Are you putting your nonprofit at risk by accepting free professional services?
Nonprofits do tremendous good, but they’re always pushed to do more with less. As a result, US nonprofits need billions of dollars of pro bono services every year.
If you are among that crowd, take precautions, because freebies and discounts on professional services pose real risk management issues. This post explains why – and what to do about it.
“Free lunch” can cause indigestion
The story is common. Jennifer is a partner in a law firm. She sits on the board of a local charity. The charity needs legal services. Jennifer volunteers the services of her firm.
This scenario can raise troubling concerns:
- Volunteer professionals delegate to subordinates. Jennifer may be busy with other projects. In fact, if she’s good at her job, Jennifer is probably quite busy. What are you going to do if she delegates the project to a junior lawyer at her firm – someone with no ties to your nonprofit and no expertise?
- Volunteer professionals may place pro bono services behind other – paying – projects. Professional rules and standards may prohibit or at least discourage such conduct, but anyone who knows the dynamics of firm practice knows that paying clients sometimes get priority. While you might be able to count on Jennifer, what about Jennifer’s subordinate? And how will you raise the issue with Jennifer if things get behind?
- Professionals may volunteer for projects that are outside their area of expertise. If Jennifer is a trial attorney, she may not be competent to draft or review contracts or evaluate your nonprofit’s labor and employment issues.
- The expertise dynamic may differ. Your nonprofit is skilled in its core areas of activity, but how do you know how to evaluate whether your pro bono counsel knows what she is doing?
- What’s your recourse? Without the policing power of a contract and payment, you might find your important work delayed or hindered because Jennifer cannot be bothered to perform the work. In extreme cases, malpractice or its equivalent may be available, but that causes additional headaches.
Although we use the example of legal services, horror stories abound about “free” or discounted financial and investment advice, website development, web hosting, IT services, marketing, and other services. One nonprofit I know waited for more than a year for a “free” website, then had to pay to get a different vendor to do it right after the free one turned out to be unusable.
Two rules of thumb for avoiding “free” stomach upset
These risks and the stories and scars behind them suggest two important rules of thumb:
> “Free” is rarely without costs. If a project is strategically or operationally important, pay for it. Use the market discipline of a contract.
> If you can’t afford to pay for critical services, consider whether you’re doing more than you should. If you’re stretched so thin that you have to rely on the kindness of others to perform mission-critical tasks, you’re in peril.
What to do if you still need to eat for free
What if you decide to go forward with a “free” offer of professional services? Use the following script, or even send this blog post to the potential volunteer:
“Jennifer, I know I’m asking a lot, and I wouldn’t ask you to help if I didn’t have confidence. But I also know that pro bono services can sometimes lead to rocky situations, and the work I’m asking you to do is important to us. So, let me ask these questions
- Has your firm performed these services before? If not, what resources will you draw on?
- Who in your firm will perform the work? Has that person done this work before?
- If you delegate the work, what quality control will be placed on the work process?
- What ensures that this project will receive the same attention as your paid work? (This is an awkward question, to be sure, but raising it at the outset may lead to a useful discussion about processes and expectations.)
- What are our agreed deadlines? (This obvious question is often unasked and unanswered in volunteer assignments.)
- How will we police those deadlines? (Setting out a timeline and a procedure for the client to enforce deadlines at the beginning – when everyone is focused and constructive – can prevent misunderstandings later on.)
- What if you mess up? (Another awkward question, but an important one.) How, in other words, can I make sure I get what was promised?
Discussions relating to these questions might be challenging. Raising them, however, is essential to effective nonprofit risk management when seeking free professional services.
If Jennifer can’t clarify these issues, that is a red flag.
One final important precaution: Build a risk management process
This last recommendation goes beyond the situation of “free” professional services, but it may be even more important. Because nonprofits have such a challenging business model, experts say that nonprofits should implement risk management processes. You can find out about that for free here, and for less than a bucket of chicken, you can take the first important step here. Don’t endanger your organization and your constituents. Take the first step now.
Oh, one final thing. We’re with you every step of the way.