Chapter Six for How Consultants Shape Nonprofits

SIX

HOW CONSULTANTS PRIORITIZE THE POWERFUL

Funder and Stakeholder Influence

Consultants’ assumptions—what they take for granted when trying to guide their nonprofit clients—have an impact on more than just best practices. Consulting is a fundamentally relational process—one that lives and dies on the quality and nature of consultants’ relationships with other people. So it stands to reason that consultants do not work in a vacuum—other people and organizations significantly influence consultants and their day-to-day work. Specifically, power dynamics between consultants, their clients, and other people and organizations are important in shaping both the process and the outcomes of consulting work, for both consultants and nonprofits. This chapter unpacks how power hierarchies show up in consulting work, and how these hierarchies—especially those between consultants, funders, clients, and communities—both influence how consultants work and come to have an impact on the ideas and perspectives to which they give priority in clients’ strategic plans.

The consulting field and the nonprofit sector writ large are home to durable power hierarchies related both to status and to resources. In this context, consultants’ attempts to help their clients do better and more efficient work leads them to mirror and reproduce existing, entrenched power dynamics in the nonprofit sector through the assumptions embedded in their work processes. While striving to attend to their clients’ immediate problems and needs, consultants leave the larger hierarchies in which consultants’ and their clients’ practices are situated intact. As with the case of best practices, this is rarely something consultants do intentionally—rather, they reproduce existing power dynamics in the nonprofit sector gradually, through the accumulated impact of many small decisions made during day-to-day work with nonprofits.

Specifically, when attempting to build buy-in into their clients’ plans, consultants in small and medium-sized firms consistently prioritize the voices of stakeholders with power over nonprofits (for example, funders and nonprofit executives) over the opinions of lower-level staff and clients or communities. Additionally, in contrast to corporate management consulting, the work of consultants to nonprofits is often paid for by a third-party funder. The uneven power relationships between nonprofits, consultants, and funders (often philanthropic foundations) lead consultants to serve as conduits of funder ideas into nonprofits’ plans. Consultants enact this conduit role by equating fundability with feasibility and framing strategic plans as fundraising tools for clients—in doing so, they perpetuate funders’ power over nonprofit activity. Taken as a whole, these practices lead consultants to reproduce familiar power dynamics between funders, nonprofits, and communities in the nonprofit sector through strategy work with nonprofits, reinforcing the durability of these hierarchies as a driving force in nonprofit work.

During strategic planning, consultants use stakeholder interviews to inform their assessments of clients’ positions in their fields, to evaluate programmatic options for clients’ futures, and to identify additional peer organizations that consultants should consider. Therefore, the characteristics and perspectives of the individuals selected for stakeholder interviews, consultants’ methods for accessing these stakeholders, and the effects of project budgets on the interview process influence consultants’ assessments of their client organizations and the options for the future that consultants promote to clients. The methods and rationales by which consultants propose which stakeholders deserve to be interviewed also meaningfully shape whose voices are prioritized and deprioritized in nonprofit organizations’ future plans.

At InsightSolutions, consultants typically identified individuals to interview via local networks—either the client suggested someone, or the consultant knew the person and valued his or her opinion, via professional networks or because the person was a previous client. As Sara explained, the client had to approve every person with whom InsightSolutions spoke, and every question the consultants asked. This means that both the limitations of consultants’ and clients’ networks and the particularities of clients’ preferences affect which perspectives are given priority in clients’ strategic planning processes. Susan, a consultant from a small practice, explained this approach, suggesting that clients’ preferences should determine whom consultants interview, because clients are the ultimate experts in their own work: “It’s their relationship, right? I can’t propose to know them. I know the process, but I’m not running the organization.” However, she suggested, consultants do have preferences and make suggestions regarding essential perspectives to include. “I mean, let me look at your donor list, and I’ll tell you who I think we should talk to. Who were your major funders? Who were your foundations? Who were your board members?”

Indeed, to direct clients’ list-generation, consultants often provide clients with a set of suggested categories of stakeholders to include. Such a list typically includes board members, senior staff, funders, partner organizations, and relevant experts. While clients are the final decision makers about who to interview, consultants prompt clients to prioritize powerful stakeholders. And InsightSolutions evaluated clients on their ability to generate names of powerful people to interview. As Sara explained, the “process of generating this list is very telling—are they heavily relying on one type of stakeholder? Is it hard for them to come up with the list or do they take a long time? Are there any big ‘Nos’ when it comes to talking to particular stakeholders?” Those things, she said, could have something to do with “their resources, their relationships, the degree to which they understand the purpose of the exercise.” InsightSolutions evaluated the quality of clients’ networks and relationships with powerful stakeholders via the process of generating the list of stakeholders with whom to speak.

