The first answer to this question is how not to pay a fundraising consultant: under no circumstances agree to pay the consultant based on a percentage of what s/he raises for your nonprofit. This is true whether the consultant is helping you with proposal writing, major gifts, special events or any other development work. Members of professional fundraising groups, such as the Association of Fundraising Professionals, must sign an ethics statement that includes an agreement to never work on a percentage basis.
Why? There are three basic reasons. First, fundraisers are professionals and should be paid as such. Second, payment on a percentage basis can lead to unethical practices such as inflating the size of grant proposals or pressuring potential donors to increase the amount of their gifts. Creating a resource development program is a long-term investment. The consultant who works with you to create a useful fundraising plan lays the groundwork for increasing your resources and this is likely to incur only after you actually implement the plan. In another example, if you are new to grant seeking, the proposal writer you hire will have a great deal of work to do to help you to receive that first grant. Once the groundwork is laid, future grants could be much larger because your consultant has prepared you to submit successful grants and you have the systems in place to do so.
How do fundraising consultants determine the fees they charge? Some charge by the hour, some by the day and some by the whole job. The experience of the fundraiser, the size of the nonprofit, and the geographic location often combine to determine the price. For example, you may pay $100-170 an hour if you are a midsize nonprofit in Boston who wants a consultant with extensive experience. A smaller nonprofit in the Berkshires or on the Cape seeking a consultant may pay in the $60 to $90 an hour range.
Most consultants use a daily rate (which is generally less) if you hire them for a larger project or a longer period of time. In this case, make sure you build evaluation points into your service contract. Review the work at agreed upon times and see if the original assumptions hold true. In all cases, make sure your nonprofit has a written agreement signed by the consultant and your organization that clearly spells out the consultant’s responsibilities, fees, expenses and timeframe for payments.
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