How Can I Become a Non-Profit Fund-Raising Consultant?

by Tony Poderis 2 Comments Filed under: Development Team

There comes a time when some non-profit development professionals begin thinking about saying goodbye to their organizations and hello to the world of fund-rais ing consulting. They want to know what it takes to be a consultant, and how to f ind clients. Although the consulting profession may seem attractive, the leap into this hazar dous arena requires serious thought and honest assessment of your knowledge, tem perament and motivation. Consultants must respond to a wide range of challenges, so they need to have a wide range of experience I know from hard-earned experience what it takes to provide sound, reliable coun sel to non-profits facing the challenges of recruiting volunteers, identifying p rospects, managing campaigns, and asking for money. No one should expect to be h ired as a fund-raising consultant without having behind them a broad base of exp erience in meeting and overcoming these challenges. Reading books and attending seminars are valuable learning experiences, but nothing trumps real-life experie nce. Large or small, young or seasoned, experienced or novice, clients expect consult ants to deliver the detailed plans and proven tools the organization needs to at tract the funds it seeks. This is a demanding profession where the consultant ca nnot say to a client, "I don't know," or "I'm not sure," or "What do you want to do next?" It can be intimidating when all heads turn and all eyes focus on the professional consultant seated alone at the end of the table, charged with answe ring any and all questions Perhaps most challenging for an aspiring consultant is selling his or her experi ence to organizations that enjoy a professional development staff and a record o f successful fund-raising. The consultant's role here demands mastery in reinfor cing and accelerating existing fund-raising campaigns, introducing new ideas, ap proaches, and strategies, and the reorienting of the development department. As critical as they are, knowledge and experience are useless without wisdom the i nstinct to know, in ever-changing circumstances, what to do and when to do it. E ven then, knowledge, experience and wisdom are meaningless in the absence of a p ositive temperament and "chemistry" with the client. Old Perceptions Die Hard Most of us have heard the old consulting joke. It goes, "What is a consultant? W hy, it's someone who takes your watch from you and tells you what time it is." (Actually, the joke is not far from what is mostly true in that a skilled consul tant will help leaders of organizations see a path clear to meeting their needs, a path usually directly in front of them, but otherwise obscured when they are not experienced or operating in a crisis mode.) One of the biggest and most common problems consultants face is dealing with an organization's disappointment with a previous consultant. All too often we hear potential clients say, "We paid our last fund-raising consultant all that money, and we got nothing for it!"

(With our careful assessment of their situation and needs, followed by a sensibl e and workable fund-raising proposal, we have the best chance of convincing them that we will be different.) Although I doubt she ever knew a fund-raising consultant, "Mother Goose" capture d a once-prevailing view of the profession: "Hark, hark, the dogs do bark, The beggars are coming to town. Some in rags, some in tags, Some in velvet gowns." In my early days, fund-raising consultants were scarce and the public's knowledg e of them was even more scant. I recall with some amusement, business and social settings where I was introduced as a fund-raising consultant. More often than n ot, women would clutch their purses and men would hurry a hand to their back poc kets to guard their wallets. This mock-shock, portrayed in "jest," reflected pre valent perceptions of the time. There is some good news. The last two decades are marked with a steadily growing appreciation of what consultants do and how valuable they can be. But, we still have some distance to go. Are We Selling Aluminum Siding or What? Some prospective clients still regard consultants as "vendors," and describe us as such in their RFPs (Requests For Proposal). Often, we're invited to submit ou r proposal for professional services as if we were being asked for a quote to ma intain and supply the organization's vending machines. Another demeaning (to me), though unintentional, situation is the "Cattle Call," otherwise known as the interview process. Organization staff lead us to an offi ce to a seat still warm from the consultant before us who has been herded into t he interview room. Seated in a separate area is the consultant who will fill the seat when we're called to be interviewed by the organization's leadership. When I was consulting, I took pains to determine the nature of the interview pro cess. If a Cattle Call was on tap, I declined. I refused to be one of the "herd. " No arrogance at work here, just experiences that convinced me the thirty-to-fo rty-five minutes allotted each candidate focuses the attention of committee memb ers more on the clock on the wall than on anyone's presentation. There was simpl y too much at stake the organization's future and my reputation to make a critically important presentation under such harried and restrictive circumstances. Bottom line? Although perceptions have improved, and sound consulting opportunit ies are more prevalent, anyone motivated by a vision of grandeur attached to the profession should probably pass on a career in fund-raising consulting. You Are On Your Own Fund-raising consulting is deeply rewarding and fulfilling. It's also a highly p recarious profession, definitely not for everyone. Before you take the plunge, m ake certain you have more than adequate experience, you possess superior judgmen t and more often than not, "luck" seems to favor you. A fund-raising consultant st ands ready to answer inevitable questions such as: Why isn't the money coming in? Why isn't the money coming in faster? What do we do now that the Campaign Chair is no longer available? Why isn't the solicitation committee doing its job? What do we do now that our biggest and most promising prospect has said no? Should we put the campaign on hold until the economy gets better?

Should we lower the goal since it seems we can't reach it? I know we still need a million dollars to reach our goal, but shouldn't we start going to the general community for $50 and $100 gifts? What do we do since our own Trustees are not giving at levels we counted on? You're a consultant, supposed to be experienced in fund-raising. Since we're not as experienced in soliciting as you are, and with our campaign lagging behind, why can't you make some solicitation calls for us? What are we paying you for anyway? And so they go. Would you be able to answer these questions? Equally significant , would you be able to act on them? Make sure you can and do. Your next contract depends on it. Never Promise What You Can't Deliver Consultants should never lead clients to believe the success of their fund-raisi ng program rests solely on the engagement of a consultant. No one can live up to such a boast and anyone who thinks they can is setting up themselves and their potential clients for expectations well beyond their reach. A multitude of varia bles contributes to a successful a fund-raising campaign, many of which are not in the control of a consultant. How Do You Measure a Consultant's Value? Consultants bring competency, judgment and a reassuring presence, characteristic s that are not only greatly subjective in nature, but also practically impossibl e to measure, relative to their value to a fund-raising campaign. Thus, there ca n be no direct correlation between the involvement of a fund-raising consultant and the outcome of a campaign. Resources available in-house allow some organizations to plan and execute fund-r aising campaigns without the services of outside counsel. If they fail, who can know to what degree the outcome would have been different had they hired a consu ltant? There are, more commonly, organizations that ignore their lack of resourc es and launch campaigns on blind faith. Most of them fail, and no amount of outs ide help would have mattered. The conundrum? You can measure, to some degree, a consultant's knowledge of the fund-raising process and of the quality of the tools he or she provides. You can evaluate experience and measure capability based on track records and testimoni als. What is "immeasurable" is the fund-raising consultant's wisdom the gut instin ct to know, in ever-changing circumstances, what to do and when to do it, while maintaining a highly positive perspective and demonstrating the insight demanded of a team leader. The True Joys of Non-Profit Consulting One of the things you can look forward to as a consultant is the satisfaction th at comes from applying your skills and dedication to improving the human conditi on or enhancing the human experience. What can compare to seeing the smile on the face of a physically challenged youn gster astride a horse at a therapeutic riding center? How comforting is it to wa tch families in crisis as they share a meal at a hunger center? How satisfying i s it to know your efforts helped improve the quality of air in your community, o r helped to preserve a wildlife refuge, or enabled a student to become the first in his family to attend college? In short, the work you do will not only make a positive difference in the lives of others, it will also bring you a level of personal satisfaction beyond what m

ost consultants can ever experience. More than just a job, non-profit consulting is a privilege and a joy. Savor every moment of it. I've Hung My Shingle . . . Now What? Network: Joining the Association of Fundraising Professionals and attending your local chapter's regular meetings are some of the best ways to get to know folks who work for non-profits (including trustees who attend the meetings) and to sp read awareness of your consulting business. Arrive early to maximize "Let me hav e your card," opportunities during the "attitude adjustment" period prior to the program. Speak: Explore opportunities to speak (free of charge) on fund-raising topics, s tarting with your local AFP chapter. Maybe the library, or the United Way, or an organization of volunteers, or the University or Community College would welcom e such a talk as part of their menu of seminars and programs targeted to non-pro fits. Speaking to a group of interested individuals is one of the best ways to b e seen and heard in action; it also helps build your reputation as an "expert" i n fund-raising. Build on the Success of Others: Identify consulting firms or solo practitioners at work in your area. Perhaps a firm needs a new consultant to add to its team, or an individual's consulting business is growing and she or he would welcome a partner/colleague such as you. Utilize the "grapevine" to determine the best pot ential matches. Publish: Write an article that might be of interest to your local newspaper's wr iter on things philanthropic. Offer an article, or articles, for publication in the newsletters of some of the non-profits in your area. Be on the lookout for a ny opportunity to have something you have written published somehow, somewhere, in your community to help build your reputation. Referrals: Collect the names of the board members from organizations where you'v e worked, or volunteered, and organizations you support. Get their addresses if you can, or do your own phone book research. Remind them of your good associatio n with them, and ask them to consider your services when needs arise in the comm unity organizations with which they are associated. Build and strengthen relatio nships with foundation program officers and corporate contributions managers. Ma ke them aware of your credentials and availability as fund-raising counsel. As t hey talk to grant seekers and grantees, these stewards of foundation and corpora te money are often in position to identify consultants which organizations can c ontact as resources for their fund-raising needs. While it's good to be mentione d in that way, we are especially blessed when those grant-givers actually recomm end us. WOM: I've advertised, mailed and otherwise distributed my brochure all with relati vely scant return, compared to time and expense expended. What worked best over time, and accounted for well over 90 percent of my engagements, was good old "Wo rd Of Mouth." Do all you can to position yourself as a qualified, experienced, a nd capable option whenever and wherever the subject of consultants arises. A Good Day's Work Warrants a Good Day's Pay Prepare for resistance and complaints from prospective clients who arbitrarily d eclare your fee is "too much." This common response likely reflects an organizat ion with shortsighted leaders who fail to accept their responsibility to raise e nough funds to support a first-rate organization. The retort, "non-profits pay l ess" is, likewise, a poor excuse unless, of course, the organization's leaders a re willing to settle for "less" quality and accuracy of work performed.