Consultants also suggest and grant access to additional powerful stakeholders on the basis of their own professional networks. One member of InsightSolutions sometimes called this category of stakeholders “Jim’s smart friends”—contacts of the firm president, to whom he conducted outreach on clients’ behalf. Specific consultants held particular relationships, and each granted access to powerful stakeholders as he or she saw fit, to benefit InsightSolutions’ clients. InsightSolutions at times tapped “Jim’s smart friends” in order to access sensitive information—for example, after an unproductive phone call with a city employee about the expansion plans of a sports youth development client, Margaux and Ines decided to ask Jim to call a higher-up city representative to get some clarity. “They know each other, he will give Jim the no-sugar-coated answer.” Further, the individuals to which consultants facilitate access are often aspirational stakeholders for clients, rather than already involved in the clients’ work—the idea is that consultant-facilitated connections might help the client recruit the individual as a funder or supporter. For example, at Margaux’s behest, I once looked through InsightSolutions’ Microsoft Outlook address book to find contact information for people with whom a client wanted to speak. Consultants’ networks are dense—as Margaux put it, “A lot of times potential donors [for one client] have also been engaged as part of a stakeholder process for another client,” allowing consultants to serve as brokers between organizations and potential stakeholders.

However, consultants often stop short of delivering new donors to clients. This boundary is exemplified by a conflict that occurred at InsightSolutions and resulted in a client terminating an engagement with the firm. Jim had pitched a project to a news media client whose leader was his neighbor. On the basis of Jim’s pitch, the client thought that InsightSolutions would introduce them to new donors. However, once underway, the project was passed to other InsightSolutions staff, who clarified that “that’s not what we do.” This inconsistency resulted in the client walking away from InsightSolutions. Jim characterized this rather tenuous difference as, “Hire us and I’ll introduce you to rich people” versus “I’ve come to know a lot of very wealthy and foundation people, and I call them and say, ‘Hey, I think you’d be interested in this.’” InsightSolutions, he told me, does not do the former, but regularly does the latter, which to him focused more on reinforcing quality relationships than selling contacts. Consultants’ networks, then, provide clients with access to powerful people that they otherwise would not be able to reach. While consultants use their networks to reinforce relationships between clients and important outsiders, they rarely serve as direct brokers of financial support—instead, their influence on clients’ bottom lines is more subtle, based on building bridges to powerful people rather than putting money in their clients’ pockets.

The nature of consultants’ networks also influences the types of elites to which consultants can facilitate access. At small generalist firm InsightSolutions, consultants’ extensive network among local nonprofits, government officials, and funders opened up information channels that their clients did not have. However, InsightSolutions’ reliance on local networks also limited their clients’ potential reach to local elites and personalities. At ArtsNow, such limits manifested differently—when a colleague of Arthur insinuated that he had a bias toward large institutions in his work, Arthur rejected this interpretation—“I just have a body of work, I don’t have a bias.” While Arthur’s network was not limited by locality, it was limited by type of organization—the large arts nonprofits that were his clients. The networks of larger consulting firms that work nationally, such as FocusImpact and WorldAdvisors, also have limitations—while these firms offer access to national funders, their networks are at times thin in clients’ local areas. Indeed, the limits of consultant networks can negatively affect client organizations, when consultants have a bad relationship with a particular stakeholder or when consultants lack sufficient leverage to reach a powerful party. In one InsightSolutions case, Jim was “on the outs” with a funder important to a client’s potential merger, making it difficult for InsightSolutions to help that client pursue funding. Relatedly, Natasha at ArtsNow admitted that the firm had been unsuccessful in reaching National Endowment for the Arts leaders on behalf of clients, as they did not have sufficient clout to garner a response.

Consultant and client networks play a predictably large role in determining the people and organizations consultants interview on behalf of clients. While consultants contractually follow clients’ lead in deciding who to interview and what to ask, consultants coach clients to prioritize powerful stakeholders for interviews, such as funders, board members, and key partners. Consultants also use their networks to facilitate client access to additional elite field members, a process strongly shaped by the limits of their networks—in terms of locality, subfield, and collegiality.

