Whereas the benefits to being on staff at a nonprofit are many (regular paycheck, health insurance, etc.), there are some disadvantages too. Office politics, demanding bosses, and a lack of control over your time are a few reasons some individuals start thinking about packing up, jumping ship, and going into consulting. If you’re considering taking your grants skills and becoming a consultant for one or several clients, be sure you take into account all the factors — the Pros AND the Cons — before you make that leap. It’s an individual decision, and it takes a certain amount of courage to make it happen. In the last installment of this 2-part blog series, I went over some of the Pros of going into consulting. In this segment, I will consider some of the bigger buckets of Cons, and my take and experience with each.
Some Challenges of being a Grant Consultant
There are some downsides…
Many people tell me they don’t have the “sales” personality to make a go of it as a consultant; I disagree that that is a crucial ingredient for success. You may think being quiet and reserved means you’d be better off in an office job. That doesn’t necessarily mean consulting needs to be off the table as a career move. I have known plenty of consultants with star power who are introverted and shy. Don’t let keep you from thinking about consulting! There are other issues in the “Cons” column to consider beyond personality type though:
Irregular income:
- Your income can swing widely as a consultant. From one year to the next, and especially from one month to the next. When one big check comes in, it’s best to not blow it in a shopping spree, but squirrel it away for those lean times. During pandemic, my usually light August was jammed with work! Now that I have mainly local arts and culture clients, my first quarter is one of my busiest, but then work dries up in Q3 and Q4. I have a very uneven year and I have to plan.
- You also may not know when your clients will pay. Even with a “Net 30” clause in their contract, I’ve had clients whose checks don’t arrive for 35 days. If you’re living hand-to-mouth, that’s going to be difficult. You need enough of a slush fund so that you can be covered when your check gets “lost in the mail,” or is delayed for any reason.
- Sometimes you may not know IF your clients will pay. If I’ve agreed to work with someone I don’t know, I set up a “pay as you go” fee structure, where I work only if there’s money in their “account.” They pay in advance, in other words. That has helped keep me from getting stiffed. These are lessons you learn over time!
No pay for office support activities:
- When your laptop is on the fritz, or you have to go to Staples for ink, to the post office to check your P.O. box, or to the bank to deposit a large check, none of that is billable. The time you spend doing your taxes, drafting proposals or contracts, reconciling your timesheets and receipts, getting business cards printed, blogging (hello!), designing your website, posting on social media — none of that is billable. It eats up many hours of my week.
You pay for all equipment, etc.:
- Your laptop (and any repairs), all hardware, software and any upgrades, all office supplies, subscriptions, the fee for your P.O. box, your EIN registration, your business’ bank fees, your business cards, your headshot, your web designer, memberships, gas to travel to clients, … the list goes on. I pay over $1500 for my Foundation Directory subscription, and several hundred dollars for the every-3-years’ maintenance of my GPC and CFRE credentials (which unfortunately time out in the same year, ugh!), monthly to attend my AFP meetings, and I also donate to several foundations monthly. It adds up.
Home space for office:
- If you work solo or are just starting out, you will need to dedicate a space in your home that can be:
- private (for Zoom meetings or client calls),
- quiet (so you can concentrate and work), and
- set aside (to keep your work from impinging on your private life).
I work from home and fortunately have a spare room that serves the purpose well. Everything is within arms’ reach. If I had to work from my dining room or kitchen table, I would constantly have to look at the mess and never get a chance to take my mind off the work. Then I would have to “move out” when people come over. What a pain.
- If your home can’t accommodate a space, preferably with a door (extra bedroom, basement, attic), then some take advantage of the co-working spaces that have sprung up. Rents can vary according to amenities, square footage, and your part of the country.
You pay your own taxes, insurance:
- You pay for your own health insurance, which can be really expensive. Either individual or family coverage and deductibles can vary depending on age and health problems. I have used the Affordable Care Act’s insurance (also called the Marketplace), but it’s not always what I would call “affordable, and is still a hit every month.
- You also should have business liability insurance. Again, rates vary. Discuss adding this type of insurance to your existing auto and/or homeowners’ insurance. My policy is about a dollar a day. It’s insurance, and if and when you need it, you’ll be glad you have it.
- You should make an estimated tax payment quarterly, since none are being taken out of your clients’ fees. It’s in your better interest if you can estimate your income, since otherwise you will have a huge tax bill on April 15. Your income can fluctuate, so you can best estimate each quarter by asking an accountant how to calculate your expenses vs. income. Overpaying is like loaning the government money and getting nothing for it.
These are just a few bigger considerations you need to weigh before deciding if consulting is right for you. Your personal life, your schedule demands outside work, your ability to concentrate and avoid distractions, your ability to stomach the workflow’s ebb and flow — and subsequent income ups and downs — are among the factors you should consider before striking out on your own. 
If I had it to do over, would I have stayed in a full-time role at a nonprofit? For me, the lifestyle consulting affords me has been the right move for me. What will you decide? Stay, or go?
