Consultants and Service Providers for Nonprofits: The Inside Scoop on Hiring Outsiders

Team planning

Effective nonprofit leaders wear so many hats, sometimes they have to hire another head.  When they can’t commit time to learning a new specialty, it’s time to call in consultants and outside service providers.

“They would all like to take your money,” said Ian Shuman, a certified public accountant in Washington, DC. “But how do you find the good ones? And, more importantly, how do you find the right ones for your needs?”

Shuman, from the accounting firm Gelman, Rosenberg & Freedman, and Benjamin Takis, an attorney for Tax-Exempt Solutions, PLLC,  tackled those questions at “Getting the Most Out of Your Consultants and Service Providers,” a program last month at Foundation Center in Washington DC.

Here’s some of their advice:

When should I hire a consultant or service provider?

Outside experts aren’t smarter than you, but they have the advantage of repetition and specialization in tasks you can’t do in house.  

Their outsider perspective provides objectivity, so they can unsnarl long-standing problems. Outsiders are temporary, so you can ramp up and scale down quickly as your needs dictate. And their singular focus makes them more efficient, especially on complex tasks.

“Because they have expertise, they can do in a couple of hours what it would take your staff 10 hours to do,” Shuman said.

What about relying on board members, volunteers and pro bono help?

Nonprofits need careful handling. Before you turn to a board member for free help, consider the cautionary tale of a nonprofit that owned a building and wanted to make money from tenants. A lawyer on the board drew up the leases, unwittingly including a provision that made all the revenue subject to tax.

If you do rely on non-specialists, like a volunteer bookkeeper, it’s a good idea to have a consultant take a look from time to time to quickly catch any problems.

Pro bono help can sizzle or fizzle. “It works best in situations where a discrete task can be done rather quickly,” Shuman said. “If it’s a big project lasting two, three months or longer, you’ll probably find pro-bono help less engaged as time goes on.”

How can I find the right consultant or service provider?

The first issue to consider is not “who” but “why.” Talk to trusted advisers to make sure you’re addressing the right issue. A money crunch might require a management consultant more than a fundraising pro.  

Trusted advisers can also provide referrals; you’ll want to talk to a few companies before you hire. To learn about ethics and business practices, ask in your interview what type of work the expert has turned down.

Don’t be dazzled by size and prestige. Look for someone who understands your particulars.  “Observe what questions they’re asking you to get a feel for your organization and needs,” Takis said. “If they lecture at you about their company and experience, it’s usually a sign that they don’t have a lot of experience dealing with the nuances of different kinds of organizations.”

Learn more about hiring consultants on GrantSpace.

Barbara Cornell

BARBARA CORNELL is an engagement specialist at the Foundation Center-Washington, DC. She has volunteered at nonprofits in the U.S., Portugal, Italy and Cambodia. Barbara worked for Congressional Quarterly before becoming a staff reporter for daily newspapers. She has been nominated for the Pulitzer Prize by the Kansas City (Mo.) Star and El Nuevo Dia in San Juan, Puerto Rico. She has freelanced for Reuters, Time Magazine and other publications.