Frank, a partner in a small firm, described prioritizing stakeholders like senior leadership and donors in terms of these actors’ power over organizations. He explained that in his work with nonprofits he used a particular tool, which he called a “stakeholder inventory,” to help clients understand “who they’re really serving and the degree of influence people have on them.” Donors, he explained, “have a tremendous degree of influence and you have no control [over them].” Due to donors’ influence, Frank suggested that clients should involve donors in their strategic planning from the beginning. In his words, “I encourage my clients to bring one of their donors [onto their strategy teams].” He explained that his clients often express fear at this notion, suggesting that their donors wouldn’t like to “see their dirty laundry.” He corrected them: “That is exactly right and that’s just what you want. . . . [If my clients] don’t do that, they develop their strategies in isolation. . . . They haven’t bothered to ask whether or not a donor might in fact like the direction of the strategy when they do the big reveal.” He argued that involving donors in nonprofits’ strategic planning processes allows organizations to ensure that these individuals will support their future plans.

InsightSolutions had a similar rationale for prioritizing powerful stakeholders. During their work with a historic park that had fallen into disrepair, Margaux disagreed with Angela, a sole-proprietor communications consultant involved in the project, because Angela wanted to cut a group of donors out of the client’s stakeholder interview list. Angela argued that “we shouldn’t talk to donors if they aren’t going to provide new information.” Margaux counterargued that donors are “good to engage” from a “purely donor-engagement perspective . . . [you talk to them] so that they feel talked to” and are thus invested in the strategic planning process. In another case, during a phone call with a youth development client, Ines proposed next steps for the engagement: “We will talk to our colleagues and see if we have a connection on the Dunnigan Foundation board. If so, we will talk to them to do two things. One, get the perspective of an outside funder, and two, tell them really good things about the program.” As these examples illustrate, engaging stakeholders via interviews or other strategies—particularly individuals with power over organizations—does not solely serve to gather information. Rather, consultants argue that such engagement helps reinforce nonprofits’ relationships with people who have power over their organizations, and can secure these individuals’ early buy-in on organizational plans.

In comparison to donors’ ubiquitous presence on stakeholder interview lists, sometimes passed over for interviews are lower-level staff, clients, and community members, people over which client organizations have power. If such voices are included, consultants often do so in shallower, highly structured ways, such as online surveys of members or by inviting staff to comment on an already-set strategic direction. Notably, these strategies are promoted by clients as often as they are by consultants. For example, in one case Arthur from ArtsNow helped a large performing arts center client prepare for an all-staff meeting in which staff members would have the opportunity to share their opinions on the organization’s strategic direction, which had already been chosen by the leadership. As Arthur put it, ArtsNow was tasked with helping the client design a session that “engages the staff without promising them any outcomes.” On the phone with the client, Arthur cautioned that it was important that the executive director made it clear to staff that they “will be reacting to the long-range plan, but not editing it.” The client confirmed, telling Arthur that he valued staff input “as long as it’s in line with what we’ve been doing.” Arthur then guided the client to design a session to do just this—engage staff and build their excitement about the strategic plan, without challenging it.

In another instance, during InsightSolutions’ historic park project, the consultant team declined to engage members of a particular community group both because the client did not like the group’s behavior and because the group had many factions and would be hard to pin down. As a client representative put it, “When we wrote the RFP we weren’t expecting significant community involvement because there was not enough time . . . community groups can become disruptive [and] we knew we didn’t have enough resources to address it now.” This community group had a very different idea from the client’s for how the cemetery should be used, and might have influenced the client’s options had it been included in the planning process. In both these cases, because stakeholder interviews focused on reinforcing clients’ relationships and building buy-in for future directions in addition to generating information, consultants and clients deprioritized staff and community groups and prioritized individuals with power over client organizations, those who might directly influence the success of client organizations’ future plans.

Once clients generate an initial list of candidates for stakeholder interviews, consultants and clients typically discuss the suitability of each person together in meetings; consultants also debate stakeholder lists behind closed doors. One sunny afternoon at InsightSolutions, Ines, Margaux, and I met to discuss stakeholder interviews for its sports youth development client. The client had proposed more interviews than were accounted for in the consulting budget, and the team had to decide what to do. Sitting around a small table, we reviewed the list of people the client suggested, one by one. Margaux thought that two of the many funders suggested by the client were not suitable for interviews because of a lack of overlap in funding priorities with the client’s programs. Ines gently disagreed with Margaux, reminding her that these interviews were “about what we learn and also about advancing their relationships.” Margaux and Ines agreed, however, that these conversations “aren’t for people who know nothing about the client—we want baseline familiarity, willingness to help out, interest in what we do.” Within groups of powerful stakeholders (such as funders), InsightSolutions consultants prioritized those who had some degree of preexisting familiarity with their client or relevance to the client’s mission and goals, to support consultants’ efforts to build buy-in among such stakeholders.

