The Consultant to Impact Investors

By Dave Bayless

Rosalie Cates advises philanthropic foundations engaged in impact investing. An independent consultant, she’s affiliated with The Giving Practice, a project of Philanthropy Northwest. I’ve been learning from Rosalie for more than 20 years. In our most recent conversation, she shared her thoughts on the centrality of mission and values, cultivating trust, and finding one’s niche as a consultant.

Praxis Personified

Rosalie Cates exemplifies praxis—the practical application of theory. A self-described, “get shit done person,” she’s prone to quoting the evolutionary economics theory of Eric Beinhocker. Rosalie has spent her career in community lending and impact investing guided by social missions. Nevertheless, she’s as hard-nosed a business person I’ve ever met. This combination of disciplined altruism and pragmatic theory gives Rosalie an illuminating perspective on consulting and business.

Mission and Trust

Whether for-profit or nonprofit, consultants are in the business of cultivating trust:

We’re trying to get people to try new things. That involves trust.

To that end, nonprofits may hold an edge. That’s because mission is central to a nonprofit.

Many for-profit businesses will take a day and figure out their values and mission, and then they go out and try to earn money again. But when you are a nonprofit, there’s just a consciousness about what’s our mission impact, and are we getting it done? What are our values, and are we true to our values?

Deviating from the status quo is scary.

We know that if a foundation is going to go out on a limb, the people who run it have to trust each other…What we have to do when we come in to work with [them] is build personal trust.

That’s true, too, in the for-profit sector. Recognizing that trust is required isn’t the same as effectively cultivating trust, though.

That’s not talking about your resume. That’s like talking about your experiences and what your own values are and what you care about before you’re going to sign on to a wacky proposition on the part of the foundation, let alone bring one up or try to draft it together.

Because mission is central to the nonprofit, the segue to talking about personal experiences and values is more natural than it might be in a for-profit setting. Nevertheless, it’s an essential step toward cultivating the trust that is essential to embracing change.

I feel like I’ve been lucky to work in an environment where we put values right out front. We talk to people about personal relationships, and then the work that we end up getting done…is made more efficient and actually of a better quality because we’ve built those trust relationships.

Finding Your Niche

Rosalie believes that to be successful as an independent consultant, one must shrink the pond.

You’re going to be more bespoke if you’re a small consultant, and you need to match up with the market that will pay for that, that really wants a bespoke thing.

Her own story made me think of something Professor of Consulting Joe O’Mahoney told me about common “deadly sins” of new consultancies.

Number two, I would say is, and this is with new consultancies, is taking the niche for granted —taking what you sell your services in to be determined by what you’ve done in the past.

At first, Rosalie took her niche for granted.

When I initially got done running a community development loan fund, I thought I would consult with other community development loan funds, because I knew a lot about it…Actually, that was not the best market in the world…They didn’t really have [budget] to pay consultants.

However, she didn’t have to look too far to find her market.

I knew a lot about community investing and that foundations wanted to be investors. So, the people that used to give me money turned out to be my clients…The old me wasn’t my client. It was the person that gave money to the old me.