity is important to ensure that the power relationship is balanced and that two-way influence and effective communication will occur. A third element of consultation involves an exchange of value between the consultant and the client; work is done in exchange for pay, acknowledgment, or other benefits that may derive from the partnership.

The biggest problem I face as a consultant is if the chemistry is wrong with the client. It’s the toughest part of consulting. It’s almost an art form to establish and maintain good working relationships.

—William P. Hall

Volunteer Consultant, Executive Service Corps of Chicago

Consultation involves more than the transfer of information or advice. What is often not understood, either by consultants or by nonprofits and community groups, is that there is a body of knowledge and skills involved in the process of consulting that is different from, and in addition to, a person’s technical or content expertise. In some ways consulting is like teaching. To be a teacher one has to know a body of information. But that knowledge alone doesn’t make a good teacher. A good teacher has additional skills such as alternative ways of transferring knowledge, instilling a love of learning, adapting to different learning styles, motivating students, and speaking from the heart. Really good teachers know that there is an art to teaching, and concrete skills and sensitivities involved in the teaching process, regardless of what they are teaching. Chapter Two in this book will focus on the process of consulting, and Chapter Four will cover skills needed as a consultant.

A successful consultation with an organization or a group ends with at least two kinds of results:

The client accomplishes their goals.

The organization or group successfully accomplishes the goals that they hired the consultant to help them with. This may include the accomplishment of a particular task, the creation of a product, acquisition of knowledge, or the strengthening of relationships within the organization. Occasionally the goals of a project change in midstream to respond to changing circumstances or new information. An effective consultation will adjust to these changes and work toward goals that serve the client’s needs.

The client increases their capacity to deal with similar issues in the future.

The organization or group learns skills or processes to deal more effectively with future challenges as they emerge and to make appropriate decisions about seeking outside help when needed. Ideally, the organization or group learns how to maintain a healthy state of adaptability to changing conditions and to maximize the strengths and resources in the group for ongoing creative improvements. Working toward this result means that you, as the consultant, deliberately try to build the capacity of the client to minimize their need for your assistance on similar issues in the future.

In a sense, one of our goals as consultants is to eliminate the need for our services in the future—or to work ourselves out of a job. As we discussed, consulting is a temporary relationship. In reality I find that the more effectively I help the client accomplish the second goal, the more they come back to me for additional assistance. The difference is that usually they aren’t coming back for the same help. Their capacity is increased, and they are taking on different or more innovative projects. This is not true when the consultant repeatedly does the same work and takes work direction from the organization. (With an ongoing relationship you may be a staff person on a contract rather than a consultant. For those of you working in the U.S., see Appendix E, The Difference between Employee and Independent Contractor, on page 213, for the Internal Revenue Service’s distinction between an employee and independent contractor.)

The goals of the consulting relationship and the process of consulting are similar regardless of the kind of consulting we do. Let’s look now at the rich diversity in kinds of consulting and the backgrounds of people providing consultation with nonprofits and community groups.

Kinds of Consultation

An amazing assortment of people in the community have consultant on their business card. Since there are no licensing bodies or certification required for someone to work as a consultant (except with certain professions such as accounting, fund-raising, or law), anyone with the moxie to call themselves a consultant and the luck to find a client can become a consultant. This is good and bad. The lack of professional standards and training requirements allows anyone to hang a shingle, whether they have skills or not. The lack of certification standards also makes it difficult for nonprofit organizations and community groups to select a skilled consultant other than on personal knowledge or referral source claims. On the other hand, in addition to professionally trained consultants, many people in the community, including experienced nonprofit directors and community leaders, technical specialists, business professionals, and retirees, have tremendous gifts to share. The lack of rigorous standards or certification makes it easy for these resources to be accessed by potential nonprofit clients.

Among those who have hung their shingle as consultants, three categories of consulting are most commonly provided to nonprofit organizations and community groups. These three categories, program consultation, organizational consultation, and community consultation, differ in skills required, who the client is, and scope of work.

1. Program Consultation

Program consultants are often specialists in a particular program area, such as child care, workforce development, home-based services for the elderly, or theater production. Program consultants might assist their clients with program design and planning, program assessment, staff development, or evaluation. For example: a housing consultant might have broad experience in developing various forms of low-income housing. An elderly services consultant may have expertise in different community-based approaches for serving the elderly. A community health care consultant might have experience bringing home health care to underserved populations, and bring best-practice ideas to a local clinic. Or a dance consultant might assist a dance company with developing a training program for new members of the company.

Clinical consultants, commonly used in psychiatric, mental health, education, or social work organizations, are often called in to assist the client with program recipients who pose challenging or new issues unfamiliar to the client. Such consultants may provide a diagnostic or advisory service, or train clinical staff to work with new or difficult issues emerging within the population served by the client. A school that has traditionally worked with native-born students might hire a consultant who understands the culture and unique needs of students from refugee communities.

People working as program consultants usually emerge from the trenches in their area of specialty. They are often staff of a nonprofit that offers direct service in that program area, and they provide consultation to other nonprofit organizations in the same line of work. For example, a nonprofit serving the Hmong community may offer a consulting service to other organizations who have growing numbers of Hmong clients. In fact, a typical earned-income strategy for nonprofit organizations is to start a consulting or training business in their area of expertise, assisting other organizations—in the same region or in other parts of the country—with program development or implementation. Program consultants also work independently, without affiliation with a nonprofit.

2. Organizational Consultation

In organizational consultation, the consultant is concerned with the functioning of all or part of an organization, usually with the aim of improving its effectiveness or viability. The consultant may focus on functional areas and systems (e.g., finance, human resources, facilities, marketing, fund development, information management,