Consultants are not adversaries. They are one-third of a volunteer-management-co unsel team working together toward a common objective. Organizations hire fund-r aising counsel because their professional experience and judgment helps to ensur e that campaign plans move quickly and aggressively that an organization steps on the accelerator rather than the brakes. I recognize the challenge that cash-strapped organizations face in providing upf ront, fair compensation to consultants for the legitimate and important work the y perform. I question whether an organization unable to pay a fair fee for a cap able, qualified and experienced consultant one ready and willing to go "the extra mile" is likely to succeed. Many such organizations refuse to acknowledge the cons ultant's role as what is arguably the most important function in the organizatio n and compound their problems by asking accomplished professionals to work for b elow standard wages. Some reading this article might react with indignation or disappointment over my views about fair pay for a good consultant. After all, non-profits work for the public good and charitable attitudes abound in such an environment. If you're a board member or a staff administrator, you may feel an outside professional sho uld be willing to compromise on compensation for the good of the organization an d its mission. The question of fees comes down to quality. Organizations that pay the best get the best. Only if leaders of an organization are willing to settle for mediocre effort can they justify an offer of mediocre pay. An old adage describes well th e outcome of such a decision: Penny wise, pound foolish! What Do I Charge For My Consulting Services? The extent to which an organization must rely on consulting services for a campa ign depends to a significant degree on how much of the planning and execution of the campaign can be accomplished by the non-profit board and staff. The less ab le the organization is to handle the planning and management of the campaign, th e greater will be the organization's need of and outlay for consulting services. On a per-day (eight hours) basis, some consultants might charge $500, but the mo st sought after and experienced fund-raising consultants charge in the neighborh ood of $1,000 per day. Some will be as high as $1,250 to $1,500 or even more. In most instances, it doesn't matter whether the consultant actually works a full day at a time. You just have to be sure the total hours-per-month requirement is met. Some consultants will charge by the hour, and their hourly rates are likely to b e in the neighborhood of $100 to $125. Based on an eight-hour day, that adds up to about $1,000 per day. Focusing too strongly on fees for consulting services, in terms of cost per hour , per day, or per month can mislead. A stated hourly, daily, or monthly rate is relatively meaningless. It all comes down to the total time provided by a consul tant to the consulting engagement. Travel Time The issue of compensation for travel to and from "real time" meetings and servic e delivery requires considerable thought undertaken well in advance in order to avoid surprises. The practices of consultants no doubt vary a great deal. I charged the going IRS mileage-reimbursement rate if the trip door to door was 1 hour or less (approx. 60 miles). I billed 1/2 the equivalent of an hourly fee for professional services f

or time in the "driver's seat" for trips in excess of 1 hour/60 miles, as well a s full mileage reimbursement. Giving Gifts To Clients I?ve been asked by colleagues about my policy on gifts to clients, e.g., flowers or candy when a special donation is received, a campaign milestone is reached, etc. My response? I never sent gifts to my clients. Practically speaking, if it's a bouquet this time, clients might then anticipate the arrival of a fruit basket the next time. I was wary of setting such a prece dent. When the time was right, I sent letters of congratulations to the appropriate pe rson or persons, with copies going where they would do the most good. I did this always with great care. Sometimes we must work praise and congratulatory letter s around organizational politics, especially when directed to what may be troubl ed or difficult staff. We might just be giving high and public praise to someone the boss wants to fire. I know this from personal experience! Along with well-directed congratulatory or complimentary letters, I always sent my personal contribution at the end of my engagement. I found no workable formul a or benchmark relative to the goal or the actual money raised, what other consu ltants gave in the past, etc. I gave what I thought to be fair and generous, and clients always regarded what I gave in that way. Of course, the amount of my do nation related to how well we did in reaching the goal and the job done by the l eadership. When I was a member of a consulting firm, the firm's Principal sent our company' s contribution to each client we served upon conclusion of the campaign. Karen, as the owner of the firm, made the decisions based on profits earned and we team members were satisfied our respective clients were favored accordingly. In my opinion, whatever a consultant contributes should be considered a bonus some thing given in addition to services good, reliable and, most often, beyond what is "contracted." Consulting Through the Lens of the Law There are a few states in America where government officials are working toward registration of everyone in the fund-raising "business." What disturbs me is the trend to lump together under the label of "Professional Fund-Raising Counsel" t he "paid solicitor" (such as those who call while you're eating dinner) and prof essional counsel. Such standards fail to distinguish between consultants who adv ise their clients and guide fund-raising approaches and individuals who solicit, receive, hold donated funds, and other things best described as "conducting fun d-raising campaigns" on behalf of their clients. The more deeply involved in the fund-raising work of the client one becomes, the more cautious he or she must be in these areas. The first steps would almost ce rtainly involve inquiries and exploration of opportunities to correct any errors concerning registration and reporting. Many states require annual registration; some require bonds, filing of contracts with charities, and reports on outcomes. Because requirements differ by jurisdi ction, the best course of action is to contact the Attorney General in the state (s) where you will be consulting and determine applicable regulations, fees and reporting requirements. Pulling the Plug

The time may come when you need to decline an engagement or exercise the termina tion clause of your contract. Although infrequent, I have found it necessary to walk away from unworkable situations. One client didn't want me to report feasibility-study results they didn't like. The "messenger" (me) reported verbatim responses of the 25 participants they sel ected for me to interview, each of whom answered questions approved in advance b y the organization's leadership. Board members were expecting results of the study as promised in our contract as well as in the introductory letter sent to each interviewee. But, the executive director and the president persisted, asking me to "soften" the wording of nega tive and critical comments made by several of the study participants. In other w ords, they wanted me to "make up" new quotes for them. I refused, insisting the words of interviewees, without attribution, had to be i n the final report. A split-second moment of decision followed when the two offi cials remained adamant about altering the report. I got up, gathered my papers, thanked them politely, warned them they were making a huge mistake in misleading their stake holders, and walked away, leaving the original report in their hand s. I don't know if they ever learned the more negative a study's results are, the m ore important it is to forego bruised egos and pay attention and respond to hone st input from key stake holders. I don't know either if they ever launched their campaign. Opportunities to Serve and Grow There is definite niche a much-needed service for a fund-raising consultant offering services as an interim development director. I have done so many times, serving numerous and various types of non-profits on an interim basis and helping them identify and recruit their next development directors. Following are ways such e ngagements worked best and why once your engaged: Focus on maintaining the basic and regular solicitation process for renewing gif ts so such funds are not delayed or deferred; implement scheduled solicitations of new prospects. Maintain giving records, ensure timely acknowledgments of gifts received, and ke ep general financial records in order. As you know, this is truly the heart of a ny development department. Be seen and heard as the professional responsible for department stability and m aintenance. This will help everyone have confidence that momentum will be not be lost during the search for the new director. Develop as soon as possible a plan to hire the new Director of Development. Work ing with a clear job description, issue a "call for resumes" geographically appr opriate to organizational needs and resources. Review the resumes, interview the best candidates, then recommend the top two or three for interviews with the or ganization's key officials. What I suggest you do not do: Don't engage in developing long-range plans or new strategies, which counters th e definition of "interim." Such elements are better left to the new director. (A s the old adage says, "The doer must also be the planner.") Don't engage in evaluating development office staff. Keep the department humming as best you can. You can't fire anyone, and you certainly can't hire anyone. Ag ain, those duties are for the new, "permanent," director to handle. The experience level of a new director of development may result in extension of your contract as a mentor for a time to be determined. I did that as well, a nu

mber of times. Contracts Agreements between consultants and their clients can take many forms. There may be occasions that demand a contract formal in nature, intricate in wording, and legalistic in phraseology. In my experience, however, simpler is better. The fol lowing are points I emphasized before I took on a job: 1.Understanding that I was not a consultant whose regimen and methodology was u nyielding. I would be flexible in the services I provided and willing to adapt t o the organization's processes. 2.Clients unwilling to take my advice and follow my counsel should not hire me. To do so would waste my time and their money. 3.No reputable consultant will "hire on" as a fund-raiser or agree to compensat ion based on a contingency or a percentage of funds raised. I'm not in position to give legal advice regarding the terms of an agreement whi ch you, as a consultant, would present to a potential client or, as it sometimes happens, the terms of a contract the client presents to you. The latter, often drawn by the client's attorney, entails mind-numbing language far beyond what is necessary and probably beyond what you want to negotiate. I'm not suggesting your response to such situations. I can only tell you what I hav e done on the several occasions when clients presented me with such excruciating ly exacting legal documents that I balked at the idea of agreeing to them. In a few such contracts, there were even exacting amounts of money cited as poss ible damages for which I would be liable, relative to a number of unreasonable c onditions. Chief among them was that somehow I could cost them money by steering their donors to other clients. In that and all similar cases, I rejected any fi nancial-liability clauses, regardless the reasons, or the way in which they were worded. In each instance, the client's presentation of a detailed legal document was sub sequent to the submission of my simple contract for services. The terms of my co ntracts were based on oral or written invitations for submission and preceded by at least one explorative meeting with officials of the organization. Even absen t the inclusion of financial liability, I respectfully rejected what I thought t o be unnecessarily formal, intricate, and legalistic phraseology, and simply rep laced it with the following: "Tony Poderis agrees to hold all organizational information, including donor rec ords, in strict confidence." The revised contracts were accepted each time no exception. In times long past, a simple handshake constituted agreement, but that's no long er so in our litigious society. That's why I chose to write contracts that engen dered trust without the imposing and intricate language that seems to dictate dist ance, an impersonal relationship, and the need for caution, if not skepticism, o f the consultant's integrity. To me, framing the relationship in this manner is a poor way to begin. The most successful and rewarding relationships in the philanthropic world work on trust. Rare are the times when we, as consultants, would ever have cause to exact lega l action against a client. Even if action appears justified, we seldom follow th rough with a lawsuit. Victimized as we may in fact be, the labeling as one likel y to instigate capricious law suits would cause irreparable damage to our standi ng with the non-profit community.

