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

Key phrases: Philanthropy consulting, watch

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Key Map

· This article items the implications of a watch launched in January 2014 by Basis Center, in collaboration with the Nationwide Network of Consultants to Grantmakers, analyzing enlighten of consultants by community, corporate, and just foundations whose annual giving totals on the least $100,000.

· The watch asked funders to document whether or no longer they outdated-usual consultants in the previous two years and, if that is the case, how frequently and for what capabilities; they had been also asked to document their level of enjoyment with consultants’ work. Funders that did no longer engage consultants in the final two years had been asked why no longer. The watch also sought birth-ended responses about working with consultants.

· The watch stumbled on standard enlighten of consultants among foundations. Whereas the implications of this watch are inclined to stress the advantages – taking relief of external abilities, allowing workers to take care of smitten by what they quit easiest, bringing fresh or neutral views to the work – respondents had been also certain that working with consultants has its challenges.

Introduction To what extent quit foundations enlighten consultants to toughen their work? Possible the most recent rise of “strategic philanthropy” and its talk of theories of alternate, logic items, and the treasure can also appear to repeat why foundations would engage consultants. Whereas we now maintain got acknowledged for years that foundations enlighten consultants to toughen diverse facets of their

work, we’ve never had a quantitative image of how many, how in most cases, and for what capabilities.

This article items the implications of a watch performed January to March 2014 by Basis Center, in collaboration with the Nationwide Network of Consultants to Grantmakers (NNCG), analyzing enlighten of consultants by community, corporate, and just (including non-public and family) foundations.

The watch asked funders to document whether or no longer they outdated-usual consultants in the previous two years and, if so, how frequently and for what capabilities. We focused completely on consulting for capabilities of governance, program pattern, and management, and excluded true, accounting, and monetary/investment products and companies and technical assist supplied by consultants straight to grantees. Funders had been also asked to document their level of pleasure with consultants’ work across diverse dimensions, including price, quality of work, and skill to discuss findings and suggestions.

For those funders that did no longer engage consultants in the final two years, the watch asked them to level to why no longer. Final, we solicited birth-ended responses referring to the advantages and challenges of working with consultants.

Methodology Records on handbook enlighten by foundations had been composed as a supplement to Basis

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 +

Complete = 86,045

Center’s annual giving forecast watch. The principal capabilities of the forecast watch are to form recordsdata on giving and resources for the most most recent yr of giving, and to forecast for Basis Center’s annual document on growth and how giving may well alternate in the approaching yr. The watch will most certainly be outdated-usual to clutch diverse traits in the field. Previous subjects maintain integrated diversity, equity, and inclusion practices of foundations and foundation engagement in mission- and program-connected investments. The watch has a most of 20 questions; the handbook questions had been developed and vetted in partnership with NNCG. (Detect Appendix.)

The extensive majority of U.S. foundations – 69 percent – are very shrimp, with annual giving of much less than $100,000. (Detect Figure 1.) Most of these are unstaffed and respectable contact recordsdata is tricky to make a selection up, making it advanced to consist of them in surveys of the field. Therefore, these foundations are no longer integrated in this analysis. We level of curiosity on the 31 percent of U.S. foundations (N = 26,650) whose annual giving totals on the least $100,000. Even supposing the excluded foundations list more than two-thirds of the foundation community, they comprised much less than four percent of total giving in 2012 awarded by community, corporate, and just foundations. The foundations invited to answer to the watch represented more than 74 percent of total giving by those kinds of foundations in 2012.

The watch was sent to the principal contact for all community, corporate, and just foundations that reported giving of $100,000 or more in 2012 for which Basis Center had contact recordsdata (N = 4,517) on the quit of December 2013. The principal contact was the particular particular individual that performed the watch the outdated yr; if a principal contact was no longer available, the watch was sent to the president or chief executive officer of the foundation.

Even among foundations with total annual giving of on the least $100,000, most are unstaffed. The total sequence of staffed foundations in the United States isn’t very any longer acknowledged, however most estimates imply that it is much less than 10 percent of all foundations, or between 5,000 and 10,000. Practically referring to the total foundations surveyed for this watch are staffed.

The watch was administered electronically (web-basically based completely) and on paper, and was birth thru March 2014. Practice-up calls had been made to the bigger foundations to support participation. Twenty-three percent of contacted foundations performed the watch (N = 1,031). Among foundations with total annual giving of on the least $50 million, the response rate was 56 percent (55 of ninety 9 foundations), more than two cases the bustle for smaller foundations. Neighborhood foundations had the ideal response rate by foundation kind, at 36 percent; the response rate was 14 percent for corporate foundations and 22 percent for just foundations. (Detect Figure 2.)

