Nonprofits have had a rough ride the past few years, including the high-profile collapse of numerous arts, culture, and service organizations. Just in my home city of Philadelphia, recent nonprofit casualties include the University of the Arts, Philly POPs, the Benefits Data Trust, and the Coalition Against Hunger.
Such closures, along with layoffs and rampant burnout among overworked and underpaid staff, have left even large, seemingly stable organizations worried about the future. Adding to the challenges, Donald Trump’s return to the presidency is likely to increase pressure on nonprofits to fill the gaps left by hollowed-out federal government programs.
In this environment, nonprofit leaders eager for answers increasingly turn to consultants for help. While no studies exist that document the extent of consultant use in the sector, anecdotal evidence shows more nonprofits are turning to consultants to fill leadership gaps and address pressing challenges.
While a handful of large firms, such as the Bridgespan Group, are the most visible providers in the field, most consultants are sole proprietors or work at small firms with staffs of less than 25. These consultants offer a range of services, including fundraising, marketing, communications support, strategic planning, program evaluation, and board development. Through this work, they claim to help nonprofits improve their operations and better accomplish their missions.
Faulty Assumptions
But how helpful are consultants, really? While most are dedicated partners to their nonprofit clients, consultants too often operate on a set of assumptions that may prevent them from considering new and better practices for the organizations they advise.
This isn’t about self-interest or malfeasance. For my new book, “How Consultants Shape Nonprofits,” I conducted 14 months of ethnographic fieldwork and 180 interviews with consultants, clients, and funders. I found that while bad apples certainly exist, most consultants are doing their best to help nonprofits thrive and are unaware that the assumptions embedded in their work could be exacerbating the very problems they were hired to solve. Those assumptions fall into two general areas:
First, when consultants compare their clients to similar peer organizations, they often conflate best practices with approaches that are common in the sector. This reinforces status quo ideas about good nonprofit practice, such as hierarchical leadership and organizational structures that can create a disconnect between those in charge and the experiences of lower-level staff.
Since financial data for nonprofits are generally available online, consultants also often use financial solvency to determine whether a nonprofit’s practices should be emulated, rather than the more nuanced task of evaluating whether the organization is accomplishing its mission. While financial health is an important indicator of success, it says little about whether a nonprofit is meeting the needs of its clients.
Second, in their effort to secure buy-in for their clients’ future plans, consultants often prioritize the opinions of people with power over nonprofits, including grant makers and partners such as city agencies — instead of seeking out the views of people in the communities nonprofits serve. Even within their clients’ organizations, consultants are far more likely to listen to executive-level staff than lower-level employees, replicating entrenched power dynamics common to the field.
Consultants themselves often operate within networks that aren’t necessarily conducive to generating new ideas. For example, sole proprietors and small firms working at the local level may understand the policies and political landscape in their communities but often have limited familiarity with the larger national context beyond what they read in trade publications and learn from their work with other clients. These constraints limit the options they present to nonprofits.
Consider the case of one small consulting group I observed during my research. The firm was attempting to guide an arts organization on how its strategies fit into conversations about the arts at the national level. But with no real connections beyond the immediate community, the consultants were unable to even get a response from officials at the National Endowment for the Arts about whether trends they observed locally were also present at the national level.
By contrast, larger firms often specialize in bringing national or international perspective to bear on local problems but may lack the understanding of local communities and organizations necessary to make their advice worthwhile. I saw this firsthand at a large consulting firm where staff routinely called upon major national foundations for advice. While this approach allowed the client to align its work with the interests of national funders, the needs of the nonprofit’s local community rarely came into focus.
Three Useful Steps
The steps consultants follow to assess a nonprofit’s health and generate solutions are often hard-wired toward traditional ideas and approaches. But given the nonprofit sector’s current volatility, these common practices may no longer be best practices. What then can nonprofit leaders do to ensure that their work with consultants yields effective and innovative solutions? In my experience working with and writing about consultants, the following three steps are central to productive engagement:
Question assumptions. Nonprofit leaders should begin the process of choosing a consultant by questioning their own assumptions about who the best partner might be. Rather than jumping to household names or those your board suggests, ask yourself which consulting firms are working with organizations you respect and want to learn from.
Consider also what evidence of success you find compelling. For example, are you interested in client stories that illuminate the impact of your work or tables and graphs that analyze the use of your service over time? Be clear, as well, about the values you want to guide your planning process. You may want to prioritize diverse voices or dig deep into the perspectives of those who are most critical of your work. Bring these ideas to your interviews with potential consultants. Their reactions will help you narrow in on the best fit.
Spend strategically. Assuming you have a limited budget, consider how you want to deploy the dollars available for consulting work. Do you want to invest in financial modeling to identify the relationship between program costs and impact? Are you interested in a survey to assess community perspectives on your work? What about a research trip to learn from providers in other states? Your answer might lead you to different consultants.
Returning to your values may also help you narrow down your priorities, rather than inadvertently deferring to assumptions about your needs embedded in a consultant’s models.
Question power dynamics. Once a consultant is selected, talk openly with them about how power dynamics affect your work together. Who is funding their work with you, and do you want or need to include them in your process? Who are the loudest voices on your board or among your donors, and how might you work together to manage them without diminishing staff or community opinions? Grant makers, for their part, should avoid meddling in consultant-client relationships unless asked for help.
The nonprofit world is facing existential questions about its role in the years ahead, and how to build strong organizations capable of meeting increasingly complex social problems. Consultants can be effective partners in meeting these challenges — if they don’t assume the old ways are the only way. With a little creativity and a lot of self-reflection, consultants and nonprofits can work together to create a smoother ride forward.
