The Roles of Advocates and Consultants in Social Change

Use of Consultants by U.S. Foundations: Results of a Foundation Center Survey Lawrence T. McGill, Ph.D., Brenda L. Henry-Sanchez, Ph.D., David Wolcheck, B.A., and Sarah Reibstein, B.A., Foundation Center

Keywords: Philanthropy consulting, survey

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Key Points

· This article presents the results of a survey launched in January 2014 by Foundation Center, in collaboration with the National Network of Consultants to Grantmakers, examining use of consultants by community, corporate, and independent foundations whose annual giving totals at least $100,000.

· The survey asked funders to report whether they used consultants in the past two years and, if so, how frequently and for what purposes; they were also asked to report their level of satisfaction with consultants’ work. Funders that did not engage consultants in the last two years were asked why not. The survey also sought open-ended responses about working with consultants.

· The survey found widespread use of consultants among foundations. While the results of this study tend to emphasize the benefits – taking advantage of external expertise, allowing staff to stay focused on what they do best, bringing fresh or neutral perspectives to the work – respondents were also clear that working with consultants has its challenges.

Introduction To what extent do foundations use consultants to support their work? The recent rise of “strategic philanthropy” and its talk of theories of change, logic models, and the like may seem to explain why foundations would engage consultants. While we have known for years that foundations use consultants to support various aspects of their

work, we’ve never had a quantitative picture of how many, how often, and for what purposes.

This article presents the results of a survey conducted January to March 2014 by Foundation Center, in collaboration with the National Network of Consultants to Grantmakers (NNCG), examining use of consultants by community, corporate, and independent (including private and family) foundations.

The survey asked funders to report whether they used consultants in the past two years and, if so, how frequently and for what purposes. We focused exclusively on consulting for purposes of governance, program development, and management, and excluded legal, accounting, and financial/investment services and technical assistance provided by consultants directly to grantees. Funders were also asked to report their level of satisfaction with consultants’ work across multiple dimensions, including cost, quality of work, and ability to communicate findings and recommendations.

For those funders that did not engage consultants in the last two years, the survey asked them to indicate why not. Last, we solicited open-ended responses regarding the benefits and challenges of working with consultants.

Methodology Data on consultant use by foundations were collected as a supplement to Foundation

doi: 10.9707/1944-5660.1231

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59,395

21,566

4,617 358

109

467

< $100,000 $100,000 to $1 million $1 million to $9.9 million $10 million to $49.9 million $50 million +

Total = 86,045

Center’s annual giving forecast survey. The primary purposes of the forecast survey are to obtain information on giving and assets for the most recent year of giving, and to forecast for Foundation Center’s annual report on growth and how giving might change in the coming year. The survey is also used to understand various developments in the field. Past topics have included diversity, equity, and inclusion practices of foundations and foundation engagement in mission- and program-related investments. The survey has a maximum of 20 questions; the consultant questions were developed and vetted in partnership with NNCG. (See Appendix.)

The majority of U.S. foundations – 69 percent – are very small, with annual giving of less than $100,000. (See Figure 1.) Most of these are unstaffed and reliable contact information is hard to come by, making it difficult to include them in surveys of the field. Hence, these foundations are not included in this analysis. We focus on the 31 percent of U.S. foundations (N = 26,650) whose annual giving totals at least $100,000. Although the excluded foundations represent more than two-thirds of the foundation community, they comprised less than four percent of total giving in 2012 awarded by community, corporate, and independent foundations. The foundations invited to respond to the survey represented more than 74 percent of total giving by those types of foundations in 2012.

The survey was sent to the primary contact for all community, corporate, and independent foundations that reported giving of $100,000 or more in 2012 for which Foundation Center had contact information (N = 4,517) at the end of December 2013. The primary contact was the individual who completed the survey the previous year; if a primary contact was not available, the survey was sent to the president or chief executive officer of the foundation.

Even among foundations with total annual giving of at least $100,000, most are unstaffed. The total number of staffed foundations in the United States is not known, but most estimates suggest that it is less than 10 percent of all foundations, or between 5,000 and 10,000. Virtually all the foundations surveyed for this study are staffed.

The survey was administered electronically (web-based) and on paper, and was open through March 2014. Follow-up calls were made to the larger foundations to encourage participation. Twenty-three percent of contacted foundations completed the survey (N = 1,031). Among foundations with total annual giving of at least $50 million, the response rate was 56 percent (55 of 99 foundations), more than two times the rate for smaller foundations. Community foundations had the largest response rate by foundation type, at 36 percent; the response rate was 14 percent for corporate foundations and 22 percent for independent foundations. (See Figure 2.)

Response Rates by Total Giving & Foundation Type

56%

26% 23% 20%

36%

14% 22% 23%

0%

20%

40%

60%

80%

100%

* Includes private and family foundations

FIGURE 1 Number of U.S. Grantmaking Foundations by Total Giving (2012)

FIGURE 2 Response Rates by Total Giving and Foundation Type (N = 4,517)

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By design, the surveyed foundations did not mirror the distribution of foundations in the United States. (See Figure 3.) To ensure subsamples large enough to permit meaningful analyses, we oversampled larger foundations (by total giving) as well as community and corporate foundations. We then weighted the data by foundation size and type to mirror the distribution of foundations in the United States, and adjusted the weights to account for differential response rates. While we weighted the data to be more reflective of the overall distribution of foundations by size and type, we do not know the extent to which the foundations that responded to the survey represent the broader foundation community and, therefore, we caution against generalizing to the broader group.