Response Rates by Complete Giving & Basis Kind

56%

26% 23% 20%

36%

14% 22% 23%

0%

20%

40%

60%

80%

100%

* Entails non-public and family foundations

FIGURE 1 Quantity of U.S. Grantmaking Foundations by Complete Giving (2012)

FIGURE 2 Response Rates by Complete Giving and Basis Kind (N = 4,517)

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By invent, the surveyed foundations did not maintain the distribution of foundations in the US. (Detect Figure 3.) To form definite subsamples enormous ample to enable fundamental analyses, we oversampled bigger foundations (by total giving) moreover as community and company foundations. We then weighted the recordsdata by foundation dimension and kind to maintain the distribution of foundations in the US, and adjusted the weights to tale for differential response charges. Whereas we weighted the recordsdata to be more reflective of the total distribution of foundations by dimension and kind, we quit no longer know the extent to which the foundations that spoke back to the watch list the broader foundation community and, subsequently, we caution against generalizing to the broader community.

We obtained responses from 757 just foundations, 194 community foundations, and 80 corporate foundations. Grouped by total giving, the sample integrated 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 much less than $1 million. The foundations that spoke back to the watch represented 33 percent of total giving in 2012.

Findings We stumbled on evidence of standard handbook enlighten by U.S. foundations. Among foundations with annual giving of on the least $100,000, one-third reported utilizing one or more consultants in the previous two years. Nonetheless, this figure obscures a large variation in utilizing consultants by foundations of diverse sizes and kinds. Increased foundations and community foundations had been significantly more seemingly than their counterparts to maintain engaged consultants in the previous two years. (Detect Figure 4.)

FIGURE 3 Pattern Distribution

Pattern Distribution

NUMBER OF FOUNDATIONS

Honest Foundations*

Neighborhood Foundations

Company 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%) Seventy 9 (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

* Entails non-public and family foundations

Advisor Usage by Complete Giving & Basis Kind (N=1,031)

81% 74%

55%

28%

75%

26% 33% 33%

0%

20%

40%

60%

80%

100%

* Entails non-public and family foundations

FIGURE 4 Advisor Usage by Complete Giving and Basis Kind (N = 1,031)

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Neighborhood foundations had been more than twice as seemingly as just foundations to maintain interplay consultants, 75 percent when when compared with 33 percent, and practically three cases as seemingly as corporate foundations (at 26 percent) to quit so.

Advisor enlighten is particularly standard among foundations with total giving of $1 million or more, of which there are almost about 5,100 in the United States. Per our watch, 55 percent of foundations with giving between $1 million and $9.9 million maintain outdated-usual consultants on the least once in the previous 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. Merely stated, handbook usage is the norm among enormous U.S. foundations.

Frequency of Advisor Expend Of those foundations that reported utilizing consultants (33 percent), more than two-thirds (68 percent) outdated-usual them one to a pair cases in the previous two years. The opposite one-third outdated-usual consultants four or more cases. (Detect Figure 5.)

Heavenly as the total enlighten of consultants will increase as foundation dimension will increase, so does the frequency with which they are engaged. Among the smallest foundations (those with total giving of much less than $1 million), 28 percent of which reported utilizing consultants, essentially the most fashioned response on frequency was once in the previous two years. Among a bit of bigger foundations (those with total giving of $1 million to $9.9 million), f requency of enlighten

rises to 2 to a pair cases in the previous two years. (Detect Figure 6.)

Among the ideal foundations (those with total giving of on the least $50 million), handbook enlighten is almost about ubiquitous: 81 percent of these foundations reported utilizing consultants in the previous two years; of those, 63 percent outdated-usual them 11 or more cases.

The frequency of handbook enlighten did not fluctuate greatly by foundation kind. Among community, corporate, and just foundations that outdated-usual consultants, the median was two to a pair cases in the previous two years.

What Are Consultants Old For? We asked foundations that outdated-usual consultants in the previous two years to protest us, f rom a list of 12 categories, the areas of abilities where they sought advice. Consultants had been most in most cases called upon by foundations to present abilities in abilities/recordsdata management/IT (40 percent), communications and marketing (28 percent), and evaluate (21 percent). (Detect Figure 7.)

Rather than for the smallest foundations, those areas of handbook engagement had been the high three among foundations. Among those with annual giving of between $100,000 and $1 million, facilitation replaced evaluate as the third most frequent put for handbook engagement.