As part of their goal to build buy-in into clients’ plans, InsightSolutions consultants sometimes reacted negatively when clients did not prioritize senior leadership as stakeholders in their projects. As Sara articulated, practicing with Ines for a client meeting, “It has concerned us the whole time that there is no leadership [at the client organization].” She continued, explaining that she and Ines were uncomfortable with the preference of the client (a senior manager) that the team wait until the conclusion of the project to talk with the client organization’s new executive director. “We advise against waiting a year to approach him.” Sara and Ines argued that it was critical to include conversations with the executive from the beginning of the project, to ensure his buy-in to the result. Indeed, InsightSolutions consultants questioned the fact that the decision-making group for the project lacked senior leadership and was primarily made up of staff. As Jim put it, “This is supposed to be a flagship program and the committee was mostly staff.” He argued that the lack of senior organizational leaders on the committee suggested that the project was “not important to the strategic direction of the institution.” A failure to include senior organizational leadership as key stakeholders and decision makers in the consulting process caused Jim to negatively judge the project and its importance to the client institution, a case that clearly illustrates consultants’ focus on securing buy-in from stakeholders with power over their clients.

Consultants in firms of all sizes also move quickly to generalize from emerging interview results, a practice which aligns with their tendency to pursue directional accuracy in research about their clients. As Heidi, an evaluation consultant at a large firm, recalled, “In one of my first projects, we committed to twenty interviews and after nine, my colleague said we are done, we got it.” She explained that her “strategy colleagues eyeball stuff,” suggesting that consultants are incentivized to synthesize as quickly as possible during stakeholder interviews to make efficient use of resources. Natalia from FocusImpact echoed this tendency. “I personally think that sometimes we get too tied to the data too early—we will hear a couple things and be like ‘Oh that must be where they are headed,’ and we are not open enough to hearing something different.” As they move to synthesize quickly while conducting interviews, consultants run the risk of jumping to conclusions, a dynamic that professionals from other research traditions may find alarming. Indeed, InsightSolutions sometimes framed the decision to stop conducting interviews “as a finding.” In the case of an environmental food access client, many potential interviewees declined to participate. Rather than adding additional stakeholders to reach the number of conversations specified in the contract, Zelda directed me to hold off—she asserted that the fact that many people declined to participate meant that the organization was not a top priority for stakeholders, “and that’s an important finding.” A senior foundation leader explained her take on this situation. Large consulting firms, she argued, have created a new normal for the process and extent of research (such as the expected number of interviews and process of analysis) to ensure profitability for their firms and to align with the consulting business model. This, the foundation leader claimed, correspondingly causes nonprofits to “redefine the goal posts” of acceptable research, a process quietly orchestrated by consulting firms to fit their business models.

Indeed, the “saturation” claimed by Heidi’s colleagues—the perception that additional interviews would yield repetition of the same insight—may be reached particularly quickly given that the small number of affordable interviews reinforces a focus on individuals that share a structural position—people with power over nonprofits. As an example, one day in the InsightSolutions office Margaux griped about the stakeholder interview process for one of her clients. She explained that the “project really suffered because [the executive director] really likes higher-up people, so all the people he had us talking to were the big whoop-de-do leaders of Philadelphia.” This fact, Margaux continued, had a material effect on the feedback InsightSolutions got about the client’s ideas. “[Those people] are naturally territorial about what they do, and they were not natural collaborators or partners in thinking.” She explained that the particular leaders with whom the client directed InsightSolutions to speak were overly critical of the client’s ideas because they were focused on ensuring that InsightSolutions’ client did not compete with their work. Margaux explained the result of this situation. “I had many, many conversations with people who were like, ‘Someone already does that’ or ‘I already do that’ (what the client was proposing). I think that’s a function of who [the executive director] knows and chose for us to talk to.” As a result, InsightSolutions was led to seriously question the client’s ideas, and to recommend that the organization consider moving in a different direction with its future plans. Too narrowly limiting stakeholder interviews to powerful individuals can make it more likely that consultants hear the same thing again and again, while simultaneously affecting the direction of clients’ strategic plans by foreclosing certain options and opening others.

In reflection, consultants’ goal to build buy-in to clients’ plans through stakeholder interviews leads them to intervene in a hotly debated topic in the nonprofit sector—organizations’ relationships to their communities. Through their day-to-day work practices, consultants in small and medium-sized firms prioritize powerful individuals as interviewees, and correspondingly deprioritize community and staff voices. Consultants’ budget-driven incentives to restrict the number of interviews included in the stakeholder interviewing process reinforces this tendency to prioritize people with power over client nonprofits, and the impulse to synthesize quickly leads to a temptation to take these perspectives for granted and assume that the opinions of the powerful represent the whole story. Taken together, these dynamics lead consultants to replicate status quo power relationships in the nonprofit sector in which the perspectives of people with power over organizations are prioritized over the voices of people over whom nonprofits have power—lower-level staff and communities.

