As professions mature, they have to change with the times, adapting to confront new needs and realities. But it’s a good idea every now and then to look back at our origins, remind ourselves of the spark that led to a whole new line of work, and look how far we’ve come.

Management and fundraising consultants originated around the same time and placein the late 1800s in Michigan.

Early management consultants came from engineering and science. The first known one was Frederick Taylor, who helped Henry Ford develop the assembly line in Detroit.

The first fundraising consultants came from public relations and journalism, helping create the campaign model of fundraising at the YMCA in Grand Rapids.

In the decades that followed, consultants from time to time tried to expand their area of expertise. But in a speech at a staff conference in 1977, Marts & Lundy fundraising consultant Melvin Brewer cautioned his audience not to stray too far from their origins:

“Through the years, we have effectively resisted the temptation to get into fields that were not really within our competency—business management of philanthropic agencies, student-recruitment programs, computer-programming counsel, mail advertising, etc. Early in the firm’s history, when it did attempt such kinds of business-getters, the results were less than satisfactory.”

Thirty-five years later, much has changed: Fundraising consultants have realized the difficulty of raising support for troubled organizations. Poor management or governance is often at the root of fundraising problems, and expanding services to help clients improve in other areas can mean success for clients and growth for the consulting firms.

How has your consulting work changed over the years?

• Greater specialization: Information technology, social marketing, globalization, donor-directed philanthropic advisers, and blurring of the lines between profit and nonprofit (e.g., cause-related marketing) are a few examples of consulting specialties that have emerged in the past 25 years or so.

• More breadth: Though consulting specialists abound, there is an equally strong demand for experienced consultants who can advise clients strategically–meaning the problem a client walks in the door with is seldom the real problem. Increasingly in our practice at the Oram Group, an engagement is a troika of fund development (not just fundraising but funding alternatives as well), governance, and strategic planning.

Consulting for nonprofit groups these days is big business: The private nonprofit sector is a substantial economic driver in the U.S., employing over 10 percent of the work force. And entry into the field is easy: As Penelope Cagney’s blog “The Need for Good Advice” pointed out, anyone can apply the consultant label and the cost of professional entry, and ongoing costs can be kept low. Technology and portability have really enabled our work. First the laptop and now, for many, the iPad and smartphones have inalterably changed us and our work. (I look at my fax machine and think “how primitive.”)

There are still large consulting firms with staffs of “resident” campaign managers and costly fixed overhead. But client visits to their offices are not that common, so they are cutting down on headquarters space, and their senior staffs work from their homes or hotel rooms.

When the Oram Group had 40 employees and offices in three cities, it was fairly rare that clients came to us. We went to them, and that’s still pretty much the rule. Having given up a midtown office three years ago, I now work from my SoHo loft. Clients who meet with me at my home enjoy the side benefits of shopping and good restaurants. It’s cheaper for me and works perfectly.

Working alone takes discipline, but the rewards of consulting make it well worthwhile.

Henry Goldstein is a principal of the Oram Group. For a free download of “So You Want to Be a Consultant,” e-mail him at hankus@oramgroup.com.

But consulting for nonprofits is taking a different turn: The number of graduates from top-level business schools entering the nonprofit sector has actually increased. Some  students, disillusioned with questionable ethics in the for-profit world and job instability in formerly secure havens like Wall Street, are beginning to work with nonprofits. Many business schools now offer students opportunities to be involved in nonprofit consulting. Last year a new national organization was formed, Students Consulting for Nonprofit Organizations, whose members include respected business schools like Northwestern and Penn State.

Seasoned management consultants are also crossing over to work with nonprofits. According to Management Consulted, 10 percent of those who leave business consulting end up advising nonprofits. This is due in part to more options being available today in the nonprofit world than in the past, as I described in a previous blog, “Big Consultants Increasingly Turn to Nonprofits.” Among them are nonprofit consulting firms closely associated with for-profit firms, like Bridgespan’s affiliation with Bain & Company.

It’s not just students and former management consultants joining the ranks. The economic downturn compelled some who lost their jobs in the recession to seek work as consultants. Recent retirees and those who had hoped to retire soon but suffered recessionary losses have done the same.

This suggests that consulting for nonprofits is very much alive.