The largest foundations made intensive enlighten of consultants across diverse areas. Of individuals who

Frequency of Advisor Expend (N=555)

32% 36%

13% 10% 9%

1 2 to a pair 4 to 5 6 to 10 >10

FIGURE 5 Frequency of Advisor Expend (N = 555)

Frequency of Advisor Expend by Complete 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 a pair cases 4 to 5 cases 6 to 10 cases > 10 cases

FIGURE 6 Frequency of Advisor Expend by Complete Giving (N = 555)

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outdated-usual consultants in the previous two years, more than half outdated-usual them for communications and marketing (83 percent), evaluate (81 percent), abilities/recordsdata management/IT (76 percent), human sources and/or executive search (64 percent), facilitation (56 percent), and training (51 percent). For the bulk of categories, handbook enlighten will increase as foundations lift in dimension. (Detect Figure 8a and Figure 8b.) Basis management is the finest category where enlighten decreases as foundation dimension will increase. To boot, utilizing consultants to toughen work connected to grants management fluctuates by dimension.

Advisor enlighten also varies by foundation kind. Honest foundations most in most cases enlighten them for abilities/recordsdata management/ IT (41 percent). For community and company foundations, consultants are most in most cases outdated-usual for communications and marketing (47 percent and 33 percent, respectively). (Detect Figure 9a and Figure 9b.) Moreover-known earlier, community foundations are more seemingly than other kinds to maintain interplay consultants in fundamental. Likewise, they are inclined to make enlighten of consultants more frequently than other kinds of foundations in most areas, however no longer by especially enormous margins. Areas where community foundations are no longer the ideal users of consultants are evaluate, grants management, foundation management, and program pattern. In most of these areas, just foundations are a bit of more seemingly than other kinds of foundations to make enlighten of consultants. Basis management is the finest

put by which corporate foundations are more seemingly than other kinds of foundations to maintain interplay consultants.

Why Expend Consultants As an different of Employees? No longer surprisingly, most foundations enlighten consultants on tale of their recordsdata desires exceed their internal sources – 78 percent stated that the “need for outdoor recordsdata, abilities, or networks” led them to maintain interplay consultants. (Detect Figure 10.) This was factual regardless of dimension and kind, even if the need for outdoor abilities appears to be most fashioned among the many ideal foundations and community foundations. The largest foundations had been significantly more seemingly than their smaller counterparts, 69 percent to 10 percent, to cite workers skill as a reason for enticing a knowledgeable. (Detect Figure 11.)

Consulting Services and products Old by Foundations (by Complete 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%

Practising

Executive coaching

Governance

Human sources/executive search

Grants management

Basis management

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

FIGURE 8b Consulting Services and products Old by Foundations (by Complete Giving) (N = 555)

FIGURE 7 Consulting Services and products Old by Foundations (N = 555)

Consulting Services and products Old by Foundations (N=555)

5% 7%

10% 11%

15% 15% 16%

20% 21% 21%

28% 40%

Practising Executive coaching

Governance Human sources/executive search

Grants management Basis management

Program pattern Strategic planning

Facilitation Analysis

Communications/marketing Abilities/recordsdata management

Consulting Services and products Old by Foundations (by Complete Giving) (N=555)

41%

34%

56%

81%

83%

76%

32%

27%

34%

forty five%

67%

51%

21%

25%

19%

27%

38%

43%

13%

18%

21%

18%

22%

39%

Program pattern

Strategic planning

Facilitation

Analysis

Communications/marketing

Abilities/recordsdata management

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

FIGURE 8a Consulting Services and products Old by Foundations (by Complete Giving) (N = 555)

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Whereas the need for outdoor abilities is the principal driver for handbook enlighten across all kinds of foundations, there are variations referring to secondary drivers. Neighborhood foundations are more seemingly than other kinds to rent consultants for reasons having to quit with neutrality and external credibility; corporate foundations are in all likelihood to rent consultants thanks to workers- skill constraints and to retain away from hiring further workers. (Detect Figure 12.)

How Foundations Discover Consultants The finest predictor of whether or no longer a foundation can also rent a specific handbook is whether or no longer that handbook has worked for the foundation sooner than. Larger than half of the foundations surveyed – 56 percent – stated they’d rehired consultants. (Detect Figure 13.)

One-quarter of foundations hired consultants who had been referred to them by other grantmakers and one in 5 (19 percent) hired consultants referred to them by board members. Easiest six percent of foundations stated they stumbled on consultants thru a ask for proposals. Online searches (four percent) and handbook directories (one percent) are no longer steadily ever outdated-usual to title potential consultants. Larger than one-fifth of foundations cited other manner of identifying consultants. Among those offering a write-in response, regional associations had been most steadily cited as a mode of discovering a handbook.