We received responses from 757 independent foundations, 194 community foundations, and 80 corporate foundations. Grouped by total giving, the sample included 55 foundations with annual giving of $50 million or more, 119 with annual giving of $10 million to $50 million, 481 with annual giving of $1 million to $10 million, and 376 with annual giving of less than $1 million. The foundations that responded to the survey represented 33 percent of total giving in 2012.

Findings We found evidence of widespread consultant use by U.S. foundations. Among foundations with annual giving of at least $100,000, one-third reported using one or more consultants in the past two years. However, this figure obscures a wide variation in the use of consultants by foundations of different sizes and types. Larger foundations and community foundations were significantly more likely than their counterparts to have engaged consultants in the past two years. (See Figure 4.)

FIGURE 3 Sample Distribution

Sample Distribution

NUMBER OF FOUNDATIONS

Independent Foundations*

Community Foundations

Corporate Foundations TOTALS

Annual Giving > $50 million 35 (3%) 15 (1%) 5 (0%) 55 (5%)

$10 million – $49.9 million 81 (8%) 26 (3%) 12 (1%) 119 (12%)

$1 million – $9.9 million 355 (34%) 79 (8%) 47 (5%) 481 (47%)

$100,000 – $999,999 286 (28%) 74 (7%) 16 (2%) 376 (36%)

TOTALS 757 (73%) 194 (19%) 80 (8%) 1,031

* Includes private and family foundations

Consultant Usage by Total Giving & Foundation Type (N=1,031)

81% 74%

55%

28%

75%

26% 33% 33%

0%

20%

40%

60%

80%

100%

* Includes private and family foundations

FIGURE 4 Consultant Usage by Total Giving and Foundation Type (N = 1,031)

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Community foundations were more than twice as likely as independent foundations to engage consultants, 75 percent compared to 33 percent, and almost three times as likely as corporate foundations (at 26 percent) to do so.

Consultant use is particularly widespread among foundations with total giving of $1 million or more, of which there are nearly 5,100 in the United States. According to our survey, 55 percent of foundations with giving between $1 million and $9.9 million have used consultants at least once in the past two years. Among foundations with total giving of more than $10 million this figure rises to 74 percent, and for foundations giving $50 million or more, it is more than 80 percent. Simply stated, consultant usage is the norm among large U.S. foundations.

Frequency of Consultant Use Of those foundations that reported using consultants (33 percent), more than two-thirds (68 percent) used them one to three times in the past two years. The other one-third used consultants four or more times. (See Figure 5.)

Just as the overall use of consultants increases as foundation size increases, so does the frequency with which they are engaged. Among the smallest foundations (those with total giving of less than $1 million), 28 percent of which reported using consultants, the most common response on frequency was once in the past two years. Among slightly larger foundations (those with total giving of $1 million to $9.9 million), f requency of use

rises to two to three times in the past two years. (See Figure 6.)

Among the largest foundations (those with total giving of at least $50 million), consultant use is nearly ubiquitous: 81 percent of these foundations reported using consultants in the past two years; of those, 63 percent used them 11 or more times.

The frequency of consultant use did not vary greatly by foundation type. Among community, corporate, and independent foundations that used consultants, the median was two to three times in the past two years.

What Are Consultants Used For? We asked foundations that used consultants in the past two years to tell us, f rom a list of 12 categories, the areas of expertise where they sought advice. Consultants were most commonly called upon by foundations to provide expertise in technology/information management/IT (40 percent), communications and marketing (28 percent), and evaluation (21 percent). (See Figure 7.)

With the exception of the smallest foundations, those areas of consultant engagement were the top three among foundations. Among those with annual giving of between $100,000 and $1 million, facilitation replaced evaluation as the third most frequent area for consultant engagement.

The largest foundations made extensive use of consultants across multiple areas. Of those that

Frequency of Consultant Use (N=555)

32% 36%

13% 10% 9%

1 2 to 3 4 to 5 6 to 10 >10

FIGURE 5 Frequency of Consultant Use (N = 555)

Frequency of Consultant Use by Total Giving (N=555)

37%

22%

0% 0%

35% 39%

36%

7% 12%

17% 13% 13%

8% 12%

16% 17%

7% 10%

27%

63%

0%

20%

40%

60%

80%

$100K to $1 M $1 M to $9.9 M $10 M to $49.9 M $50 M+

1 time 2 to 3 times 4 to 5 times 6 to 10 times > 10 times

FIGURE 6 Frequency of Consultant Use by Total Giving (N = 555)

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used consultants in the past two years, more than half used them for communications and marketing (83 percent), evaluation (81 percent), technology/information management/IT (76 percent), human resources and/or executive search (64 percent), facilitation (56 percent), and training (51 percent). For the majority of categories, consultant use increases as foundations increase in size. (See Figure 8a and Figure 8b.) Foundation management is the only category where use decreases as foundation size increases. In addition, the use of consultants to support work related to grants management fluctuates by size.