I expected my non-profit clients to share my respect for our association and my role as a trusted member of the organization's "team." Contract language that su ggests otherwise almost predicts trouble and positions non-profits and their fun d-raising consultants as adversaries rather than partners working to achieve a c ommon goal. Additional Reading: To Consult, Or Not To Consult, That Is The Question Consulting Agreement For An Annual Fund Campaign These are my views about becoming a non-profit fund-raising consultant. I welcom e your comments. ============= Posted on July 14, 2011 PND is pleased to offer a series of articles for jobseekers and prospective emp loyers provided by our partners, Commongood Careers, a national search firm dedi cated to helping today's most effective social entrepreneurs hire the best talen t, and Professionals for Nonprofits, an East Coast-based search firm that provid es temporary, temp-to-hire, direct hire, and executive search services to the no nprofit sector. How Can I Become a Nonprofit Fundraising Consultant? by Tony Poderis This article was written by Tony Poderis, a veteran fundraising consultant who s erved as director of development for the Cleveland Orchestra for twenty years; h e is not affiliated with Commongood or Professionals for Nonprofits. Are you a nonprofit development professional thinking about striking out into th e world of fundraising consulting? Think before you leap: although the consultin g profession may seem attractive, you'll need to do a serious and honest assessm ent of your knowledge, temperament, and motivation for this work. Here are my su ggestions, based on hard-earned experience. Consultants Need Experience No one should expect to be hired as a fundraising consultant without having a lo t of real-life experience with recruiting volunteers, identifying prospects, man aging campaigns, and asking for money. Large or small, young or seasoned, nonpro fits expect consultants to deliver on detailed fundraising plans. You can never say to a client, "I don't know" or "What do you want to do next?" Be prepared to live in the spotlight and have all the answers. Perhaps most challenging for an aspiring consultant is selling his or her experi ence to organizations blessed with a professional development staff and a record of successful fundraising. The consultant's role here demands mastery in reinfo rcing and accelerating existing fundraising campaigns, introducing new ideas, ap proaches, and strategies, and helping to reorient the development department tow ard different goals. Specifically, be ready to answer (and act on) the following questions clients wi ll inevitably throw at you: Why isn't the Why isn't the What do we do Why isn't the What do we do money coming money coming now that the solicitation now that our in? in faster? campaign chair is no longer available? committee doing its job? biggest and most promising prospect has said no?

Should we put the campaign on hold until the economy gets better? Should we lower the goal since it seems we can't reach it? I know we still need a million dollars to reach our goal, but shouldn't we start going to the general community for $50 and $100 gifts? What do we do now that our own trustees aren't giving at levels we counted on? You're the fundraising expert: Why can't you make some solicitation calls for us ? What are we paying you for anyway? Old Perceptions Die Hard Most of us have heard the old consulting joke: "What is a consultant? Someone wh o takes your watch and tells you what time it is." Another challenge consultants usually face is dealing with an organization's disappointment with a previous c onsultant. Your best weapon against both kinds of prejudice is your careful asse ssment of the client organization's situation and needs, followed by a sensible and workable fundraising proposal. That'll show them what you're worth, and how you're different from other consultants. Never Promise What You Can't Deliver Consultants should never lead clients to believe the success of their fundraisin g program rests solely on the engagement of a consultant. No one can live up to such a boast and anyone who thinks they can is setting up themselves and their p otential clients for disappointment. A multitude of variables contributes to a s uccessful a fundraising campaign, many of which are not in the control of a cons ultant. The Interview Process: Are We Selling Aluminum Siding or What? Anyone motivated by a vision of grandeur should probably pass on a career in fun draising consulting. Beware the interview process known as the "cattle call," wh ere you're led to a seat still warm from the previous interviewee and are expect ed to give your spiel in half an hour. When I was consulting, I took pains to av oid this; if I determined that the organization was holding a cattle call, I dec lined the interview. No arrogance at work here; it's just that experience has co nvinced me the time allotted each candidate focuses the attention of the committ ee more on the clock than anyone's presentation. There was simply too much at st the organization's future and my reputation to make a critically important p ake resentation under such harried and restrictive circumstances. Negotiations: Pay and Contract Prepare for resistance and complaints from prospective clients who declare your fee is "too much." Consultants are not adversaries; they should be viewed as one -third of a volunteer-management-counsel team working together toward a common o bjective. Some of you reading this might disagree: after all, nonprofits work fo r the public good. If you're a board member or a staff administrator, you may fe el an outside professional should be willing to compromise on compensation for t he good of the organization and its mission. I feel the question of fees comes d own to quality: organizations that pay the best get the best. On a per-day (eight hours) basis, some consultants might charge $500, but the mo st sought-after and experienced fundraising consultants charge in the neighborho od of $1,000 per day. Some will be as high as $1,250 to $1,500, or even more. In most instances, it doesn't matter whether the consultant actually works a full day, as long as the total hours-per-month requirement is met. Some consultants w ill charge by the hour, and their hourly rates are likely to be in the neighborh ood of $100 to $125. Based on an eight-hour day, that adds up to about $1,000 pe r day.

Contractual agreements between consultants and their clients can take many forms . There may be occasions that demand a formal, detailed contract. I'm no legal e xpert, but in my experience simpler is better. Sometimes a client organization w ill express its fear of a consultant poaching its donor records for another clie nt by insisting that the contract include financial-liability clauses. I always respectfully rejected this, and instead proposed the following wording: "Tony Po deris agrees to hold all organizational information, including donor records, in strict confidence." This was always sufficient guarantee for every one of my cl ients. Certification Many states require annual registration of fundraising consultants; some require bonds, filing of contracts with charities, and reports on outcomes. Because req uirements differ by jurisdiction, the best course of action is to contact the at torney general's office in the state(s) where you will be consulting to determin e applicable regulations, fees, and reporting requirements. I've Put Out My Shingle . . . Now What? Network: Join the Association of Fundraising Professionals and attend your local chapter's regular meetings. Speak: Explore opportunities to speak (free of charge) on fundraising topics, st arting with your local AFP chapter. Your local library, the United Way, a volunt eer organization, or your local college may invite you to give a talk if they pr ovide seminars and programs targeted to nonprofits. Speaking to a group of inter ested individuals is one of the best ways to be seen and heard in action; it als o helps build your reputation as an "expert" in fundraising. Build on the succes s of others: Identify consulting firms or solo practitioners at work in your are a. Perhaps a firm needs to add a new consultant to its team, or an individual's consulting business is growing and she or he would welcome a partner/colleague s uch as you. Publish: Write an article that might be of interest to your local newspaper. Off er an article, or articles, for publication in the newsletters and/or Web sites of some of the nonprofits in your area. Referrals: Collect the names and contact information of the board members of org anizations where you've worked or volunteered. Remind them of your good associat ion with them and ask them to consider your services when needs arise at their o rganizations or other organizations in the community with which they are associa ted. Build and strengthen relationships with foundation program officers and cor porate contributions managers, and make them aware of your credentials and avail ability. As they talk to grantseekers and grantees, these stewards of foundation and corporate money are often in a position to identify consultants that organi zations can contact as resources for their fundraising needs. WOM: I've tried nearly every form of advertising, typically with scant return (c ompared to the time and expense involved). What worked best over time was good o ld "word of mouth." Do all you can to position yourself as a qualified, experien ced, and capable option whenever and wherever the subject of consultants arises. Opportunities to Serve and Grow There is a definite need out there for fundraising consultants to pinch-hit as i nterim development directors. I have done so many occasions. A few caveats: Focus on maintaining the basic and regular solicitation process for renewing gif ts so that they are not delayed or deferred, and implement scheduled solicitatio

ns of new prospects. Maintain giving records, ensure timely acknowledgments of gifts received, and ke ep general financial records in order (truly the heart of any effective developm ent department). Be seen and heard as the professional responsible for department stability and m aintenance. This will help everyone have confidence that momentum will be not be lost during the search for a new director. Develop as soon as possible a plan to hire a new director. Don't engage in developing long-range plans or new strategies, which run counter to the definition of "interim." Such elements are better left to the new direct or. Similarly, don't evaluate, hire, or fire development staff; just keep the de partment humming as best you can. The successful hire of a new director of devel opment may result in extension of your contract as a mentor for a period of time to be determined. (I did that a number of times.) The Last Word: Joys of Nonprofit Consulting One of the things you can look forward to as a consultant is the satisfaction th at comes from applying your skills and dedication to improving the human conditi on or enhancing the human experience. What can compare to seeing the smile on the face of a physically challenged youn gster astride a horse at a therapeutic riding center? How comforting is it to wa tch families in crisis as they share a meal at a hunger center? How satisfying i s it to know your efforts helped improve the quality of air in your community, o r helped to preserve a wildlife refuge, or enabled a student to become the first in his family to attend college? More than just a job, nonprofit consulting is a privilege and a joy. Savor every moment of it. Tony Poderis welcomes your comments at his Web site, Raise-funds.com. ============== To Consult Or Not to Consult: That Is the Question by Tony Poderis 2 Comments Filed under: Development Team

