Posted on March 22, 2024

What Nonprofits Need to Know About Working With a Professional Fundraising Consultant

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Nonprofit organizations often require funds to sustain and enhance their operations, leading to the need for comprehensive fundraising strategies. However, fundraising is not just about strategy and execution; it’s highly regulated, necessitating compliance with specific registration requirements across various jurisdictions. 

Nonprofits seeking to enhance their fundraising efforts often face a critical decision: whether to rely on in-house staff, hire external support, or adopt a hybrid approach that combines both options. The choice you make can have significant implications on the effectiveness of your fundraising campaigns and the overall success of your mission-driven initiatives.

Fundraising Support Professionals: Consultants, Counsel, and Solicitors (Oh My!)

Nonprofit organizations seeking support for their fundraising campaigns have much to navigate, particularly when working with a support professional. While the IRS provides a loose definition for professional fundraising services in the Form 990 glossary, every state names and defines fundraising professionals differently. 

Some states use the language, “fundraising counsel” or “professional fundraising consultants” while others may use the term “paid solicitors” or “commercial fundraisers”. The important thing to keep in mind is that there are distinct legal implications regarding registration depending on how a fundraising professional is defined in a particular state. 

So, whether you are hiring someone to simply advise or assist in endeavors that result in fundraising or you need someone to manage and perform all aspects of your fundraising activities and potentially make solicitations of donors on your behalf, you will need to ensure that they meet fundraising registration requirements in all states that are relevant. For more information, please refer to Affinity’s guide on Fundraising Consultant and Solicitor State Registration Definitions.

Why Nonprofits Choose to Hire a Fundraising Consultant

Fundraising consultants are professionals who have the capacity to advise and assist nonprofit organizations in a variety of areas. Although services may differ from one to another, a consultant might be used to assess an organization’s current fundraising efforts and identify new opportunities. Or, they may assist with the development and execution of a particular campaign. 

There are many different types of providers and their services can range from strategic planning and training to the implementation of specific fundraising initiatives. A consultant or firm might be hired to help with capital campaigns, major gift programs, grant writing, or to guide the development of a comprehensive fundraising strategy. The primary thing to note is that a consultant is generally not involved in the direct solicitation of funds. However, they are instrumental in building the capacity and effectiveness of a nonprofit’s own fundraising efforts.

Utilizing a professional fundraising consultant can provide expertise and specialized skills that may be absent within the organization’s existing team. The right consultant can bring a wealth of experience, fresh perspectives, and insight into industry best practices. They can also offer temporary or project-specific support during times of increased demand, such as during a large campaign or when launching a new program that requires additional funding.

What You Need to Know About Working With a Professional Fundraising Consultant

Nonprofits need to be aware of the legal requirements associated with hiring an external fundraising consultant. Many states mandate the nonprofit to report the relationship with professional fundraisers and fundraising consultants, and some of those states even require separate reporting by the provider. Because the specific terms and the nature of registration requirements can differ widely from state it’s essential to consider the role and responsibilities of your consultant.

In some states, any consultant associated with planning, managing, or advising on fundraising must also register independently and details about the relationship between nonprofits and consultants may need to be disclosed and filed with the state, if not a copy of the written contract.

While some aspects of fundraising registration may be consistent across several states, there are usually a good many individual state requirements that can vary significantly. These little intricacies highlight the importance of organizations being well-informed about the specific requirements surrounding fundraising consultants. 

Considerations When Choosing a Consultant

Choosing a fundraising consultant often involves careful consideration of the specific needs of your organization and the expertise of the potential consultant. However, another critical aspect that often gets overlooked is ensuring the selected fundraising consultant meets all state-specific legal requirements. 

Thorough vetting of any professional assistance is critical for the success and integrity of your nonprofit organization. Before partnering with a professional fundraising consultant, it’s essential to do a little bit of research in order to safeguard your organization and ensure that you’re partnering with someone who has your best interests in mind. 

For more information and guidance on choosing a fundraising consultant, refer to these articles by the Federal Trade Commission and the National Council of Nonprofits.

Get Help With Fundraising Registration Compliance

Regardless of whether you’re managing registration and renewal responsibilities in-house or considering the expertise of a fundraising professional, successfully navigating this complex process can be a drain on resources. That’s where Affinity steps in. We understand that different organizations have varied needs and capacities. And, although we do not provide registration services for individual professional fundraisers, we do offer three distinct service levels of registration assistance for nonprofits that include reporting of the professional relationship by the nonprofit, each designed to fit your unique circumstances. 

Whether you’re after basic support to complement your own efforts, a more comprehensive guide through the process, or an all-inclusive service to assist with complex registrations or nationwide filings, you have the flexibility to choose. This customized approach allows you to focus more on your organization’s mission and less on the often daunting paperwork and administrative hurdles of fundraising compliance. With Affinity’s tailored support, you’ll find the perfect fit for your nonprofit’s fundraising registration needs.

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