Here’s one FAQ we often hear in the consulting world: “How do you compute your fees?” Sometimes this question is also posed as “What is your hourly rate?”
This is an important question for a client to ask and the answer is not, and should not be, the same for each client. And, every consultancy has a different approach to pricing. So it’s almost impossible to compare apples to apples when looking at various consultants. But let us give you a PRO TIP: there is a way to level the playing field when you are seeking professional counsel, and it’s our favorite first step: a client’s written scope of work.
At The Olympia Collective, our fees always depend on the written scope of work. That’s why we insist, for both of our sakes, that we finalize the scope before we give you a fee quote. Trust us, it’s a win-win!
Once you have what you want written down, why not share that with several fundraising consultants to see how they respond? Then you will have actual, real data on what fees are required to get it done.
To be able to fairly review fee quotes from consultants, your written scope of work can be formally incorporated into a Request for Proposal (RFP) document that you provide to each consulting firm you ask to do a bid. NOW you will really be able to see what each fundraising consultant can offer, and how they would approach your project.
At a minimum, good RFPs contain a description of the project, background on the organization and its current situation, a list of the resources that will be available to the chosen consultant, a desired timeline for completing the work, and a list of the final deliverables required.
The scope of work is done. You have released your RFP.
So, what factors do consultants consider when computing their consulting fees?
At The Olympia Collective, whenever we get an RFP or a request for a quote, there are lots of factors for us to consider:
- What skills and work experiences are needed to complete the scope? Which of these do we already have in-house?
- Do we need to find/hire additional talent in order to complete the scope?
- How much time do we need to allocate over the entire project, and week by week, to get the work done?
- Is there another firm we could team up with to complete the work if some of the scope is not in our wheelhouse?
- What internal meetings need to be included throughout the project? How much prep for each?
- What client meetings need to be included throughout the project? How much prep for each?
- How much travel will be involved? How much in person time versus virtual time?
- Will we have access to the data we need from the client? Do we know if the client’s data quality is good? What systems does the client use? Do we have expertise in those systems?
- How fast does the scope need to be completed?
- What resources other than talent are required to complete the project? Will we need to purchase new software, subscriptions, or supplies to be able to do the work?
- How much overlap does the client have with our core values? What is their culture like? What adaptations do we need to make to be sure we adapt to the client’s culture in all that we do?
- How stable is the client organization? Its leadership?
- Is the client board in support of this project? How committed is the leadership to the work?
- How much training will we have to do with the client in our specialty areas of nonprofit revenue generation, board and staff support, and data and insights?
- What has the client’s previous experience been with consultants? Positive or negative? What are the myths we will need to bust as we do the work?
Once we have those answers, we can calculate fees based on what the scope requires and the specific client organization. Good consultants always want to be sure we can complete the scope on time and within budget. We want to assemble team members highly skilled in what you need. These teammates have years of experience doing what they are doing, and by choosing us, you have access to each of them in just the right mix for your project. It’s like being able to time share professional minds.
When anyone attempts to determine our hourly rate, it may seem high. That’s because in addition to the scope we must take into account that the talent we tap into has deep levels of experience in each specialty area and that an hour of their time may be worth a week of an unskilled person’s time. One of our favorite quotes on this comes from a 2019 Twitter post that went viral by Davy Greenberg: “If I do a job in 30 minutes-it’s because I spent 10 years learning how to do that craft in 30 minutes. You owe me for the years, not the minutes.” YES!!!
One Way to Be Sure You Aren’t Stuck Paying Consulting Fees
One last thing we never forget to say: All contracts with The Olympia Collective allow either party to cancel anytime with 30 days’ notice. No questions asked. This policy has provided a lot of peace of mind to our potential nonprofit clients. We are confident that our fees are worth the results. And we always offer references of current or former clients that can tell you we are worth every penny.
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Founded and led by veteran nonprofit fundraiser Olympia Ammon, The Olympia Collective specializes in non-profit revenue generation, board & staff support, and data & insights. We empower our clients to deliver maximum impact to the communities they serve.