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Hanging Your Consultant Shingle in the Nonprofit Sector

by Carol Lukas and Rebecca Post

 

Picture of an open sign hanging on a doorknobSOME 1.6 MILLION nonprofit organizations exist in the United States, and many consultants want to tap into this market. Aside from the business opportunities that nonprofits represent, many consultants like the idea of working for the benefit of society. The good news is, most nonprofits and community groups, at some point, turn to outside consultants and experts. But before you hang your shingle as a nonprofit consultant, there are some unique elements about the sector that you should know.

Nonprofit organizations exist to serve a public need. These organizations typically focus on social needs, cultural enrichment, community development, health care, and education. Nonprofits are tax-exempt, nongovernmental, self-governing organizations that, unlike for-profit corporations, do not distribute profits to their directors or shareholders. Differences also exist in bottom line, ownership, tax structure, funding, and reporting. But the most important distinction between nonprofits and for-profits is that nonprofits are driven by commitment to a mission—how they intend to change the world. That distinction is equivalent in power only to the for-profit drive for profits.

A large and growing industry of nonprofit consultants already exists. Many of these consultants are excellent and have dedicated their lives to working with nonprofits. They deliver the same range of products and services as consultants in the for-profit world. Some are in private or boutique practices, others have formed either for-profit or nonprofit consulting firms. The nonprofit sector is not lacking consultants and trainers, so don’t be surprised to find a lot of competition.

So what does this mean for consultants and trainers who want to work with nonprofits?

First, you will have to answer the spoken or unspoken question—“So what makes you think you know enough to help nonprofits?” Do you know their industry or similar organizations? Who in the nonprofit world will vouch for your skills? The nonprofit sector does try to learn from the for-profit sector, so there is value in translating practices between the sectors. But translation is the key; wholesale replication doesn’t work.

Second, because of the mission- and constituent-driven culture in many nonprofits, two kinds of skills are uniquely important: participatory decision making and cultural competence.

  • Decision making can involve many people—board, staff, volunteers, constituents, residents, and community members—and it is often a lengthy process. It is important for consultants to know how to manage participatory decision-making processes.
  • Nonprofits often provide service to, or have present on their staff and boards, representatives of diverse cultural communities and economic classes. Issues of equity, inclusion, power, accessibility, and language are regularly explored and dealt with openly. Consultants who don’t have experience working across cultures might consider finding a mentor or partnering with an experienced consultant with this experience.

Frequently Asked Questions

Q. What are some common features shared among nonprofits?
A. Most people who work in the nonprofit sector do so because they want to. Pay is less; skills are equivalent. Volunteers are commonly used in nonprofits in place of staff, so volunteer recruitment and management can be very important. Management of nonprofits requires the same attention to quality, production, sales, marketing, finance, human resources, facilities, and customers that a for-profit requires. But the language used can be very different; for example, program delivery is a substitute for production.

Q. What credentials should a consultant have to compete in the nonprofit sector?
A. Consultants need the same credentials as in the for-profit world. Qualifications include some level of academic credentials, nonprofit management or leadership experience, knowledge of the industry the organization works in, a track record of working with similar size or type of organizations, a “product” that is needed, and skill in delivering it.

Q. How do nonprofits pay for consultants?
A. Very few nonprofits have consulting costs built into their budgets. Most have to raise money from a donor or foundation to pay for consulting assistance. So there can be a lag time between when a nonprofit seeks proposals from consultants and when they can actually start the work. Some nonprofits issue RFPs or RFQs when looking for outside assistance. There is likely to be robust and spirited competition in responding to these. The work is usually awarded to consultants with connections to staff or board, or previous experience with the organization.

Q. How can I build credibility to work with nonprofits?
A. Focus on three things: experience, relationships, and reputation.

  • Gain experience in the sector by partnering with another nonprofit consultant on a pro bono basis if you have to. Serve on a nonprofit board. Volunteer to do work with a credible organization in your area of specialty. Study how the sector works.
  • Build relationships through networking with colleagues, nonprofit leaders in your community, business leaders who are active with nonprofits, or nonprofit associations of consultants (such as your local nonprofit state association, management support organization, Alliance for Nonprofit Management, National Network of Consultants to Grantmakers, College of Consultants).
  • Build your reputation in the sector by doing research, publishing articles, and doing pro bono work.

Q. How does the current economic climate affect nonprofit consultants?
A. Many for-profit businesses are operating on tight budgets right now, but for nonprofits, the definition of lean means really lean. Be aware that consulting is one of the first expense items to be cut. Consulting rates are significantly lower in nonprofits, and the consulting approach needs to quickly result in a concrete deliverable. Doing things quickly, efficiently, and at a reasonable cost is required.

 

For more information, please contact Sandy Jacobsen at 651.556.4510 or email her at sjacobsen@FieldstoneAlliance.org to discuss your interests and how we might work together for strong nonprofits and communities.


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