To consult, or not to consult that is the question. Or at least it would be if Ham let were to ask it. Hamlet s slings and arrows of outrageous fortune make me think o f fund-raising goals too great and resources to meet them too few. His sea of tro ubles sounds like an ocean of red ink. In fact, think about a scarily challenging fund-raising campaign too long, and y our mood is likely to mirror the melancholy Dane s. Just like him, you may begin t o contemplate traveling into an undiscover d country. If you re exploring using outside professional fund-raising counsel for the first time, the journey is likely to take you to a country nearly as undiscover d where no traveler returns as Hamlet s oblivion. But, the land of fund-raising consultants is a place from which you can come back, and if you watch your step, with the co mpetent and capable help you need. Fund-raising consultants can be a godsend to non-profits. For organizations with an inexperienced, small, or nonexistent development staff, they can do everythi ng from mentoring a budding development director to designing specific campaigns and tools to setting up the organizational structure for an ongoing fund-raisin g effort. Larger organizations with considerable experience in fund-raising and

a fully professional development staff can benefit from a consultant s mastery of the process of initiating new types of fund-raising efforts and reorienting the development department Basically, there are two types of consultants: National or regional firms offering a full range of services and a large staff experienced in all facets of fund-raising and well versed in the needs of all ty pes of non-profit organizations. Locally based individual consultants or minimally staffed firms that know a part icular community s fund-raising climate and resources and perhaps specialize in on e or more broad types of non-profit organizations the arts, education, health care , social services, etc. ..Ay, There s The Rub! Generally, the first category of consultants will work only with organizations t hat have an established history of service and a successful fund-raising record. They are akin to investment brokers who will handle an individual s account only if he or she has $100,000 on deposit. While their attitude may seem discriminato ry and elitist, major consulting firms do not want to be confronted with organiz ational and board leadership problems, insufficient staff and volunteers, an ind istinct mission, or any of the other likely deterrents to conducting a successfu l fund-raising effort. They exist to bring more know-how to an organization whic h is already well-grounded and has the financial base to afford the not inconsid erable cost of their services. Such firms charge in the neighborhood of $1,250 a day plus expenses and are likely to require contracts of some length. For non-profits that are smaller, less well-defined, new, or relatively inexperi enced at fund-raising, consultants from the second grouping are likely to be abl e to do more and at a lower cost. Often, they are individuals who have a success ful track record as development director at one or more organizations within the community. They know the lay of the land who has given how much to what causes an d who has the ability to lead a campaign. Local fund-raising consultants can men tor an organization s board and fledgling development staff. They are more likely to be able to help with any institutional problems hamstringing an organization s fund-raising efforts. They probably have dealt with similar obstacles in the pas t while facing the same resource constraints. They are likely to be more willing and able to help an organization develop a workable strategic plan, write a cle arer mission statement, enlarge its volunteer base, or undertake a maiden fund-r aising effort. Their intimate knowledge of a community s donor and volunteer base can make them invaluable. Many individual consultants and small firms will charg e by the hour, and their daily rates are likely to be in the neighborhood of $50 0. A proposal from a first-class consulting firm, large or small, to act as counsel in a fund-raising campaign would likely include the offer to help determine: The Case For Support The campaign plan Key prospects and their suggested giving levels Individual strategies for major-gift solicitations Volunteer leadership Volunteer solicitors The proportion of gifts to be sought from trustees, other individuals, corporati ons and foundations The campaign goal Consultants expect to be made familiar with an organization s financial projection s and strategic planning process, and to be involved in the articulation of its mission (at least in terms of how it will be presented during the campaign). Con sultants need to meet and work with key staff members and trustees of the organi

zation. The extent to which an organization must rely on consulting services for a campaign depends, to a great degree, on how much of the planning and executio n of the campaign can be done by the development department. The less able the d evelopment department is to handle the planning and management of a campaign, th e greater will be the organization s need and outlay for consulting services. Consultants should not be thought of as a replacement for either the staff or th e volunteer leadership of a campaign; they are an addition to the campaign team, hired so that an organization can move more quickly and aggressively because of their added professional experience and judgment. The best way to choose a consultant is to ask other non-profits in the community for recommendations and then interview those candidates who look as if they mig ht fill the bill. Request a written proposal that includes a firm estimate of ti me and charges. Always be sure to talk with both a principal of the consulting o rganization and the person who will be handling the assignment day to day, and i nclude a cancellation clause in the contract that requires no more than 30-days n otice. For Those Who Would Bear The Whips And Scorns Of Time .. 1.Never hire consultants whose regimen and methodology are unyielding. Consulta nts should be flexible in the services they provide and willing to adapt to an o rganization s processes. 2. Never hire consultants who request they be paid a percentage of the funds ra ised in a campaign. This is regarded as unethical in the industry and can result in serious and lasting consequences for non-profit organizations. See my articl e The Argument Against Paying Development Professionals Based upon the Amount of Funds Raised 3. Never hire consultants unless you are committed to taking their advice and fo llowing their counsel. To do otherwise is to throw your money away 4. Never hire consultants to ask for the money. That s the job of your volunteers. It s the responsibility of the board. See my article Asking For The Money Is The Job Of The Leadership And Friends Of A Non-Profit Organization: Never Hire Some one To Do What Is Their Responsibility To Consult, Or Not To Consult If you go into the process of picking a fund-raising consultant with the confusi on of a Hamlet, then tragedy does await. But, choose carefully, with an understa nding of what it is you really want to achieve and you can hit today s goals while laying the groundwork for future success. As Shakespeare said in a cheerier ref lection on problems and solutions, All s Well That Ends Well. Those are my views on the subject. What are yours? I welcome your comments and s uggestions.

========== Consulting Agreement for an Annual Fund Campaign by Tony Poderis 7 Comments Filed under: Development Team

The following example of an annual fund development agreement between a non-prof it organization and a fund-raising consultant is suggested as a guideline for: 1. Organizations having little or no experience in drafting such documents. 2. Experienced development professionals beginning a new career as development consultants. There may be occasions when a contract more formal in its nature, intricate in i ts wording, and legalistic in its phraseology is needed. However, my experience has been that simpler is better This sample annual fund agreement can be easily adapted for capital, endowment, sponsorship, and underwriting campaigns. The purpose of the fund-raising campaig n and some of its jargon might be different, but for the most part, the steps in the fund-raising process are the same. That can be confirmed by reviewing my we bsite s articles and plan outlines for those respective fund-raising campaigns. A good campaign plan must layout what is to be done, when it will be done, and w ho will do it. The same is true of an agreement between an organization and a co nsultant. Clearly defined and agreed-upon expectations are at the heart of any s uccessful contract. Contract Between Fund-raising Consultant and Non-Profit Organization for Counsel for an Annual Fund Campaign Introduction Annual fund campaign gifts to the Non-Profit Organization (NPO) provide the entr y point of support for most of its donors. Annual funds comprise the foundation of the NPO s overall operating support, and they are the steppingstones to special and major gifts. As personal contacts by NPO volunteers with donors continue, t hose donors are made more and more a part of the NPO family through a process of cultivation. As a result, the NPO will better be able to secure future sponsors hip, underwriting, endowment, and capital gifts. In addition, certain individual s will be capable of making provisions for the NPO in their estate plans. Thus, it is axiomatic that the NPO s sound future relies upon a strong annual fund program that builds a predictable base of support to help meet current and grow ing operating needs year after year. Such an achievement will provide a pool of proven donors for other fund-raising efforts. It will also encourage the opportu nities for special individuals to engage in carrying out the mission of the NPO in volunteer governance roles. Overview Fund Raising Consultant (FRC) will assist NPO in the planning and implementation of a renewed and accelerated Annual Fund program for NPO s upcoming fiscal year. FRC will work with NPO s campaign leaders, administrative staff and board of trust ees to complete the campaign, which for the next fiscal year, will require contr ibuted income to be raised in the amount of approximately $__________ to balance the operating budget. Scope Of Work To Be Provided By FRC 1.Develop a campaign plan: The plan will detail work and campaign structure needed to complete personal so licitations of NPO Board of Trustees; current and lapsed donors; and new individ ual, corporate, and foundation prospects. The plan will include timetables and c ampaign-related marketing and publicity plans.

2.Conduct prospect identification and review sessions: Identify donor prospects and determine appropriate asking strategies and donati on amounts. 3.Design prospect cultivation programs: Prospects are to be engaged in and involved with the NPO so that they develop a sense of ownership of NPO and its mission. 4.Develop membership gift levels: Incorporate benefits and privileges to donors for corresponding contributions. Those giving benchmarks will also relate to specific NPO programs and services m ade possible by donors support. 5.Produce and package certain NPO programs and services: Ongoing programs and services and new and desired endeavors will be reviewed, s ummarized, and prioritized by need. Help to identify the most likely prospects f or those underwriting and sponsorship opportunities based on past experience, pr ospect contribution guidelines, and the degree to which recognition and credit f or support is desired. Assist in the development of full proposals for funding t o the appropriate prospects. 6.Provide training and orientation for volunteer solicitors: Personally work with solicitors to assist them in feeling comfortable with thei r role as a solicitor. Ensure they have the best and most complete tools possibl e. Train and advise solicitors on how they should ask for money. 7.Assist in preparing planning, organizational, and marketing documents: These include a fund-raising budget, a case for support, funding proposals, let ters, and newsletters. They are all required for successful implementation of an y fund-raising program. 8.Provide ongoing counsel and direction: Full and involved hands-on management of the campaign. Explicit Duties And Responsibilities Of FRC A key aspect of FRC s service will be personal involvement in working with NPO cam paign management in the formulation of detailed and individualized strategies fo r all solicitations for major gifts. Major-gift prospects are valuable resources . Each solicitation must be planned with care. FRC will work closely with the NP O campaign leadership to maximize the chances for success in each major-gift sol icitation instance. 1. Coordinate all aspects of the campaign working with the campaign chair. Prov ide the resources and guidance necessary for the chairperson to lead the solicit ors in the most efficient and timely manner possible. 2. Attend all campaign-related meetings and actively participate in the proceed ings. 3. Develop and prepare documents and exhibits required for all meetings, includ ing agendas, time-lines, etc., with campaign leadership, committee, and staff. 4. Provide campaign orientation and training to volunteer solicitors. 5. Assist with the compilation and review of all viable NPO donor prospects. Con duct rating programs to suggest asking amounts for each prospect Recommend the top tier cutoff level of prospects having the best giving potentia l as those to be personally solicited by committee members. 6.Work with solicitors to provide solicitation strategies for their prospects. 7.Assist in the development of other campaign-related materials, such as pledge cards, gift return envelopes, proposals, brochures, etc. 8. Develop and produce progress and tracking summaries for forecast and evaluat ion reports and meetings. 9. Provide opinions and counsel for all situations that directly or indirectly could affect the campaign s outcome. 10.FRC agrees to hold all organizational information, including donor records, in strict confidence. Summary of Responsibilities for NPO s Campaign Leadership

