Choosing an Annual Fund Consultant | The Essential Guide

Annual funds are your nonprofit organization’s bread and butter. These campaigns run all year long, and they’re where your team draws their operational budget from. Annual funds pay the electricity bill, your staff’s salaries, and for the paper in the copy machines.

They aren’t quite as glamorous as some of the more high-profile campaigns that your nonprofit might run through the year, but they’re just as important for the ongoing success of your organization. So how can you inspire your supporters to give to your annual fund year after year?

The most frightening thing about this question is that there is no single answer! The right annual fund campaign strategy is going to look different for every nonprofit. However, there is one similarity between all nonprofits trying to improve their annual fund: they could benefit from the assistance of an annual fund consultant.

An annual fund consultant is a nonprofit fundraising professional that your organization can employ to help you overcome the challenges you face and improve your annual fundraising success. When your nonprofit hires a consultant, your whole team benefits from the experience and knowledge that they bring.

This consultant will work with your team very closely, so it’s important that you find the right one for your nonprofit. To help you break down the process of choosing an annual fund consultant, we’ve laid out 7 simple steps that can be used by nonprofits of any size.

Those 7 steps are:

1. 1. Determine your needs.
2. 2. Establish your budget.
3. 3. Compile your list.
4. 4. Narrow it down.
5. 5. Submit your RFPs.
6. 6. Evaluate the proposals and conduct interviews.
7. 7. Make your decision.

Each step in the decision-making process will help you find the annual fund consultant who is most suited to help your nonprofit take its fundraising to the next level. If you’re ready to learn more about finding your best-fit consultant, let’s get started.

1. Determine what you need from an annual fund consultant.

The first thing that you need to know about the status of your nonprofit organization’s activities is how your annual fund has been performing in the past. Has there been a gap between your budgeted overhead funds and your actual amount spent? Are you in the red, or are you performing well?

Determining where you currently stand is an important first step because it gives your organization a baseline to start from. Then, ask yourself the following questions:

• What are our goals?
• What challenges do we face?
• What does the staff think?

Let’s break down each of these questions further to figure out what your annual fund consultant really needs to assist your organization with.

Goals.

When considering what your organization needs from an annual fund consultant, it’s important to consider where you want to go from here. If you don’t have a clear idea of what goals you want to achieve for the upcoming annual fund campaign, you’re going to have a harder time finding a consultant who can help you achieve those goals.

Think about what would demonstrate success most effectively for your organization. Could you do more to increase your population of recurring-gift supporters? Is your donor population shrinking every year?

Establishing clear and quantifiable goals for your annual fund campaign will help you hone in on what skills and experiences you need the most in an annual fund consultant.

Challenges.

Focusing on the specific strategies that challenge your organization might be a little painful, because no one likes to think too hard about their missteps, but it’s just as important as laying out your goals.

Where has your organization struggled in the past? Are there things that your institution doesn’t have the capacity to handle? Being honest with your organization about the challenges that you face during your annual campaigns will help you overcome them and choose the most effective annual fund consultant for your nonprofit.

In addition to clearly marking what efforts pose as obstacles for your organization, it’s important to think about what capacity-building exercises you need your annual fund consultant to help you through.

Capacity building is the process through which a nonprofit organization improves its effectiveness and ensures its longevity. Everything from improving your approach to technology to learning better fundraising appeal strategies counts as capacity building.

Staff considerations.

Finally, when thinking about what you’ll need from an annual fund consultant, don’t forget to talk to all the members of your staff that are involved with your annual fund campaign. They might have different insights into the process than you do, and differing perspectives can only help you broaden your understanding of where you need to improve!

When you start to think about bringing on an annual fund campaign consultant, conduct interviews with your team members to see where they feel as though your organization has room for improvement. Signing on a consultant has to have buy-in from your whole team to be as effective as it could be.

Now that you know where you want your annual fund to be, what challenges you’ll face along the way, and where your staff believes that your fund needs improvement, you’re ready to find a consultant that can work with your nonprofit’s unique situation to provide the highest quality insights.

2. Establish your ‘annual fund consultant’ budget.

The next thing to consider, once you’ve established why you need a consultant, is how much you’re able to spend on the consultant. Depending on the existing budget, if there’s a gap between intake and expenditures, and size, the budget for an annual fund consultant can vary widely from organization to organizatio.

There are a few groups of people that should be involved in establishing your budget for a consultant:

• Your financial planners or advisors—they can let you know what’s feasible.
• Your board members—you have to have them on your side.
• Your executive director—remember, whole team buy-in is crucial.

The size of the budget that you agree on will be an influence on which consultants you’re able to consider for your annual fund campaign, as well as the style of consulting you end up purchasing.

There are two main styles of paying a fundraising consultant:

• Your organization and the annual fund consultant agree on a flat fee for a predetermined set of activities over a set course of time.
• Your organization keeps the annual fund consultant on retainer and pays them hourly, per diem, or some other ongoing payment schedule.

The style that your organization determines to be best for your needs will also determine which consultants you reach out to, because not all consultants have the same pricing agreements.

Once your team is aligned on how much you’re willing to spend on your annual fund consultant and the type of engagement you wish to pursue, you’re ready to start compiling your list of potential consultants.

3. Compile a list of potential annual fund consultants and firms.

Compiling a list of potential annual fund consultants might seem overwhelming, but it can be done with just a little research and a willingness to ask your peers and colleagues for input. You want to provide your organization with as many potential candidates as possible, so cast the net wide to start.