As noted earlier, one of the major differentiators between consultants to nonprofits and corporate management consulting is the involvement of funders—philanthropic and corporate foundations and high-net-worth individuals—in the nonprofit consulting process. After prioritizing funders for stakeholder interviews, consultants help their clients access resources by framing strategic plans as fundraising tools, integrating funder opinions into clients’ plans, and using consultants’ networks to connect clients with funders. However, this work is characterized by a hierarchical power imbalance—both consultants and client nonprofits depend on funders for resources, and funders do not reciprocally depend on consultants. In practice, the hierarchical relationship between funders, consultants, and nonprofits leads consultants to serve as conduits of funders’ ideas into nonprofits’ work, perpetuating funders’ dominance in the nonprofit sector and status quo revenue models for nonprofit work.

In funder-consultant-client relationships, funders broker relationships between consultants and grantees, opening up new resource streams for both (Stovel and Shaw 2012), but consultants also facilitate relationships between nonprofits and funders. As an InsightSolutions consultant explained, “The money to work with InsightSolutions comes from foundations, so we have pretty strong ties to certain program officers. For example, for one client we went back to the same program officer for a larger grant [after the initial planning engagement was over].” At FocusImpact, during a project for a community foundation, consultants produced plans for the foundation’s grantees and then wrote grant proposals for grantees back to the same foundation—their client—“to fund the plan we built with them.” While, as mentioned earlier, consultants generally do not accept engagements in which their job consists of connecting nonprofits to donors, consultants do use their ties to funders to facilitate relationships between funders and nonprofits, to finance getting hired and reinforce relationships. In this way, consultants facilitate resource access for nonprofits able to access consulting (Krehmeyer and Freeman 2012).

However, these relationships are fragile and characterized by uneven power. Discussing the shifting sands of consultant-funder links in Philadelphia, Ines shared that over time, fewer and fewer funders provided grants for strategic planning, even as many continued to require strategic plans as grant eligibility criteria. Over time fewer funders referred nonprofits to InsightSolutions for projects. Despite consultants’ ability to facilitate relationships between funders and clients for both groups’ mutual benefit, the status of funders as the most powerful agent in the triad affects outcomes for both clients and consulting firms, positioning funders as atop the hierarchical relationship between funders, consultants, and clients.

In an interview, a former WorldAdvisors consultant shared the potential consequences of the hierarchical relationship between funders, consultants, and clients, expressing concern that funders paying for nonprofits’ planning processes “could cause the grantee to feel coerced.” She pointed specifically to a case that led, in part, to her decision to leave the firm:

I was working for an advocacy group for a vulnerable population. They were a tiny organization with a $2 million budget, and a $300,000 shortfall. We were brought on to do a sustainability plan for them. Our fees were $300,000—so an obvious way to make them more sustainable was fire the consultants. Doing any kind of financial planning was really challenging because ultimately their fate depended on legal rulings. . . . We ended up working with them, we weren’t in a great position to have impact—we didn’t know much about that [field]. . . . So our judgments weren’t that great. And ultimately our product wasn’t that useful to them, it would have been more useful to have our fees. It wasn’t like the [WorldAdvisors] partner thought we could have a ton of impact, they thought it was a great way to get in with the foundation, even if we weren’t the best fit. So the nonprofit [was] strong-armed. . . . If you’re a nonprofit CEO, you’re never going to say no to a program officer. If they say, “We want you to do a WorldAdvisors plan,” and you know it’s to line up funding for something, you say sure.

As this consultant recounted, funders’ preferences for particular consulting firms and consultants’ dependence on funders for resources can create conflicts of interest. In this case, the funder-brokered relationship between client and consultant fell short of serving the client’s interest, instead privileging the funder’s preference first and the consulting firm’s interest second. The structure of dependencies in the consulting field skewed the client-consultant relationship, resulting in a counterproductive experience for the nonprofit.¹

Recall that funders only sometimes mandate the consultants with which grantees work; nonprofits also at times hire consultants directly and without funder influence. And as a prior chapter revealed, consultants often prioritize clients’ interests above their own firms’ bottom lines, as part of efforts to genuinely support their clients. Acknowledging these contingencies, in the triadic relationship between funder, consultant, and client, power hierarchies and overlapping dependencies mean that while consultants facilitate resource access for nonprofits by using their ties to funders to help get nonprofits grants to hire consultants, consultants also at times deprioritize clients’ needs to advance their own relationships with funders.

