Working with a Fundraising Firm: Clarifying Expectations From Both Sides

During the last few weeks I have discussed the processes and content that non-profit organizations use when outsourcing their fundraising to a consulting firm. A question was raised about the expectations from both sides: what the organization’s expectations are from the fundraising firm and the fundraising firm’s expectations of how the non-profit agency will work with their principals and staff. This week’s posting explores these issues.

When an organization makes the decision to outsource its financial resource development (FRD) function it often does so following an arduous and lengthy process. Often the executive director of the organization will have spent many hours interviewing perspective firms and reviewing proposals. There might have been a series of meetings within the board and/or executive committee, the FRD committee, and possibly the endorsement of the board of directors agreed to the expenditure that can often be in the tens of thousands of dollars.

The negotiations with the consulting firm and the internal discussions within the organization often focus on the bottom line issues. Generally this refers to “the retainer the organizations would have to pay” and “the length of time it would take until the non-profit sees a return on the investment”. Less time and attention is devoted the discussion of what is expected of each side in the process of raising the funds.

There is no doubt that the board and the staff of the non-profit have expectations of how the consulting firm will work and how it will cultivate donors. Simultaneously, the consulting firm has expectations for the agency’s role in the process. The responsibility for is neither fully in the firm’s hands nor the agency’s hands. There must be not only clarity of what each expects of the but there also needs to be a specific timeline of what will be accomplished during each phase of the firm’s engagement by the organization.

A number of conflicts can arise at the beginning of the working relationship if they have not been fully discussed and understood by all the people working together on a daily basis. For example, the organization’s leadership will often expect the consulting firm to come with lists of potential new donors and part, if not all of what the organization is paying for, is the firm’s expertise in identifying generous and wealthy people who are prepared to immediately make donations. Most non-profits that outsource the FRD function do not understand that professional firms will not come with a list of donors but will come prepared to develop a strategic plan on how to broaden the organization’s circle of support and strengthen the capacity of the present donors to reach out to new and potential donors. This is not a magical process and requires a great deal of planning and cooperation between the non-profit and the consulting firm.

Most agencies do not like to share their data bases of donors. Generally, non-profit organizations work very hard to successfully recruit their donors and they do not want to lose control of the list and have it circulating among the staff of a consulting firm. There is a strong sense that the list could wind up in the hands of the “wrong person” and could be misused. This mindset needs to be overturned and the non-profit has to be prepared to be totally open and recognize the issue is not “our donors” – from the agency – and “their donors” – from the firm. The focus has to be building and strengthening the overall support for the organization through strengthening the overall donor base.

When working with a professional fundraising firm the donors clearly “are the agency’s” and the firm may not abuse that knowledge by approaching donors for other organizations. This is not only a matter of trust but it is a basic ethical principle among fundraising professionals and consulting firms. If a contributor has said to a member of the consulting firm that he or she is interested in assisting an “X” type of organization and asks the consultant if he/she is are aware of such programs, the consultant should inform its client (the agency) that the donor has voluntarily approached the firm for information on other services.

From the very beginning the consulting firm has to articulate its perspective and to clarify this issue. When there is agreement then the new approach to fundraising will be developed from a solid base of cooperation however, when there is no agreement, there will be tension between the organization and the firm. The organization expects the new donations to begin arriving “yesterday” and the firm senses they cannot begin the campaign because they have not received the information they need to plan the appropriate strategies.

Another issue that sometimes plagues the working relationship between the two parties is the expectations of the level of involvement of both parties during the process. The non-profit engages the firm and may expect the firm to fulfill the active role of “bringing in the support” while the firm expects the agency staff to be full partners in the process. The consulting firm expects a representative of the agency to play an active role in cultivating and soliciting donors. It is essential to remember the contributor is not writing a check to the fundraising consulting company; that person is supporting the important services of the non-profit. When the actual solicitation is taking place the representatives of the outside consulting firm can be present but it is essential for a professional or volunteer from the non-profit be prepared to play an active role in the process and be physically present.

The shared responsibility must be understood from the very beginning. Prior to signing an agreement the consultant firm has to clearly state what information it needs and expects to receive from the organization and the organization needs to agree to these fundamental terms. Each party has to fully understand their roles in a successful FRD development program and be prepared to be a full partner in the process. If there is no agreement on these basic issues, the outsourcing will be frustrating to both sides and will not yield the fruits expected from each other. When the expectations of each side and the roles they are to play in the process are clear, the campaign has a greater chance of being successful and raising the needed funds and strengthening the reputations of both the non-profit and the consulting firm.

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.