Is nonprofit consulting a job or a business?

Is nonprofit consulting a job or a business?

Years ago I remember seeing some sort of video talking about buying a business. While it went into many of the nuances of the process, what struck me was a concept that I’d never considered. As the buyer, are you simply buying a job, or are you buying a business?

While you may not be interested in, or in a position to, by a business, this is a very meaningful question to those of us who are consultants, vendors or freelancers to the nonprofit sector. When you entered this work, were you simply replacing a paycheck job for another kind of “job” that fit your lifestyle or fill the gap in your time or income? Or, did you see what you are building as something that could grow beyond you so that somebody might take it over someday?

Either answer is fine. You might like simply doing what you do, and have no interest in getting bigger, as long as it pays your bills. What you do may not lend itself to growth as easily as other activities. For example, if you’re a writer of grant proposals, you could hire other writers and develop a “stable” of writers to which you can farm out projects. But that may not be why you got into the work of being a grant proposal writer. Maybe you can’t stand managing others, and simply love to get into the nitty-gritty of what your nonprofit client needs and how you can craft language to get it funded. As long as that pays your bills for your needs, that’s a great way to go. If not, you might need to consider another model.

Many respects, this is an “academic” issue. By the nature of being an independent contractor, you’re a “business” whether you like it or not, regardless of how you’re organized as a sole proprietor or some kind of corporation. What I’m really talking about is your attitude and approach to your work. There’s no shame in having your independent contractor status as the attitudinal equivalent to the job you once had. However, by simply being independent, you have options where when you were employed full time, you didn’t. One of those options is building your enterprise into something bigger than yourself… A business. It’s great to have options.

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How many nonprofit clients do you need each year?

How many nonprofit clients do you need each year? Not “how many can you handle?” How many do you need? As someone who spent time in fundraising, I know that’s like asking “how big a gift can you take?” Unlimited? Right?

Well, not quite.

As a good friend, a refugee from Silicon Valley now at a nonprofit housing agency, said the other day, “I only have so much bandwidth.” (Bandwidth = “time in our lives,” to you and me.)

Do you have enough bandwidth to make the money you need or want?

Answering that question right depends on a lot of variables… how much you charge per hour or per job, how much time you put into each assignment, how much vacation you want and what else fills the space in your day, like family and other obligations.

After you account for all of that, how many assignments can you take on in a year? From there, how many jobs can you count on regularly – one, two, three or four times annually, or each month? Which ones are going to leave (or you want to leave?) Does that leave room for new clients?

Remember that like any part of our lives, nonprofits have yearly lifecycles and that you are usually working ahead of their cycle (for example, any preparation for year-end fundraising should be done by late October.) That could mean that when they’re at their busiest, like in December, you’re “off” because all your work for them is done. (And don’t forget to work those times into your calculations.)

Unfortunately, too many of us leave the concept of “how many clients” to chance. Even if we do calculate how many, we make little efforts to make that goal. Usually, we just wait to see what comes our way.

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Every nonprofit I know loves a bargain

Every nonprofit I know loves a bargain. Come on, admit it. You do too! And who loves a bargain more than anyone? Your nonprofit client.

Still, you need to make a living, and usually offering a discount comes right out of your pocket. Are there times when you can offer a discount and actually help yourself?

Yes.

Timing is everything.

Let’s say that you build websites for your nonprofit clients. Like anything else, there’s an annual cycle to your work. I’m guessing that calls for your work get more intense in the fall and spring, when your clients are around and hear from their donors, trustees and clients, and less in the summer and right before the holidays when they’re focused on their vacations, or year-end programs or gifts. (Remember, I’m guessing on the cycle, but you get the idea.)

How about a “sale” when you’re work cycles down?

If you can predict your business based on your client’s cyclical need for your service, you may be able to schedule your sale. That’s the ideal. When demand is traditionally low, you cut your prices to fill your time. That way you have a chance of making money when otherwise you wouldn’t at all.

Alternatively, you could suggest to your clients that can’t seem to bring themselves to paying your rates, that you’ll do work for them when you usually cycle down… like in August, for example. They’re happy with the better rate and you’re happy to get any income over that period. Win/win!

Our age of social media offers another possibility… a flash sale! Looking ahead at a week down? Offer a flash sale online to your best clients! They might have some project on the back burner that they’ve always wanted to do, and now that a reliable vendor is offering a special price, they’re on it! Or, a new client could use it to try you out.

The downside of sales are, of course, if your clients only look for a sale to work with you. One way to get around this is to make them special, somewhat unpredictable.

Like we see among our retail friends, a well-timed sale brings in income when otherwise, you’d be dry. It’s worth a thought.

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Is that nonprofit consulting RFP solid or smoke?

Is that nonprofit consulting RFP solid or smoke?

Not long ago a consultant friend of mine came up to me after a networking group meeting. It was clear he was on a mission. “You know what you should write about for ThinkNP?,” he said with the concern that only a recent experience can bring. “RFPs that aren’t really there!”