Paul, a senior sole-proprietor consultant, explained what he saw as the problem with this funder involvement, focusing on the case of evaluation consultants. “Evaluators rarely get funding from an unbiased source. Their work is often paid by a foundation, and boards want to report that the foundation is spending money wisely. Boards don’t embrace [inconclusive] findings. . . . Foundations exercise an indisputable bias on evaluations because they look at the work through rose-colored glasses.” As Paul suggested, consultants are aware that funders do not appreciate null results, which runs the risk of prompting consultants to bias findings to comport with funders’ views of reality. Funders’ disproportionate power in funder-consultant-client relationships can easily cause the locus of attention in the triad to shift to the funder, whose power looms large over consultants’ work and nonprofit client outcomes.

At the end of the day, what everyone needs is money. You would be foolish to undertake something that you weren’t sure you could pay for and hadn’t confirmed that someone was interested. . . . Every grant [application] is sort of a mini strategic plan. You go through the same set of questions in an intensely shrunk down way.

In this consultant’s articulation, money is the ultimate enabler of nonprofit work, so tailoring nonprofits’ plans to funders’ interests is obvious—without an interested funder, a nonprofit plan lacks sense.

Examples from InsightSolutions illustrate how consultants incorporate funder preferences into conversations with clients. In a meeting with a health and social service client, a board member asked Jim which InsightSolutions-generated options funders might prefer. He answered without missing a beat. “Institutional funders would be interested in [options] 3, 2, 1 in order.” He explained his assessment. “The idea of an organization rethinking, here is our mission, what’s a different way to do that? Funders are very interested in that. . . . Foundations believe there are too many nonprofits, they want to see mergers.” In another case, Margaux was concerned that a client’s program model was confusing: “I worry about contradictory statements—targeting underserved youth, but also targeting economic diversity. It will be hard for funders [to understand]—it felt clean and straightforward [before].” Margaux’s concern about what she perceived as contradictory foci was directed at a fear of alienating funders, rather than the actual functionality of the idea. In a subsequent discussion about the same client, Ines and Margaux discussed materials they planned to use during stakeholder interviews with funders. Margaux pantomimed a conversation. “What do you need to hear to tell you it’s fundable? Evidence? What’s exciting? The questions it raises?”

Other consultants similarly focus client plans on ideas they feel are “fundable.” As one consultant explained, strategic planning clients are perennially concerned about where they will find money to support their strategic goals. In response, her firm made a point to “get [clients] to a goal that’s powerful, that their funders we know would be excited about.” Navigating clients’ fears about plan elements for which they cannot pay, these consultants guide clients to solutions that the consultants perceive to be fundable on the basis of their knowledge of relevant funders. Firms that work for both nonprofits and foundations have a particular advantage in this regard—as a consultant from a major generalist firm described, “When you work with nonprofits and foundations together you have a better sense of what makes for good philanthropy from the nonprofit side and good nonprofits from the foundation side.” Consultants’ insider knowledge about funder interests can influence how they design client solutions, to better align clients’ ideas with funders’ inclinations.

In some cases, a penchant to design client solutions around funder preferences can lead consultants to consider options very distinct from clients’ original ideas. In one case, Margaux and Ines discussed the results of a meeting with a city official, who was interested in the client organization providing services that differed sharply from its historical focus. The official “said it would be great if there was an academy where . . . directors could learn [best practices]. What about that? It’s fundable.” Margaux was skeptical. “I don’t know how much appetite [the client] has for [being a] middleman. I don’t think they would be into that idea. [But] they need to see that working with the city entails compromise.” Ines agreed. “[These] are fundamental questions—do what you want and sacrifice scale, or compromise with the city?” Ines suggested that the client needed city funding to achieve the growth he desired, but that this funding would entail compromise to align with city interests. Though InsightSolutions did not, in the end, propose this solution to the client, the consultants considered the option purely due to its “fundability”—its correspondence with funder preferences. When conducting strategic planning with nonprofits, then, consultants often conflate fundability with feasibility—while consultants usually rule out funder-driven ideas that strongly depart from clients’ interests, they heavily weight perceived fundability in evaluating options, tailoring clients’ plans to ideas they feel will be exciting to funders.

