Hiring a DEI Consultant? Here’s How to Avoid Exacerbating Inequity in the Process

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If you are a foundation that received three to five proposals in the process of hiring your diversity, equity and inclusion (DEI) consultant, you may have extracted upward of $25,000 to $30,000 of uncompensated — and largely unnecessary — work from BIPOC leaders you are seeking to support. 

Since 2020, we have seen a flood of open RFPs from philanthropic organizations soliciting BIPOC consultants to advance their DEI work. They see an open RFP process as more equitable, and requests are infused with language encouraging submissions from historically underestimated and marginalized groups.

In fact, when hiring a DEI consultant, the typical RFP process is both inefficient and exploitive. While BIPOC expertise can transform how a foundation integrates DEI, the open process hugely disadvantages emerging BIPOC firms, and actually perpetuates the inequities foundations are hiring the DEI consultant to help them address.

As professionals with deep experience in philanthropy, we propose an alternative — an approach that fairly compensates DEI consultants for their expertise, gets foundations a better consultant match, and requires less time from everyone. It is based on our experience on both ends of the process — as the foundation hiring managers and external consultants.

The current assumption, that time spent on a proposal is the consultant’s reasonable “cost of business,” is antithetical to DEI work. Missing from the conversation is the highly racialized nature of these processes. Foundation leaders tend to be predominantly older and white. 

The typical RFP process requires 20 to 40 hours of uncompensated consultant time. Through the oftentimes months-long process, foundations unintentionally (or intentionally) extract significant free consulting time from small firms. The meeting- and documentation-heavy process puts strains on small and independent businesses, which don’t have the junior support staff of larger groups such as Bridgespan and McKinsey. In an environment where DEI engagements are hugely under-resourced, most DEI consultants never recover the cost of RFP responses because the cost of delivery is so high, and margins are abysmally small.

Moreover, for DEI work, having a consultant develop a long, written plan is wasted energy. Such plans are usually radically adapted, or thrown out altogether, once the DEI consultant is onboard. That is because building an organization’s DEI capacity is an adaptive rather than a technical challenge. (For a short primer on adaptive versus technical challenges, see this piece.) There is no “standard solution.” Integrating DEI is a challenge that requires changes in values, beliefs, attitudes and approaches. It requires experimentation and for the group to learn their way together toward a solution. That means it is not possible to know in advance exactly how to reach your goals. A skilled DEI consultant will nimbly adapt their approach along the way, responding to your team’s reactions and real-time events.

How the typical RFP process is experienced by prospective DEI consultants 

The first hour. The process begins when a friendly email pops into the hello@ or info@ inbox; we know you’ve sent it to a dozen organizations. The RFP is both lofty and vague. Every organization wants to transform culture and build new policies and processes — in six months. Despite their lack of DEI expertise, they often dictate a scope of work that we know from experience will not help the organization achieve their DEI outcomes. Their proposed budget would cover only half of the time required. Sometimes, they don’t even provide a budget. “Just tell us what it would take,” they say. The proposal is due in a few weeks because they are “eager to get started.” 

Hours two–four. The exploratory client call, i.e., unpaid consulting. This often involves a mini-needs assessment and providing significant advice on a better way to structure the work. Why? Because in most instances, the people hiring DEI consultants don’t know the best practices and sequencing. Yes, that’s why they are hiring a consultant!

The next 5–15 hours. Depending on the depth of requirement, 10+ hours are spent mapping out the approach, team, timelines and more. Using a canned proposal template lowers the chance of winning, even though 70% of the time, we will radically adjust the timeline, approach and deliverables once we start the engagement and better understand the organization’s actual needs and capacity.

Hours participating in several rounds of interviews. The large, endowed foundation receives more free advice from the small consulting firm.

The free training. In many instances, the organization requests a sample training to get “a feel” for the consultant or firm’s style. It takes one or two hours to tailor basic training to the organization’s needs, not to mention time to deliver it.

The last 10–12 hours. After you’ve won. If, after nearly 20 to 25 hours of work, you win the contract, you spend an additional time revising the work plan and preparing documentation to meet the foundation’s very specific contracting requirements — all before a contract is signed. If the organization is a large, private foundation, expect to spend money on an attorney to ensure that intellectual property agreements and insurance requirements are fair to you.

