Staffing a Nonprofit: Contracting with a Consultant vs Hiring an Employee

The decision to contract with a consultant or hire an employee to support your nonprofit organization can be a crucial decision, especially for nonprofits with limited resources, but large goals. While both options have their benefits, hiring a consultant can be a cost-effective and efficient way to obtain specialized expertise, improve processes, and implement strategic initiatives.

Consultants are experienced professionals who can offer unbiased opinions, innovative ideas, and effective solutions tailored to each organization's specific needs. Attaining a consultant provides access to high-quality expertise and support without the long-term commitment and financial burden of hiring staff. 
Additional benefits include:

1. No benefits or overhead costs: Organizations incur costs for employees above their salary, these expenses including payroll taxes and fringe benefits ranging from paid time off, to health insurance, and retirement contributions. Additional expenses include equipment, office space overhead, worker’s compensation, payroll services, and equipment. Contracting with a consultant, is based on an agreed-upon contracted rate; they pay for their own taxes, benefits, and equipment.
   
2. Flexible contracts: Consultants can be hired for specific projects or tasks, with contracts customized to fit each organization's needs. 
3. Access to specialized expertise: Hiring a full-time employee with specialized expertise can be costly. Consultants, on the other hand, offer specialized expertise for a fraction of the cost of hiring internally.
4. Lower training costs: Employee onboarding requires an investment of time and training resources. Consultants are experienced professionals with processes allowing them to quickly get up to speed on an organization's needs, without requiring extensive training, providing immediate value.
   
5. Reduced risk: If an employee doesn’t turn out to be a good fit for your organization, it can be, difficult, time-consuming, and costly to go through the termination process only to have to start the hiring process again. Consultant’s contracts are for a fixed period of agreed-upon time If you love the consultant, you can choose to extend or enter into a new contract.
   ​
   

It is important to note,  not all consultants are created equal. It's essential to due your due diligence when deciding who to work with.  The consultant should have relevant experience, knowledge, and skills. Additionally, having a clear scope of work, budget, and timeline will help ensure that both parties have realistic expectations and goals. Referrals and references from other similar organizations can help identify consultants supporting the nonprofit industry and speed up the vetting process

Overall, hiring a consultant can be a smart investment for nonprofit organizations seeking to maximize their impact, innovate, and adapt to changing environments. Leveraging the expertise of a consultant allows organizations to improve operations, increase efficiency, and achieve their mission while staying financially sustainable.

Are you considering hiring a consultant for your nonprofit organization? We would love to learn about your organization and share ways our monthly nonprofit consulting and grant writing packages may assist you.