Consultants also think carefully about how and when to conduct stakeholder interviews with funders, to strategically use funders’ voices to advance planning work. For example, Ines shared that there are some funder conversations that are “helpful to have at the beginning so you can leverage them later—see what ideas [funders] have so that if we use them, we can say, ‘Thanks for the great idea, here’s how to stay involved.’ And then there are those you have at the end, to test options.” InsightSolutions used funder interviews to generate ideas that could be used later to encourage funder support, and to build the case for particular options as optimal for client nonprofits.

For example, in one InsightSolutions case Sara gave specific instructions in a call with a funder to “ask about all four options even though [the client] prefers [one option in particular].” She explained that she wanted to know whether funders’ preferences aligned with the option the client preferred, or whether funders “had a strong appetite” for a different option. In a subsequent conversation, Sara described how we would use funder reactions to question the client’s preference. “Both funders thought that franchising and [another option] were long-term dreams. So the options are multiply at home or multiply at [a partner site].” Indeed, InsightSolutions later used funders’ interests to challenge this client’s preferences—during an internal strategy session, Ines griped to Sara, door closed in her office, “We should talk to funders before fleshing out the options. [The client] thinks we will [develop full plans for] all of the options, and we will need that ammo—we can provide a rationale for not looking at franchising.” She continued, saying that InsightSolutions’ recommendations would flow directly from funders’ interests as uncovered through interviews: “We think you should focus on options 2 and 4 because funder input is this.” Ines proposed using funder preferences generated through stakeholder interviews to cut a client’s set of options in half, overriding the client’s desire to pursue all available options (which the consultants felt was not feasible).

It is important to note that while consultants do use funder preferences to advocate for particular options to clients, consultants also occasionally challenge funders’ opinions. For example, at ArtsNow, Isabel rejected a funder’s desire to avoid public funding for a new cultural center, claiming that the project would not be possible without public support. In a meeting with the funder and client representative, Isabel conceded to including the funder’s vision for the organization in her report, but not his funding expectation. “We are amenable to an outcome report with two scenarios, but in both cases [the project] would need to be subsidized by the city.” Later, however, Isabel wondered if she gave the funder “too much tough love.” Though she stood by her assertion that subsidy would be necessary, she worried that she had pushed the funder too far out of his comfort zone and preferences for the project.

As they work to facilitate resource access for clients, consultants’ methods to include funder voice in client work reinforces the power of funder priorities to shape nonprofits’ work. Consultants limit nonprofits’ options to those that align with funding sources of which consultants are aware, or funder preferences that consultants uncover in their research. In the process, consultants redefine feasibility in nonprofit strategic planning to mean fundability by existing or prospective funders. While consultants do not always transfer funder preferences to client nonprofits, rejecting funder-driven ideas that too strongly contrast with client preferences and historical models and those that consultants think are impossible, consultants treat alignment with funder interests as a key determinant of a particular option’s feasibility. Of course, tailoring programs to funder preferences is a time-honored tradition in the nonprofit sector practiced by nonprofits themselves as well as consultants—rather than representing a departure from past practice, consultants’ roles as conduits of funder interests into nonprofits’ plans reinforce status quo hierarchies and power relationships in the nonprofit sector.

FocusImpact shared this view, and articulated it even more sharply. As Marion put it, her approach to strategic planning was specifically geared toward helping her clients fundraise. “[If] you ask a nonprofit what it needs most, it’s going to say money. . . . [But] if you have a common understanding of your mission and impact goals, you can raise money to support plan implementation, . . . completely shifting the way an organization is able to finance growth.” Marion framed mission and goal clarity as supportive of fundraising success for nonprofits. Another FocusImpact consultant echoed this framing.

Any time we try to [help a client] make decisions, they’re like, “How are we gonna pay for it?” That’s not strategic. I get that it’s an important question, and I’ve been on that side, and it’s terrifying. But, when you have a strong, powerful vision and mission and a clear sense of where you’re going, it’s that much easier to raise the money, because funders are either excited about [your plan] or not, but they’re not unclear about it. So we make people hold off on the fundraising anxiety. . . . We build out a tool to go to funders and say, “This is what we need.” And some of our clients have immediately gone to funders and actually raised significant money in the first year.

Marion and her staff equated clarity of mission and goals with fundraising success, framing strategic plans as potent tools to win over funders. “Fundraising anxiety,” according to this FocusImpact staffer, is ill-advised because it is not integrated into the organization’s mission and goals—rather, the clear direction clients articulated in FocusImpact-created strategic plans were keys to unlock funders’ wallets. Other FocusImpact staff members correspondingly touted clients’ success in post-plan fundraising as justifying FocusImpact’s fees—as one put it, “If our strategic plan will help them raise $5 million, that’s a really good investment for them to spend $200,000.” “Strategy” here was equated with means-end rational clarity and focus, with strategic plans framed as key to securing resources from powerful actors.