There may be a sturdy relationship between foundation dimension and enlighten of referrals from other foundations and RFPs to earn consultants. Prior enlighten of a handbook will most certainly be positively correlated with

Consulting Services and products Old by Foundations (by Basis Kind) (N=555)

12%

35%

26%

15%

47%

forty five%

14%

21%

17%

13%

33%

31%

16%

20%

21%

22%

27%

41%

Program pattern

Strategic planning

Facilitation

Analysis

Communications/marketing

Abilities/recordsdata management

Honest* Company Neighborhood

* Entails non-public and family foundations

FIGURE 9a Consulting Services and products Old by Foundations (by Basis Kind) (N = 555)

Consulting Services and products Old by Foundations (by Basis Kind) (N=555)

15%

13%

16%

25%

19%

11%

4%

1%

10%

6%

1%

13%

22%

5%

6%

10%

11%

15%

15%

Fund pattern (community foundations)

Practising

Executive coaching

Governance

Human sources/executive search

Grants management

Basis management

Honest* Company Neighborhood

* Entails non-public and family foundations

FIGURE 9b Consulting Services and products Old by Foundations (by Basis Kind) (N = 555)

Why Foundations Expend Consultants (by Complete 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

Dwell away from hiring further workers

Time body exceeds workers skill

Need for neutral perspective

Need for outdoor abilities

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

FIGURE 11 Why Foundations Expend Consultants (by Complete Giving) (N = 555)

Why Foundations Expend Consultants (N=555)

6%

10%

23%

25%

34%

78%

So much of

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

Desire to retain away from hiring further eternal workers/prefer to outsource responsibilities

Time body for project(s) exceeded foundation workers skill

Need for neutral perspective or assist to construct outcomes

Need for outdoor abilities, recordsdata, or networks

FIGURE 10 Why Foundations Expend Consultants (N = 555)

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foundation dimension – almost about the total ideal foundations (95 percent) stated they’d hired consultants who had beforehand worked for them, when compared with 54 percent of the smallest foundations. (Detect Figure 14.)

Neighborhood foundations outdated-usual all these techniques to earn consultants with bigger frequency than other kinds of foundations, even if their enlighten of RFPs was two cases more frequent than corporate foundations and practically four cases more frequent than just foundations. (Detect Figure 15.)

Delight With Consultants Respondents had been asked to level to their level of pleasure with their most most recent consulting experience with appreciate to facets of the work (e.g., quality, affect, level of engagement). Delight was high total: On a four-level scale

of very overjoyed, overjoyed, significantly upset, and indubitably upset, ranges of dissatisfaction never exceeded 6 percent. (Detect Figure 16.) But pleasure with consultants lowered as foundation dimension elevated. Increased foundations persistently expressed decrease ranges of pleasure with handbook work than did smaller ones, even if pleasure never dipped below 80 percent. (Detect Figure 17a and Figure 17b.)

The widest difference in pleasure ranges concerned price. Whereas 95 percent of the smallest foundations stated they had been overjoyed with the costs concerned with their most most recent experience with consultants, 80 percent of the ideal foundations expressed a identical level of pleasure.

Delight ranges by foundation kind diverse very tiny, even if corporate foundations had been practically unanimously overjoyed with their

Why Foundations Expend Consultants (by Basis Kind) (N=555)

16%

19%

23%

33%

87%

7%

27%

31%

11%

68%

4%

18%

13%

31%

78%

Outside credibility needed

Dwell away from hiring further workers

Time body exceeds workers skill

Need for neutral perspective

Need for outdoor abilities

Honest* Company Neighborhood

* Entails non-public and family foundations

FIGURE 12 Why Foundations Expend Consultants (by Basis Kind) (N = 555)

How Foundations Discover Consultants (N=555)

22%

1%

4%

6%

10%

19%

25%

56%

So much of

Itemizing of foundation consultants

Online search

Quiz for proposals

Referral from a grantmaker network(s)

Referral from board member

Referral from one other grantmaker(s)

Prior enlighten of handbook(s)

FIGURE 13 How Foundations Discover Consultants (N = 555)

How Foundations Discover Consultants (by Basis Kind) (N=555)

19%

11%

31%

30%

66%

10%

0%

3%

15%

63%

5%

10%

19%

26%

55%

Quiz for proposals

Referral from a grantmaker network(s)

Referral from board member

Referral from one other grantmaker(s)

Prior enlighten of handbook(s)

Honest* Company Neighborhood

* Entails non-public and family foundations

FIGURE 15 How Foundations Discover Consultants (by Basis Kind) (N = 555)

49%

10%

21%

68%

95%

24%

7%

15%

50%

74%

13%

11%

20%

34%

59%

2%

10%

18%

21%

54%

Quiz for proposals

Referral from a grantmaker network(s)

Referral from board member

Referral from one other grantmaker(s)

Prior enlighten of handbook(s)

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

Figure 14: How Foun