Consultant use also varies by foundation type. Independent foundations most often use them for technology/information management/ IT (41 percent). For community and corporate foundations, consultants are most often used for communications and marketing (47 percent and 33 percent, respectively). (See Figure 9a and Figure 9b.) As noted earlier, community foundations are more likely than other types to engage consultants in general. Likewise, they tend to use consultants more frequently than other types of foundations in most areas, but not by especially large margins. Areas where community foundations are not the greatest users of consultants are evaluation, grants management, foundation management, and program development. In most of these areas, independent foundations are slightly more likely than other types of foundations to use consultants. Foundation management is the only

area in which corporate foundations are more likely than other types of foundations to engage consultants.

Why Use Consultants Instead of Staff? Not surprisingly, most foundations use consultants because their knowledge needs exceed their internal resources – 78 percent said that the “need for outside knowledge, expertise, or networks” led them to engage consultants. (See Figure 10.) This was true regardless of size and type, although the need for outside expertise seems to be most common among the largest foundations and community foundations. The largest foundations were significantly more likely than their smaller counterparts, 69 percent to 10 percent, to cite staff capacity as a reason for engaging a consultant. (See Figure 11.)

Consulting Services Used by Foundations (by Total Giving) (N=555)

51%

47%

20%

64%

23%

4%

24%

25%

14%

35%

17%

12%

8%

12%

15%

19%

19%

12%

2%

4%

9%

6%

13%

17%

Training

Executive coaching

Governance

Human resources/executive search

Grants management

Foundation management

$100,000 to $1 million $1 million to $9.9 million $10 million to $49.9 million $50 million +

FIGURE 8b Consulting Services Used by Foundations (by Total Giving) (N = 555)

FIGURE 7 Consulting Services Used by Foundations (N = 555)

Consulting Services Used by Foundations (N=555)

5% 7%

10% 11%

15% 15% 16%

20% 21% 21%

28% 40%

Training Executive coaching

Governance Human resources/executive search

Grants management Foundation management

Program development Strategic planning

Facilitation Evaluation

Communications/marketing Technology/information management

Consulting Services Used by Foundations (by Total Giving) (N=555)

41%

34%

56%

81%

83%

76%

32%

27%

34%

45%

67%

51%

21%

25%

19%

27%

38%

43%

13%

18%

21%

18%

22%

39%

Program development

Strategic planning

Facilitation

Evaluation

Communications/marketing

Technology/information management

$100,000 to $1 million $1 million to $9.9 million $10 million to $49.9 million $50 million +

FIGURE 8a Consulting Services Used by Foundations (by Total Giving) (N = 555)

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While the need for outside expertise is the primary driver for consultant use across all types of foundations, there are differences regarding secondary drivers. Community foundations are more likely than other types to hire consultants for reasons having to do with neutrality and external credibility; corporate foundations are most likely to hire consultants because of staff- capacity constraints and to avoid hiring additional staff. (See Figure 12.)

How Foundations Find Consultants The best predictor of whether a foundation may hire a particular consultant is whether that consultant has worked for the foundation before. More than half of the foundations surveyed – 56 percent – said they had rehired consultants. (See Figure 13.)

One-quarter of foundations hired consultants who had been referred to them by other grantmakers and one in five (19 percent) hired consultants referred to them by board members. Only six percent of foundations said they found consultants through a request for proposals. Online searches (four percent) and consultant directories (one percent) are rarely used to identify potential consultants. More than one-fifth of foundations cited other means of identifying consultants. Among those providing a write-in response, regional associations were most frequently cited as a means of finding a consultant.

There is a strong relationship between foundation size and use of referrals from other foundations and RFPs to find consultants. Prior use of a consultant is also positively correlated with

Consulting Services Used by Foundations (by Foundation Type) (N=555)

12%

35%

26%

15%

47%

45%

14%

21%

17%

13%

33%

31%

16%

20%

21%

22%

27%

41%

Program development

Strategic planning

Facilitation

Evaluation

Communications/marketing

Technology/information management

Independent* Corporate Community

* Includes private and family foundations

FIGURE 9a Consulting Services Used by Foundations (by Foundation Type) (N = 555)

Consulting Services Used by Foundations (by Foundation Type) (N=555)

15%

13%

16%

25%

19%

11%

4%

1%

10%

6%

1%

13%

22%

5%

6%

10%

11%

15%

15%

Fund development (community foundations)

Training

Executive coaching

Governance

Human resources/executive search

Grants management

Foundation management

Independent* Corporate Community

* Includes private and family foundations

FIGURE 9b Consulting Services Used by Foundations (by Foundation Type) (N = 555)

Why Foundations Use Consultants (by Total Giving) (N=555)

21%

35%

69%

52%

94%

10%

35%

36%

39%

86%

7%

20%

22%

31%

84%

3%

17%

10%

29%

75%

Outside credibility needed

Avoid hiring additional staff

Time frame exceeds staff capacity

Need for neutral perspective

Need for outside expertise

$100,000 to $1 million $1 million to $9.9 million $10 million to $49.9 million $50 million +

FIGURE 11 Why Foundations Use Consultants (by Total Giving) (N = 555)

Why Foundations Use Consultants (N=555)

6%

10%

23%

25%

34%

78%

Other

Outside credibility needed to sway foundation colleagues/board or external stakeholders

Desire to avoid hiring additional permanent staff/prefer to outsource responsibilities

Time frame for assignment(s) exceeded foundation staff capacity

Need for neutral perspective or assistance to achieve results

Need for outside expertise, knowledge, or networks

FIGURE 10 Why Foundations Use Consultants (N = 555)

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foundation size – nearly all the largest foundations (95 percent) said they had hired consultants who had previously worked for them, compared with 54 percent of the smallest foundations. (See Figure 14.)

