Choosing a Fundraising Consultant

The decision to hire a fundraising consultant is challenging. Especially for small and mid sized nonprofits.  The culture in most nonprofits conditions us to believe we need superhuman abilities.  Bringing about change while being under-resourced becomes a badge of honor.  And this happens while our staff burnout and our mission suffers.

Oh—and have we mentioned the cost.  How do we invest in fundraising when every dollar is being spent to deepen and expand our mission?

Everyone will tell you the real question is “how can you not invest in fundraising”.  I believe that is true. 

BUT it is not that simple.

In the U.S. today only 2% of nonprofits ever break $1M in annual revenue.  And only 0.4% break $10M. If it were simple everyone would be raising buckets of money.  But we know this is not the case. 

Nonprofits solve some of the most intractable problems in the world.  Problems that governments and big business can’t even begin to understand. 

You deserve the opportunity to raise the funds you need to thrive. That’s why we created this comprehensive guide. 

We will not pretend it's easy.  We won't sugar coat the hard stuff.  We WILL give you what you need to make an informed decision—even if it’s a hard one. 

So let's dive in!

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When you need a fundraising consultant

I have worked in the nonprofit space for over 20 years.  Many things are complex.  Determining when you need a fundraising consultant is not one of them. Which one to pick is. 

There are 3 main reasons that organizations seek to hire a fundraising consultant. 

These are all brass tax bottom dollar reasons.  Further down we discuss the “reasons under the reasons”.  But we need to start where it matters most—the bottom line.

Nonprofits hire fundraising consultants because they desire to have more money.  Full stop. 

Some in the nonprofit space think money and finances are ‘second cousins once removed’.  This could not be further from the truth.  Money makes the world go around.  And Money is what fuels your mission.  So, let’s get off our high horse and talk about the 3 reasons you might want more money. 

1.   Desire to grow at a faster rate

This is awesome!  You are not worried about the lights staying on!  There is a big opportunity out there to serve more people.  There is the opportunity for a capital campaign.  You want to serve in a new geographic area. 

You are at a juncture in your organization’s life cycle where its time to put the petal to the metal and make a go at it! 

But—you don’t know how to do it.  You want to make sure you structure it right.  How do you message growth?  You begin to investigate hiring a fundraising consultant. 

This is exciting.  The wind is at your back. The open road is ahead and the sky is the limit.  But let’s be real.  Your financial margin is still thin.  And you don’t want to mess this up! 

2.   You get stuck and plateau

You are pretty confident you can keep the lights on.  But the reality is your fundraising has stayed the same for a few years.  We know the cost of doing business has gone up.  Your revenue line staying flat, actually feels like you have less money. 

This has created a lot of pressure and fear.  You are stuck in a rut.  And need to break out of it soon because things are getting tight.  You don’t have the ability to think about growth and opportunity like you dream of. 

You need someone to come in.  Help you kick start things.  Get them moving again. 

3.   You start to contract

This is the pressure cooker.  Your numbers are going down.  You are having to contract your programing.  You have either laid off or you are thinking about laying off staff.  You are living day to day, hand to mouth.  Trying to make ends meet.  You need help to turn things around.  But how do you afford it when the money is starting to dry up? 

‘Reasons under the reasons’ organizations need a fundraising consultant.  

And these ‘reasons under the reason’ can also be categories in 3 main areas. 

1. Strategic Issues

Strategic issues run the gambit.  They include but are not limited to:

• Lack of Effective Overall Strategy: Struggling to design and implement major fundraising growth.  Or donor development strategies.
• Difficulty in Donor Development: Challenges in identifying and cultivating relationships with major donors.  Mid-level and monthly programs are also included here. 
• Ineffective Grant Writing: Trouble in writing and securing grants from foundations.
• Inadequate Market Analysis: Limited understanding of fundraising potential and opportunities.
• Staffing Challenges: Do you have the right staff in the right positions? 

2. Capacity Building Challenges

All small and mid sized non-profits struggle with capacity.  It’s the nature of being small and mid sized.  This includes:

• • Insufficient Staff Training: Fundraising team lacks the necessary training and professional development.
  • Underdeveloped Board: Board members are not equipped to help with fundraising.
  • Weak Infrastructure: Inadequate or absent fundraising systems and processes. Including donor management systems and CRM tools.

• Lapsed Donors: You struggle to keep the donors you reach each year.  

3. Operational Inefficiencies

And finally, operational issues occur in all organizations.  Sometimes an outside voice is needed to help build synergy and team cohesion. 

• Ineffective Event Planning and Management: Difficulty organizing and executing fundraising events. Especially one that make money.
• Poor Campaign Execution: Struggling with day-to-day fundraising activities. Including: direct mail campaigns, online fundraising, and social media engagement.
• Lack of Performance Metrics: You don't have a scorecard of what matters most.
• Inadequate Crisis Management: Challenges in addressing and mitigating issues that arise. From challenges in fundraising efforts, threatening continuity and success to disasters and crisis.

