Why Hire a Consultant?
It's difficult for many nonprofit managers to publicly acknowledge the need for a consultant. So many of us have learned that if some expertise is needed, one quietly develops the needed skills oneself, delegates the learning task to a staff member, or scans the board of directors for an already skilled member who might volunteer to help out.

Going outside the organization's boundaries to find help might be construed as wasteful, or perhaps even an admission that the manager can't handle the situation.

On behalf of nonprofit managers everywhere, The Corporate Fund would like to do away with this myth. Even the most highly skilled managers need help from time-to-time. And the most savvy of them are quick to recognize the limits of their knowledge and abilities. They understand their organizations' strengths and weaknesses, and they grasp clearly when their organizations need to import a particular kind of expertise.

How Consultants Can Help
Under certain conditions, professional consultants can be a nonprofit manager's best resource. Some of those conditions are:

• When a specialized skill or body of knowledge is required for a limited period of time, such as someone to help design a client feedback evaluation system that will produce reliable statistics.
• When the organization needs quick access to new technology and training in its use, such as employing a just-released software package to track donors to a major fundraising effort about to get underway.
• When someone is needed to do a job that regular staff don't have time or skills to do, such as contacting corporations in the region as part of a marketing survey for new uses of existing agency services.
• When the organization needs additional knowledge or skills to help it move to a new level of development, such as someone to lead a strategic planning retreat for the board of directors and key staff members.
• When the additional credibility of an "outside expert" could strengthen management's efforts on a key issue, such as developing training for first-line supervisors to encourage greater accountability for achieving organizational goals.

These are just some of the reasons nonprofit managers may consider hiring a consultant. There are others, limited only by the organization's ability to assess its needs and recognize where it needs help.

Roles Consultants Play
Three major types

In the above list of different conditions that might warrant hiring a consultant, notice how different the tasks are: A consultant helping your fundraising volunteers work with a new piece of donor-tracking software will likely play quite a different role in the organization than will the consultant who takes your board members off on a weekend retreat.

Consulting models differ widely, depending on the consultant's philosophy, experience, area and level of expertise, and the understanding that exists between the consultant and the client organization. Three of the most widely recognized consulting models, or styles, are:

EXPERT - the consultant is seen as an expert, and the hiring manager turns some responsibility (and perhaps authority) over to the consultant. The consultant sets up shop as the expert - the person in the organization, however temporarily, who knows what needs to be done, when it ought to be done, and who ought to do it. In effect, the expert consultant becomes a senior member of the manager's staff, and may be in the position to tell others what's wrong and how to fix it.

EXTRA PAIR OF HANDS - the consultant again has expertise, but functions as a closely supervised staff member, working under the direction of the manager, who retains all authority and responsibility for the task. Decisions about who does what and when are all made by the manager.

COLLABORATIVE - in this role, the consultant joins her or his expertise with management's knowledge and insights about the problem. The consultant helps the manager solve the problem, with both parties taking active roles. The emphasis is not on the consultant's expertise, but on being part of the problem-solving process. In the end, the organization should be more able to help itself.

Under the right circumstances, one or more of the models may be just what's needed to move things along. For example, an expert can be in and be out quickly, while a collaborator may take more time to ensure clear communications and shared decision-making. The nature of the task and the client organization's objectives are key variables in selecting an appropriate role for the consultant.

Wait! Before You Contact a Consultant...

  Diagnosing your problem
A consultant can be invited into the organization at any number of key points, but before contacting potential helpers, it is really useful to both the organization and the consultant if a certain amount of "diagnostic homework" is accomplished first. Here's a list of questions to ask and answer before starting a search for a consultant:

• What's going on in the organization that triggers the urge to find a consultant? Can you look past the "symptoms" and focus on the "real problem"? For example, "high staff turnover" may be a symptom of something not working well in any number of areas - hiring process, supervision, rewards, and the work environment.
• How serious is the organization about solving the problem? Are you bringing in a consultant primarily to demonstrate to the staff that you care? Or are you also open to making real changes that may be called for?
• If the consultancy went really well, what outcomes would you like to see? Do you want a bandage to stop the flow for the short-run, or are you committed to a longer-term solution?
• Who needs to be involved in the consulting project? Just you? Top management? The board? All staff? Consumers? Funders? Have the people who might be affected "bought in" to the idea of bringing in an outside consultant?
• If you were going to be the consultant and knew nothing about the organization, what would you need to know to be helpful in this situation? Are you prepared to provide this information to the consultant? Are others?
• What skills and knowledge do you think a consultant could bring to the organization for this project?
• Given all your responses to the questions above, ask yourself, "Can I state some clear objectives for the help I want from a consultant? What are the outcomes I seek? What could the consultant do to help me achieve these outcomes?"

