Shining a Light on the True Cost
FSPs have different ways of pricing their services to you, their NPO client. Following are explanations of several ways. This may not be an exhaustive list, but it represents billing strategies that I have encountered in the past. An FSP may use multiple methods or just one.
Flat rate or 'menu' pricing
When you go to a restaurant, the menu lists the food offered and shows how much it costs. You pay $6.99 for the daily special or $5.25 for the budget breakfast. You can see what you're getting and what it costs by reading the menu. If you want to make a change — for example, you want the budget breakfast, but you want two eggs instead of one — you pay an extra change.
For your FSP, that's menu pricing. Want a two-page appeal letter with one round of edits? That's this price. Want an e-blast? That's this amount. Oh, you want two rounds of edits, not one? No problem — but there will be an additional charge.
An FSP may charge by the hour (or an increment thereof). Often it will be able to give you an idea of what doing a specific job will most likely run in terms of hours (and therefore cost), assuming you don't ask for something that is outside the norm.
'Not to exceed' fee
This is closely related to the hourly fee, except that it has a cap on it. Basically, your FSP says it will provide you with X for a price not to exceed $Y.
Your FSP may charge a monthly retainer. This is the fee that covers all the conversations you have that are not related to a specific job. It may provide access to a certain amount of time from its senior leadership. It could include a quarterly review and a semiannual strategy meeting. This prevents your FSP from having to bill you for that six-minute call you made to ask a question.
Pamela consults with nonprofits, helping them develop their fundraising strategy and writing copy to achieve their goals. Additionally, she teaches fundraising at two universities, hoping to inspire the next generation of fundraisers to be passionate about the profession. Previously, Pamela led the fundraising programs for nonprofit organizations. Pamela is a member of the Advisory Panel for Rogare, the fundraising think tank at Plymouth University’s Hartsook Centre for Sustainable Philanthropy, a CFRE, a graduate of Wheaton College (IL) and Dominican University, and holds a Doctorate in Business Administration from California Southern University. Contact Pamela at email@example.com or follow her on Twitter at @pjbarden.