“What do you mean ‘not there,’?” I asked. That’s when he told me… not long ago he picked up the phone to an exciting call. Someone he met at an event not long ago called him to submit a proposal for some work that was right up his alley. It was a perfect fit, and he enthusiastically agreed to submit a detailed proposal in a pretty short timeframe.

As soon as he hung up, he started to plan out what he would say. He put aside another job that he was working on to get done the proposal. He made the deadline. Then he waited… and waited… he followed up with a phone call. “Just going to the board,” he was told. “Great!,” he said to himself. That will keep the pipeline full.

Of course, you can guess where this is going right? No job. In fact, he later learned that the RFP really wasn’t real. Well, it was real in the mind of the person who asked for it, but not in the executive board’s eyes. It was vapor.

Is this a problem?

It certainly was to my friend. He put a lot of time into a proposal. He set aside another job to meet a deadline. Since most consultants sell their time, when you don’t spend your time making money, you’re losing money, right?

Or is it just business as usual?

Some would say, “it’s what we do.” Some hit and others don’t. You can’t get work without running into this sometime.

Personally, I’d find it more than a bit annoying. I wouldn’t “dump” the client… yet. If I hear from the same person for another quote, we’d discuss the viability of the project more thoroughly. Maybe they’re just overly enthusiastic about what they do? Maybe they’re new to the job and don’t know the politics?

Can you totally prevent this from happening? Probably not. Still, here’s three questions might help you discern whether a call for your work is vapor or has substance.

Is this a new or established client? If you know them from past work, then by all means, go for it if they’ve been reliable in the past. If they’re new to you, ask around about them (discretely), pull up their 990 and do Google search to see if any “red flags” come up on the organization or the person you’re deal with.

What can your contact tell you about their decision making process? In the case above, learning the next steps might have revealed that this was not a decision between vendors, but a decision about whether the proposed project was even viable.

Is the requester a decision maker? I’ve found that a lot of junior staffers are tasked with the job of “find us some names and prices of vendors to do [project here.]” The person doing the investigating really doesn’t know what s/he is asking for. You educate them as part of their process. It’s worth asking “can I talk to whoever wants the project?” so you can get a better idea of what’s required, and have a chance to sell yourself to the decision maker.

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What is your nonprofit consulting business’s most valuable asset?

What is your nonprofit consulting business’s most valuable asset? I could see a number of you coming up with a wide variety of answers.

Is it you? Are the skills, the personality, and your methodology your most valuable asset?

Is it your relationship with clients? Regardless of how you work with clients or what you bring to the table, is the fact that you can pick up the phone and have someone at the other end of the call recognize your name and be willing to talk with you your most valuable asset?

Is it your database? A boss of mine, years ago, used to remind us all to “make the list and work the list.” “The list” was, in his mind, our organization’s most valuable asset. In our case, this was a list of potential donors to our organization. For your business, it’s your list of current clients, past clients and potential clients in your identified market.

While you and your relationships are certainly valuable and have a major impact on your business, I would say that it is your list that will make or break your business every time. In fact, while your “goodwill” through your relationships and what skills you bring can have a value, it is much easier for an outsider to put an actual price tag on how many names are in your database, whether they are up to date, how frequently they are customers of yours, and how much revenue they generate. If ever you have a vision of selling your business, your database is a tangible asset along with whatever branding you have developed over time.

So where does that leave you? Of course, always bring your best self and skills to the relationships that you are building with clients and potential clients. However, never forget that the names on your list, the notes you keep with those names, the number of times you have connected with those names and information as simple as whether you have the right phone number, email and address for those names might be what ultimately you have to bring to a successor who might be willing to pay real money to pick up where you left off.

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When nonprofit client contacts change jobs.

When nonprofit client contacts change jobs.

After you’ve been in this business for a while, you start seeing your client contacts change. If you started in the nonprofit sector, much of this will be surprising. It is simply a fact that some job titles change more frequently than others. For example, direct service social workers might change more frequently, and so will a lot of the fundraising staff. As people grow into the organizational hierarchy, they tend to stay longer, but even they eventually move on. My observation is that the staff people who stay the longest, sometimes for decades, are those who serve in administrative positions, what we used to call secretaries. A lot of times there the real glue and institutional memory of the organization.

There’s a lot of implications of this for your business.

One is the maintenance of your database. Having contacts change means that you need to update your database on an ongoing basis. That takes time away from your primary consulting work. If you’re able to connect with people through a social media site, such as LinkedIn, you might be able to keep track of this easier, but LinkedIn will not automatically change most database programs (there are some exceptions, such as Salesforce and some Microsoft products, but these tend to be more expensive.)

Another implication of staff changes at your client is how you bridge that relationship to a new connection at the current client. Sometimes people in new positions want to “bring in their own people,” which not only means staffing changes but also vendor changes. Therefore, don’t simply get the new person’s contact information and expect to carry on as usual. You need to resell yourself and your services to what is, in essence, a new client. The new staff person might see you as a valuable outside resource that brings continuity to their operation or sees you as their predecessors “person” that is most easily disposed of. You might have a chance of maintaining your relationship with our client. However, don’t be surprised if you don’t even get a hearing, and are out right away.