Community foundations used all these methods to find consultants with greater frequency than other types of foundations, although their use of RFPs was two times more frequent than corporate foundations and almost four times more frequent than independent foundations. (See Figure 15.)

Satisfaction With Consultants Respondents were asked to indicate their level of satisfaction with their most recent consulting experience with respect to aspects of the work (e.g., quality, impact, level of engagement). Satisfaction was high overall: On a four-point scale

of very satisfied, satisfied, somewhat dissatisfied, and very dissatisfied, levels of dissatisfaction never exceeded 6 percent. (See Figure 16.) But satisfaction with consultants decreased as foundation size increased. Larger foundations consistently expressed lower levels of satisfaction with consultant work than did smaller ones, although satisfaction never dipped below 80 percent. (See Figure 17a and Figure 17b.)

The widest difference in satisfaction levels concerned cost. While 95 percent of the smallest foundations said they were satisfied with the costs involved in their most recent experience with consultants, 80 percent of the largest foundations expressed a similar level of satisfaction.

Satisfaction levels by foundation type varied very little, although corporate foundations were almost unanimously satisfied with their

Why Foundations Use Consultants (by Foundation Type) (N=555)

16%

19%

23%

33%

87%

7%

27%

31%

11%

68%

4%

18%

13%

31%

78%

Outside credibility needed

Avoid hiring additional staff

Time frame exceeds staff capacity

Need for neutral perspective

Need for outside expertise

Independent* Corporate Community

* Includes private and family foundations

FIGURE 12 Why Foundations Use Consultants (by Foundation Type) (N = 555)

How Foundations Find Consultants (N=555)

22%

1%

4%

6%

10%

19%

25%

56%

Other

Directory of foundation consultants

Online search

Request for proposals

Referral from a grantmaker network(s)

Referral from board member

Referral from another grantmaker(s)

Prior use of consultant(s)

FIGURE 13 How Foundations Find Consultants (N = 555)

How Foundations Find Consultants (by Foundation Type) (N=555)

19%

11%

31%

30%

66%

10%

0%

3%

15%

63%

5%

10%

19%

26%

55%

Request for proposals

Referral from a grantmaker network(s)

Referral from board member

Referral from another grantmaker(s)

Prior use of consultant(s)

Independent* Corporate Community

* Includes private and family foundations

FIGURE 15 How Foundations Find Consultants (by Foundation Type) (N = 555)

49%

10%

21%

68%

95%

24%

7%

15%

50%

74%

13%

11%

20%

34%

59%

2%

10%

18%

21%

54%

Request for proposals

Referral from a grantmaker network(s)

Referral from board member

Referral from another grantmaker(s)

Prior use of consultant(s)

$100,000 to $1 million $1 million to $9.9 million $10 million to $49.9 million $50 million +

Figure 14: How Foundations Find Consultants (by Total Giving) (N=555)

FIGURE 14 How Foundations Find Consultants (by Total Giving) (N = 555)

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consultants’ quality of work and responsiveness to feedback. Community foundations were less satisfied by costs and timeliness of deliverables. (See Figure 18a and Figure 18b.)

Why Foundations Do Not Use Consultants Foundations that had not used consultants typically said that they had “no need for outside technical support or expertise” in the past two years. This reason was given far more often – 79 percent of the time – than others, such as “foundation policy or practice does not support hiring consultants” (12 percent) and “cost of consulting services” (nine percent). (See Figure 19.)

These results did not differ much by foundation size. (See Figure 20.) However, community foundations did seem to be more vulnerable than other types of foundations to sticker shock – 38 percent of community foundations cited cost as a reason for not using consultants, compared with 10 percent of corporate foundations and eight percent of independent foundations. They also

Satisfaction With Consultants (N=555)

49%

51%

56%

56%

57%

57%

58%

59%

45%

41%

38%

36%

39%

36%

35%

35%

Cost

Impact of work

Responsiveness to feedback

Compatibility with foundation values

Ability to communicate findings

Timeliness of deliverables

Level of engagement

Quality of work

Very satisfied Satisfied Dissatisfied No opinion

4%

5%

2%

3%

5%

4%

6%

5%

3%

3%

2%

5%

4%

2%

2%

2%

FIGURE 16 Satisfaction With Consultants (N = 555)

Satisfaction with Consultants (by Total Giving) (N=555)

80%

82%

87%

85%

87%

93%

87%

91%

90%

93%

92%

93%

95%

94%

95%

96%

Cost

Responsiveness to feedback

Quality of work

Ability to communicate findings

$100,000 to $1 million $1 million to $9.9 million $10 million to $49.9 million $50 million +

