Choosing Your Clients Carefully

ConsultantServicesNonprofit organizations not only find themselves hiring staff and selecting board members on a frequent basis but also contracting out services to outside providers, such as cleaning services, or hiring consultants in public relations, fundraising, or organizational dynamics. There are many articles written about the criteria that the agency should use to select a particular service provider or consultant. However, we do not generally focus on what criteria the consultant (or service provider) should use when deciding to work with a specific client.

It is important that consultants also use criteria when deciding whether to work with a nonprofit organization. In this posting I explore some of the issues that a consultant or consulting company should consider when deciding whether to engage with a client.

Let’s begin with public relations consultants, who are often hired to shape the image of an organization and to identify the most effective way to brand it. In the same way that an agency checks out the consultant’s reputation, the consultant has to check out the prospective client’s reputation. What are people saying about the nonprofit in the community? How do the community and its leaders view the agency’s services?

No consultant wants to work with an organization that is not valued by the community. However, often the agency is providing excellent services, but the community is not aware of them, and so it seeks a PR consultant. However, a distinction needs to be made between the nonprofit that has not been successful in communicating its message to the community and the one that is known to be misusing community funds or delivering less than professional services to the community. In the latter case, the professional consultant may not wish to get involved in rebranding inappropriate, unethical, or unprofessional activities.

Similarly, consultants involved in financial resource development want to be able to ensure prospective donors secured as a result of their guidance that the organization is providing a valuable service to the community at a reasonable cost. The fundraising consultant strives to make the case honestly for supporting the agency when cultivating donors and seeking new contributions. To do so he or she has to be convinced that the organization is providing a cost-effective and valued service to the community. This means that prior to taking on the client the professional consultant needs to check out the agency just as the agency checks out the consultant.

How do consulting firms or individual consultants confirm that it is in their best interest to take on a specific client? One important indicator is the agency’s response to the consultant’s initial request for information about the organization. The consultant should request such materials as minutes of board meetings, annual reports, a certified accounting audit, and any evaluation reports that demonstrate the effectiveness of the services provided and the community’s response to these services. If the agency willingly and promptly provides these materials, that is a good sign. Only after the prospective consultant (or firm) has had adequate time to review the materials, and has been able to engage with the appropriate people on the staff or board of directors to discuss any questions or issues, can he or decide to take the agency on as a client. Only then can the consultant feel comfortable with having his or her name identified with the specific agency.

For example, a fundraising consultant might see that 70% of the annual budget goes to cover the organization’s overhead and only 30% is being to fund the agency’s services. Very few donors would be willing to provide funds to such an organization. A consultant who agreed to take on such a client might be risking his or her professional reputation.

A lack of financial transparency, an unwillingness to give the consultants access to annual budgets or the certified audit, and a disproportionate amount of funds going to administrative costs are all red flags that signal that there is more than meets the eye in the agency’s operations. The consultants may be putting themselves at risk by taking on such a client. If an organization does not adhere to approved professional practices, such as using only 10%-12% of the budget for administration, and does not have a code of professional ethics, then no matter what the fee, it may not be worth it to work with such a client.

Clients should be selected because their values match those of the consultant’s values, and there is a common vocabulary as to the priorities and ethics guiding both the consultant’s practice and the nonprofit’s activities.

Stephen G. Donshik, D.S.W., is a lecturer at Hebrew University’s International Nonprofit Management and Leadership Program and has a consulting firm focused on strengthening nonprofit organizations and their leadership for tomorrow. Stephen is a regular contributor to eJewish Philanthropy.