You may be saying “wow, it seems like you are making the case that everyone could use a fundraising consultant”. You need to keep reading.  Yes, there are a lot of reasons people may need a fundraising consultant.  But not everyone is ready to bring one on. 

That’s why we have developed 10 questions that you need to ask to see if you and your organization are ready.

10 questions to ask! Are you ready for this?

1.   Are you looking for a fundraising consultant, coach or vendor?

Knowing what type of help you need is critical. 

Vendor- A company that provides a service for you usually on repeat.  Often a technology solution.  This is the realm of CRM’s.  E-mail management.  Direct mail outreach.  They will help you with one thing inside of your fundraising program.  A healthy fundraising shop may have multiple vendors providing different services. 

Coach- A coach is someone you call upon to help you get better.  It is usually for a limited period of time (6-12 months) and helps one person or team.  A good coach helps you figure out what internal motivators are blocking you from achieving what you desire.  They also help to hold you accountable to your goals.  They may or may not help you level up your skills. Here are 11 reasons you may deserve a fundraising coach.  

Consultant- A consultant comes in and provides analysis of your current realities.  Creates a strategy to help you with your challenge or problem.  And then helps you put in place a strategic solution.  This may or may not involve coaching. 

Do you know what you need? 

2.   Do you know where you are going—or need help in finding a destination?

Do you know where your organization is headed? Do you need helping figure it out?  Either is fine.  But knowing this in advance is very helpful. 

Fundraising consultants are experts in fundraising.  A few have expertise in fundraising and have also led organizations. Only the later can help you with your overall strategy.  Knowing what you need is very useful. Why? So you don’t waste your time and money in choosing the wrong help. 

3.   Are you serious about growing?

This is a question that I ask potential clients.  Is this something you deeply desire to do or is this something your board is asking for? Are you doing it begrudgingly?  Are you ready to put in the work and hours to get better and grow?  If you are not serious about growing I would recommend that you NOT get a fundraising consultant.   

4.   Do you have the support of your board and executive team?

Investing in a fundraising consultant, as we will discuss below, is not a cheap endeavor.  Most consultants will want to work with you for several months and many up to 1-year.  Why?  They know that this time-frame is needed to see results.  It is important that your board and your executive team support this direction.   If you are constantly battling each other inside the organization you will significantly hinder the work of the consultant. And your ROI will diminish.

5.   Have you clearly outlined to your team why bringing in extra help is needed?

Its impossible to get support from your board and executive team unless you have outlined the reasons.  This does not need to be exhaustive.  A clearly defined and logical description of what is going on and why you need support is critical. It is critical both to the process of hiring a fundraising consultant. As well as bringing your team along on the journey. 

6.   Are you willing to make changes?

This is the hardest for most organizations.  Change is hard.  Leading change is hard.  If you want different results you are going to have to change what you are doing.  Before you hire a fundraising consultant, you need to think long and hard if you are willing to make changes to your organization. Change how you work. And changes to how things have been done in the past.

7.   Do you understand the ROI?               

Hiring a consultant is not an insignificant expense.  Have you understood the ROI implications of this investment?  I am shocked how many times I ask a nonprofit leader what is your expected ROI from this investment.  And they stare back at me blankly. 

This is the hardest part of most leaders in hiring a consultant.  You have undoubtedly tried many things.  And they have not all worked!  Maybe none of them have.  A good fundraising consultant will help you to understand the ROI of your investment from the outset.  Make sure you ask them! 

Knowing what is needed to make your investment worthwhile is crucial. Also critical is realizing that in fundraising tips, tricks and hacks are detrimental.  We are talking about real people giving generously of their finances.  So, this investment will take time to see results. A good consultant will walk you through the realistic time to see a positive ROI.

8.   What happens to your revenue, team, mission if you don’t get help?

What happens if you don’t start bringing in more revenue?  If you don’t get more help what happens?  Do you shut down?  Do you lay off staff?  Do you close programs?  Being able to forecast into the future and imagine what happens to this organization and mission that you love is oftentimes painful, but monumentally important. 

9.   Are you building a single campaign or a revenue engine for your future?

Knowing exactly what you are trying to accomplish is key.  Are you looking for help on a time bound campaign? A building fund, year-end fundraiser or other capital project?  Or are you looking to grow an enduring fundraising engine.  Both are valuable.  They are just different and you need to know what you are looking for. 

10.   Have you built in time for yourself or your team to do the work?   

As mentioned above—change is hard.  And it takes time.  As you think about hiring a fundraising consultant you need to think through how much time it will take.  Depending on the size of your team the amount of time you spend as an executive will vary.  But it will not require less than 1-2 hours of your time per week.

Fundraising Consulting: Spending Money to Make Money–But How? 

You know that raising more dollars requires investment.  But you don’t have the money to spend in the first place.

Jim Collins, in his book Good to Great, says that one of the qualities of high performing leaders is that they manage paradox.  He calls this “The Genius of the And”.  Great leaders, he says, refuse to choose between A and B.