FIGURE 17a Satisfaction With Consultants (by Total Giving) (N = 555)

Satisfaction with Consultants (by Total Giving) (N=555)

82%

82%

87%

82%

89%

94%

88%

91%

92%

92%

93%

91%

92%

92%

92%

93%

Impact of work

Compatibility with foundation values

Level of engagement

Timeliness of deliverables

$100,000 to $1 million $1 million to $9.9 million $10 million to $49.9 million $50 million +

FIGURE 17b Satisfaction With Consultants (by Total Giving) (N = 555)

Satisfaction with Consultants (by Foundation Type) (N=555)

87%

91%

94%

95%

93%

99%

99%

96%

93%

93%

93%

95%

Cost

Responsiveness to feedback

Quality of work

Ability to communicate findings

Independent* Corporate Community

* Includes private and family foundations

FIGURE 18a Satisfaction With Consultants (by Foundation Type) (N = 555)

Satisfaction with Consultants (by Foundation Type) (N=555)

87%

91%

94%

95%

93%

99%

99%

96%

93%

93%

93%

95%

Cost

Responsiveness to feedback

Quality of work

Ability to communicate findings

Independent* Corporate Community

* Includes private and family foundations

FIGURE 18b Satisfaction With Consultants (by Foundation Type) (N = 555)

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Why Foundations Don’t Use Consultants (by Foundation Type) (N=476)

16%

2%

1%

12%

38%

56%

11%

1%

3%

10%

10%

77%

5%

1%

1%

8%

12%

79%

Other

Negative experience with a consultant

Challenge of finding a reputable consultant with the skills we need

Time needed to recruit, vet, and engage a consultant

Cost of consulting services

Foundation policy and/or practice does not support hiring consultants

No need for outside technical support

Independent* Corporate Community

0% 0%

0%

* Includes private and family foundations

cited time as an obstacle more frequently than the others. (See Figure 21.)

Qualitative Findings The following section highlights general themes and findings from open-ended responses to a question asking foundations to describe the benefits of and/or challenges in working with consultants over the past two years. Of the 555 foundations that reported using a consultant in the past two years, 282 (51 percent) provided an open-ended response.

Benefits of Using Consultants These competencies help respondents address the complex, multifaceted needs of the foundations' target populations:

• External expertise. As noted earlier, 78 percent of foundations that employed consultants said they needed expertise beyond staff capabilities. When asked to reflect on the benefits of consultants, respondents reaffirmed this basic value proposition time and again, and mentioned how helpful they can be in areas that foundations do not consider specialties, such as evaluation, communications, information technology, and knowledge management. Facilitating important internal conversations is another important role: “The consultant's skills were useful in aiding the flow and direction of discussion, providing useful activities to allow for the free flow of ideas, and providing a detailed summary of the discussion.” As

foundation work becomes increasingly complex and specialized, the need for subject-matter expertise also grows. As one respondent noted, “[It’s] nice to work with someone so knowledgeable in a specialized field.”

• Best use of staff. Many foundations, especially smaller ones, noted that they try to do a lot with limited staff and that there is little or no in-house capacity for additional responsibilities. Moreover, it may not be the best use of staff time to take on work best addressed by consultants. As one respondent put it, hiring consultants “allowed our staff to continue their primary functions and not engage in something outside their areas of expertise.” For some foundations, consultants allow them to “stay lean”; they engage them to help streamline internal processes and free staff

Why Foundations Don’t Use Consultants (N=476)

6%

0%

1%

2%

9%

12%

79%

Other

Negative experience with a consultant

Challenge of finding a reputable consultant with the skills we need

Time needed to recruit, vet, and engage a consultant

Cost of consulting services

Foundation policy and/or practice does not support hiring consultants

No need for outside technical support

FIGURE 19 Why Foundations Do Not Use Consultants (N = 476)

FIGURE 21 Why Foundations Do Not Use Consultants (by Foundation Type) (N = 476)

Why Foundations Don’t Use Consultants (by Total Giving) (N=476)

8%

8%

76%

8%

4%

1%

10%

17%

55%

4%

2%

3%

7%

10%

79%

6%

1%

1%

9%

12%

79%

Other

Challenge of finding a reputable consultant with the skills we need

Time needed to recruit, vet, and engage a consultant

Cost of consulting services

Foundation policy and/or practice does not support hiring consultants

No need for outside technical support

$100,000 to $1 million $1 million to $9.9 million $10 million to $49.9 million $50 million +

0%

0%

FIGURE 20 Why Foundations Do Not Use Consultants (by Total Giving) (N = 476)

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time for other things. A couple of foundations noted that consultants were helpful during the organization’s startup: “We remain a relatively new organization with a small but expanding staff,” one reported. “Outside consultants have been highly supportive with respect to a number of programmatic, organizational, and strategic initiatives.”