But where do you start? There are three primary places where you can find annual fund consultant recommendations:

• Consulting directories. These collections of nonprofit consulting firms or individuals are carefully curated by respectable organizations and are a great starting point for your search. However, they’re not as comprehensive as other resources.
• The internet. The whole world is at your fingertips, so don’t be afraid to use it. Use search engines to find results for “annual fund consultant,” “annual fund consulting,” and other similar terms.
• Recommendations. Ask other nonprofits who have employed consultants before what their experiences were and who they would work with again. This is extra useful if you talk to organizations with similar goals or challenges.

Once you’ve created a great big list, narrow it down by categories that can’t be compromised on. For example, if you’re only interested in a consultant who can personally train your staff, you might not be willing to even reach out to a remote consultant. If you know that you aren’t able to or don’t want to pay travel fees for a consultant, eliminate any that aren’t local or don’t offer remote services.

Your curated list is now ready for deeper research.

4. Narrow down your list to only consultants experienced with your situation.

Your list is now hopefully long enough that you have options, but not so long that you can’t conduct some serious research about each of these. In the last step, you eliminated annual fund consultants that weren’t logistically a good fit for your organization. Now it’s time to narrow down your list even further by eliminating consultants that aren’t a good cultural or experiential fit.

Look back at the list you and your team put together of your goals, challenges, and capacity-building expectations. Then look at your nonprofit itself—its size, mission, constituent population, and anything else that differs it from other organizations. Use both of these conceptual lenses to determine which consultants will be most effective for your nonprofit’s annual fund.

Go through the remaining consultants on your list and ask about each one:

• Does this consultant have experience with nonprofits of our size?
• Does this consultant have experience with nonprofits with similar missions?
• Has this consultant improved other organizations’ annual funds in the way we hope to improve ours?
• Has this consultant solved problems similar to ours before?

While every nonprofit has a different experience and unique circumstances that surround their need for a consultant, it is possible to find an annual fund consultant that has helped other nonprofits with analogous situations.

Searching for annual fund consultants with a proven track record of success can put your mind (and your boards’ minds!) at ease when bringing a new team member onboard.

5. Submit RFPs to your favorite annual fund consultants.

The next step in choosing an annual fund consultant is to start a conversation with the consultant! You don’t want to offer or sign a contract before getting a better understanding of the consultant, how they operate, and how they’ll fit into your organization’s existing framework.

An RFP, or “request for proposal,” is the formal next step in engaging a fundraising consultant. The RFP gives the consultant an idea of what your organization is like, what its needs are, and what they want from the consultant. Then, the consultant either accepts the RFP and begins to research and craft their proposal, or turns it down.

Some consultants don’t respond to RFPs for a variety of reasons, so if that occurs, determine whether they’re not the right fit or if you should offer a less formal way to start a conversation about a potential engagement.

Either way, this step in the process is designed to begin a true dialogue about the needs of your organization and the ideas and plans of the consultant. Once you’ve begun the conversations with a variety of consultants, it’s time to move onto the next stage of the process.

6. Evaluate the proposals and interview the annual fund consultants.

So the conversation has begun. Next, it’s time to review the proposals and invite the potential annual fund consultants to a presentation and interview, either virtually or in your organization’s offices. During this encounter, the consultants will give a more thorough overview of their ideas for your organization’s annual fund and how to overcome the challenges you’re currently facing.

During the presentation and interview, you, your board, and your executive team will have time to get to know your potential consultant a little better and ask them questions about their proposal for your organization. This time also gives the consultant the opportunity to ask questions of your staff—this is a two-way street, after all.

Things to keep in mind during your interview process include:

• How well does the consultant seem to “get” your organization?
• Are their suggestions things you’ve already tried, or are they offering new strategies?
• Do they seem overwhelmed by the scope of the issues you face?
• Do they seem like they’re willing to adapt to the situation, or will they rigidly stick to the plan?

Finding a consultant who is adaptable, innovative, and determined to succeed is crucial for the success of your annual fund campaign.

One last tip: make sure you give your team enough time to give every potential consultant the time they deserve! If they feel as though they’re going through a cattle call instead of being listened to, they won’t want to sign a contract to work with you.

7. Decide on the best annual fund consultant for your team.

So you’ve interviewed all of your potential consultants, reviewed their proposals, and sat down with your nonprofit’s team. What should you do now? It’s time to choose your consultant, of course! You may have a clear decision in your mind, or you may need to have a longer conversation with the rest of your staff before choosing.

While you’re making your decision, keep in mind some of these ideas:

• Will we be able to maintain what this consultant has proposed even after they are no longer working with us?
• Will this consultant fit in with our staff culturally and emotionally? Do they seem like they will fit naturally into the dynamic of the office or could their presence cause some sort of tension?
• How broad was their knowledge of our type of nonprofit and issue? Do they seem prepared to lead our team in the right direction?

Then, once you and your team have come to a conclusion that all are happy with, it’s time to draft your contract and reach out to your chosen annual fund consultant. And then the true excitement begins!

Your nonprofit’s annual fund is an important fundraising endeavor that can seem impossible to maintain or improve. However, with the help of an annual fund consultant, your organization can see improvements in donation numbers, sizes, and retention rates. For more information on annual funds and consulting, please check out a few of our favorite resources:

• Hiring a Capital Campaign Consultant: A capital campaign is one of the largest fundraising endeavors that you can undertake. Don’t go it alone! A capital campaign consultant could be the perfect addition to your team.
• Nonprofit Annual Report Best Practices: Part of being a responsible steward is keeping your donors informed every year. Revamp your annual report with these great tips from DonorSearch.
• 7 Steps to Encourage Church Donors During Your Annual Appeal. Is your church getting ready to issue its annual appeal? Learn how you can drive more gifts!