Tips on Hiring and Using Consultants Effectively
The following questions and considerations are intended to help nonprofit organizations evaluate whether or not to hire an outside consultant. If organizations perform their “due diligence” first, it increases the probability that this will be an effective and productive relationship. We hope the following is useful as a three-step process for creating beneficial relationships between consultants and nonprofit organizations.
1. Assess the need
- Decide if you need a consultant, or whether you should hire an employee. The IRS has an excellent publication that outlines the differences between a contractor and an employee at irs.gov.
- Define the outcome or product you are seeking through consultation. Ensure that staff and board are “on the same page” with these needs. Some organizations have used a team of 2-3 people within the organization to develop the RFP, job description or contract, and then to evaluate the responses.
- Designate a contact person and a back-up for contract implementation and management who knows the organization, readily has access to information, and is committed to the outcome.
- Articulate the skills, qualifications, and experience you are seeking.
- Identify the budget, timeline, and deliverables for the contract.
- Provide clear information on how to submit bids or responses to your request.
- Review your past experience with consultants. What made those partnerships positive and what areas needed to be improved? Consider elements of the contracting process that can be changed to avoid the mistakes.
- Talk to other organizations with similar needs to find qualified consultants.
2. Negotiate the relationship
Understand that a consultant works most effectively with organizations when the relationship is equal. The consultant brings skills that the organizations need, and the organizations provide timely information and guidance to the consultant. When this relationship is successful, there is a strong sense of mutual satisfaction in a job well done.
As you review bids or responses to your RFP, consider the following:
- Does this person have the skills or experience needed to achieve your objectives?
- How can the consultant add to the existing capacity of the organization?
- Does the consultant have certifications, appropriate licenses (including a federal Tax ID number) and insurance?
- Will the consultant’s services be more efficient and effective than having an in-house person complete the same tasks?
- Has the person provided references or work samples?
- Does the consultant have a confidentiality policy?
- Does the proposed scope of work resonate with your needs, outcomes, budget, and timeline?
- What are your expectations of the consultant? Is the consultant aware of these?
- Is the “fit” and chemistry right for your organization? Can this person listen to your needs and develop an appropriate response?
- Has the person lived and/or worked in your community before?
- Is the consultant familiar with the issues of your community environment?
3. Develop the contract and engage the practitioner
Contracts are, by far, one of the most important elements of a successful consulting relationship. If the arrangement is long-term, you may wish to develop a shorter-term contract in the beginning of the relationship with specific benchmarks for evaluation.
Other key issues to consider are:
- Who is providing supervision to the consultant and is there a reporting process in place?
- Who “owns” the final product or data generated through the contract?
- What is the preferred method of communication with the consultant? How often does the person need to be in your offices, if at all?
- What will happen if the scope, timeline, budget, or staffing for the contract change?
- What are the terms of payment for completing the contract?
- Are the expectations outlined and agreed upon between the organization and the consultant?
- What are the benchmarks or reporting systems for meeting the objectives?
This information is a short primer on effective consulting relationships. We hope it helps create an effective partnership that will aid you in meeting your mission. Consulting relationships, when managed effectively, can bring targeted expertise and creative opportunities to nonprofit in addition to building their internal capacity.