• Fresh/neutral perspectives. A downside of having a small staff is that it limits the range of ideas that can be generated within an organization, and several foundations noted the importance of bringing in external perspectives from time to time to stimulate fresh thinking. This can be particularly important during strategic planning. One foundation reported that “[our] most valued consultants provide us with self-introspection to add important details to strategic-planning efforts, the wisdom to be impactful externally, and the vision to convey our message in a meaningful way.” Another respondent said consultants were able to represent the perspectives of important external audiences “without the biases developed from working within the organization.” Another described a consultant who in communicating with grantees “was experienced, knew how to ask questions, and was able, we presume, to get honest answers not tailored to what the foundation staff and board wanted to hear.” Experienced consultants can also bring knowledge to the foundation of what has worked in other circumstances. “Because of their experience,” a respondent said, the consultants could “communicate what had been successful elsewhere (process and end result) and … assess the current conditions in our community. It was a tremendous benefit to have outside perspectives and voices … perceived as ‘neutral’ by our community members.”

Challenges of Using Consultants • Getting consultants up to speed. The challenge

most frequently brought up by respondents was how hard it can be to provide consultants with the context necessary for them to work effectively:

“The amount of time it takes to bring a consultant up to speed can be a significant undertaking, and often it is questionable whether the output, especially with the cost, is worthwhile. On the other hand, some of the consultants we have worked with have been a tremendous resource and have improved our work.”

“Consultants have been an excellent way to add capacity and expertise for specific projects. [The] challenge is in communicating foundation values, history, and needs to someone who hasn't experienced these, and finding a consultant who is as invested in the project as staff and board.”

For smaller foundations, the task can be especially daunting: “Consultants have expertise in their area and are great ‘teachers,’ but explaining the complexity of a community foundation can be difficulty …. We are very small, so we can’t always give the time they need.”

• Finding the right consultant. More than merely matching expertise with need, finding the right consultant can also depend on the qualities of the foundation. A respondent from a family foundation acknowledged the organization’s “many personalities” and noted that “no one consultant is able to navigate all of those personalities well.” It can also be difficult to find consultants who are sufficiently proactive: “Finding folks with the ability to be creative [and] innovative and [able to] iterate – not just be told what we need them to do – has been a bit challenging.” In some cases, local expertise may be the best fit for a foundation’s needs: “If we compared our overall satisfaction with local consultants versus national consultants,” a respondent said, “the rating would be higher for local consultants and a great deal lower for those more on a national scale.”

• Ensuring sufficient engagement. Consultants, by definition, work with multiple clients, often simultaneously. This can create a number of challenges, especially for smaller foundations. Several smaller respondents said they did not feel they were being treated as “important”

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clients; some noted that they could not get sufficient time and attention from senior people at the consulting firm. Others said they needed more support than they actually received. Some foundations chalked up what they perceived as consultant indifference to a relative lack of “passion for the foundation.” Another common complaint was an apparent haste to offer ill-fitting, off-the-shelf solutions to problems consultants were hired to address: “There [was] some sense on [our] team that some consultants rely heavily on ‘canned’ approaches and we spent a fair amount of energy and time encouraging a more tailored approach.”

• Knowing what you are getting into. Beyond getting them up to speed, working successfully with consultants often requires a great deal more time and close supervision than many foundations are prepared to provide. As one foundation put it, “We would have preferred more structure [to the process], but [in retrospect] I don't think we were ready for what we asked for.” Said another, “You have to pay attention to make sure you get a valuable product.” Another pointed out, “It is a skill to work effectively with consultants and get the work product you want.” One prerequisite is to go in with realistic expectations about the level of effort that will be involved: “Be clear about your objectives and the amount of management time needed to effectively manage the consultants. Alignment with values, style, and direction require a big investment in staff time.” Foundations also offered examples of things that add time and effort to working with consultants: coordinating meetings with busy people, timing work so stakeholders are engaged at the right times and in the right ways, and building in adequate time to effectively supervise the work. Managing sometimes unrealistic expectations of board members may also factor into the mix.

Challenges remain even when the consulting work per se has ended. Sometimes the biggest lesson learned from the process is that there are no quick fixes. Moreover, the task of implementing recommendations is in many respects more difficult than identifying potential solutions.

Conclusion It is clear from this study that consultant use is an established practice among U.S. foundations, especially those with annual giving of at least $1 million. Among foundations with annual giving of between $100,000 and $1 million, consultant use is still evident but not as widespread. Community foundations are more than twice as likely as corporate or independent foundations to employ consultants. While frequency of consultant use rises dramatically as foundation size increases, there are no major differences in frequency by foundation type.

Consultants are most commonly used in three areas: technology/information management/IT, communications and marketing, and evaluation. Larger foundations also frequently engage consultants in human resources/executive search, training, executive coaching, and facilitation. Community foundations were also more likely to engage consultants across areas of support, but corporate foundations were most likely to engage them for foundation management.

The main reason for using consultants, overwhelmingly, was the “need for outside knowledge, expertise, or networks.” Likewise, for those foundations that did not use consultants in the past two years, the main reason was that they had “no need for outside technical support or expertise” during that time.

Foundations generally expressed high levels of satisfaction with consultants. Fewer than six percent of respondents expressed outright “dissatisfaction” with the consultants they most recently engaged, although satisfaction levels did decrease as foundation size increased.

