Nonprofits & NGOs

Who Gets Paid?

The funding that goes to intermediaries and consultants often dwarfs the support that social sector leaders, social entrepreneurs, and community-based advocates receive.

Frustrating. Galling. This is how some of the best social sector leaders I know describe the fact that funding to intermediaries and consultants often dwarfs the support they receive for their work on real issues on the front lines. I’m not talking a small differential—the disparity is large.

The problem

Here’s a fictitious example that illustrates the disparity, based on several true stories: A well-regarded international nonprofit uses mobile technology to educate youth and bring local populations into the global economy. Say it receives a $50,000 grant to execute its programs and open a new location in India. This is terrific. But then the same funder turns around and pays $500,000 to a fancy consultancy to assess the work of this nonprofit and a number of its peers, and write up a report to inform the foundation’s grantmaking strategy for this fast-paced, emerging field. The consultant has little experience at the nexus of new technology and developing markets, and no on-the-ground expertise. Therefore, she must lean heavily on the nonprofit’s knowledge, networks, and experience to gather information for the report.

In another instance, a consulting organization invited a well-known social entrepreneur to collaborate with a corporation in a “shared value” venture. The social entrepreneur was skeptical, concerned that it would take away valuable time from him and the entire organization. Eventually, he became convinced that the opportunity’s benefits would materialize quickly and agreed to the venture. As of today, the social entrepreneur has given his knowledge, time, and organizational resources to advance the project for 18 months, and there are no gains to speak of. The organization has not compensated him for his or his staff’s contribution to the “shared value” proposition. Meanwhile, the consultant is getting paid for every hour of work involved in brokering the project.

Does the tendency to compensate intermediaries more generously than the people actually doing the work bother you as much as it bothers me?

The rub

Social sector “doers”—nonprofit leaders, social entrepreneurs, and pioneering community workers—rarely get paid for the knowledge, referrals, and networks that they share with consultants who are tasked with assessing the field. Yet capturing and synthesizing this information for broader application is critical if we want to solve complex social and environmental challenges.

Consider the daily reality of these doers. Their time is scarce and overstretched as they work to tackle some of the world’s most persistent and troubling problems. But when a funder requests a report and sends in a consulting team, the doer must say “yes,” even though the conversations, meetings, and phone calls may pull a number of hours from the organization’s work to advance its mission.

The doer’s expertise, history, and relationships are huge assets that the market doesn’t adequately value. And this knowledge is often the crux of any “aha” offered by consultant reports. Without the rich and grounded contributions of those working on the front lines, reports tend to lack deep data, nuance, and meaningful insight.

Outsider value

The field has a legitimate desire and need for third-party perspective. Consultants and intermediaries can gather and aggregate data; they can offer neutral, objective perspective to form broad landscape analyses, which often shed light on upcoming trends that are hard to see when we look at things more narrowly. These contributions are valuable.

And there is also a desire among many organizations in the field who give away money to—intentionally or unintentionally—shift risk. They are looking for a stamp of approval that lends credibility to their funding decisions.

Where does the money trail lead?

The problem is not that we use and compensate consultants for the valuable work that they do, but rather that we fund one (the one who lies farther from the issues and the communities we seek to understand and serve) more than the other.

Why are we willing to pay one group of people to work with certain standards and not another? Especially when we are talking about funds coming from the same source, whether foundations, CSR initiatives, or public dollars allocated by government programs.

We ask social impact doers to move mountains with fewer resources. While they scrimp and stretch to address some of the most challenging dilemmas of our time—too often from cramped quarters and using outdated tools—intermediaries are paid plenty to travel business class, work from comfortable offices, and use the best technology to do work that is more straightforward—conducting interviews, aggregating and analyzing data, and writing reports.

And the money that consultants make doesn’t usually trickle down to the people and problems we care about. Their offices are rarely—if ever—in the communities where they are providing expertise and consultation, whether that is in East Palo Alto in the United States, Kibera in Kenya, or the favelas in Brazil.

What does the money trail tell us about priorities?

Time is money, for everyone. If we are willing to pay for the time of one group of people but not another, this reveals that we somehow feel more entitled to the time and knowledge of doers than we do of intermediaries. The money trail indicates a degree of distrust toward social innovation leaders. If we trust those with the most knowledge, why not give them the money and let them hire the people they believe will provide the most bang for the buck to aggregate knowledge about the field?

Undervalued assets

Here are some of the valuable assets that doers with first-hand experience contribute to our understanding of the field, often without acknowledgement or compensation:

  • Time is one commodity that applies 24/7 to everyone, and for doers, time devoted to an interview distracts from work toward the organization’s mission.
  • Knowledge built over time is an asset that outsiders cannot easily replicate.
  • Access to clients and customers is something that an intermediary cannot gain without a referral from a doer who has a solid reputation.
  • Trust makes it possible to have real conversations that get to the truth.
  • Networks of service providers, collaborators, and other players are important to understanding the landscape.
  • Experience of past successes and failures informs assessments and is essential to any well-informed recommendations about the field.

What’s the solution?

When we ask social sector leaders, social entrepreneurs, and community-based advocates for an interview or advice, we should understand that they are juggling many mission-critical priorities. And although they are working in sectors where the market does not adequately compensate them for the tremendous value they offer, we should pay them more than a penny for their thoughts. Their assets are scarce, often unique, and valuable. Paying intermediaries more than doers sucks time and resources from those closest to the people and issues we most care about. In the end, time is money for everyone. Let’s act on that as we invest in finding solutions to our pressing social problems.

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  • BY Daniel F. Bassill, D.H.L.

    ON September 9, 2013 01:18 PM

    Thanks for the article.  I’ve seen the same growth, not only in consultants but in people getting funded to do research and evaluation.  I wrote about this in a blog article in 2011.

    The Internet has changed the world in which we work in many ways. One of the most powerful is the ability to aggregate information related to social and environmental issues and to use maps to show where a problem is concentrated, as well as who is in those areas already working to solve the problem.

    While consultants and other intermediaries can still get paid to do what they do, perhaps we should evaluate them on how they use their own web sites to pull people “who can help” to “places where help is needed.”

    At the same time, if someone would be aggregating information related to this issue, and hosting forums where interested stakeholders might connect and share ideas, perhaps we could find new ways to drive operating resources directly to those in direct service so they have more talent to apply all the advise they get from consultants and researchers.

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