Do you think that what has happened in the corporate world will tarnish the image of consulting for nonprofits?  As job prospects elsewhere brighten for graduates, will  nonprofit consulting lose its appeal? Do you worry that there is or will be a glut of consultants?

But in truth, you’ll win more business by asking the right questions.

In today’s economy, for example, there are lots of conversations with potential clients that go nowhere. Have you experienced this? You talk and talk, hold meeting after meeting, but nobody makes a decision. You can avoid this by asking a series of incisive questions that help you verify that the organization indeed needs your help.

First, figure out if the organization’s leaders see a significant perceived problem or opportunity. If they don’t have one, why would anyone hire you?

To ascertain whether a truly significant problem or opportunity exists, you should ask questions like:

* What is this costing you right now?

* If you don’t fix this issue, what will the consequences be?

* What do you think this opportunity is worth to your organization?

* What other problems is this causing for you?

* Would you say this is one of your top two or three priorities right now?

Keep asking such questions to uncover whether there is a burning problem. If there isn’t, you won’t get the assignment.

Second, make sure you are speaking to someone who is responsible for dealing with the problem and is empowered by his or her organization to fix it. In any institution, there are always lots of problems—and plenty of people willing to talk about them. But unless you are talking to the person in charge of dealing with the issue, that’s all you’ll do—talk. Questions you can use here might include:

* Who owns this problem?

* Are you personally responsible for fixing this?

* Who would authorize an expenditure to address this?

* Who needs to be involved in this initiative?

Especially in a nonprofit organization, it’s essential to understand who the various constituencies are that need to be part of the solution.

Third, the nonprofit must have a healthy dissatisfaction with the current rate of change or improvement. The organization may have a problem, and it may be significant—but it will not hire a consultant unless it is unhappy with current progress or solutions. Questions that can help to ascertain this would include:

* Would you say this is a minor irritant or something you’re truly fed up with?

* Why do you feel that now is the time to put extra resources against this?

* How effective have your own efforts been to address this?

* What solutions have been tried already?

And here are two questions to help you understand what your client’s most important issues are. First, “How will you be evaluated at the end of the year?” The answer will tell you exactly what the client’s agenda is.

And, second, if you’re with a prospect or client who seems distracted and unengaged, ask, “What’s the most important thing we should be discussing today?” This question will rapidly refocus the conversation.

Andrew Sobel is the coauthor, with Jerold Panas, of Power Questions: Build Relationships, Win New Business, and Influence Others (Wiley, February 2012).

When times are difficult, it’s logical and natural to seek new ideas. It makes sense that staff members think they need a new approach, and, by good fortune, whenever your clients start thinking this way, some new article or book appears detailing how someone has already solved their very problem. Just think, you could be a hero (or make your client a hero) by bringing the solution to your client.

However, just as likely, your client will ask your opinion about some new approach. They will be excited about it, and so may you. After all, it provides an entirely new way to look at a persistent problem. It rests on the latest research. It has been tried at another nonprofit with spectacular results. It was even written up in The Chronicle of Philanthropy. What is the worst that could happen if you just give it a try?

A lot. And in ways that could damage both you and your client.

Leading scholars of management, such as Robert Schaffer and Chris Argyris, have tried, largely in vain, to get managers (and their consultants) to resist being drawn to every new fad like moths to a flame. Those fads can include survey tools, communication applications, revenue-generating platforms, talent-management systems, and leadership development. Take a walk through the business section of a large bookstore (or online) and you will see a steady stream of “groundbreaking” ideas. Most of those books are gone within months (or are ranked online below the one-millionth most popular book).

Being an effective adviser means being independent, objective, and rigorous in your due diligence before making recommendations. If you can’t explain the theoretical underpinnings of a new approach, give several examples of where it has worked and why, and explain in detail how it is an improvement on current methods, then you have no business proposing it to your nonprofit executive.

Every new management approach carries with it significant costs for just trying it.  Leadership has to bake it into the culture. Managers need to learn how it works. Staff members need to be trained. Systems may need to be set up. New evaluation protocols need to be adopted. And contingency plans need to be put in place in case it doesn’t work.

Although consultants are traditionally a source of new ideas, your role includes making sure your clients learn how to use effectively the tools they already have before adopting new ones. It takes discipline, but resist the temptation to jump to a new approach before it’s clear an old one isn’t working.