While the results of this study tend to emphasize the benefits to foundations of using consultants – taking advantage of external expertise, allowing staff to stay focused on what they do best, bringing fresh or neutral perspectives to the work – respondents were also clear that working with consultants has its challenges. In particular, they noted that “getting consultants up to speed” in the early stages of the work was no easy task, especially for smaller foundations. Finding the

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“right” person to work with and securing a sufficient level of commitment from consultants once hired also posed challenges. Perhaps the most important piece of advice from respondents to foundations that are thinking of using consultants is to be realistic about how much effort will actually be required. The amount of time and supervision it takes to work successfully with a consultant is often underestimated.

One of the foundations surveyed for this project made the following provocative, though somewhat cryptic, comment about the value of engaging consultants:

“Consultants extend the capacity of our small staff in essential ways, and many understand the foundation's mission and strategies; without consultants we would only be grantmakers. With consultants, we're able to achieve much greater goals. We've been lucky to find (through some trial and error, admittedly) some terrific consultants, in whom we now have high degrees of trust so [we] can let them take the work and run with it with limited oversight on our part.”

What it actually means to be “more than grantmakers” is open to interpretation. But this thought expresses in an intriguing way the kinds of aspirations that many foundations may entertain when choosing to engage consultants.

Whether to advance aspirations or support day- to-day functions, it is clear that foundations are using consultants at varying levels for a variety of functions to advance their work, finally providing an answer to the question: “To what extent do foundations use consultants in their work?”

Acknowledgements The authors would like to thank NNCG for being wonderful partners. Without their inquiry on opportunities to collaborate and collect data on consulting practice, this article would not have been possible. The authors would also like to thank two anonymous reviewers for providing thoughtful and thorough feedback, which allowed us to make significant improvements to this article.

Brenda L. Henry-Sanchez, Ph.D., is director of research for special projects at Foundation Center. Correspondence concerning this article should be addressed to Brenda L. Henry-Sanchez, Foundation Center, 79 Fifth Avenue, New York, NY 10003 (email: [email protected]).

Lawrence T. McGill, Ph.D., is vice president for research at Foundation Center.

David Wolcheck, B.A., is a research associate with Foundation Center.

Sarah Reibstein, B.A., is a research assistant with Foundation Center.

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APPENDIX Philanthropy Consulting Survey Questions

II. PERSPECTIVES ON GRANTMAKER PRACTICE Foundation Consultants The Foundation Center is partnering with the National Network of Consultants to Grantmakers (NNCG) to better understand the scale of foundation engagement with consultants, the role of consultants in helping foundations achieve their goals, and how consultants can better serve the needs of foundations. For the purpose of this research, we are focusing on grantmakers’ use of consultants for purposes such as governance, program development, and management and excluding activities such as legal, accounting, and financial/investment services and providing technical assistance directly to your grantees. 9. In the past two years, did your foundation use a consultant(s) for any of the following purposes? (Please check all that apply)

 Communications and marketing  Evaluation  Executive coaching  Facilitation  Foundation management  Fund development (for community foundations)  Governance and board member engagement  Grants management  Human resources and/or executive search  Program development  Strategic planning and establishing priorities for

new foundations  Technology/information management/IT  Training  Other (please specify): ____________________

________________________________________  No (Please proceed to Question 15)

10. In the past two years, approximately how many times has your foundation engaged a consultant or consulting firm?

 1 time  2 to 3 times  4 to 5 times  6 to 10 times  More than 10 times

11. What is the reason(s) your foundation employed a consultant(s) in the past two years? (Please check all that apply)

 Desire to avoid hiring additional permanent staff/prefer to outsource responsibilities

 Need for neutral perspective or assistance to achieve results

 Need for outside expertise, knowledge, or networks

 Outside credibility needed to sway foundation colleagues/board or external stakeholders

 Time frame for assignment(s) exceeded foundation staff capacity

 Other (please specify): ____________________

12. How did you identify the consultant(s) you used in the past two years? (Please check all that apply)

 Directory of foundation consultants  Online search  Prior use of consultant(s)  Referral from board member  Referral from another grantmaker(s)  Referral from a grantmaker network(s) (please

specify): _______________________________  Request for proposals  Other (please specify): ____________________

13. How would you rate your overall satisfaction with the consultant(s) you used most recently?

14. Please describe the benefits and/or challenges your foundation experienced in working with a consultant(s) over the past two years: _______________________________ _______________________________________________ _______________________________________________ _______________________________________________ _______________________________________________ _______________________________________________ _______________________________________________ _______________________________________________ _______________________________________________ _______________________________________________ _______________________________________________ Please proceed to Question 16. 15. What is the reason(s) your foundation has not used a consultant in the past two years? (Please check all that apply)

 Challenge of finding a reputable consultant with  the skills we need  Cost of consulting services  Foundation policy and/or practice does not  support hiring consultants  Time needed to recruit, vet, and engage a  consultant  Negative prior experience with a consultant  No need for outside technical support/expertise  Other (please specify):_____________________

16. Would you be willing to speak with a Foundation Center staff member about your responses as part of this research project?

 Yes  No

Copyright of Foundation Review is the property of Grand Valley State University on Behalf of the Dorothy A. Johnson Center for Philanthropy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.

