How to Start a Fundraising Consulting Business

Start a fundraising consulting business by following these 10 steps:

1. Plan your Fundraising Consulting Business
2. Form your Fundraising Consulting Business into a Legal Entity
3. Register your Fundraising Consulting Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Fundraising Consulting Business
6. Get the Necessary Permits & Licenses for your Fundraising Consulting Business
7. Get Fundraising Consulting Business Insurance
8. Define your Fundraising Consulting Business Brand
9. Create your Fundraising Consulting Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your fundraising consulting business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Fundraising Consulting Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

What are the costs involved in opening a fundraising consulting business?

The costs associated with opening a fundraising consultant business are minimal, for consulting doesn’t require specialized equipment. Business owners need marketing materials, a computer, a phone, and a mode of transportation. Most business owners already have what they need aside from the marketing materials.

What are the ongoing expenses for a fundraising consulting business?

There aren’t many ongoing expenses for a fundraising consultant business. The main costs include marketing and transportation expenses.

Who is the target market?

Fundraising consultants work for nonprofit organizations of all sizes and in all areas. After all, most nonprofits would benefit from raising more money.

How does a fundraising consulting business make money?

Fundraising consultant business owners make money by charging for the time they spend helping a nonprofit organization.

As consultants Linda Lysakowski and Mazarine Treyz explain, nonprofits will sometimes offer a percent of the total funds raised as compensation. Commission-based compensation structures should be avoided, however, because they’re considered unethical. When presented with such an offer, consultants should explain they charge for the time they work.

How much can you charge customers?

Fundraising consultants frequently charge by the day or hour. Consultant Tony Poderis reports that daily rates for experienced consultants range from $500 to $1,500-plus per 8-hour day. Hourly rates can run between $100 and $125 per hour.

How much profit can a fundraising consulting business make?

A fundraising consultant business can earn a significant annual revenue. Working only 1,200 billable hours each year, a consultant could earn $75,000 (based on a $500 per 8-hour day rate). Consultants who work more or charge over $500 per day can see six-figure annual incomes.

How can you make your business more profitable?

Some fundraising consultants expand their business by adding other nonprofit consulting services. For example, Campbell & Company also assists with executive searches, communications and strategic decisions.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your fundraising consulting business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a fundraising consulting business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Anyone who is passionate about serving the public good may enjoy running a fundraising consultant business. Though they are private business owners, consultants work closely with organizations that help others.

What happens during a typical day at a fundraising consulting business?

Fundraising consultants spend much of their time strategizing with leaders of nonprofit organizations. Depending on where in the consulting stage they are, a consultant might spend their day:

• Discussing an organization's challenges, needs, and past efforts with leaders
• Privately developing a strategy to address an organization’s challenges and needs
• Collaboratively reviewing and revising a strategy with leaders
• Implementing a strategy, which may include coaching or training an organization's members

Much of this work is done in meetings with either one person or a small group of people. In the final stages of the process, consultants might present strategies and ideas to larger groups.

What are some skills and experiences that will help you build a successful fundraising consulting business?

Because they will be helping others strategize and plan successful fundraising events, fundraising consultant business owners must be experts in the field of nonprofit fundraising.

When becoming an expert, there’s no substitute for real-life experience. Fundraising consultants should have years of experience working as a fundraiser for a nonprofit before striking out on their own. Having experience will give consultants credibility and help inform their strategies when working on challenging problems.

In addition to working as a fundraiser, business owners should also read extensively on the topic and attend training sessions led by others in the industry. Books, like The Generosity Network and Nonprofit Fundraising 101, explore relevant topics in depth. The Association of Fundraising Professionals has a number of events, webinars, conferences, courses, and other training opportunities that cover many different topics.

What is the growth potential for a fundraising consulting business?

Many fundraising consultants work only for themselves, but a few grow their businesses to include more people. Campbell & Company and Graham-Pelton are a couple larger businesses that have a few dozen consultants. Amy Eisenstein has a one-person business.