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By: Catherine Siebel, Impact Assessment for
Foundations and Nonprofits
I have been intending to write this post for several months. But today was the day that I put my resolve to the sticking place (forgive the messy metaphor) and decided to sit down to my computer. Today, you see, was the day that I received the following e-mail:
Our budget is tighter than we thought and there doesn’t seem to be extra room for us to have you to work on our program assessment. Thanks very much for your time and your proposal.
This e-mail followed two phone calls about the scope of the project, an hour of my time going through the organization’s materials in order to give them a fair estimate of what I thought the work would take (For the record: the price I quoted was $3,500), and half an hour putting together a brief proposal. This is hardly a novel occurrence – every consultant I know has experienced some variation of this.
I see this situation – and countless others just like it – as a consequence of three factors that anyone in the sector who has either engaged a consultant or provided consulting services recognizes:
Looking for a Deal. Every nonprofit consultant I speak with has several versions of this story: being contacted by a nonprofit about our pro bono services; being asked to shave a few thousand dollars off of a project estimate for budgetary purposes; having a client engage in the practice of “scope/creep”, in which the work requests creep beyond the boundaries of the contracted services; or any number of other scenarios. No matter what you call it, the result is the same: devaluing the work of the people who have the experience and knowledge to strengthen your organization
Misunderstanding Consultant Fees. In my experience, that math that clients tend to do regarding my fees is to compare it to staff salaries (i.e., “This consultant is charging $20,000, which is half what Mary makes!”). This type of calculation leaves out a number of factors that independent contractors must take into account. Remember for example, that this $20,000 must account for compensating ourselves as employees (both sides of income tax; time of for sick days, vacation, etc.; health care and retirement benefits) as well as the cost of running a business (purchasing our own laptop and printer; marketing our services by maintaining a website, engaging in social media, and attending networking events; providing printed materials to our clients). And so – for that $3,500 that I’m charging, about $700 of that is realistically going into my paycheck.
Playing Chicken. I suspect that anyone who is reading this has been engaged in at least one game of chicken between nonprofits and consultants: the nonprofits don’t want to disclose their budget for a given project fear that the consultant’s fees will magically meet that exact number, and consultants don’t want to disclose their fees until they understand the scope of the project, the nature of the organization, and who their competition is. And so begins a time-consuming and arduous process between the two parties where they attempt to feel one another out. Hardly a free market scenario.
Here's what both nonprofits and consultants can do to avoid these problems:
Be Upfront and Transparent (That’s it).
How could the scenario that began this post have been avoided? Both the prospective client and I should have told it like it is. Imagine a world in which the initial contact that the client made read something along the lines of:
“Hi Catherine, We are looking for an evaluator to do (x). The budget we’re looking at is about $1,500. Please let me know about your availability to discuss this project.”
And I could have responded:
“Hello, Thank you for your inquiry. My projects typically begin in the $3,000-$5,000 range; my fee includes the work product as well as all meetings, correspondence and local transportation. Please let me know if you are interested in continuing the conversation.”
Instead, we wasted precious time (and therefore, money) engaged in a ineffective dance that ended in frustration (certainly mine, but also probably the nonprofit’s) - and got none of the work done.
I implore you to think about this. And then change the conversation – quite literally. Save everyone the time, money and frustration.
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