What is Advocacy? Definitions and Examples

Advocacy is defined as any action that speaks in favor of, recommends, argues for a cause, supports or defends, or pleads on behalf of others. This fact sheet offers a look at how advocacy is defined, what kinds of activities comprise advocacy work, and what kinds of advocacy projects several tax-exempt groups are currently leading. How is advocacy different from lobbying? Lobbying is only one kind of advocacy. Not all advocacy is lobbying but all lobbying is advocacy. What kind of activities comprise advocacy work? The following list of advocacy activities is not exhaustive. Each activity includes an example of a recent, concrete action on the part of active nonprofit groups around the country. The list and examples can serve to motivate others and suggest ideas for future advocacy on all fronts and in all kinds of struggles.

• Organizing: Build power at the base. Center for Intercultural Organizing in Portland, OR organizes the immigrant and refugee communities in their area. These meetings enable immigrant leaders to mobilize their constituencies and build power in their communities.

• Educate Legislators: Provide information on issues. NARAL Pro-Choice Wisconsin offers fact

sheets on its Web site for distribution to state legislators so that they will be aware of issues facing women who seek abortion.

• Educating the Public about the Legislative Process: Introduce communities and constituencies

to the legislators whose represent them. Utah Issues: Center for Poverty Research and Action sponsors an annual Citizens Day during which the organization’s members and other Utah residents come to the state capitol to meet their legislators and learn about the legislative process. When communities have the opportunity to meet legislators face to face and discuss the issues that affect their everyday lives, not only do legislators receive the tools they need to represent their communities, but those communities are empowered to invest more heavily in the outcomes of policy debates, giving them a stronger hand in their own future.

• Research: Produce relevant resources that reflect the real story of your community. California

Immigrant Policy Center released the report “Immigrants and the U.S. Healthcare System” to dispel myths and present realities in the state of California.

• Organizing a rally: Mobilize for your cause. The Fair Immigration Reform Movement (FIRM), a

coalition of pro-immigrant organizations, rallied in Washington, D.C. in June 2007 to raise awareness of the need for comprehensive immigration reform and an end to immigration raids.

• Regulatory efforts: Take action at the agencies. CASA of Maryland, Inc. has pushed for the state

Motor Vehicle Administration (MVA) to comply with existing laws and to stop discriminating against drivers license applicants on the basis of ability to prove legal residency.

• Public education: Educate the community on the issues. Rights for All People in Denver, CO

periodically holds community forums on state and federal immigration issues.

• Nonpartisan voter education: Inform the electorate on the issues. CARECEN of Los Angeles, CA encourages civic participation in the Latino and immigrant community, and educates the public about how to participate more fully in elections and civic life.

• Nonpartisan voter mobilization: Encourage citizens to vote. In 2004, the Illinois Coalition for Immigrant and Refugee Rights (ICIRR) began an ambitious campaign to register and mobilize tens of thousands of new immigrant voters in the suburban counties surrounding Chicago.

• Educational conferences: Gather, network, share information, and plan for the future. National

Council of La Raza (NCLR) holds an annual conference where NCLR’s affiliate organization and other groups convene to discuss issues and strategies affecting the Latino community in the U.S.

• Training: The United States Student Association (USSA) holds Grassroots Organizing Weekends

(GROW) training sessions that teach successful strategies and skills for direct action organizing on issues related to students.

• Litigation: Win in court for your cause or your community. El Centro Humanitario para los

Trabajadores in Denver, CO operates a legal program that assists workers in the recovery of thousands of dollars in unpaid wages each year.

• Lobbying: Advocate for or against specific legislation. All nonprofits are permitted to lobby.

501(c)(3) public charities can engage in a generous but limited amount of lobbying. The Florida Immigrant Coalition (FLIC) works at the state level to pass a bill allowing undocumented high school graduates in Florida to pay in-state tuition rates.

How can your organization get more involved in advocacy? Educate. Inform your organization about the current policies and problems affecting your community. Evaluate. Evaluate your organization’s mission and goals, and examine whether current programs involve advocacy as a means to address problems or grievances in the community. If not, how could advocacy play a larger role in your organization’s programs? Collaborate. Work in coalitions with groups whose philosophy and goals resonate with yours. Together, pooling staff and resources, all parties involved in the coalition should be better equipped to take on campaigns and work for change. The staff of Alliance for Justice’s Nonprofit Advocacy Project (NAP) offers many tools for tax-exempt groups. Please see our Web site, http://www.afj.org, for more details. Good Luck! The information contained in this fact sheet and any attachments is being provided for informational purposes only and not as part of an attorney-client relationship. The information is not a substitute for expert legal, tax, or other professional advice tailored to your specific circumstances, and may not be relied upon for the purposes of avoiding any penalties that may be imposed under the Internal Revenue Code. Alliance for Justice publishes plain-language guides on nonprofit advocacy topics, offers educational workshops on the laws governing the advocacy of nonprofits, and provides technical assistance for nonprofits engaging in advocacy. For additional information, please feel free to contact Alliance for Justice.

11 Dupont Circle, N.W., 2nd Floor Washington, D.C. 20036 Phone: 202-822-6070 Fax: 202-822-6068

www.allianceforjustice.org

[email protected] 866-NPLOBBY

1611 Telegraph Ave., Suite 1006 Oakland, CA 94612

Phone: 510-444-6070 Fax: 510-444-6078