The average life span of a management idea today is about three years—far shorter than 50 years ago, when it was 15 years. In fact, Management Consulting News reports that in just a month’s time the largest 25 consulting firms in the world published almost 500 books and articles.

Because the pressure to produce new thinking is so intense, there is even a subscription service for consultants—White Space—that tracks and analyzes new material and identifies gaps where consultants might best apply their resources to develop new thinking. Some consulting firms are systematic in the research and development of new ideas, and it is built into their business model.

Other consultants borrow concepts from other disciplines like science (theoretical biology, quantum physics, chaos theory) to improve organizations. Certainly consultants to nonprofits look to the business world for ideas.

Consultants also look to their clients for inspiration. As Peter Drucker, the management expert, observed, “Every consultant knows that his clients are his teachers and that he lives off their knowledge.” For instance, in the late 1800s, YMCA employees invented what we recognize today as the fundamentals of a capital campaign and went on to form the first fund-raising consulting firm, offering the YMCA approach to other organizations.

Less creative consultants decant old ideas into new bottles so they will at least appear innovative.

How important is innovation in your work? Where do your ideas come from?  How important is new material to your success?

I’m sure we all have a favorite holiday smell. Often it’s from a favorite food with a rich aroma. But we’ve all had a time when we thought the smell signaled something wrong even before we’d sat down to eat.

After working with nonprofits for many years, I’ve realized that you can tell when something’s not right through a quick smell test.  I sniff the air for signs that things need to change the first time I enter the CEO’s office.

There are some variations on the smell test. Here are some I use:

Smell the coffee. Is the organization alert in a caffeinated way to changes in the environment it operates in? Is it aware of the adaptations it might need in the slow economy? Does it embrace social media and other emerging technologies in how to operate with supporters? If the organization doesn’t smell of coffee, it may be sleepwalking to a slow demise.

Smell the rotten eggs. Check out what doesn’t seem right. For example, actively seek out aspects of the organization’s processes that may look fine but are actually broken.  The eggy smell may be from a dysfunctional board or a senior staff member performing poorly. If there’s a whiff of something that is not right, take action sooner rather than later.

Smell the smoke.  Keep on full alert for possible signs of smoldering that could turn into a serious fire. I recently told a group of senior managers in a major charity that they were beginning to lose support from individuals and corporations to a rival charity. It wasn’t a big loss, but it could grow. They had to smell the potential for disaster and take early action before the “fire” took hold.

Smell the fresh air. Often organizations, especially senior managers, need to get out more rather than spending endless time in meetings with colleagues or peers. Any organization that spends too much time obsessed with itself and its internal processes will eventually begin to have the scent of decay.

Standard management consulting approaches to figuring out what’s wrong all have their merits. But to figure out the changes that must happen, you might do best by unlocking your inner bloodhound.

Most of the help these companies used to offer came in pro bono assistance. But now they are going beyond that to offer aid for a fee, sometimes through a nonprofit arm and often at a lower cost than they would charge businesses.

Among the companies that have started or expanded specialized nonprofit services in the past dozen years:

Booz Allen started a unit in 2007 to serve nonprofits that is just like any of the other specialty practices within the company.

Monitor Group created the Monitor Institute in 2007 to serve nonprofits. [Editor's note: This corrects an inaccuracy that previously stated the institute was classified as a B corporation.]

Accenture started ADP Accenture Development Partners in 2002, an organization that
provides advice to nonprofits.

Wellspring is a for-profit company founded in 2002 to serve nonprofits. Christopher Keevil founded it after he stepped down as a partner of the Boston Consulting Group.

Bain & Company started Bridgespan in 2000 to operate as a separate nonprofit.

McKinsey & Company in 2000 expanded its “social sector” practice.

FSG Social Impact Advisors is a nonprofit that was co-founded in 1999 by Michael Porter, who also founded the Monitor Group.

While profit margins for nonprofit work are generally modest compared with for-profit work, management-consultant groups gain many benefits by aiding charities and foundations. That work helps companies recruit and retain employees who want to work for a company that is socially conscious as well as profitable. And association with good causes can be part of promoting a consulting company’s brand.

