One of the hardest things to do as a consultant is set your rates. How much is your time really worth? How long will it actually take you to complete a task? These questions can be even more challenging when you work in the non-profit sector. If your clients are churches, food banks, universities, parks and private foundations, salary sites like Glassdoor don’t have much data. If you’re a graphic designer, accountant or a programmer, you may be able to start with Elance and benchmark from there, but what if you’re a volunteer coordinator or your specialty is program evaluation? There’s no transparent market for you to check rates. Even if you really, really love the cause, freelance life can’t be all free work.
Let’s face it, most full-time non-profit jobs don’t pay that well, even when those positions are pretty much equivalent to jobs that pay twice as much in the for-profit sector. If you plan on making non-profit groups a big part of your client base, you can’t price yourself beyond what they can pay regardless of your skills. This is my second time out as a consultant and when I looked for comps I found a range of $75 — $350/hr. Which doesn’t really narrow it down. Here’s what I did to figure out how to bid.
1. Find out what they pay their own staff
Since all non-profits have to file detailed forms with the IRS every year, you can actually find out what their top employees get paid. Right now, it’s not that easy to look at salary numbers across organizations but you can pull an individual group’s 990s with a free account at Guidestar. Some groups also post them on their own websites, with their annual reports. See if there’s a staffer with a job similar to yours and divide by 2000 (40h a week, 50 weeks a year) to get a rough hourly estimate.
2. Ask your network
You may think you are the only person who does development plans for small health care providers but you are not. Find the subreddit or ning or blog or annual meeting where people who do work like yours hang out and start asking about rates. Check out the Chronicle of Philanthropy and Non-Profit Quarterly for ideas. Ask. It’s not that the non-profit world is full of happy, sharing individuals who don’t have a competitive bone in their body. There are people at NGOs who will cut you like a desperate bond trader. But it is a smaller world and good consultants often have more work than they can handle. Find a busy consultant and ask what rate they would bill you at if you joined them on a project. That will help you test the market and maybe get you on a job right out of the gate.
3. Figure out your preferred rate.
If you have a rate for commercial clients, you can start with that but expect there may be a big gap. At a minimum, you must have figured out your ‘nut’ before you set out on your own, right? That would be how much you need to make to cover your costs and maintain your not-too-extravagant cost of living. That’s the rate you can’t go below, unless you plan on having commercial clients you charge much, much more. Do this even if you’re retired and you’re thinking about your charity consulting as extra income. You need to give your time a basic value — even volunteer time gets a value of $22/hour when we estimate the size of the social economy. And if you’re a woman, consider increasing that rate by 30% just to make up for that pesky gender wage gap.
3.5. Are you doing this on the side of your current non-profit job? A few special tips:
- Make sure you’re not running afoul of your organization’s consulting rules or conflict of interest policies. If your org is so small it hasn’t figured out it needs these yet, some good basics are: don’t use company resources to do your consulting work, don’t take clients adverse to what your org does, and don’t sign up for projects that you’d have to oversee in your day job (i.e. if you work on mapping local wildlife, don’t take a contract submitting butterfly maps to yourself because this is a violation of ethics and the space-time continuum).
- It is totally legit to look at the contracts your organization has made to see what type of consulting rates they’ve been willing to pay. It is not legit for you to publicize the rates those consultants agreed to unless they give you permission, because they may have had all kinds of reasons they negotiated those terms you don’t know about. You’re going to figure out what your own terms are in Step 4.
4. Calculate the difference between your preferred rate and what you think you can get.
If these are the same, you are a winner. Ask for that rate. If they’re not, make a list of reasons why you would take the lower rate. You may want to set up a sliding scale between the two or just have two tiers. You may charge one rate for on-site trainings and a lower rate for research you can do from home. You want to be very explicit with the client about why you’re offering which rate. For example:
- Your rate scale is based on an organization’s annual budget (which you checked back in Step 1). Non-profits that take in more pay the higher rate.
- You’re treating the difference between the two rates as your ‘volunteer’ or ‘pro bono’ work for the year. This won’t actually get you a tax benefit, but if you really want to work with a client who can’t afford you for professional development reasons you should track how much income you gave up to work with them. Keep an eye on your ‘pro bono’ amount when you’re calculating your quarterly taxes to see if you are turning yourself into a charity.
- They’re offering to compensate you in other ways, like access. There are non-profit and foundation conferences you can’t attend unless you’re sponsored or speaking. Maybe the client will help walk you through the steps needed to get on a roster of approved government contractors. These should not be nebulous promises of exposure, but real assets that you can use for your business.
5. Think about the extras.
Charities and foundations often have special operating rules about how much of their budget they can spend on consultants and certain admin costs. Call out your travel costs, rather than packing them into a total project estimate, because there may be more flexibility in their travel budget than their subcontracts budget. If you’re bidding on a job for a foundation, get to know the world of expenditure responsibility, which is how you can accept a grant instead of a contract even if you are not a non-profit. You will be subject to extra oversight if you do this, so get your books in order now.
6. Do an excellent job
If you’re thinking that the pay is so low you won’t be motivated to really kick-ass, don’t take that job. If you really need the money and you take it anyways, you still need to kick-ass. The only way this differs than the for-profit world is that the non-profit world is even smaller. You’re also competing against larger firms who’ve served non-profits for years. If people think they got good value for their money you’ll get referrals and eventually you can make the case to raise your rates based on your greater level of experience.