Yet another is how you transfer with the person who has moved to build relationships at their new place of employment. This is actually one of the brighter spots in job churn for nonprofit organizations and your business. Assuming that your relationship was positive with this person at their last employer, there’s a good chance that you will “go with them” to their next. Make sure that you do everything you can to help them make their transition smooth, whether that means immediate income for you or not. Like any of us, your contact will be finding their way into a new organization with their new job. If you have contacts there or are able to help them navigate this transition, particularly as it relates to your product or services, your assistance can be rewarded with further business with this person and their new employer.

Unless somebody is a founder of a nonprofit, is likely that you’ll run into the circumstance eventually. It’s important that you keep up with changes in current clients, your past clients, and your database of potential clients. Maintaining your list, right up there with maintaining your relationships, is your most valuable asset as a business.

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Your time as a nonprofit consultant versus their time as a nonprofit client

Your time as a nonprofit consultant versus their time as a nonprofit client

I’ve noticed that I have a very different concept of “time” then my clients. While this is natural, and I’ll explain why I also find it a bit frustrating.
It’s natural for 2 reasons:

  1. For a lot of nonprofits, “process” is king. What they do programmatically is often built on processes. For example, if you’re working with a social service organization, much of their work is taking their clients through a multistep process to get to their ideal end result, whether that’s getting somebody a job, making sure they find new housing or any number of other intended results. While you might not think that this should impact their ability to respond to you, you’ll find that it’s ingrained in the culture, right down to their cutting your final check. The one subsector of the nonprofit economy that I hear most complaints about among my colleagues in higher education. Waiting for a decision from a college or university can be painful. You better have other things going if for nothing else to keep your mind occupied if not your bank account full
  2. Your clients are usually paid by a paycheck which they get weekly, biweekly or monthly. You, of course, are usually paid when your job is complete, or if you meet particular milestones in the project. Maybe you’ve set up an arrangement where you build a monthly for hours, but the idea is that whether they get to you today tomorrow or next week, they still get their paycheck. Waiting 2 weeks for somebody to get back to you in response to your giving them a draft on a grant proposal or a design to review means that your paycheck is delayed. It’s a tough situation to be in because your client too hard is not good for your relationship. Yet not pressing them at all means not making your bills this month.
    What’s a consultant to do? I find that this is a balance between relationship and education. Of course, we all need to have strong relationships with our clients. This allows for important feedback in both directions. What this also allows for is education. With a good relationship, it’s not as difficult to help a nonprofit employee understand that for you to be most effective, you either need to pick up the pace of a project, or get responses more quickly.

There are always times when this won’t work. While your primary contact might have empathy for your position, his or her higher-ups, or even their finance office, might take the attitude of “that’s their problem.” At that point, you need to make a decision about whether, despite the amount of money involved, that this client is worth it to re-engage for future projects. Alternatively, you can simply plan for it, and make sure that you have other projects that you’re working on to fill the gaps so that you can not only endure this situation but several simultaneously. After all, at some point, they will pay and so will the others.

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Even nonprofit consultants live in a bubble.

Everyone lives in a bubble. Even nonprofit consultants live in a bubble. Whether it’s in their local town, your business or even a Facebook community, like anyone, you have limited exposure to the “outside world.” What you listen to on the radio, watch on TV, or catch on the internet just re-enforces it. Your life, like mine or anyone’s is 98 percent “in the bubble,” and just a little bit outside… and what’s outside is scary!

What bubble do your nonprofit clients lve in? The nonprofit bubble.

While your world touches theirs, your world also includes some of the business world, too, whether you like it or not. That’s not the same for your nonprofit clients. For a lot of them, besides their family, you and your fellow consultants could be the only non-nonprofit people they touch in the day-to-day life. Otherwise, it’s partner nonprofits, clients and maybe government agencies.

No wonder they don’t trust you! You’re as alien to them as Star Wars’ new villain.

Before you start muttering “Luke, I am your father,” here are three ways you can break through their defensive shields without firing a laser pistol.

  • Get a referral. Saying “Our friend Bob said I should call you,” even though they may not know Bob well, makes a big difference in getting an appointment with someone new. Your mutual friend could be a LinkedIn connection, a trade association buddy, or a colleague in the same organization, just to name a few.
  • Have your reputation proceed you. Have you written an article in a publication your prospect read, or spoke at a conference client attended? Make yourself someone they want to meet because you’re now known as an “expert.”
  • Share some of your expertise, for free. A couple of good ideas go a long way to building trust. You don’t need to give away everything you do, just give them some samples. Tell a story about how you solved a problem for a client just like them.

Connecting your bubble with theirs is essential. Your clients need to know that you’re not there to break their bubble. You’re there to understand it… and them.

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