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#647: The Future of Consulting to Nonprofits is Bright, But Cloudy

Posted By Mark Haas CMC FIMC, Tuesday, September 6, 2011
Updated: Tuesday, September 6, 2011
As part of our desire to contribute more to our communities, we'd like to serve more nonprofit clients. Except for the smallest ones, they seem to be run by sophisticated managers who could use specialized consulting expertise. Is this a good market to get into?

When compared to for profit clients, nonprofits differ only in mission focus and how profits are handled. Other than that, which may have little or nothing to do with how you advise them, nonprofits can be extremely rewarding and consulting services very effective in helping them achieve their mission. Furthermore, as public sector budgets tighten and philanthropic funding sources remain tight, there is a greater need for alignment, transparency, accountability and performance in nonprofits to get as much bang as possible from each buck. For the same budget reasons, demand for traditional nonprofit services, especially in health and human services, is growing. That's the good news.

The cloudy forecast comes from the same factors of tight budgets and new ways nonprofits are beginning to operate. Many smaller ones are merging to share services, cut costs or consolidate clientele. Others are changing the way they raise funds, deliver services and staff their organizations. While this may seem like an opportunity for management consultants, the lack of budget and uncertainty on how best to change how a nonprofit does business will constrain those consulting opportunities.

Tip: The Chronicle of Philanthropy reports that 2011 nonprofit job growth is flat and business giving is unlikely to increase. This means your ability to deliver real value (i.e., what nonprofits need, not necessarily what your firm is most qualified to deliver) is in expanding constituent services without any more funding. At the top of the list is your ability to increase revenues from corporations through mutual investments and service delivery projects, not the traditional development function of increased giving. Use the approach of leveraging business and nonprofit missions to mutual advantage and you will find a lot of nonprofits asking for your help.

© 2011 Institute of Management Consultants USA

Tags:  client service  customer understanding  innovation  marketing  nonprofit 

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