I believe foundations could save time, solve problems more efficiently, and add greater value if their senior leadership would think like consultants.
Let me explain: Most consultants work on a time-and-materials basis, meaning that they have an hourly rate. Foundation leaders who hire those consultants deem the value of their work worth that fee. However, foundation leaders rarely calculate the cost and value of their own staff's time -- which is a pretty simple thing to do.
Let's say the annual salary of a senior program officer at your foundation is $100,000. Let's assume her annual benefits are 25 percent, so now you are at $125,000. There are 2,080 working hours per year, so if you divide $125,000 by 2,080 hours, you'll have $60 per hour.
Now think about some of the activities your senior program officer is expected to do. A weekly 2-hour staff meeting for 50 weeks a year would be $6,000. Your staff person spending 2 weeks preparing board dockets (participating in meetings, writing and rewriting board materials for your docket deadline) is $4,800. If you do this every quarter, that's $19,200 for your one senior program officer. Conducting mandatory site visits for 25 grantees a year? That could be $12,000 if you assume it takes 8 hours per visit to plan, prepare, travel, conduct, and summarize the site visit.
What are the costs for all of your staff to engage in these activities? You can begin to see how it all adds up. Of course your staff needs to meet regularly, you need to conduct site visits, and you need to prepare for board meetings. But consider the value your foundation is receiving for your staff to engage in all of these activities by asking yourself these four questions:
- What is the value we're getting for the cost?
- Is the value worth this cost?
- Are there ways we can increase the value of this activity?
- Are there ways we can be more efficient with our time?
I'm positive that if you think about your staff's time versus the value you receive, you'll be surprised, and you'll come up with some creative ways to accomplish more with the human capital that you have. For more ideas to improve your grantmaking, visit the resources page on my website.