Consultants that are structured as nonprofits themselves can attract grants and other support.

Have you worked for big management companies? What has been your experience at those organizations? And what is the difference between working at those large organizations and working at smaller, more specialized nonprofit practices? Are you considering expanding your consulting to include more services to nonprofits?

Please talk about the pros and cons of each type in the comments section below.

To figure that out for myself, I borrowed ideas from the management consultant Harold Jarche, who advises thinking about this task into three approaches—seek, sense, and share. Here’s how I put his advice to work.

Seek

Social media can help you keep up with topics so you can be more effective in your work.

Start with making a list of the five to 10 of the best information sources that cover your area of expertise.

Find them on Twitter, subscribe to their blogs, connect on LinkedIn or “like” their Facebook page. Then create a dashboard by using an RSS reader and carve out regular time to read every day. You can also scan based on keywords.

Sense

It might seem obvious, but in the daily rush to get items ticked off the to-do list, it is easy to ignore the goal at hand: making sense of the information you read each day.

To do this, you must put ideas into practice and figure out what worked. You must also find time to reflect, a process that happens, in part, in quiet—and for most of us that means turning off our social-network streams.

Create a system that allows you to synthesize what you’ve learned from your social networks. You might do that by writing about what you learned (a blog is terrific for that) or incorporating new ideas into a presentation.  I like to use wikis to share the best ideas I have discovered with my clients and others.

Share

Learning also happens by sharing information on social networks. To do this well, you need to be comfortable “learning in public“ as opposed to the solitary way so many of us learned when we were in school.

A good example of how the process of interacting with peers can work can be found on the Packard Foundation’s wiki on organizational effectiveness, through which nonprofit consultants and evaluation geeks share information about the preliminary findings of Packard’s evaluation of nonprofit consulting practices.

While I’ve gotten a lot of value of sharing and engaging on Twitter, I’ve seen other social media platforms that go deeper than 140 characters. Quora is interesting for discussions as well as Facebook Groups,

Being a master at networked learning helps you stay up to speed in a world that is changing so fast you must constantly learn more to be a strong consultant.

Is using social networks and social-media channels valuable for nonprofit consultants? Tell us what you think.

Values are what a nonprofit stands for, the principles that an organization would defend and follow no matter what the consequences.

But it is not an easy process, and many nonprofits fail to achieve the following when spelling out their values:

Authenticity. Many groups state the values they aspire to, not the ones that are part of everyday practice. This disconnect is usually obvious to employees and others. You must find ways to ask your client to list the values that everyone would say describe the group today.

Usefulness. Often nonprofits make lists of values to share with employees and the public, but they don’t include anything that really counts as a value.

For instance, when a nonprofit says it puts its “focus on members” or pursues “continuous learning,” it is talking about strategies, not values. Strategies don’t help much when it is time to set priorities or make tough tradeoffs.  So you must help your clients find ways to ensure their strategies and performance objectives are built on their true values.

Pervasiveness. Even when a nonprofit’s values are authentic and useful, many employees are unaware of them. They don’t hear leaders talk about values. They don’t see values discussed in communications with clients, members, or others, and they aren’t asked to think about values as they design or evaluate programs.

Consultants need to help organizations figure out how to make sure their values are visible and to realize that no value statement will make a difference unless it becomes embedded in the group’s culture.

Priority. A warning sign that an organization is not values-based is when it offers the public a list of eight to 10 “values,”  or even more. Because values are supposed to show what a nonprofit cares most deeply about, it is realistic to have three to five of them, and the organization’s leaders should be able to rank them in importance.

For example, is innovation so important it could be sacrificed for equality? Is avoiding a deficit more important than transparency? Ask the organization’s leaders whether priorities are so clear that everyone would automatically put the list in the same order.

Crafting a set of values is a difficult, heart-wrenching exercise. If the organization hasn’t thought deeply about values, it may take months for leaders to work through them. Then they must see if the chosen values make sense to the organization’s supporters, clients, and others who care about it.

Because most organizations have not had the difficult discussions about what they really stand for, consultants often need to encourage a vigorous discussion over values.

Once the values have been identified, it’s time to help make them part of all aspects of the culture and operations, including programs, hiring, training, and relations with the community.