The Board’s Trust in the Consultant’s Loyalty to Their Cause

I received a question this week from a reader concerning the Board of Director’s trust in the consultant’s loyalty to the non-profit organization. The question arises because consultants are generally working for a number of organizations at the same time. It is only natural for there to be some concern about the potential for competition among clients or for the consultant to have a possible conflict of interest in working for multiple organizations.

Essentially, these are two separate issues. One has to do with the client organization receiving the appropriate attention and time they require in order to maintain their financial sustainability. Two is the issue of potential or actual competition among organizations providing similar services or serving the same client population. In either case the agency’s board of directors, as well as the professional staff, working with the consultant have a right to be concerned. Of course the key issues are 1) how to prevent these conflicts from arising in the first place; and 2) what to do when the agency board and executive staff are confronted with them in the course of working with the consultant.

It is advantageous to anticipate possible scenarios prior to engaging a consultant in a contractual agreement. An approach should be formulated prior to beginning the working relationship with the consultant. The agreement between the client and the organization should include the development of a work plan that will stipulate the focus of the consultant’s efforts and specify what will be accomplished during a specific period of time. It is customary in the field of financial resource development (FRD) to develop a 6 month agreement that includes: the planning process, the development of local support groups, visits for the organization’s representatives to meet with supporters and potential contributors, and other specific tasks to be accomplished during this initial period between the consultant and the agency.

The agreement then becomes a “tool” by which the organization and the consultant can evaluate the progress that has been made by the consultant and how the consultant’s time has been managed and used. If there is a question about the consultant’s availability the agreement becomes the measure by which the board of directors and the executive staff can hold the consultant accountable. At the same time, the consultant has the agreement as a measure of how the organization has fulfilled its responsibilities during this initial period. Thus the agreement ensures that both parties have fulfilled their respective expectations.

The perception of competition for the consultant’s time and attention is one issue, and the possibility of a conflict of interest among the consultant’s clients is a very different concern. During the negotiation of a contract with the consultant the agency representatives should look for a clearly articulate “conflict of interest policy”. The question should be asked, “Does the consultant have a policy demonstrating that the client organization can be confident in knowing that its best interest is primary in the working relationship with the consultant?” This would mean that if the consultant is engaged to assist an agency raising funds for a client population that is developmentally disabled then additional organizations serving the same group of people would not be engaged by the consultant during the period of the contract.

No organization wants to find itself in a situation where it is one of several agencies being served by the same consultant who is raising funds for groups providing similar services to like populations. This should be a red flag and is something that would be cause for ending the relationship with the consultant if there was indeed a competitive relationship. Ethical practitioners avoid these kinds of difficult situations by discussing potential conflicts before a contract is signed with a new agency.

During the last two years, I have consulted with organizations regarding raising funds. When there has been the slightest possibility of a conflict of interest with one of my clients, I have assisted them in identifying an alternative address to receive the assistance they have requested. The impact of this practice has been two fold. On one hand the organization requesting my intervention appreciates my recommending another consultant, and on the other hand, the consulting firm receiving the recommendation is happy to provide the service.

The client organization has learned from the experience. They have an awareness of the process involved in developing a working relationship to assist them in raising funds, and they have also learned that they should be concerned about a potential conflict of interest when engaging an FRD consultant. Often there is as much, if not more, to be gained from turning down a request for service, as there is from reaching an agreement with a potential client to provide them with the services they have requested and need.

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