Self-Employed Consultants: What Works and What Doesn't

After spending 12 years raising money for two New Orleans nonprofit institutions,

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Mary Liz Keevers decided she had had enough when her daughter was born and her boss at a local university would not let her cut back her hours.

It wasn't that she had had enough of fund raising altogether. But with a new baby, she didn't want to continue working 45- to 60-hour weeks.

So she set up her own fund-raising consulting business five years ago, seeking greater flexibility in when, how, and where she works. Now she can chaperone her daughter Avery's school trips or take extra time off during school vacations without requesting an employer's permission. She can work unconventional hours if she chooses, getting up at 4 a.m. some days and working until 7 a.m., when she takes a break to get Avery ready for school.

Another benefit is more variety in her work: Her client list includes a local Habitat for Humanity affiliate, the Louisiana Bar Foundation, and Dress for Success New Orleans, an affiliate of a national organization that provides professional attire and support services to women seeking jobs.

Ms. Keevers is far from alone -- a growing number of fund raisers appear to be leaving their charity jobs to become self-employed consultants. At recent annual meetings of the Association of Fundraising Professionals, Ms. Keevers has found that her workshops on starting a consulting business have been well attended, and the proportion of association members who describe themselves as consultants has been on the rise in recent years.

Flexibility and Technology

Like Ms. Keevers, many fund raisers turn to freelancing to gain more control over their working lives. "The flexibility thing is key," says Michael Wyland, a consultant in Sioux Falls, S.D. "It is those life changes -- a geographic move, a recent marriage or childbirth, or a recent divorce -- that seem to cause people to look more at the option of going out on their own."

Mr. Wyland says that technology may also play a role in prodding more fund raisers into freelancing. Not only is computer technology cheaper and more powerful than it was a decade or two ago, making it easier to run a business from home, he notes, but more fund raisers now also have the skills to use the technology. "There are enough people who are midcareer professionals who are technology-literate," he says. "When my wife and I went into consulting 12 years ago, that was not at all the case."

Increased demand for outside fund-raising help may also be a factor in the freelance boom, he says, because charities are more likely to use consultants today. "It's not only become more acceptable to ask for help, they are budgeting for that assistance," he says, "And they are seeing consultants as a viable alternative to adding to employee counts -- or doing without necessary services."

Some fund raisers see consulting as a way to advance their careers. As director of annual giving at Brown University until last year, George Nehme thought it would be difficult to move up to a development-director position because universities tend to recruit from the pool of fund raisers who focus on major gifts or capital campaigns.

He says he also saw a market for his skills, since relatively few consultants specialize in annual funds. Now running his own consulting business, he says he likes making a choice about the work he does: "You can set your own agenda, and focus on the aspect of fund raising you really are a subject-matter expert in."

Mr. Nehme says he thinks the high turnover in the fund-raising profession may be helping to drive people out of charity jobs and into consulting. "The rate of turnover and transition is so frequent as to be destructive," he says. "Those who have been in the profession for a number of years find themselves constantly having to reprove themselves [to new bosses], and adjust to new missions, new strategies."

Sometimes, he says, turnover at the top can help "chase away people who need to be chased away." But, he adds, it's also pushing out talented people who are tired of working in a state of upheaval -- especially if they don't see any national leaders or groups doing anything to combat the turnover problem.

Pitfalls of Freelancing

However, consulting is not for everyone, says Mr. Wyland. Some fund raisers, he says, start freelancing without a clear idea of their goals, or of what they need to do to get started. "The biggest mistake people make is they fail to understand that what they are doing is starting a business," he says. "Very few people are fortunate enough to just hang out a shingle and start a practice."

He and his wife, Margaret Sumption, took a year to set up their business, first making sure their personal finances were in order, writing a detailed business plan, and establishing relationships with bankers, insurance agents, and others.

Another common error new fund-raising consultants make is not charging enough, he adds. "People think, 'I made $50,000 a year, so if I charge $25 an hour for 2,000 hours, that is all I need,'" he says. They often underestimate expenses, such as health and retirement benefits, and forget that an employer no longer pays half of their Social Security, he says, or they don't remember to include the cost of time spent marketing their business or doing administrative work. Mr. Wyland estimates that most consultants need to charge roughly three times their old hourly salary to net the same profit from their business.

Ms. Keevers advises new consultants to decide early on their specialty. "I decided that because I had a good deal of experience in several areas of fund raising, I would let the market determine my niche, and that was a big mistake," she says. Certain tasks, like managing special fund-raising events, ate up a lot of time but produced less profit. After about a year, she decided to focus on strategic fund-raising plans, capital and endowment campaigns, and feasibility studies. If clients ask for other services, she says, she refers them to another consultant.

"I would advise anyone to determine what it is they like to do best," Ms. Keevers says, "and decide that that is how they are going to serve their clients."

Fighting Isolation

Once in business, freelancers often struggle with a sense of isolation, Ms. Keevers and other consultants say. Many combat that seclusion by making a more conscious effort to make regular lunch appointments with colleagues, or by getting involved in professional associations or informal networks of consultants.

For Sally Bryant DeChenne, a consultant in Los Angeles, being her own boss means she doesn't get embroiled in office politics. But it also means she misses out on the direct contact she used to have with donors -- something she has tried to replace by channeling those skills into her sales pitches to prospective clients. "I actually love generating new business," she says. "That's the salesman in me."

Serving as an outside consultant can be both freeing and lonely, she says. "The best thing about consulting is that you get to leave at the end of the day," she concludes. "And the worst thing about consulting is also that you leave at the end of the day."