Fiscal Sponsor Organizations

Hey, Lucy! In my experience, some fiscal sponsors have formal Procurement Policies which may indicate a different level of due diligence depending on the cost, and others may have a more informal process where the team flags certain contracts depending on cost/type of work in relation to cost/etc . We don’t currently have a formal policy at my current FS, but my previous FS had three levels: Micro-purchases (at the time, this was defined as $3,500), Small purchases (a the time, this was defined as between $3,500-150,000), and Large purchases (at the time, this was defined as anything over $150,000). For Large purchases, projects did have to conduct a bid process and present the bids to the FS. (Important consideration: the project didn’t necessarily have to choose the least expensive bid. They just had to be able to explain why/how they made their selection.

Hi @Lucy Kennedy-Wong, she/her - great question (and definitely appreciate the response, @Stef Flores!).

Just to be clear, it sounds like your question is more about rates for independent contractors (as in, the rates/amounts at which your projects pay individuals) - is that right?

And are these long-term contractors (ie. That are acting as de facto staff), or more project-based folks?

Appreciate @Stef Flores’ response! That’s definitely a helpful way to think of this question generally, though wild to think of a $100k purchase as small :p.

To answer you Andrew, yes, I’m mostly thinking about rates for independent contractors. Some of them are long term (social media/media person, etc.) and some of them are more project based (lobbyist). We have a policy for employees, so that makes it easier to properly fit people within a range, but I want to create more guidance for ICs.

Right, @Lucy Kennedy-Wong, she/her? It’s a dreamy budget for many projects.

I think this could be the end of day fog hanging over me, but what am I missing here (@Andrew Schulman you too!)? The Procurement Policy I noted was also for services…so when a project was hiring and paying an IC (for SM, fundraising, program development, etc.)

Are you looking for guidance on how you can help projects ok/approve a rate proposed by an IC?

Yeah, I definitely could have been clearer

Since Lucy has mentioned salaries/staff, I was thinking this was more about how does an org evaluate rates requested by contractors to ensure they are reasonable. Is that closer to what you’re asking, @Lucy Kennedy-Wong, she/her?

As in, if one project is hiring a social media person who charges $50/hr and another wants to hire someone for the same job who charges $500/hr, is there any way for the sponsor to participate in/help the project evaluate those rates?

If that is what you’re looking for, Lucy, it’s a great question and one that I’m not sure that I’ve heard other sponsors asking about. @Stef Flores - does SocialGood have any policies or guidelines around rates/costs for contractors?

Yes, @Andrew Schulman is picking up what I’m putting down. I’m thinking about a way to help projects evaluate whether an IC rate is reasonable, like what steps they should take before proposing/accepting a rate.

@Stef Flores, it sounds like you basically make projects create an RFP for any work over $150k, but for smaller contracts there is theoretically less of a fear that pay could be considered unreasonable?

Sorry for the much delayed response on this @Lucy Kennedy-Wong, she/her@Lucy Kennedy-Wong, she/her! Not sure if this is still an open question, but if it is, I’d say you, as the FSO, could put in a light process where you review IC rates before the contract is signed (assuming you’re already involved in the process of contract review and vendor payment for your Model A projects) just to give the project a heads-up if something seems really out of whack.

I’m not sure there’s a way to come up with guidelines since there are so many different types of ICs/Vendors and sometimes there’s really good reason for the rate of one to be 5x or 10x the rate of another, but you could create a list/database of ICs (for internal use) that your projects have used along with the type of work and their rates — then if something comes across your desk that catches your eye (for the wrong reasons) you could look at your list and see if it is really an outlier and let the project know that the going rate for similar contractors (used by your other projects) is $[RATE].

They might still move forward but at least you’ve provided some reasonable market data…

Thanks @Andrew Schulman! I like this idea. I’m thinking about what I’d do if a project chose a contractor that I think had an excessive rate…is there less of a concern of paying independent contractors a reasonable rate? Maybe my concerns are overblown?

@Lucy Kennedy-Wong, she/her technically, you have the ability to stop them from going with a certain contractor, but I doubt it’s something you’d invoke unless there was a real issue. You are the stewards of the funds.

My feeling is this: if the project can justify it in some way that seems reasonable, it’s ok. So maybe that’s policy - if they are going to go with someone whose rate is an outlier (as determined by the fiscal sponsor), then they need to provide a compelling reason for that.

@Andrew Schulman yeah. Appreciate your help in thinking this through! I was just commenting to someone today that a big reason why I am able to do my work is because of all the support and resources I’ve gained from this fiscal sponsor ecosystem. And you are a big part of that

Swinging back after weeks ! Apologies for letting this roll out of my frame for a hot minute.

Yeah, we don’t have any guidelines on this, specifically, for the reasons Andrew highlighted above. If the project has the funds, and the comp seems reasonable, it’s good on our end. However, we’ll occasionally flag rates that feel high and check in with the project.