The volunteers and the administration of the NPO will comprise two-thirds of the team that will launch, implement, and manage a successful annual fund campaign as quickly and cost effectively as possible. The FRC will comprise the other thi rd of the team. In order for the campaign to be successful, all must perform the ir assigned parts. Some of the key responsibilities of NPO volunteers and admini stration are: Campaign Chairperson 1. Recruit a committee of solicitors sufficiently large enough to assign person al solicitors to all prime prospects. Each solicitor will be responsible to pers onally solicit five to six prospects. 2. Convene and lead all required prospect rating and assignment meetings and al l tracking, progress, and final report meetings. Campaign Solicitors 1. Endorse and articulate the mission and case for support of NPO. 2. Make personal gifts and secure contributions where personally connected. 3. Select and personally solicit five to six prospects. 4. Attend all report and progress meetings of the campaign team. NPO Staff: 1. Compile applicable previous donor data, identify new and likely prospects, a nd provide all other related information required. 2. Print and help distribute campaign materials, including brochures, pledge ca rds, gift envelopes, etc. 3. Help arrange and schedule campaign meetings. 4. Type letters, proposals, listings, etc. as required by campaign leadership and solicitors 5. Receive and record, apprise appropriate solicitor of, and acknowledge to don ors all gifts. NPO and FRC enter into an agreement as outlined above to work together for a con tract period of at least __(*)___, which is of a duration spanning the present t ime to approximately the end of the campaign and fiscal year. Either party may c ancel the contract with 30 days written notice. Based upon a mutually agreed-upon assessment and review of the proposed Annual F und Campaign, NPO staff, NPO board, and FRC, estimate that on-site activities an d meetings and FRC s in-office production of campaign resources on behalf of the a nnual fund campaign, will require an average of __(*)__ days per month of FRC s ti me to ensure the fulfillment of all established campaign premises and initiative s and to fully support NPO s campaign. The fee for FRC s services to design, implement, and direct the annual fund progra m to help NPO meet its short-term and long-term fund-raising goals is $___(*)___ per month, plus travel costs, and all other prior agreed-upon expenses. For the NPO:____________ Title____________ Date________ Consultant:_____________ Date________ Addendum Filling In The ____(*)___ Blanks of the Contract The extent to which an organization must rely on consulting services for a campa ign depends to a significant degree on how much of the planning and execution of the campaign can be accomplished by the NPO board and staff. The less able the organization is to handle the planning and management of the campaign, the great er will be the organization s need of and outlay for consulting services.

On a per-day (eight hours) basis, some consultants might charge $500, but the la rger firms and the most sought after and experienced fund-raising consultants ch arge in the neighborhood of $1,000 per day. Some will be as high as $1,250. In m ost instances, it doesn t matter whether the consultant actually works a full day at a time. You just have to be sure the total hours-per-month requirement is met . Some consultants will charge by the hour, and their hourly rates are likely to b e in the neighborhood of $100 to $125. Based on an eight-hour day, that adds up to about $1,000 per day. Focusing too strongly on fees for consulting services, in terms of cost per hour , per day, or per month can mislead. A stated hourly, daily, or monthly rate is relatively meaningless. It all comes down to the total time provided by a consul tant to the consulting engagement. Remember, the best consultant for your particular situation should not be consid ered solely based on what your organization can afford or what it has provided i n the budget. I recognize the serious constraints under which most non-profits o perate when it comes to having money available to pay for professional services. However, what really determines a consultant s value to any organization s fund-rai sing program is the consultant s mastery of the fund-raising process. Don t look at the dollars alone. Look for someone with: Good decision-making ability Proven and well-regarded professional experience Proper temperament Keen judgment These attributes create a value that will help you move forward more rapidly and aggressively. Especially when it comes to fund-raising consultants, you really do get what you pay for. The lowest bid is not necessarily the best bid. Take note as well that these are fees for professional services only. All fair a nd applicable expenses must also be factored into the total budget for fund-rais ing counsel. For more information regarding fund-raising consultants, you are welcome to revi ew my article To Consult, Or Not To Consult, That Is The Question. Those are my views on the subject of agreements by non-profit organizations with fund-raising consultants. What are yours?

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The Argument Against Paying Development Professionals Based on Amount of Funds R aised by Tony Poderis 17 Comments Filed under: Development Team

Few topics generate more heated discussion in non-profit organizations than whet her development professionals (staff or consultants) should be paid a percentage

of the money raised, receive commission-based compensation, or be paid a perfor mance bonus. Perhaps because it is a practice of giving financial rewards to dev elopment professionals contingent upon the achievement of fixed money goals, we can simply refer to it as contingent-pay. Whatever you want to call it, two things are becoming more and more apparent. 1. The practice is increasing. 2. The practice is troubling the development profession. Thinking about why we have seen more contingent-pay in recent years, I found mys elf reflecting on a change I have witnessed in how we development professionals describe and perhaps even think about ourselves. There is a tendency these days to describe our work as fundraising and to call ourselves fundraisers. I have al ways thought of the volunteers as being the true fundraisers and we development professionals as the people who develop the atmosphere for that fundraising. To some this may seem like an exercise in semantics, but I think it is a great deal more. Many development professionals today enter into consulting agreements or are hir ed as staff to raise funds. Sometimes they even seek to be THE fundraiser for the organization they serve. The result is that these development professionals and their organizations have blurred the once clear difference between the fundraisi ng role of development officers and that of trustees and other volunteer leaders . Many development professionals have become the fundraisers for organizations. As a result, contingent-pay methods of compensation have gained acceptance. The argu ment being, let s reward people for results and penalize them for poor performance . Contingent-pay becomes an inducement for development professionals to take on the tough job of fundraising and a way for boards to justify turning over to sta ff or consultants what is essentially a trustee responsibility. To me, the answer to the question of why contingent-pay is so troublesome seems obvious. It is one thing for development professionals to discuss fundraising te chniques and philosophies and to strenuously air disagreements. It is quite anot her to tell people that the way or amount they are paid is unethical. However, the Association of Fundraising Professionals (AFP) takes a strong and u nequivocal stand on contingent-pay. Their 1992 position paper developed by the e thics committee states: Members shall work for a salary or fee, not percentage-ba sed compensation or a commission. The AFP cites the main consequences of continge nt pay: 1. Charitable mission can become secondary to self-gain. 2. Donor trust can be unalterably damaged. 3. There is incentive for self-dealing to prevail over donors best interests. AFP, Giving Institute, AHP and other major for-the-profession associations tell th eir thousands of members and all other development professionals not to engage i n contingent-pay arrangements. Despite that admonition, many development profess ionals are not only continuing to do so, but accelerating their acceptance of su ch compensation schemes. How then do these development professionals deal with t he fact that the governing bodies of their profession hold them to be engaging i n an unethical practice? I believe that very few of those who work for contingent-pay are truly unethical , rather they are guilty of bad judgment. In this instance, as in so many others in our society, individuals fail to follow long-standing codes of ethics becaus e they reject them as tenets of conduct. What were held in the past to be standa rds to live by, are often viewed today as mere opinions, open to interpretation and argument. This is a societal problem that we see manifesting itself in this instance in the disavowal of strictures against maximizing personal gain while i

n the pursuit of recognized philanthropic good. The rationalizations are there f or anyone who wants to find them. Commonly Voiced Justifications for Contingent-Pay Sales incentive programs used effectively in for-profit businesses will work as w ell in non-profit settings. It makes no difference whether you are selling light bulbs or support for symphony orchestras. Well, I ve sold light bulbs and I ve sold support for orchestras, and I m here to tell y ou there is a difference. Incentive-driven efforts for the sale of commercial pr oducts involve an explicit selling and buying environment which customers unders tand and expect. When we are seeking voluntary charitable contributions we are n ot working in the same transactional environment. We are not selling to prospect ive donors; we are presenting them with an opportunity to realize their own desi re to contribute to their community and concerns. We are not telling prospective donors to buy our product because it accomplishes something they need at the be st value in the marketplace; we are asking them to consider making a gift to som ething in which they believe and that they want to support. An individual solici ting a gift is involved in a very different transaction from one selling a produ ct. Ask someone if he or she expects salespeople to get a percentage of the pric e paid for a purchase; ask a donor if he or she expects the person asking for a gift to get a percentage of that gift. I ll bet you dollars to donuts the answers are different. The board won t or can t raise the money, so we have to do it. Time and again I have found that this situation occurs because the development p rofessionals either did not know how to present encouraging and workable fundrai sing plans to board members involving them as the leaders of the effort, or beca use the development professionals simply chose not to do so. If we compensate our development professional on a contingent-pay basis we will n ot have to pay for development efforts that fail. This is sheer folly. Boards that say they have nothing to lose actually lose eve rything. Such an attitude assumes failure. Contingent-pay means that both the board and the development professionals share the risk. Nothing could be further from the truth. They share the risk when the risk is th e same: that the organization will not make its goal. Contingent-pay creates a s ituation where the board s risk is that the organization will not make its goal an d the development professionals risk is that they will not make their money. Still Not Convinced? While I have no problem espousing with vigor the concept that non-profit develop ment professionals should work only for salaries or predetermined fees, I recogn ize that the emotional baggage that accompanies discussions of pay and ethical b ehavior can easily cloud the issue. Therefore, let me point out some additional pitfalls associated with contingent-pay for both the non-profit organization and the development professional. Abrogation of responsibility The board can be less likely to contribute its time to the fundraising effort. That can leave the development professional out on a limb and the organization with an atrophied board. The future be damned! The development professional will find it hard to justify expending time or effort on work that does anything other than maximize the amou nt of money to be raised in the identified time period. The organization therefo

