Shining a Light on the True Cost

As the donor public has been focused on nonprofit overhead in recent months, it seems that nonprofits have in turn been focusing on their costs to raise money. That's perfectly logical and wise, but this has generated a lot of questions and misunderstandings about what and how consultants or agencies charge.

I've been enjoying the summer and feel relaxed and strong enough to tackle this subject. No, this isn't an argument that one method is better or even that another pricing model is evil. Rather, here's information you need to know when you're considering using an outside resource for fundraising assistance.

Let's get three things out of the way. First, for the sake of this article, I am going to use the acronym FSP (fundraising service provider) to refer to consultants, agencies, trusted partners, vendors or any other nomenclature you (or they) want to use to describe this resource. Trying to be politically correct by constantly including all the possible titles would be too taxing.

Secondly, I am an FSP. I've worked for two agencies — one at the beginning of my career and one more recently — and currently own a one-person consulting company. I also worked for nonprofit organizations (NPOs) for nearly three decades. So I'd like to think that this background gives me at least a little insight into both sides of the aisle, as it were.

Thirdly, FSPs all have expenses to cover, just like your NPO. They pay salaries and benefits, have utility bills, and have to buy paper and ink for the printer and copier. Unlike an NPO, they exist to make a profit. This may be the expectation of the owner(s), and in some cases it is the obligation that company has to its shareholders. No matter how much the staff loves your mission, if an FSP isn't making money by working for you, it won't remain in business if it keeps working for you.