Corporate and private philanthropy require daily decisions on a myriad of topics, including governance, grantmaking, employee engagement, community outreach and communications. While philanthropic institutions often expand their expertise and resources as they evolve, an outside advisor can provide valuable support to help them through unique challenges or periods of transition. Advisors come with distinct project knowledge, experience working with a range of clients, a toolbox for solving critical issues and a neutral stance to keep things focused. Whether facilitating board succession, devising a strategic program plan, conducting a landscape analysis or developing a corporate social responsibility platform, hiring a philanthropy advisor might be the most efficient and effective means to tackle pressing concerns.
Do your homework
• Get the board on board. The first step in ensuring a successful experience when hiring a philanthropy advisor is making sure the stakeholders are in sync and there is consensus about what role the adviser will play. Does everyone agree that hiring an outside advisor is important? What amount of time and financial resources will the foundation devote to working with the advisor? Most importantly, what will the scope of work be for the advisor? Lack of clarity on any of these fronts will erode the potential for success.
• The better the plan, the better the results. What issue do you want the advisor to address? What problem needs a solution? The clearer the goals and parameters the foundation provides, the more effective the advisor can be. Think through, for example, whether the advisor will have a primary point of contact at the foundation (either a staff member or a board member). Is the expectation that the advisor might interview various members of the board and, if so, are all the board members aware of this plan and willing to make themselves available? Make sure the timeframe you set for the work is realistic, given the availability of the board members and the scope of work. Identify measures of success as a way to communicate to the advisor what you are looking for and to ensure you have a common understanding of the goal. While you cannot — and probably should not — predict the outcomes, you can be clear about what questions you want asked and your expectations concerning the result. For example, you may not be able to determine in advance if the board will choose a multiyear grant strategy driven primarily by a Request for Proposals (RFP) process, but you can make it clear that you want the advisor to help the foundation arrive at a grantmaking strategy that will both suit the interests of the board and address priority concerns.
• Preparation is good for the foundation and the advisor. Gathering background materials on the foundation (information about the founders as well as its history, grants, bylaws, policies, meeting minutes, etc.) in advance for the advisor to review is a valuable and time-saving step that can provide critical context for the consulting engagement. These materials will accelerate the advisor’s ability to partner effectively with the board and get to the heart of the work. Saving time saves money. Helping the advisor to prepare also builds confidence with the board, as they will recognize that the advisor has done the “homework” on the foundation.
• Define your search strategy. Planning a search and vetting process will ensure an efficient use of resources to find the most qualified advisor. Begin by determining who will lead the search and who will participate at all stages of the process, from the initial preparation and vetting of proposals to the interviews, reference checks and final selection. Narrow your search by developing a position description or RFP that defines the scope of work and the qualifications you seek. Consider asking candidates to describe their areas of expertise, the approach they recommend to address your needs, their fee for service and their payment protocol. Candidates should also provide at least two references. Share the position description or RFP through the many vehicles available for finding qualified candidates, including colleagues who understand your organization’s operations and challenges, trusted sources such as professional networks and membership organizations, and online outlets like your company or foundation website. To address a more complex scope of work, consider approaching firms with an array of specialties.
Understand the business model
A consulting firm or individual advisor typically determines fees by looking at the scope of work, analyzing the amount of time required to complete the project, placing a value on that time and establishing a total. Note that the fee associated with an individual’s time can vary widely according to factors that are critical in determining the right fit. For example, a consultant’s breadth and depth of experience in the field and expertise with a particular issue may factor into the fee. A more complex project may require a firm to use more than one consultant or use specialized analysts to conduct research. A consultant’s location may necessitate travel to the foundation or sites being analyzed, and fees often vary depending on the advisor’s regional base of operation. Finally, an advisory firm’s size is a factor. A nationally based company with multiple sites and overhead requirements will most likely charge higher fees than a single independent consultant.
An advisor’s billing structure can also vary, ranging from a monthly retainer with an agreed-upon start and completion date and anticipated project deliverables to a flat fee that is payable in installments (e.g., one-third due upon signing an engagement agreement, one-third halfway through the project based on certain deliverables or timeline, and one-third upon completion of the project). An advisor might also establish a set fee plus an additional charge — as per the hourly rate — for work that goes beyond the scope of the agreement. Particularly in more complex cases, consultants build in this provision to account for extra facilitations and research. Additional charges are applied monthly or upon completion of the engagement for travel-related expenses, printing costs and other administrative items.
Questions to ask
When interviewing a candidate, ask questions that not only address their specific experience but also can reveal whether they are a good fit for your organization.
1. Have you worked with an organization like ours before? This question includes but also goes beyond foundation size, board composition and subject matter. Philanthropy is a highly personalized undertaking. You want an advisor who instills trust; one who listens, understands and adapts to the changing needs and varying opinions among stakeholders and integrates well with your learning process (vs. dictating theirs). Although all foundations are unique, a consultant with enough experience across the field will be well-versed in addressing the complexities and nuances of your organization.
2. Have you ever worked on a project like ours? For optimal results, find a candidate whose experience includes projects and/or organizations similar to yours, a respected track record of successful outcomes and a working style that fits well with your organization’s structure and resources.
3. How many other clients and projects will you be handling while you are working with us? Advisors often juggle several projects and clients at the same time. The best ones are experts at time management. However, you’ll want to make sure your candidate is not overextended and has the time to both meet deadlines and be responsive to your needs.
4. How much foundation board and staff time will it take to support your work? Working with an advisor often requires additional staff time to gather data, communicate with board members and grantees and implement changes. An advisor may need to interview key stakeholders and facilitate meetings. Knowing what is required beforehand will enable you to manage internal resources.
Check references
A critical determinant in selecting the best fit is learning from the experiences of others who have worked with this advisor. Ask your candidates to provide the contact information of at least two references. When you call them, ask questions that provide insight beyond what you learned in the candidate’s interview. Were they pleased with the process and outcomes in working with this advisor? Was work completed on time? What challenges, if any, arose during the process, and how they were resolved?
Seal the deal
After you have selected your advisor, enter into a signed engagement agreement before starting your work together. This agreement should define the scope of work, timeline, outcomes, fees and any contingencies or liability issues.
With this level of planning throughout the search and engagement process, you are best positioned for a positive experience with your new advisor. Your relationship is built on solid understandings and expectations and has the potential to grow into a richer sense of purpose and trust over time as you address your organization’s philanthropic activities and challenges together.
Robyn Hullihan and Elizabeth Wong are senior philanthropic directors at Foundation Source, which provides support services for private foundations (www.foundationsource.com).
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