re loses the benefit of a development professional working to build a strong bas e of committed volunteers for future fundraising and other projects and programs . The organization sacrifices long-term health in order to achieve short-term ga in. The hired-gun syndrome The development professional sees his/her future as based u pon simply the achievement of one short-term goal after another rather than the organization accomplishing its overall objectives. It therefore becomes more lik ely that the development professional will identify his/her professional identit y with his/her track record, not with the organization. Whose customers are they? When the development professional leaves the organizatio n, relationships established by him/her will leave also, or at the very least, t he history of those relationships will disappear. Raising the bar Each time the goal is accomplished and the incentives are paid, the board will have the tendency to view itself as having been too easy on the deve lopment professional. They will feel they have been had, and their goal setting wi ll evolve toward unobtainable levels in order to make sure they are getting full value. This is not how campaign goals should be set. Money is raised to meet a stated purpose and the well is never arbitrarily pumped dry. The lucky so and so!Should an unexpectedly large gift come in, the board will no t want to give the same percentage to the development professional, creating gre at potential for ill will and bitterness. Not with my money you don t! Some foundations, corporations, and private donors wi ll not make a contribution if a portion of the gift is to be paid out as a commi ssion. In some instances they will not give to a campaign that pays any commissi on at all. Read the fine print in any grant, and be prepared to disclose how the development professional is being paid before accepting somebody s gift. No, no, no, it s not worth that much! It is hard to pay a commission on in-kind do nations. Who determines the cash value? Are you going by wholesale or retail or what? How do you figure the commission? More opportunity for ill will and bitter ness. Promises, promises!Most of the money raised in capital and endowment campaigns c omes in the form of pledges, with payments often spanning a number of years. The contingent-pay development professional will want his/her money when the pledge is made. What happens when a pledge is not fulfilled? Does the non-profit organ ization ask the development professional to return the commission? What happens when a multi-year pledge payment schedule is extended an additional number of ye ars by the donor? Does the non-profit organization expect the development profes sional to wait for years as the payments are made? It was your fault! Development professionals working on a contingent-pay basis a re more likely to be viewed by the organization as personally having caused the failure when a goal is not reached. The board does not accept its responsibility , and the development professional is more likely to be fired. No, it was your fault, you misled me! The development professional expects to ea rn his/her incentives. When he/she doesn t, it creates a personal financial proble m. The development professional is likely to blame the organization and move on to another job, even if he/she isn t fired. Why don t I have the chance to make more money too?Contingent-pay is out of line w ith other compensation practices within a non-profit organization. This can crea te resentment and lessen the team spirit of staff. In fact, it can create resent ment and lead to a failure by other staff to support fundraising efforts. Fair s Fair What should the rewards be for development professionals of non-profit organizat ions? Simply, the best market-value compensation that can be managed in the form of annual salaries or reasonable and fair fees paid by the hour, day or for a p roject. As with other members of any organizations staff, the development profess ionals should be valued for their contributions to their organizations and for t he cost to replace them.

It s Your Decision I believe in the standards that have resulted from thousands of development prof essionals working to help raise billions of dollars over decades of time. For me , not everything should be a matter of personal opinion; codes of ethics are est ablished through collective wisdom because we do need absolutes by which to live . When I see all the wrong that can befall an organization or an individual in c ontingent-pay schemes, I cannot imagine for the life of me why either would want to go that route. There is a difference between the ethical selling of light bulbs and symphony or chestras. When I was selling light bulbs, I had the responsibility to make sure my customers got full value for the dollar they spent. When I was selling a sympho ny orchestra, I had the responsibility for helping to keep a community asset hea lthy and strong for my and succeeding generations. It s that simple. One is about value and the other is about what we value in life. Those are my views on the subject. What are yours? I welcome your comments and s uggestions.

-------------------------------------------------------------------------------Comments 17 responses to The Argument Against Paying Development Professionals Based on Am ount of Funds Raised Leave your response James says: August 13, 2013 at 11:48 am Slice it, dice it any way you want it's selling. Here's a thought how about sell ing the donors which you claim would not want the fund raiser to receive a commiss ion on the same concept we all already know .they do! It's all selling and it's all about compensation be it salary, commissions, etc. Do you think that a donor believes a lackluster fund raiser will keep their job ? Do you think a donor wants them to? Do you think a donor wants the end result of the non profit's service to be accomplished? Do you really think there is a difference between selling the light bulb and sel ling the donor on how their money accompishes something for the community? Instead of attempting to label selling and compensation as something different t han it is how about you and the ethics committee try to edeucate donors, if this i s such a big deal?

To me, every argument you presented and very articulate at that can be made for peop le on salary. As a sales professional when did you stop buying into the idea tha t all humans are in sales? When spouses, students, employees, or salespeople sto p performing or "meeting their quota/expectations" they become divorced from eac h other. Maybe it's time the old ways of claiming what is ethical be transformed instead of the constant attempt to sell us on the difference between selling and selling? I enjoy all of your writing. Thanks for the thought-provoking discussion. Reply David Patterson says: August 13, 2013 at 1:50 pm James, I ve been a salesperson, a manager of sales forces, and the CEO of companies that rely heavily on spirited selling which is then rewarded by commissions that trav el upward with performance. I ve also asked for charitable donations, headed fundr aising efforts, and been CEO of nonprofit organizations. There is a difference between selling products and services and working as a dev elopment officer for a nonprofit organization. Fundraising and selling are not t he same thing. Many skills and attributes are shared by development officers and salespersons, but a better comparison could be made between the development off icer and the sales manager or in some cases the marketing department. The job of a development officer in a nonprofit organization is to manage and ex ecute some or all of the organization s fundraising endeavors. Having paid, on-sta ff professionals ask donors for gifts is neither preferred nor desirable. Gifts should be asked for by a peer of the prospective donor. Peer-to-peer asks yield the largest return. The job of the professional development officer is to create the support and environment that prepares peer-group solicitors to make a stron g, convincing, and compelling ask. A donor is not a customer. Making a donation is not the same thing as buying a p roduct or service. Making a donation is choosing to expend social capital in sup port of something you believe makes society better. People also make gifts becau se, for business or societal reasons, they want to be associated with the cause or associate with its supporters. Whether you are making a donation out of heart felt conviction or because you want to establish relationships that can help in climbing the social or career ladder, you will want to be asked for that donatio n by someone you view as important. That someone is not a sales person. It is a pe er or someone you would like have consider you as a peer. Some time ago, I was given the responsibility for acquiring donations from CEOs of banks and other companies. As CEO of the nonprofit in search of the donations , I could have attempted to ask for the money from these men and women. Now mind you, they either didn t know me or were acquainted with me in only the most passi ng manner. I could have attempted to sell them on the cause and the amount. Most l ikely, I would have been shuffled down to a lower level contributions manager, a nd I would have received a smaller gift or no gift at all. Instead I chose to ha ve current supporters of my organization who were peers of the CEOs make the ask . Every CEO made a gift and made it within the range of what we wanted to acquir e from them and their companies.

That s fundraising! And it s not selling. It s managing. Yes, there are small-gift solicitation efforts that do not function on a peer-to -peer basis. I have managed such an effort that was responsible for collecting t ens of millions of dollars a year, and no one who was selling was involved. These efforts were about marketing and technology support not sales. Think database ma rketing and fulfillment skills. Do I believe that good development officers should be rewarded based on the succ ess they achieve? You bet I do. But I do not believe in making that reward a com mission. Annual review and raises are the way to go. Add to that development pro fessionals moving from smaller to larger organizations capable of paying at a hi gher scale and you have a system of fundraising compensation that has worked wel l. Finally, a person who is motivated entirely by money I believe you said, It s all abo ut selling and it s all about compensation be it salary, commissions, etc. is not som eone well equipped to be a development officer of a nonprofit organization. When it comes to raising money for a nonprofit the most successful development offic ers are more committed to the mission of their organization and a belief in the value of the philanthropic sector than they are to defining themselves by how mu ch money they earn. I hope I haven t sounded too pugnacious in my defense of these points. I do realiz e that these issues are a topic of discussion that is receiving more attention t oday than it did a decade or two ago. However, after considerable thought and ha ving walked both sides of the street and around the block for that matter I am still convinced of the differences between selling and fundraising and the validity o f separate compensation strategies. Dave Reply James says: August 13, 2013 at 2:45 pm Thanks for your response very though-provoking. I have a question a more specific case but still on this subject; it applies to

What if the salary-paid developer isn't able (for whatever reason) to find enoug h volunteers? He puts into place a monthly membership program which aligns with the non-profit's missions. Would it be feasable/reasonable/ethical for that developer to pay/offer commissi ons to any paying member who beleived enough in the mission [and wanted to earn extra income] the opportunity to recruit/resale memberships to other people? For the sake of conversation/clarity say a non-profit gym had a free membership, and also an upgraded $30 monthly membership. Their primary means for raising fu nds is by allowing any upgraded member to recruit/resale memberships to others f or a commission of $10 per month from each member they brought in/sold. Not an M LM but more of a direct sales force promoting the cause of the gym. All the free members, non sales people, etc. benefit from the cause .yet all the " salespeople", in addition to benefitting also get to earn some income. In this s ense, the donors are also consumers and beneficiaries of the over cause.

