How to price consulting services is one of the top questions I hear from nonprofit consultants that I coach.
For many of us who come from prior salaried jobs in the nonprofit sector, charging what we’re worth can be hard. Let’s take a look at the most common pricing mistakes for nonprofit consultants and how you can overcome them.
Common Mistakes When Pricing Consulting Services
Here are the most common pricing challenges and mistakes I see among nonprofit consultants:
- Charging based on what you earned while working in the nonprofit sector, where salaries are notoriously low.
- Undervaluing your services and contributions—another trend in the nonprofit sector.
- Pricing consulting services based on what you think clients “can afford.”
- Pricing your services based on what the one other nonprofit consultant you know is charging (rather than your value, your business goals, etc.).
- Giving price discounts to clients before they even ask for them.
- Only using hourly pricing (even if you’re an expert in your field and highly efficient).
- Being afraid to raise your prices, especially with existing clients.
- Not presenting yourself as the expert you really are—and thus not charging at an “expert” level.
One of the LEAST common pricing mistakes that I see? Underpricing consulting services.
How to Price Your Consulting Services in 5 Steps
1) Read up on trends in nonprofit consulting rates
In our roundup of nonprofit consulting trends, we shared that, according to the 2024 Nonprofit Consultant Salary Survey Report, the average hourly rate for nonprofit consultants is just over $150.
Consultants with more nonprofit experience or specialized expertise charge quite a bit more. For example, consultants with 20+ years of nonprofit experience charge an average of $186/hr. Average annual revenue for nonprofit consultants is reported at roughly $100,000 (though some prior surveys have suggested average income closer to $200,000).
Keep in mind, though, these are averages. Your services may be appropriately priced at higher or even lower numbers depending on multiple factors, such as geography and the type of work you are doing. For an example of these nuances, Funding for Good has a deep dive article on how to price grant writing services, which we update regularly.
2) Use this simple formula to find your BASELINE consulting rate
Start by deciding how much you want or need to earn each year and how much time you want to spend doing so.
For example, one consultant I worked with in Nonprofit Consulting Boot Camp was crystal clear that she wanted to earn $80,000 by working no more than 15 client hours per week (not including admin or business development work). She also wanted to take at least a month off per year.
Here’s how we did the math together:
$80,000 annual income goal divided by 11 months = $7,272 per month. That’s how much our consultant needs to bring in during each month she works.
$7,272 in monthly income divided by 60 hours worked per month (15 per week) = $121. This is our consultant’s MINIMUM hourly rate that she needs to earn to hit her goals.
Now, eventually, she realized she should and could charge more. But this remains her baseline minimum.
One important note for once you determine your baseline consulting rate: Don’t offer pre-emptive discounts.
Many nonprofit consultants discount their services before a client even asks for it! Instead, quote your price and let the client decide if they can afford it. Yes, some clients may ask for a discount. But you can decide whether to offer that discount when they ask (not before!).
3) Explore alternatives to hourly billing
When you only bill clients by the hour, you open yourself up to a few challenges.
As you become faster and more efficient at providing a service, you will end up earning LESS over time. Hourly pricing (without the benefit of a retainer) also creates more income instability, as you never know how many hours a client will request or pay for in a given month. Plus, some clients may start to think of you more as a “staffer” rather than a consultant, and question how many hours you’re working and on what.
The top alternatives to hourly billing are project-based pricing and retainer pricing. We break down the differences in detail in our guide on how to determine grant writing fees.
4) Focus on your confidence
The more you see yourself as an expert who adds incredible value to your clients, the more likely you will be to price your services accordingly. Truly, one of the biggest changes I see in consultants I coach through Boot Camp is an increase in confidence.
For example, one consultant I coached had 20 years of nonprofit fundraising experience—and she started out pricing her services as if she had five years. This consultant had raised millions for nonprofits. She was fast and efficient. She really knew her stuff. But it didn’t translate into her rates until she started working with me as a coach. Today, she confidently quotes rates 50-60% higher than what she originally thought she was worth—and clients pay it without second-guessing.
Sometimes, we just need someone else to see us, recognize our value, and encourage us to own that value.
5) Refine, refine, refine
Pricing your services is not a one-time activity. Here at Funding for Good, we still revisit our services and pricing every year. We assess where we worked too much for too little (yes, it still happens sometimes), which services delivered the best and most reliable results for clients, and which services we enjoyed providing most. Because yes, one of the perks of being a consultant is the opportunity to focus on work that is most rewarding, meaningful, and financially sustainable.
If You’re Still Struggling with Pricing Your Services
Getting to the right price for services takes time—and often support. If you’re struggling with how to price your services (even after reading this article), that is okay. Funding for Good has a couple of ways we can help you:
We offer our signature 1:1 Business Coaching Boot Camp for Nonprofit Consultants, where we work with nonprofit consultants one-on-one over an intensive 60 days.
We also offer one-hour Consultations on Demand, which you can book at any time.
