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Posted 08/14/2023 in consultants by Whole Whale

Understanding the Cost: How Much Should a Consultant Charge?

Understanding the Cost: How Much Should a Consultant Charge?

As a consultant, determining your rates is a crucial task that could greatly influence your business's success. It's essential to strike a balance that allows you to meet your financial needs, while also providing fair and competitive pricing for your clients. With the preliminary release of the 2022 consultant survey by Nonprofit.ist and Do Better Consulting, we now have valuable insights into the charges by professionals in the fundraising sector, which can provide a benchmark for consultants in other fields as well. 

The Findings from the 2022 Consultant Survey

The survey, which included responses from over 300 professionals, highlighted that fundraisers charged anywhere from $50 to $250 per hour. However, most consultants found a comfortable range between $76 and $150 per hour. This data provides a revealing look at the current trends in consulting fees within the nonprofit sector, specifically for fundraising consultants. 

Get a look at the initial data with our interactive dashboard.

Factors That Influence Consultant Rates 

It's worth noting that several factors contribute to these variations in rates, including expertise, experience level, and geographical location. A seasoned consultant with decades of successful projects would naturally charge more than a consultant just starting out. Additionally, consultants based in regions with a high cost of living may also set higher rates to account for these costs. 

Setting Your Fundraising Consulting Fees

With the benchmarks provided by the 2022 survey in mind, how should you determine your own consulting fees? Here are some considerations:

  • Know Your Worth: Determine the unique skills and experiences you bring to the table. The more specialized your expertise, the higher your rate can be.
  • Understand Your Market: Get to know what similar consultants in your sector are charging. The 2022 survey results can be a good starting point, especially if you're a fundraising consultant.
  • Factor in Your Costs: Consider your business costs, including taxes, insurance, and overhead, as well as your desired income, when setting your rates. 

The Earnings of New Consultants

If you're a new entrant in the consulting business, you might wonder what your potential earnings could look like and what rates you should charge for your services. The 2022 consultant survey offers some enlightening information on this front as well.

According to the survey, consultants with five years or less of experience earn around $20,000 to $60,000 per year, with outliers both above and below this range. This data is a strong indicator of the income potential for new consultants. It's important to note that these figures will depend heavily on the specific sector of consultancy, the geographic location, and the number of projects or hours a consultant can secure in a year. 

Setting Rates as a New Consultant

The survey further revealed that newer consultants typically charge rates between $50 and $150 per hour. The variation in these rates is likely influenced by factors such as the consultant's specific niche, their prior experience in the field, and the level of demand for their services.

If you're a new consultant setting your rates, it's crucial to understand that even though your experience in consulting might be limited, the skills and knowledge you bring from previous roles could add considerable value, so, don't undervalue your worth. However, setting competitive rates in line with the market trends for new consultants can make your services attractive to potential clients and help you secure projects.

Even as a new consultant, there are ample opportunities to earn a decent income. It's key to understand your market, recognize your worth, and set your rates accordingly. The journey might begin modestly, but with time, expertise, and a solid track record, your earnings and rates have the potential to grow significantly.

In conclusion, setting consulting rates is a complex process that relies on both market trends and personal factors. The 2022 Nonprofit.ist and Do Better Consulting survey provides a helpful benchmark for consultants in the fundraising sector. It's crucial to remember that your unique value proposition and your market's standard rates should ultimately guide your fee structure.