Or am I missing some details? If I am missing some details, is there a way to do the example and ensure it's a win/win/win, legal and ethical for everyone? Thanks, James

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David Patterson says: August 13, 2013 at 3:30 pm James, The example you give doesn't seem like fundraising to me. It seems more like rec ruiting a sales force to sell memberships that have a specific benefit which can be measured in terms of dollars, than asking for donations to a 501c3 nonprofit . I just don't see how this is fundraising as it is understood in the nonprofit world. The very fact that you are offering a quantfiable value exchange would no t make the membership a donation. The "donor" would not be able to decare it as a charitable donation. I think the hypothetical gym you suggest would be better served by being a for-profit. I doubt that it could qualify as a 501c3 nonprofit organization. Also, I don't understand the use of the term "developer." That makes the whole p roposition sound like a business development to me. Dave Reply

James says: August 16, 2013 at 10:04 am David, I sent you a reply but apprantly it didn't post. I'm confused aboiut your last reply regarding the gym membership example. Many N P have memberships and/or quatifiable amounts for services or products they offe r girlscouts, hospitals, Harvard, etc. That being the case with the gym example if it were NP it sounds like you're saying that scenario wouldn't be fundraising, it would be selling/recruting? Which all sounds good to me or am I missing some details? I'd enjoy emailing you with my specific case which is similar to this if you're available. Thanks,

James Reply

David Patterson says: August 20, 2013 at 12:40 pm James, If a nonprofit organization provides benefits to donors that have material value , the value of those benefits cannot be declared as a tax deduction by the donor and the nonprofit has to declare to the donor the amount of that value and that it is not tax deductible. If your gym qualifies under IRS rules as a nonprofit, then any amount that a member would contribute over and above the value of the membership or any other quantifiable benefit would be tax deductible. All of thi s would depend on your gym qualifying as a nonprofit under IRS rules and the val ue of the gym membership that you would be awarding to donors. As far as the whole issue about paying by commission goes, I stand by my earlier statements and arguments about what is ethical best practice for a nonprofit. Thank you for your kind words about our exchanges. I work on this website as a g ift to the nonprofit community, and the type of exchange you are suggesting is m ore in line with how I earn my living. This is not a project I could take on at this time. I suggest you find a consultant in your community or seek advice from those in your community working in philanthropy. A place you might start is by your local community foundation. Many communities also have chapters of professi onal socities for development pros. Reply

Jack Benson says: June 10, 2013 at 6:04 pm With commission based fundraising, the benefits to a Not-For-Profit can enormous . Especially for a NFP with limited resources and cannot afford the upfront fees associated with traditional fundraising fee structures. Lawyers have embraced t his practice it for years, taking 30-40 percent on contingency AND IS CONSIDERED ETHICAL. Like lawyers, if the fundraiser doesn t produce, they get nothing. If th ey both only make a phone call to produce big results, it s a windfall. Other time s, it may take more work than the contingency/commission covers. But over time, it balances out. What s the difference?

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David Patterson says: June 10, 2013 at 10:41 pm Jack, one big difference is the relatonship between a donor and the organization to which he/she makes a donation. The donor has the righful expectation that as close as possible the money given will go to support the work of the organizati on. Exorbitant charges such as the 30 to 40 percent you suggest would drive dono r's away. Fundraising expense of that magnitude is considered unethical in the n onprofit world and is condemened by all organizations monitoring ethical fundrai sing. Fundraising for nonprofit organizations is about more than getting money out of prospective donors. It is also about fulfilling a donor's charitable intent. Reply

Tony Poderis says: June 11, 2013 at 9:36 am Jack, To my way of thinking, the biggest difference is that the lawyer is working tot ally on behalf of her or his client. In non-profit fund-raising, there is always a two-pronged approach: being true to the organization s mission, and at the same time, giving donors the opportunity to give money to something in which they be lieve and that they want to support. I believe that your favoring of contingent-pay is driven more by the limited, or unavailable, salary-paying resources of a non-profit, rather than by any good a rgument in support of what is almost always a failing practice. You have read in my article that I have a long and unyieldingly stand against an y form of contingent-pay in the non-profit sector having an organization s staff dev elopment officer working for compensation based on a percentage of funds raised, a bonus, or a commission. Such arrangements, and any variations, are denounced by major for-the-profession associations. They go so far as to state, emphatically, that contingent-pay is u nethical. Most development professionals themselves think it s a bad idea. But I do far mor e than just cite high standards and strong ethics as good reasons to have nothin g at all to do with the contingent-pay practice. (Though they could stand alone. ) I let the contingent-pay principals know of the very real harm possible when wor king in that way. In my article on the subject I list a number of very real and damaging consequences that may befall both parties when working to such an arran gement. Read them again, and I hope you will be convinced that they far outweigh what you described as such benefits being enormous in value or quatity. My hard stance against contingent-pay was bolstered even more by a personal expe rience, several years ago, when I was engaged as a fundraising consultant for a major organization. Sadly, it represents what appears to be an ever-growing issu e. During my several months serving the organization, I conceived, developed and pr oduced fundraising plans where there had been none. Annual, endowment, capital, sponsorship, and underwriting campaigns were all fully developed and were being

phased into the duties of the organization s new and first-ever Director of Develo pment whom I helped hire. The individual was hired at a straight annual salary basis while I was nearing t he end of my consulting term. Soon, the Director of Development was up and runni ng very well and I concluded my consulting engagement. In a routine phone call some months later, just to check in to see how that indi vidual was doing, it became readily clear that the several key development initi atives I had set out for the organization had not progressed much, if at all, ex cept for the Annual Fund. There were no ongoing cultivation activities. Recruitment of a volunteer fundra ising team was abandoned. There was nothing in place to ensure opportunities for long-term funding. What was clear was that the Director of Development was dead set only on meeting the Annual Fund goal. Why? Because after I left, the next salary review with management allowed O.D. to work toward a bonus of $5,000, contingent upon meeting the Annual oal by the end of the campaign/fiscal year. Just about all of the warnings I cite in my article were at work in this Money was being raised only for this year. There was no thinking/planning morrow. the D. Fund g case. for to

When I see all the wrong that can befall an organization, or an individual, in c ontingent-pay schemes, I cannot imagine for the life of me why anyone would want to go that route. Reply James says: August 13, 2013 at 1:09 pm Tony, What if the 5000 bonus would have been for meeting goals in ALL the areas your d eveloped? Reply

PS says: March 21, 2013 at 6:21 pm We are debating about this as a NP about a specific short-term position that is soley responsible for selling marketing/promotions package as part of a fundrais er. We are looking to develop some business/corporate partners to build our res pective lists while providing marketing opportunities to the wider community. W e are also approaching prospects to support through their marketing budgets and not their philanthropic budgets. We would like to have a sales person in this p osition and incentivize through commissions. Thoughts? Reply

Tony Poderis says: March 22, 2013 at 9:24 am PS, My first thought would be that you should consider that you are a non-profit organization, balancing what you do for the public good according to your missi on, then to give considerable thought that, perhaps, the marketing focus you are debating about might take you away from that mission and cause problems with yo ur regular support and volunteer base, and the IRS. Foregoing philanthropy, and getting into sales, with a commission-based approach, can be risky, if not causing problems connected to your non-profit status, then to discourage your volunteer base and donors who could think that your money ne eds are being satisfied by what is a commercial endeavor. There are IRS rules regarding percentages of income a non-profit is allowed thro ugh such means, if support from the public in the form of contributions is minim al. If the main thrust of the plan is to offer to sell and promote the products and services of commercial businesses and vendors, and this program will take consi derable time and effort, balanced to paying a commission to the staff facilitato r, then I would sugges that you think about abandoning the plan. Maybe my article, which is somewhat based on this idea, will be of use: Should Your Organization Sell Products And Services To Raise Money? http://www.raise-funds.com/2001/should-your-organization-sell-products-servicesto-raise-money/

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Tony Poderis says: February 5, 2012 at 3:01 pm Rodney: You have shown me all of the good reasons why you must hire a Director o f Development now. Spectacular and well-received performances; Large expense budget, enough to operate a large and complex organization; Five years of successful operation, which means you should have a reasonably-siz ed, appreciative, and some moneyed audience patrons needing to be asked in the rig ht way for money; You are already paying a host of people, so adding one more a critically important individual must be done. Biting the bullet now, and getting a seasoned and capable pro will help begin to have those board members know a good deal about fund-raising, and have them do something about it. You do have income from the performances. You can have working capital from the board members and from those patrons whom you know could give major gifts. The only way to go: When Should a Non-Profit Organization Hire its First Development Director?

http://www.raise-funds.com/2006/when-should-a-non-profit-organization-hire-its-f irst-development-director/ What s a Good Director of Development Worth? http://www.raise-funds.com/2005/whats-a-good-director-of-development-worth/ And when you do hire that person, remember to read again, and to discuss with y our colleagues, the article above so you do not hire on a contingent-pay basis, but with an annual salary. Reply

Rodney Pirtle says: February 1, 2012 at 12:38 pm I am on the board of Spectacular Senior Follies, an organization that produces a variety show once a year for four performances. We are going into our fifth ye ar of struggling to keep a very successful venture (attendancewise) afloat worki ng with a board, the individual members of which know nothing about development or fundraising (using the distinction in your article). We have somehow managed to pay most of our bills (which runs to six figures) to date, but that's all. No one receives monetary compensation except the creative staff, i.e., the direc tor, the musicians, the wardrobe person, the choreographer, the state crew, and the lighting and sound people. I don't see how we can keep this up much longer, despite the success of the show from an attendance standpoint. My question is very simple, if not simplistic. How do you pay the salary of a development prof essional when you have no income or working capital? Thank you for any response and ideas you may have. Reply

David Patterson says: April 28, 2011 at 10:42 am Let me add to Tony s comments one more thought. Development directors and personne l of nonprofits are not in an equivalent position to sales persons. Maybe to a s ales or a marketing manager. Development professionals devise and execute plans to take an organization s fundraising needs to market that market being donors and p otential donors. With the exception of small-gifts and annual campaigns, the peo ple making the sale are volunteer solicitors. That is because peer-to-peer request s yield more and larger gifts. As a development director, or even an executive d irector, you don t want me asking a person with a net worth of $150 million for a gift of a million dollars. You want another person from his/her economic/busines s/social set making that ask. Getting back to small-gifts and annual campaigns: in them you rely strongly on tools like direct mail and the internet to generate sales to bring in the donations. Reply