At this point, the consultant has spent roughly $5,000 to $6,700 in uncompensated time on the process. Most DEI contracts range from $35,000 to $90,000, with the median right around $50,000 for a nine-month contract.

In the game of RFP roulette, you win less than 50% of the time.

And here’s a really egregious practice: After losing the contract, you sometimes learn through your network that the organization shared your creative ideas or training materials with the firm they did hire; it is often a larger firm with whom they had pre-existing relationships. The firm is often larger, white-dominant or white-led — because “it felt like a better culture fit” or “they would need less time to get up to speed.” In some cases, the organization that drew you into the long RFP process ghosts, never even offers a reply.

A better RFP process

In the corporate recruiting world, there is a growing conversation around the benefits of paying candidates to interview. A more equitable — and effective — process to hire a DEI consultant might look like this: 

1. Begin by developing a short statement explaining why improving your DEI capacity is important to achieving your organization’s mission and where you see your organization in a year. Before reaching out to any consultant, build consensus at the team or organization level about desired outcomes, timelines and budget. 

But please don’t outline how you think the work should be done. Ask the consultant to share ideas in a paid conversation. (See step 4.) Do be transparent about your budget. And start looking for where you can get more money because building your DEI capacity requires more of your time and money than you’ve probably budgeted for — really!

2. Invite a few firms on a needs assessment date with your team — and pick up the tab. The most important selection criterion is whether you and the DEI consultant can build a constructive relationship. That fit is best assessed through a working meeting than a written proposal.

Since you are issuing the invitation and receiving advice, offer a minimum flat fee or hourly rate to cover the consultant’s time. This fee recognizes that the consultant will invest three to four hours in meeting prep, running the meeting, and providing a brief follow-up memo with recommendations that will have value to you, even if you don’t hire them for a longer engagement.

To identify prospective dates, ask prospective consultants to provide a short statement of capabilities and general approach and examples of past client work. Assume you are getting the same material they share with all prospective clients.

3. Interview past clients from your top two choices. You’ll learn more about what it’s like to work with a consultant from past clients than a detailed, written proposal. Oh, and when you speak with past clients, use structured interview techniques to reduce bias in the process.

4. Co-develop the work plan AFTER you pick your consultant. Assume time to develop the work plan is covered in the contract, not before the contract starts. Keep the work plan flexible because DEI is an adaptive rather than a technical challenge. 

5. Pay 25 to 30% of the consulting fee upfront. Far too many organizations have net 60 and net 90 payment terms, i.e., payment is received 60 or 90 days after the work is done and an invoice is submitted, effectively paying the consultant a full quarter after they complete work. Advance pay provides a valuable cushion to smaller firms that run on tight margins.

The concept of hiring based on qualifications and paying consultants to develop the full work plan is relevant to hiring all kinds of consultants. It was recommended in the Calls to Action of the Funder and Evaluator Affinity Network.

Beyond fair pay for the tailored advice you receive, a compensated RFP process also benefits the foundation.

You’ll get high-quality proposals and spend less time on the process. Since the best individuals and firms are in high demand, they generally avoid RFPs that are unclear. Offering compensation for responding will vault you to the top of their prospect list.

The money you pay to the firms you don’t hire will strengthen the overall field of DEI consulting. If nothing else, consider it a small way to level the playing field for BIPOC firms.

Finally, this approach will kickstart your DEI capacity building sooner. It will force internal conversations and decisions that will start your journey during the selection process.

Aparna Rae is the Founder of Moving Beyond, a startup building solutions to solve complex DE&I and People challenges using real-time Employee Voice & Impact data, experiential e-learning and an innovative lab approach grounded in human-centered design. She has supported both philanthropic and private sector organizations.

Kendall Guthrie is an experienced philanthropy professional and veteran of dozens of RFP processes -- both as the foundation staff person hiring consultants and as the consultant being hired. She led one of the five actions teams for the Funder and Evaluator Affinity Network. She is an occasional partner with Moving Beyond.