At the Axelson Annual Symposium this June, Eric Weinheimer made an intriguing remark in his session on social enterprises. Eric, recent past CEO for The Cara Program and newly minted CEO for the Donors Forum, started by discussing the mission-driven market as problematic because “we play small” and went on to say that “we need to come from a position of power…” which he equated to social capital. He then exemplified the value in that relational capital. As someone who has used the term “social sector” for several years to connote nonprofit service providers, volunteers, investors, and beneficiaries engaged in a web of connections to contribute to positive social change, I was engaged and even excited by his analysis about the power of relationships.
Toward the end of his presentation, he mentioned the power of “pro-bono”. I left wondering what exactly he was trying to convey, especially in light of his prior comments that seemed to challenge the social sector to play on the same field as the business sector, from the standpoint of leveraging capital.
To be clear, I have benefitted from “pro-bono” services for many years. When I first re-launched The Center for What Works as a national research nonprofit, and years later when I merged with a larger educational institution, I’m not quite sure how the organization would have survived without the benefit of high-quality pro-bono legal counsel. I received first-rate counsel from top firms in Chicago for zero monetary cost. Years earlier, I launched a marketing and communications plan with critical assistance from Northwestern Kellogg MBA students and University of Chicago social scientists helped me to devise a database to analyze complex data. These engagements had clear cost though – I spent hours working with the consultants – getting them up to speed, pulling documents together, engaging in meetings. I believe most of them were successful due to very tightly defined scope. Yet, they cost hours and weeks of time.
I also volunteered my own time as a pro-bono consultant through Net Impact, a global membership organization that facilitates business professionals to use the economic and knowledge engine of business to improve the social sector. Again, the most successful projects were those that aimed to answer a tightly defined issue. My greatest success as a consultant was often due to the up-front process of narrowing scope and expectations. Without that, it would have been a waste of time on both ends.
So, I understand and agree with the “power of pro-bono”. Still, there was something that didn’t sit quite right in reflecting on Eric’s comments.
I fully endorse the Donors Forum’s new “Commitment to Full Cost Funding” and have followed and blogged responses to the efforts around “Real Talk about Real Costs” and the Overhead Myth, and I feel skeptical of organizations that rely on and demand pro-bono, without accounting for the time investment that it represents. In other words, pro-bono is not always the best way to go.
Pro-bono can be and often is more expensive than paid talent, when we consider the value of time. It takes real commitment and time to engage with often limited time advisors and consultants in short-term projects. It becomes hard to achieve meaningful results. At worst, time is exhausted and the final product is either overly complex or uselessly simple, leading to wasted time and the inability to implement the initial goal.
Having said that, if done well, it can absolutely move the organization forward in significant ways.
Nonprofits need to know when to value and find the means to pay market rates for professional services and to understand the benefits and risks of various options.
A couple of years ago, Taproot Foundation Founder Aaron Hurst provided the closing keynote at a Chicago conference – he was inspiring, and he discussed the power of pro-bono from a positive perspective, akin to why would anyone pay retail! I agree whole-heartedly. For sizeable law and accounting firms who are committed to contributing part of their time to social sector organizations, hats off!
We, as social sector leaders, do need to play big, enter relationships across sectors from positions of power and use our “scrappy”, “bootstrapping’ history as an entrepreneurial benefit akin to the best of creativity and innovation. We also need to ensure that we account for pro-bono, including in-kind services, in the spirit of committing to full cost funding. We need to do this to manage the true costs of achieving social change and to ensure that our governing boards and fiduciary managers and investors understand it as well.
In discussing this topic recently with Eric, he agrees that we need to make strategically sound decisions. He utilized the continuum from high end pro-bono services to stellar market-rate consulting services at The Cara Program, and many types in between.
It’s clear that social sector executives need to partner with and rely on professional services consultants to inform and round out capacity gaps, assist on a range of issues from legal to business strategy, from financial management to outcome management, and to provide a coveted outside eye and expertise. These partnerships often make the difference for service providers, in raising funds, determining realistic strategy and better understanding target population so that results can be realized, reported on and improved.
Let’s just make sure that we know what we are signing up for and caution that very little ever comes for free.