Tony Poderis says: April 28, 2011 at 10:25 am

Hello RW: Thank you for your welcome comment. You said in your last paragraph: Be st of all, there is no risk to the nfp. If the development agent brings in reve nue, they get paid, if they do not, they will not be compensated. Their survival is tied to the health and welfare of the nfp. There is indeed great risk to the non-profit. No non-profit s survival should ever be in the hands of any one person to bring in the revenue. It s far more than jus t not being compensated when she or he does not bring in revenue. Others on staf f will not be compensated as well. Worse, the dozens, hundreds, even thousands o f people in need depending on the programs and services of the non-profit, are l eft high and dry. The job of seeing to it that the necessary funds are raised, i s that of the non-profit s Board of Trustees. Non-profits are public entities, and as such, belong the community. The operation of them is the responsibility of a volunteer board of trustees who must take on fund-raising as their duty. I appreciate that a for-profit sales rep does as well have risk to her or his li velihood, including her or his family s financial security, but should the rep not bring in enough revenue, the company does not go under. The product is still av ailable in the marketplace, but for sure, not the food bank that so many people counted upon once the revenue support stream was not sufficient. Your well-articulated countering argument is appreciated. I know it well, as you can see from my article, which juxtaposes the concepts of a commercial sales tr ansaction to the very different non-profit solicitation of a donation. I came fr om nineteen years with General Electric marketing light bulbs, then on to twenty years as Director of Development for The Cleveland Orchestra. So, I know well t he customer/sales and donor/gift process of each, and I have seen and worked the differences and similarities of each. For example, take a look at the following one-page document: http://www.raise-funds.com/wp-content/uploads/2010/09/pdf-51planning51-non-forprofit.pdf Note the many similarities as you have correctly implied, but the marked and sta rk differences in mission and bottom-line, must be taken into account to make im possible the commission compensation arrangement to work for the non-profit fund -raising professional. Here is an example of the real difference between the sales rep and the developm ent officer. It s a brief summary of what was an actual experience I had as consul tant for a major organization. During my sixteen months in service, I worked a great deal to develop and fine-t une fund-raising plans where there had been none previously. annual, endowment, capital, sponsorship, and underwriting campaigns were all fully developed and we re phased into the duties of the organization s first-ever Director of Development . He was hired on a straight salary while I was there. Soon, he was up and running, doing well, and I concluded my engagement. In a rou tine phone call some months later, just to check in to see how he was doing, it became readily clear that he had not progressed much, if at all, in the developm ent of any fund-raising campaign but the Annual Fund. There were no cultivation activities, no building of a volunteer solicitation te am led by the Board, or any effort expended for long-term funding. He was just d ead set to get to the Annual Fund number goal set out for him. Why? Because afte r I left, the next salary review had him set to work to a bonus of $5,000 to be given to him should he meet the Annual Fund goal by the end of the campaign and Fiscal Year. Just about all of the warnings I give in my article were at work in this case, and were not heeded. All future development/cultivation plans were a

bandoned in favor of the immediate reward, and the need to himself bring in the revenue for this year s ability to make a living. I rest my case. Thanks again for your welcome interest. Reply

RoadWander says: April 27, 2011 at 12:01 pm Thank you for a well-thought and well written article. I must respectfully disag ree. For 24 years I have been a straight commission sales rep, working for for-profit ompanies. Early in my career I made very little and rubbed nickels together to m ake ends meet. The more I learned, and the more relationships I built, the more my income grew. I have grossed over $400k per year in some years, less than$100k in others. Those of us in this business ride the economic boom and bust, carvin g out a living and supporting our families the best we can. What is the cost of my efforts to the company? A straight 10% of sales. I am a k nown quantity and my rate is built into the operating cost of goods. Whether tha t company has one rep or 100 reps in the field, the cost per sale is still a ste ady 10%. When I close a large sale, I celebrate, if I close a number of small sa les, I celebrate. If I receive an order that is spread out over months or potent ially years, I receive my commission upon payment. If I leave a company with rec eivables on the books, I continue to receive my split of commissions for those m onths or years, even after I leave. It is a nice bonus in my income that is paid because it was earned. The for-profit world uses independent reps and have built a system that works. I ndependent Reps want these jobs because they are potentially lucrative. We stay on the job for many years because our early investment grows year over year. Non-Profits must embrace commission development because it does provide an oppor tunity for those who give of their time and effort to earn a living wage. It enc ourages development professionals to continue to build relationships with donors and foundations. It provides a financial base for their effort to become a care er, not just a summer job. Best of all, there is no risk to the nfp. If the deve lopment agent brings in revenue, they get paid, if they do not, they will not be compensated. Their survival is tied to the health and welfare of the nfp. Thank you for allowing me to express my opinion. RW Reply =========== c

Asking for the Money Is the Job of the Leadership and Friends of a Non-Profit Or ganization by Tony Poderis 4 Comments Filed under: Development Team

Never Hire Someone To Do What Is Their Responsibility Fund-Raising Consultants Can Be A Godsend. They Can Also Be An Ethical, Financia l And Donor Relations Disaster For organizations with an inexperienced, small, or nonexistent development staf f, consultants can do everything from mentoring a budding development director t o designing a campaign. Larger, more experienced organizations, even those with a fully professional development staff, can benefit from a consultant s mastery of the process of initiating new types of fund-raising efforts and reorienting the development department. There is a valid place for consultants in the business of fund-raising, but ther e is also a place consultants should never go. It is one thing to engage a consu ltant to assist in the creation of a development effort, the design of a campaig n, or an evaluation of organizational need and the resources available to meet t hat need. It is quite another to hire a consultant to ask prospects for money. So What s Wrong with Hiring Someone to Solicit a Prospect? Everything! Organizations ask for money to meet a current need and lay ground work for the f uture. The twin goals of every solicitation should be to get the largest gift po ssible and to strengthen the organization s relationship with the donor. Use a hire d gun to ask for money and you automatically reject those two goals. Every competent fund-raising professional knows that the best solicitation is ma de by someone the donor knows and respects. It is always easier to flat out turn down or, at the very least, give less to, someone you don t know. When I want you to give to a campaign, the person I want asking for that gift is a colleague, a neighbor, or best of all, a friend who contributed to a cause when you asked. D oes that sound like a hired-off-the-street solicitor? We can all agree that when a volunteer solicitor asks a peer prospective donor f or money, the opportunity to achieve a significant contribution is maximized whe n solicitor and prospect share the following qualities: 1.Career Status 2.Economic Status 3.Interest In The Organization 4.Mutual Respect 5.Social Position When you engage a hired gun outside fund-raiser to come into your organization to solicit a prospective donor, that individual will most likely share none of the above qualities with the prospect. I would take five out of five any day and I cou ld live with having only points 3 and 4 available in some solicitations if I had to. But, I would not chance a solicitation to a prospective donor for my organi zation with any less. Sacrificing Long-Term Health of an Organization A board will be less likely to contribute its time to a fund-raising effort whic h has been turned over in its entirety to an outsider. That can leave the execut ive director and staff development professional out on a limb and weaken the boa rd. A hired solicitor will short circuit the growth of an internal development e ffort. Money spent on the hired solicitor will not be available to build a profe ssional development department. And that gets to the matter of money.

Numbers Don t Lie If your organization needs to raise $50,000, then engaging a professional solici tor will require that you raise $50,000 plus the commission or fee you pay the s olicitor, and that commission or fee can be a substantial percentage of the mone y raised. A study(1) reported by Janet S. Greenlee of Penn State University at H arrisburg, PA and Teresa P. Gordon of the University of Idaho of 970 campaigns u sing professional solicitors between 1991 and 1996, found that the median gross amount raised was $28,082 and the median amount netted by the organizations was $4,693 an effective yield of less than 17 percent. But that is not even the worst of it. Greenlee and Gordon reported that, In some solicitations, the cost of the fund-raising campaign exceeded contributions gene rated by the campaign. A total of 56 solicitations resulted in such negative pro ceeds. These charities actually lost money by engaging a solicitor. The average loss for these negative solicitations was $13,540; the median was $3,015. One of the most frequently asked for pieces of data by prospective donors is how much of their gift will actually be used to produce the work of the organizatio n or will benefit the clients-users of that organization. I can t conceive of tell ing a donor that 83 percent of his or her money will be eaten up in the cost of a campaign. I know what my response would be. Independent of Greenlee s and Gordon s numbers, my experience has been that a though tfully conceived and well-run campaign using volunteer solicitors will nearly al ways yield more than a campaign in which an individual or a firm is hired to ask prospects for donations. Equally important, a volunteer solicitor campaign is a stepping stone for future fund-raising. An Organization with a Past Is an Organization with a Future When an organization s leadership and committed volunteers are the ones doing the asking during a campaign, they are building relationships with donors on two lev els. They are establishing a relationship between the organization and the donor s and between themselves and the donors. As a result, when the organization cond ucts its next campaign, it has a double foundation upon which to rest its base o f proven donors. These donors have a history of giving to the cause and a histor y of giving in response to solicitation by a volunteer who has demonstrated his or her own commitment to the cause. The organization receives an immensely great er future benefit from volunteer solicitor campaigns over hired solicitor effort s. A regional or national hired solicitation firm can give no guarantee that if it is engaged for future campaigns the same solicitors will be assigned. A local hi red solicitation consultant may be asking the very same donors for gifts to anot her organization next month, or may have asked your donors for someone else the month before. No matter how you cut it, donor relationships and solicitation cre dibility suffer when the work of asking for donations is given to a hired gun. I have yet to find the organization that believes it will only need to ask for m oney once. The business of fund-raising for a non-profit organization is the bus iness of building relationships, and relationships are built on a personal level and based on trust. The hired solicitor is here today and gone tomorrow. He or she brokers no relationship between donor and organization through the strength of his or her ongoing personal contact. Donors who see a substantial portion of their gift going to pay an outside, hired solicitor feels taken. There is no rel ationship and no trust. An Offer You Should Refuse

So, when a consultant says to you, Don t worry, I ll raise the money. Neither you, nor your board, nor your organization s friends will have to ask for a penny, run, don t walk. Run in the other direction. If you fall for that line, you most likely wil l not make the campaign goal and you are assuredly selling short your organizati on s future. Note: Additional Resources relative to the importance of building and maintainin g donor relationships which can be accomplished only from within an organization : Donor Growth Steps The Development Process Ideal Solicitor To Prospect Matches Contacts With Donors Between The Asks (1) The Impact of Professional Solicitors on Fund-Raising in Charitable Organizat ions. Greenlee & Gordon: Nonprofit and Voluntary Sector Quarterly, vol. 27, no. 3 , September, 1998, pgs. 277-299. 1998 Sage Publications, Inc. Greenlee and Gordon: Janet S. Greenlee E-mail Teresa P. Gordon E-mail