In addition to a monthly retainer, a fundraising consultant wants to receive a percentage of the sponsorship money that will be raised from our fundraising event. Is this an acceptable practice?

It is generally accepted among fundraising professionals that taking a percent of dollars raised from a fundraising is unethical.  In fact, most fundraising codes are clear and prohibit consultants from taking a percent of dollars raised.

CNM’s publication, Nonprofit Consultants: How to Choose Them and How to Use Them, underscores the importance of establishing a fee schedule with consultants before they are hired. Consultants can present the fees for a project in several ways, among the most common – and acceptable – are the following:

  • Flat rate – the consultant commits to one fee for completing the entire project regardless of how many hours are spent
  • Hourly rate – the consultant quotes an hourly rate with time estimates for each part of the project
  • Hybrid approach – a combination of both a flat rate and hourly rate for each component of the proposal, that is calculated on time estimated for each portion of the project

Often times a contract with a consultant will include a “not to exceed” provision, meaning actual charges may be less but cannot be more than the estimate.  An agreement with a consultant should include how and when the consultant will be paid.  It is typical for a client to pay a portion of the fee up front as a “retainer” and then receive monthly invoices.

Bottom line, if a consultant requests a percentage of any fundraising opportunity, keep looking.  You may be short-changing your organization in more ways than one!

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