Armed with these answers, you're now ready to go "consultant-shopping."

  "Where Can I Find The Kind I Need?"
The Corporate Fund Consultant Resource Bank

Nonprofit managers in New Hampshire often struggle with the problem of having sufficient access to consultants who understand the nonprofit world. The Corporate Fund Consultant Resource Bank was established in 1989 by Antioch New England Graduate School, and is now operated by the New Hampshire Charitable Foundation, one of the members of The Corporate Fund.

If you have questions about how to use the on-line Consultant Resource Bank , contact:

Melissa Jenness, Administrative Assistant
New Hampshire Charitable Foundation
37 Pleasant Street
Concord, NH 03301
Phone: 603-225-6641
e-mail: mj@nhcf.org

Currently, the Bank consists of more than 100 consultants whose clients include nonprofit organizations in New Hampshire and other New England states. They represent over 25 areas of expertise that have proven to be important to managers of the State's nonprofits over the years. The areas of expertise and the firms and individuals who fill them are updated regularly.

There are no costs to nonprofit organizations that use the Bank to help identify consultants. Costs for hiring consultants referred by the Bank are the responsibility of the organization receiving the consultant's services. Names are included in the Bank based on the recommendations of two nonprofit organizations that reported having had a successful experience with the consultant. Full reference checks have not been conducted and the organization needing assistance is responsible for determining a referred consultant's appropriateness for a task. This guide suggests ways for nonprofit managers to go about this task to help ensure selecting the right consultant.

Selecting The "Right" Consultant
What to look for and checking references

Two extreme tendencies often show themselves when it comes to selecting a consultant: One is to move too quickly. The manager jumps at the first name referred, an action as risky as filling a key staff position with the first applicant for the job.

The other extreme is to move too slowly. The manager gets so many names, reads so many brochures or resumes, and asks for so many proposals, that she or he gets bogged down in data and can't make a timely decision. Meanwhile, the opportunity for outside help slips by.

There's a happy medium between the two extremes.

Earlier, it was suggested that you answer a series of questions to help you determine what the task was on which you wanted help, and what a consultant might do to provide that help. With this information, you can go "consultant-shopping" with greater confidence.

Look for consultants who have the kind of background and experience that match the task you've identified. If you need someone to assist you in raising your service providers' awareness and skills regarding their role in the organization's marketing strategy, locate 2-3 consultant referrals that have grounded experience in marketing awareness development.

This is not the time to see whether the person who designed your agency's new brochure can stretch into the marketing awareness and training arena. Nor is it the time to save the organization $150 in fees by selecting the lowest bidder even though that person is a good friend of a former employee.

But most important, it is not the time to select any consultant without a thorough reference check.

One of the more common mistakes shared by managers in both the for-profit and nonprofit sectors is the absence of good reference-checking for consultants. Do not turn over an important task to a person who is not only going to get a share of your scarce resources, but who also will likely be in the position to influence the life of the organization for the next several years!

Hiring a consultant before you thoroughly check credentials, experience, and references can result in embarrassing or even devastating consequences later.  

Getting Started
These steps, at a minimum, are recommended:

• Have a clear idea of what you want your consultant to do for you.
• Gather the names of at least 2-4 consultants (individuals or firms) who seem to have the expertise that matches your objectives.
• Invite the names on your list to submit proposals to the organization, if this step seems appropriate. Provide a "Request for Proposals" (RFP) for larger jobs, specifying the tasks, time frames, products, etc.
• Personally interview at least two consultants from your list who respond to the RFP, or, if one isn't used, who expressed clear interest in working with you. (If you don't find the one you want, keep going down your list, adding a few more names, if necessary.)
• Offer other "stakeholders" in the consultancy (your board and staff, for example) an opportunity to interview your final candidate(s).
• Conduct thorough reference checks for all final candidates.
• Ask finalists key questions about their understanding of the task, their availability when you need them, their fees, etc.
• To the extent possible, make sure the consultant's style and personality are a "good fit" with your way of working and with the ways of other key persons who will be involved.
• Ask the consultant you're considering to provide the names and phone numbers of 2-3 recent clients whose organizations and project types are similar to yours.
• Telephone or meet with the references. (Written references do not allow you to probe or to pay attention to enthusiastic responses or cautious ambiguities.)
• Attempt to get the most descriptive answers, avoiding questions that invite simple "yes" or "no" responses, such as, "Were you satisfied with the consultant's ability to focus on the problem with you?" Rather, try "What did you like best about the way the consultant worked with you; and what concerns did you have?"
• If an answer is too general, probe further. For example, should the reference tell you, "Well, this consultant was always there when I needed her," you might say, "Tell me about one of those times that stands out most in your mind."
• Pursue any cue that raises your concern. For example, when responding to one of your questions, the reference might hesitate or sound vague. Ask about it, as in, "You sounded a little hesitant. Was there something that didn't work out as well as you'd hoped?"
• Close an interview with the simple, but direct, question, "Would you hesitate for any reason to hire this consultant to work with you again?" While this does invite a "yes" or "no" response, it is designed to help the respondent be thoughtful and to make a clear commitment. If the answer is "yes," follow with, "What are the key reasons you would hesitate?" If the answer is "no," ask, "Would you manage the relationship any differently than you did before?"
• Avoid asking questions in ways that generate the answers they would like to hear. For example, if Reference A told you that the consultant was excellent in working with his board of directors, be careful not to force Reference B into that answer by saying something like: "Others I've spoken with say that this consultant really works well with boards of directors. Was that your experience, too?"
• Keep data-gathering on consultants in perspective. Don't assume that if doubts about a candidate are raised, you shouldn't hire that person. Someone else's experience won't necessarily be yours. Probe negative comments, then merge the responses with the positive reports and use your best judgment.

Contracting
Setting expectations and negotiating fees

Managers often complain about consultants who didn't do what they expected them to do. Take for example, the consultant who:

• Said he was going to carry out "research," but then interviewed only eight of the organization's 50 employees.
• Indicated the staff/board retreat would be scheduled before June 30, but now it's July 30, and he still isn't sure when he can break away for a weekend.
• Committed to be available by phone whenever you needed her, but hasn't returned any of your calls in the past two weeks;
• Promised not to speak to any members of the board without first checking with you, and now you've found out he's having dinner with the board president tonight.
• Billed the organization for 15 consultant days, when you were sure she knew you couldn't afford any more than 12 days.

The "contracting" phase of hiring a consultant is not merely an important step in working with a consultant, but is typically the phase to which problems can be traced when things go wrong in a consultancy.

It will take some diligent attention from you as the client and from the consultant to manage a successful contracting phase.

The Contracting Meeting
Schedule a "contracting meeting," the sole purpose of which is to discuss the wants and needs of both parties and to come to an oral agreement on mutual expectations.

Cover the following topics:

• The nature and scope of the services the consultant will perform.
• The roles, responsibilities, and authorities to be assigned to the various key players, including the consultant, top management, board members, staff, and so on.
• If hiring a consulting firm, clear commitment of the specific consulting staff who will be working on the project.
• Specific time frames for achieving milestones, project completion, reports, follow-up sessions, etc.
• Specific levels of effort (consultant days, secretarial days, etc.) by task (orientation, preparation, planning, delivery, evaluation, interviews, report-writing, etc.).
• Location for specific tasks (main office, out-of-town site, consultant's office, etc.).
• Description of products to result from the consultancy, such as reports, marketing plans, data summaries, and the like, including formats, outlines, inclusion of "raw" data or other appendices.
• Agreements on how information will be treated (Confidentially? Anonymously? Limited distribution? Board first, then staff?)
• Fees and expenses, including method and frequency of invoicing, turnaround time for payment, discounts for timely payment, interest on overdue payments, etc.
• Manner for giving notice to renegotiate any parts of the contract (scope of work, report formats, due dates, costs, etc.)
• Summarize the agreements and decide whether the client or the consultant will put the summary in writing. Keep the document brief and its contents clear.

About Fees
Discussing consultant fees can be as awkward as talking salary with a job applicant. Clients and consultants typically save the issue until last. Clear communication about fees during the contracting phase, however, can avoid problems later on.

Fees consultants charge normally cannot be compared to salaries paid to organizational staff. Consultants have an entirely separate (and higher) scale on which they operate, based primarily on the fact that they don't sell all of their available time and that the rates for the time they do sell often include the "costs of doing business" (overhead, benefits, marketing, and the like).

Thus fees for consultants can range anywhere from $150 per day to over $2,000 per day, depending on factors of specialty, experience, reputation, overhead structure, etc. There is no certain correlation between quality and fee. That's why the reference-checking phase is so important.

Estimating Time Budgets
When developing a budget for using a consultant, it is often necessary to include the consultant's planning, preparation, report-writing, and travel time, in addition to time spent with the organization or its stakeholders. Thus, when discussing fees with a potential consultant, find out whether there are charges for time other than that spent on-site, and if so, whether the same rates apply (some consultants charge less for time spent in travel status or for tasks carried out in their own offices).