Another FocusImpact staffer clarified the difference between the firm’s approach and actual fundraising work: “When people ask us if we do fundraising we say no, we don’t help you build a capital campaign or figure out who you’re going to cultivate.” Rather, fundraising success was an indirect product of FocusImpact’s work. As Marion put it, “If you don’t know what you’re asking for money for, you’re never going to be successful [fundraising]. So we help clients clarify their message really powerfully, and in the cases that are really successful they are able to turn that . . . into money.” As yet another FocusImpact consultant admitted, “If you can really focus and be strategic about your work, fundraising will kind of come. I maybe blindly believe in that.” When strategic plans are successful, this consultant suggested, they become a type of currency that can be converted into capital. Framing strategic plans as currency further reinforces consultants’ conduit role between nonprofits and funders, highlighting the differential support in resource access provided to nonprofits that are able to access consulting services.

This framing was also present at ArtsNow, where staff sometimes referred to plans as “marketing tools.” The positioning of strategic plans as fundraising tools aligns with the common requirement among funders that prospective grantees have strategic plans, and the popularity of certain large consulting firms due to perceived legitimacy by funders. And consultants’ ideas about strategic plans as fundraising tools may have credence—in a study of formal planning by nonprofits, Hwang and Bromley (2015) found preliminary evidence that having a strategic plan may indeed support nonprofit fundraising success.

While conducting research about their nonprofit clients, consultants’ strategy of using stakeholder interviews both to gather information and to build buy-in into their clients’ plans leads them to prioritize stakeholders with power over nonprofits—funders, executives, and key partners—over the people over which nonprofits have power, such as lower-level staff and community members. Budget limitations and consultant inclinations to synthesize quickly from research results intensifies this bias, causing consultants to reproduce and re-embed familiar power dynamics in the nonprofit sector in the context of contemporary debates about nonprofits’ relationships to their clients and communities.

Consultants then often strategically use the perspectives of powerful stakeholders in their work with clients. They do so most prominently in the case of funders, historically the most powerful entities in the nonprofit sector. By framing strategic plans as fundraising tools, incorporating funder preferences into planning processes, and conflating fundability with feasibility, consultants serve as conduits of funders’ ideas into nonprofits’ plans. The fact that both nonprofits and consultants depend on funders for survival leads consultants, doing their best to facilitate resource access for clients, to tailor nonprofit plans to funder preferences (O’Mahoney and Sturdy 2016), reinforcing status quo hierarchies and revenue models in the nonprofit sector. While consultants wield power to connect their clients to resources, they cannot overcome the larger funder-driven power dynamic—indeed, consultants are just as ensnared in it as are their clients. As a result, consultants perpetuate—and indeed, often promote—philanthropy’s influence on nonprofits’ plans, and the overall hierarchical dominance of funders in the nonprofit sector.

The upshot? While many may perceive these findings to be a condemnation of consulting work, in reality they raise a potent question for consultants and the organizations that hire them. To what extent should consultants aim to shift the status quo in the nonprofit sector, and to what extent do they want to? The structural inequities of the nonprofit sector and broader global society are well documented and acknowledged, and many people and organizations—especially in recent years—have decided to dedicate themselves to making our nations more just and equitable places for all. This is critically important and pressing work. It requires keen self-awareness, courage to speak truth to power, and the ability and appetite to recognize and challenge one’s own assumptions, as well as those of others.

However, there is also something to be said for many consultants’ current modality—helping clients do their best and most impactful work within the constraints of the current system. Stated otherwise, many consultants help their nonprofit clients accomplish social impact in the context of and despite the limitations of the nonprofit sector as it currently exists. This approach requires backgrounding—and often times, actively using—existing structural inequalities and power dynamics as taken-for-granted operating realities that consultants must work around or work with, rather than work to change.

Both goals—social change and what to do in the meantime—are valid and have defensible explanations. What’s important is to realize that these two goals are in fact distinct and require different strategies for work and for action. One cannot work within the existing system while simultaneously working to change that same system. It’s up to consultants—and their funders and clients—to choose.

Notes

1. Funders’ power over consultants and nonprofits was reflected in the process of conducting research for this book. At FocusImpact, I was welcomed into the firm’s nonprofit-serving practice but denied access to their philanthropic practice—a member of the latter explained, “We could never ask a client about an outsider sitting in [on a meeting].”

2. Return on investment analysis.