Great leaders don’t think of paradoxical situations as problems to solve. They think of them as tensions to manage.  So, they figure out how to have the best of A and the best of B, without the negative qualities of either. 

Most nonprofit leaders have felt disappointment, letdown, burn from fundraising efforts.  And there are many reasons for this. 

• It might have been the wrong effort
• The wrong person leading the effort
• The right person and right effort but wrong time

The list of reasons why your past efforts have not worked is endless.  But this does not mean you have to choose to not invest in fundraising.  You have to choose how to invest in fundraising without the negative experiences you have had in the past.  You need the best of A, without its downsides. 

But the question of how to manage the tension of spending money to make money remains.

A world class fundraising consultant is going to help you manage this tension.  Help you to stagger your investment so that you can see progress, results, ROI and build upon it. 

A world class fundraising consultant is not going to tell you the biggest and best strategies that you have no ability to implement.  A world-class fundraising consultant is going to analyze your unique situation.  Recognizing where you have done well and where you have struggled.  They will build you a plan utilizing your strengths. 

You need the best of B—without the downsides.

How can I afford a fundraising consultant?

There are many ways to pay for a fundraising consultant.  Here are a few ideas that we have seen work well over the years:

1. Ask a committed donor who does not want to ‘foot the bill’ forever to help you hire the consultant and raise more money.
2.  Delay other investments for 1-year and generate a positive ROI so you have more to invest later. 
3. Apply to a capacity building grant from a local foundation.
4. End something that is not working and use those funds to hire the consultant to help you build something that does work.
5.  Ask the board to underwrite it

10 qualities in a good fundraising consultant

You have asked yourself hard questions. Dove into paradoxical thinking. Thought through and how to fund it. Now what to look for in a consultant.  Here is a list of 10 to consider. 

• Relevant Experience: Specific experience in your field or with your type of project.
• Proven Track Record: Evidence of past success.
• Expertise: Deep knowledge in the required field or specialty.
• Strategic Thinking: Capability to think long-term and align with your goals.
• Problem-Solving Skills: Ability to tackle and solve complex issues.
• Cultural Fit: Compatibility with your organization’s culture and values.
• Communication Skills: Clear and effective verbal and written communication.
• References: Positive feedback from previous clients.
• Project Management Skills: Experience in managing projects from start to finish.
• Cost: Pricing with clear ROI rationale.

It works

When I first talked to Mike, it was clear the organization he leads, International Samaritan, had hit a plateau.  As he told me the story of his organization I found out why. 

They had doubled their fundraising revenue during the pandemic. But in 2022 giving declined and 2023 was not looking any better.

After two meetings we began working together. They went through our Strategic Fundraising Accelerator.  Over the course of 8 weeks we:

• Conducted a deep dive analysis.
• Thoroughly understood every part of their fundraising operation.
• Interviewed everyone involved to gather comprehensive insights.
• Discovered they had focused on increasing their existing major donors but neglected their future pipeline.
• Discovered their donor’s retention rate was half the national average.

After doing this work, we:

• Made recommendations for strategy, structure, and staffing changes.
• Engaged the board of directors in the decision-making process.
• Proposed and gained unanimous approval for the new strategy, staffing, and structure.
• Implemented enhanced major donor programs and retention strategies.
• Developed a pipeline of new major donors.
• Worked to assist them in hiring key staff.  

Our 8-week engagement turned into a deep and long working relationship.  And do you know what happened?  They grew.  

THEY GREW 58%!  

Because of what they learned, they are still at it.  And are working to grow 70% this year.  

Here is what he says:

“We had hit a fundraising ceiling when we first called James, and I could tell from our very first phone call that he had the expertise we needed. We brought him in to meet with our board, and the advice he gave us was the opposite of what I thought we should do.  But he had clearly been where I was, and gotten through the wall we were hitting, so we chose to trust him and to follow his plan. 

 My life and our organization is so much better off after working with the Kipos group for a year.  We have a vibrant team of people working a cohesive plan now, and our board has set a goal to double our fundraising results in the next five years.  This is a huge leap forward for the communities we serve, and James and his team provided the blueprint and the training we needed to get there.  He heard us, saw what we needed to do, showed us how to get there, and then walked us through it until we were strong enough to do it on our own.  I've worked with a lot of consultants over 30 years.  This was my best experience yet.”

A final word

Having worked in nonprofits for decades I know from first hand experience the hard work that you put in.  I know it's not a 9-5 job.  It takes all of what you have got! 

I also know that you know you need to ‘do fundraising’ but are afraid, hesitant, have been burned and so you delay. 

I would love to be able to help.  If you would like to talk about getting help for your nonprofit I offer free 30-minnute sessions.  These sessions are not for me to pitch you on our services.  They are for me to get to know you, ask you some questions about your organization, and give you my initial thoughts. 

These sessions are so important to me that I made a short video for you here to explain a bit more about how they work. 

Take a moment, watch the video, and schedule a call today!