Managing The Relationship

Preventive maintenance and dealing with the "bumps"

All managers want their relationships with consultants to go well, which would mean that a "hired hand" would do what was promised, that the outcomes would have the desired effect, that the work would be accomplished on time and on budget, that there would be few, if any disagreements or misunderstandings, and finally, that everyone involved would look forward to working together again.

At least three ingredients will help such an outcome occur:

1. A competent, complete contracting phase.
2. A conscious, thorough "socialization" of the consultant.
3. Proactive, assertive management of the relationship on the part of the client organization.

Contracting has already been discussed, but it would not be overstating our case to say that a good job at it substantially reduces the likelihood of certain kinds of difficulties arising later; or, if they do, that there will be an agreed upon method for dealing with them.

Socialization
"Socialization" or "read-in" is the process by which consultants are introduced to and integrated into an organization. They learn how things are done; what the "rules" are (both written and unwritten); what norms and customs are followed; where the decision-making power in the organization lies; how communications flow; what attitudes exist on the part of the organization's members toward each other, toward the organization itself, and toward the work they do.

The consultant, although "external," has needs similar to those of a new employee: She or he wants to be effective, and a key ingredient to that success is finding out how things work.

Socialization occurs whether you want it to or not. New organizational members can find out the hard way (by making an error, committing a faux pas, and by informally hearing things from others; or, the organization's management can choose to present the organization in orderly, comprehensive, and useful ways.

Here are some ideas we have for bringing your consultant successfully into the picture:

• Prepare an information kit for the consultant that contains such materials as the past few annual reports, promotional brochures, current strategic and program plans, a budget overview, an organizational chart, a list of all employees by position, a sampling of job descriptions, and minutes from the past year's staff and board meetings.
• Give the consultant an oral briefing on the history and mission of the organization, how communications flow, how decisions get made, what the most significant barriers to progress are in the organization, and so on. Be sure to include a summary of current goals and directions.
• Introduce the consultant to all the board and staff members with whom she or he will be in contact during the project. Doing these introductions at an in-house social event with refreshments is a pleasant way to begin. Take your consultant on a tour of your facilities, including any off-site locations. Make sure people who work at these stations know the consultant is coming and why.
• If the consultant will be spending any significant amount of time in your facility during the project, try to provide a work space that has a telephone, some privacy, access to a reproduction machine, and the like.

Proactive, Assertive Management of Problems
If things start to go wrong on the project, the clearest, surest advice for managers is to surface the problem and get it on the table right away. Talk about it. Don't hesitate one moment to tell your consultant that you sense something is not right, and then specify what the evidence, behaviors, or intuitions are that led you to your discomfort.

Do not wait to see if it's going to straighten itself with more time. Stay in charge of the consultancy. Act on whatever facts you have and on your intuitions. The worst that can happen is that you find out things are all right. The best thing that could happen is that you are on to something and you get it corrected before any real damage is done. Some symptoms to be alert to include:

• Project tasks falling behind.
• Project overspending.
• Consultant avoiding you, or you the consultant.
• Staff or board members reluctant to work with the consultant.
• Consultant overstepping agreed-upon boundaries.
• Confidentialities broken.
• Poor quality of work.

Most disagreements have a workable solution. Maybe the contract was poorly articulated or expectations were not realistic; perhaps the problem was incorrectly diagnosed or the staff reluctant to take ownership of it; it's possible the client was too tied up with other priorities to pay sufficient attention to the project, or that the consultant's plate was too full to do the job for the client that needed to be done.

Or maybe the chemistry just wasn't right.

If you find yourself at the point of not knowing what to try next to get things back on track, you might seriously consider terminating the contract. Remember, though, that "failed" consultancies are hard to blame on one party. Usually we can find collusion in the behavior of both parties, so be prepared to make a fair settlement with your consultant. This may mean offering compensation for all tasks or time performed to date.

Should you have to terminate the contract, review with the consultant what transpired in an effort to understand what went wrong and how it might have been prevented.

If you think the consultant did not fulfill the terms of the contract and you feel certain that you lived up to all your agreements, you may want to contact an attorney to explore what options you have.

Taking it all full circle, however, we believe that a well-conceived contract and an assertive attitude toward managing it with lots of clear communication are the key variables that will keep you and your consultant working well together.

Written for The Corporate Fund
©2003 Edward J. Tomey
472 Hurricane Rd.
Keene, NH 03431-2161
Tel. & Fax: 603-352-6325
etomey@worldpath.net