Career Paths: Nonprofit Consultant
Mr. Goldstein's career has taken him through nonprofits and government agencies over the span of two decades, and led him to write his self-published guide Introduction to Fund Development Planning in 2007. In 2003, he went into business for himself under the shingle of Goldstein Consulting, where he offers his expertise with one simple principle of commitment: "I only accept clients and projects that I believe in. When I accept your assignment, your mission becomes my mission and I am committed to your success." He was kind enough to share with us his insights on the economy's effect on clients, his self-employed status, and the overlap between advising nonprofits and corporations.
VAULT: Describe how you began consulting for nonprofits. Did you get your start working in the nonprofit sector itself, or at a consulting firm?
Ken Goldstein: Before going into independent consulting, I had already been working in the nonprofit and local governmental sectors for about fourteen years. I had experienced a range of organizations and positions, including doing direct client service work and being an Executive Director, and had wound up as Silicon Valley Director for CompassPoint Nonprofit Services. CompassPoint is a nonprofit itself, but one that serves other nonprofits through consulting, training, and research into the field. I loved learning about the different types of organizations that we served, and different approaches to social problems. It was, in many ways, a continuation of the education I received when getting my Master of Public Policy and Administration degree, and my preparation as a consultant, facilitator, and trainer. When it was time to leave CompassPoint, I also had many connections to get me started with consulting gigs. I love working with smaller organizations and projects that are too small for a CompassPoint or other large firms to take on, so I still get referrals from my old colleagues there.
V: What is the organizational makeup of Goldstein Consultants? Have you given consideration to expanding into an incorporated firm, or do you prefer to remain as an independent proprietorship?
KG: I still chuckle a little at the official sounding title of "Goldstein Consulting," as it really is just me as sole proprietor, lead consultant, marketer, accountant and janitor. I network a lot with other sole proprietor nonprofit consultants, and we've talked about the pros and cons of joining forces, but I've always preferred to remain independent. I never want to get to the point where I'm spending all my time running my business (paying other people, more tax headaches, liabilities of taking others on ...) and not helping my clients run their businesses. By sticking to solo projects I keep my red tape to a minimum, keep my schedule flexible, and can concentrate on helping the grassroots organizations that couldn't afford the rates I'd need to charge as "a firm." Of course, through my networking with other consultants, we do refer jobs to each other, and can share advice and best practices on how to survive as an independent, so I'm not out there completely on my own.
V: Having served a wide range of nonprofit interests, including healthcare and the arts, what would you say is an area you have the most experience with? Is there a particular cause closest to your heart?
KG: If I had to summarize the type of organization that I'm most experienced in, I would describe it as "community resource center." Locally-based, single-site agencies, with a budget of $1 to 2 million, focusing on providing basic needs assistance to their immediate geographic regions. Things like access to food, health care, and housing, but also early childhood education, parent education, and referrals for mental health, addiction, and job training. I'd also say that the basic needs items—food and shelter—are the causes that are closest to my heart, and are also the causes that I'm drawn to as a donor to organizations, not just as a professional working with them. As you pointed out, I've also enjoyed working with arts groups and environmental causes, and I'm grateful for the chance to have a variety of clients, but if I have to choose one area, it would be basic needs.
V: Conversely, have there been prospective clients whom you have had to turn away, either on professional grounds or out of a personal objection to their mission or methods?
KG: I've turned away clients based on availability, when I've simply been over-booked. And there have been some potential clients that I've strongly suggested go back and take a closer look at their own goals and plans before hiring a consultant (usually somebody with a "great idea" for a nonprofit, but nothing concrete yet). But I can't recall ever having to tell a potential client that I can't take them on because I object to their mission. That's not to say it won't ever happen, just that I've been lucky in that regard, to serve a region with plenty of causes that I do believe in.
V: The chief aspect separating nonprofit consulting from the for-profit field seems to be an emphasis on fundraising and specialized accounting; however, your resume lists efforts in everything from M&A to operations development. What are some vital for-profit practice skills that consultants could use to transition into nonprofit work?
KG: Probably the area of management consulting that's most easily translated is HR. Labor laws are labor laws, regardless of the type of employer. Marketing is also easily transitioned, with just a little extra attention to deciding who you are marketing to, potential clients or potential donors. On the fiscal side of the house, things do get a bit trickier with the myriad of funding streams, the thousands of strings attached to most of those dollars, and the disconnect between income and demand for services. The social services world is one where the same forces that increase demand for services also lowers revenue. I think business consultants who want to take on nonprofit clients can best educate themselves, and serve the sector, by first volunteering to be on a nonprofit Board of Directors. That kind of immersion into the types of issues that the sector faces would be a great education that could then be turned into a line of work.
V: In the wake of the recession, what were the most significant effects you observed of both the nonprofit consulting sector and for nonprofits themselves? Did more organizations seek your services, or were you required to more actively pursue clients and projects?
KG: For better or for worse, when your profession is assisting organizations in trouble, a down economy can be good for business. I've been booked pretty solid for most of the recession, and only just this month enjoying my first "down time" in several years. The way the recession has hit some of my clients is as a magnifying effect.
Management and fiscal practices that were questionable when money was flowing become toxic when the money slows down and once strong reserves become monthly cash-flow nightmares. Managing in such an environment requires the willingness to make unpopular and tough decisions. As an "outsider" I have often been better suited to do that than a leader who is entrenched in the problem (or, perhaps, the cause of the problem).
V: Given that much of the nonprofit sector relies on the support of the government, what effect, if any, do you foresee the Obama administration's economic and social initiatives having on nonprofits?
KG: For the right type of organization, some of the Obama administration's initiatives can be a great boon, but that's not without some cautions.
Federal dollars involve the most red tape, but rarely allow a realistic administrative overhead budget line to comply with that red tape. Federal contracts and grants can also be very slow to pay, requiring the agency to spend out of their reserves to provide services until such payment comes. And, always, we have to caution agencies about over-relying on any one type or source of income. A lot of the Obama initiatives are only for two or three years of funding; organizations that do receive this money need to plan from day one how they will support programs when the "stimulus plan" ends. So, yes, if you have the administrative capacity and overhead to handle a Federal grant, fantastic - but a well-diversified fund development plan is still required.
You can find Ken Goldstein on the web at the Goldstein Consulting website, or at his blog, The Nonprofit Consultant. His book, Introduction to Fund Development Planning, is currently available for purchase at Amazon.
For more information on careers in the nonprofit world, check out The Vault Career Guide to Nonprofit Careers.