Wealth Insights

Comprehensive Guide to Nonprofit RFPs

An in-depth guide on how to write an effective request for proposal, plus nonprofit RFP process best practices.

Key takeaways for nonprofit leaders:

1. Ensure your goals and needs are clearly defined.
2. Avoid overreliance on RFP templates.
3. Consider what qualifications are most valuable.
4. Establish clear, concise evaluation criteria.
5. Focus on quality over quantity.

Leading a nonprofit comes with unique challenges. How do you communicate your passion to inspire and engage potential donors? How do you best manage the grants and programs that ensure your cause is served on a daily basis? How can you grow your nonprofit’s endowment fund to ensure your mission has support for the long-term?

To answer these questions and meet needs that can’t be met internally, many nonprofits turn to outside consultants and vendors. And in order to find the right consultants and vendors, many develop a request for proposal — commonly referred to as an RFP.

What is the Purpose of an RFP?

RFPs can be used to find vendors and consultants with specialized skills to help support your nonprofit’s programs, such as finding the right investment advisor to help manage your endowment, for example. The process also applies to finding providers for marketing, public relations, CPA services, event support, and so on.

According to Kevin Phillips, a senior vice president at Regions Bank with 20-plus years of experience working exclusively with nonprofits, many nonprofits have bylaws that require them to solicit RFPs.

However, even if your bylaws don’t require an RFP, it’s still a smart idea to consider creating one. “It’s a great way to set the stage for nonprofits,” he explains.

The Benefits of an RFP

For nonprofits, the RFP process offers one very significant benefit: information. The process can streamline and simplify the process of comparing experience, features, offerings, and price across potential vendors.

“A well-written RFP makes everyone’s life a lot easier,” says Robin Brown, Regions’ Director of Asset Management Strategy and Operations.

Even a nonprofit that is satisfied with its current providers can find valuable answers and new ideas via RFP that wouldn’t come up through other means, such as insight into new products, services, and technologies.

“Everyone expects their current provider is keeping them abreast, but sometimes you do need to issue the RFP to find out if another provider is offering services you hadn’t even heard about,” she explains.

Phillips echoes this sentiment, noting that the RFP process can be a useful tool to help you get a better sense of the current landscape. “When you reach out to a targeted group of providers, you get a well-rounded sample,” he notes.

Writing a Nonprofit RFP: Best Practices

When managed correctly, your RFP should help take pressure off your organization’s internal staff and board members by streamlining what can otherwise be an arduous process.

“Putting together a well-written, clear RFP is essential to future success,” Brown says. “It’s how you determine what program or purpose the search is for. It’s how you determine who is invited to participate, and who comes to the final presentation.”

The following steps can help you write an RFP that achieves your goals.

1. Clearly define your goals

Before putting anything on paper, start by defining your needs or goals in a clear and concise manner. This definition will drive every other part of the process, from the questions you ask to the types of firms you seek.

2. Review RFP examples

As an early step, Brown also recommends reviewing RFP examples, either from board members who are willing to share them from their own work, from existing partners, or even past examples the organization has created.

3. Forgo the use of templates

While there are a wide range of free RFP templates available online, Brown notes that templates are unlikely to address your nonprofit’s specific needs or drill down to the questions you need to ask potential consultants or vendors.

“Too often we see what looks like boilerplate templates,” she says. “Think about what’s unique to you instead.”

4. Consider your organization’s unique needs

Most RFPs include a minimum qualifications section for potential vendors and consultants. “When used correctly, this can make a big difference,” Brown says.

When building out this section, think carefully about what qualifications match your very specific needs. This is perhaps one of the most important factors to consider when creating a request for proposal for your nonprofit, as you’ll want to ensure you apply that information to each element of the RFP.

5. Tell your story

Use the organizational overview section of your RFP to tell your story. While your summary should be succinct, it should also be honest and thorough. The better a responder knows your organization and its mission, the more thorough and on-target the response will be.

6. Outline project requirements or scope

Provide as much detail as you can on what you anticipate the project requirements or scope of services will be. This is a crucial step, as giving respondents a solid sense of your needs will help potential firms determine whether they are, in fact, a good fit for the project. When outlining the project requirements, leave room for creative solutions and ideas you have not considered.

7. Establish evaluation criteria

Work with your team and board members to establish evaluation criteria. This list of criteria should be developed in a manner that will enable you to seamlessly review and compare the submissions you’ll receive.

“Organizations will grade RFPs and have a scoring system,” explains Phillips. “They might see five or 10 of them weeks apart, so you need a system to make sure the comparison is apples to apples.”

8. Provide clear follow-up instructions

Apply the same level of detail and clarity to your delivery and follow-up directions, too. Do you want to see work samples or data from a potential consultant, for example? Then make it clear what type and how much.

“Make sure you set limits on what you want in each proposal, and your directions are clear,” Brown says. “Otherwise, you end up looking through a lot of annual reports.”

In Episode 26 of Regions Wealth Podcast, Chief Investment Officer Alan McKnight touches on the factors nonprofit leaders should consider when choosing an advisor to manage their endowment fund.

Finding a Pool of Potential Partners

Beyond clear, concise writing, the best way to ensure you find the right partner through the RFP process is to start with a strong set of contenders. So how do you find them?

“Start by asking who has a specialty practice in this area,” Phillips says. “Leverage your board’s expertise. Do your due diligence, and research your potentials rather than just putting out a public request.”

On the one hand, the RFP process is designed in part to level the playing field and make sure you find the best partner regardless of past relationships. On the other, past relationships — through the board, through your network, or through other pipelines — can still be a valuable tool in establishing a pool of candidates.

“A broad search may lead to a respondent pool that’s a little less tailored to your needs,” notes Brown.

Both Brown and Phillips agree there’s no magic number for a starting round of contenders, although some organizational bylaws have minimum requirements. Some organizations start with eight to ten respondents and whittle it down to two to three finalists for in-person or virtual presentations. Others start with a smaller pool of contenders to make the process a bit more manageable.

Evaluating Your Contenders

Both Brown and Phillips agree: It’s important to focus on quality, not quantity. Your final pool of contenders should make sense and be appropriately targeted.

“If you’re a nonprofit, you may specifically want to look at groups that manage nonprofits,” Phillips says. “They’ll know best practices. You’re looking for a specialist, not a generalist.”

Once you’ve identified your pool of contenders, make sure they have an opportunity to ask questions. Again, the more clarity they have, the better the responses will be. This can apply to everything from their “provider type” description to the way they determine and outline their fees. The latter in particular comes with a lot of variation, so establishing a dialogue and ensuring transparency — and something approximating an “apples to apples” comparison — is key.

Finally, leave room for potential consultants and vendors to exceed your expectations.

“Being a good advisor is more than delivering a statement,” Phillips says. “It’s having important conversations with organizational staff. It’s assisting with donor conversations. It’s asking, ‘Is there some sort of underlying reporting that will take some of the burden off staff?’ It should really be about a whole package. When an RFP is done right, it reveals the organization that can provide even more than you need.”

Looking for additional guidance? Learn more about Regions’ nonprofits, endowments, and foundations capabilities.