Imagine this: You want to accomplish something big with your philanthropy, but you need help to achieve it. You decide to retain an expert philanthropy advisor or consultant. Naturally, you assume the first step is to develop a Request for Proposals (RFP) so you can find the most qualified and diverse consultants and advisors to respond. It’s an effective, fair, inclusive, and transparent process. Right?
Wrong.
In my experience advising hundreds of foundations, corporate giving programs, and ultra-high-net-worth philanthropists over the past 23 years and talking with dozens of consultants helping to launch and lead the Philanthropy Consultants Network and the National Network of Consultants to Grantmakers, RFPs can be the worst way to find and engage talented philanthropy advisors.
In fact, the RFP process can easily waste your time, waste money, and impede your ability to find top talent. What’s worse, it can inadvertently undermine the consultants you invite to apply!
But most funders don’t realize this. They genuinely want to find fabulous and diverse advisors, consultants, evaluators, and executive coaches – but they don’t recognize how the RFP process gets in their way. (Psst – this is why I wrote a whole book on this topic, called Delusional Altruism!).
I personally find RFPs to be, on the whole, not a good use of time and an impediment to my ability to improve my clients’ conditions. I recently shared this on TikTok and reposted the video on LinkedIn, and it received close to 12,000 views and many comments from other consultants sharing similar experiences. This prompted me to start a two-part blog series to debunk six common myths about using RFPs to find consultants and advisors. I hope you find it valuable! Here are the first three:
Myth 1: RFPs help you find the best philanthropy advisors and consultants
✔️Fact: The best advisors and consultants often ignore RFPs
Talented philanthropy advisors and consultants often don’t respond to RFPs because their services are in high demand. Most of their business typically comes from referrals, reputation, and repeat business. They view responding to RFPs, where you might have a one-in-10 or one-in-40 chance of being selected, as a waste of their time. Time that could be spent on more valuable activities such as helping funders increase their impact through executive advice, consulting, and content creation. Other consultants, both seasoned and emerging, choose to ignore RFPs because they have identified other marketing and business development strategies that have proven more effective and less time-consuming, such as networking, speaking, and relationship building. This all means if a foundation issues an RFP they are immediately eliminating some of the most successful and talented advisors from consideration.
Consider this example: A consultant colleague once received an RFP from two partnering foundations who sought a nationally recognized philanthropy consultant with experience developing and managing early childhood initiatives. The RFP was full of unnecessary expectations and legalese, taking 19 pages to explain how to submit a 10-page proposal and outlining all the activities the consultant should undertake and in what order. They’d had months to write the RFP but allowed the consultant only weeks to apply. They refused to allow the consultant to talk to the decision-makers so she could fully understand their objectives, and she was required to be available on a specific day to fly in for an interview in the event she was selected as a finalist. Her award-winning, woman- and BIPOC-owned and led consultancy was widely known for its expertise in early childhood. She was uniquely qualified to deliver stellar results for these funders. But because of their rigid conformity to their tightly defined RFP process, she didn’t apply—and they lost out on a quality consultant. I am sure there were other top philanthropy consultants who also took a polite pass.
On top of that, most RFP processes prevent consultants from doing their best work. For example, funders often begin the RFP processes by determining every detail of the consultant’s scope of work, including all activities, hours anticipated for each activity, a detailed timeline, and list of deliverables. This is typically done by the CEO and select board members, even if they have never done the activities they are asking the consultant to do (e.g., lead an organization through strategic planning, design and conduct an evaluation, or help a foundation operationalize diversity, equity and inclusion). By doing so they effectively eliminate the consultant’s vast experience and expertise from the initial assessment, visioning, and design of the consulting engagement. The scope of work has now been framed, tightly defined, and approved by the board. It’s now difficult to alter it significantly, even if the philanthropy advisor recommends a vastly different approach that would add greater value, allow the funder to achieve results faster, or cost less. The advisor is an expert. But instead of harnessing that expertise most funders thwart it.
Myth 2: RFPs are the most efficient way to find consultants
✔️ Fact: RFPs can easily waste funders’ time and money.
On top of hamstringing funders’ likelihood of finding the best consultant and preventing the consultant from doing their best work, the RFP process can also drain the philanthropist’s time, energy, and money. This is because funders spend way too much time designing what they think is the perfect scope of work, writing and editing the RFP, obtaining board approval of the RFP, widely disseminating it via networks and social media, reviewing scores of proposals, interviewing finalists, and making selections.
I was once asked by a foundation to submit a proposal to conduct an evaluation. I asked how many other consultants the evaluation director was requesting bids from. “Fifty,” he said. “Fifty?” I replied, stunned. “Five-zero?” “Yes,” he proudly answered. “I prescreened fifty evaluators, and I sent them all the RFP.” This was to conduct a $40,000 evaluation.
I politely declined, since my then-three-year-old could do the math and realize my chances of success were low. Months later I checked in with the foundation’s evaluation director. He was exhausted and overwhelmed. It turned out he had indeed received a massive number of proposals he had to sort through and vet. Then he’d had to determine finalists and interview them, all before he could make a decision and hire someone.
This process took him about six months from start to finish. The evaluation itself could have been conducted in that time frame. Consider the time and expense of all that staff time: annual six-figure salary of a well-paid evaluation director (plus benefits) plus annual salary of a decently paid program associate (plus benefits), divided by 2,080 working hours per year (to determine hourly rate). Now multiply that hourly rate times the hours spent identifying and prequalifying 50 evaluators, preparing and disseminating the RFP, responding to dozens of inquiries, reading 40 proposals, vetting and prioritizing them, conducting due diligence, interviewing finalists, declining 39 of them, and finally hiring one. They probably spent half of the $40,000 project fee just on hiring the evaluator. Meanwhile other important projects got sidelined.
An extreme example? You’d be surprised how common this is. But you can easily see how the process itself can quickly get out of control.
Myth 3: Using an RFP to retain a philanthropy advisor demonstrates transparency
✔️ Fact: There is rarely anything transparent about consultant RFP processes.
Foundation leaders and corporate donors face pressure to be transparent. And they should be. After all, they are stewards of the public trust. They often view sending an RFP to scores of philanthropy advisors and consultants as one way to demonstrate transparency because they aren’t picking a specific advisor “behind closed doors.”
But there is very little that’s transparent in the RFP process. Funders don’t publicize which advisors they chose to invite or what criteria they used to identify them. Nor do they publicize how they made their final determination, which is always “behind closed doors” anyway. The process is least transparent to the philanthropy consultants and advisors themselves, who typically have little opportunity to meet with the ultimate decision-makers and therefore have no way of fully understanding the funder’s needs or objectives. They are rarely told whom or how many advisors they are competing against. While most RFPs outline a specific scope of services and timeline, the philanthropy advisor has no idea how or why this was determined, or if it even makes sense. On top of that, funders rarely share their budget or even budget range, even when asked directly by the advisor. The advisor is expected to guess (and then is often told their proposal was declined because the fee was outside the budget!).
Now that we have debunked those three myths about RFPs, you’ll want to make sure to subscribe to my newsletter to see me bust more myths in part two. You can subscribe right now to receive practical tips delivered straight to your inbox. Click here to sign up: https://putnam-consulting.com/category/practical-tips-for-philanthropists/
