How Do You Spend Money?
Independent Consultant Business Expense Report
I'm excited to share the results of our Independent Consultant Business Expense Survey with you today. We've all asked ourselves the same questions: Which tools are actually worth the money? What expenses deliver real ROI? Am I spending too much (or too little) compared to others at my level?
What makes this data particularly valuable is that it comes directly from all of us, real consultants doing real work in the social impact space. I found it fascinating to see how consultants at different stages prioritize their spending. For example, productivity tools consistently get high value ratings across all experience levels, while face-to-face relationship building often provides the highest ROI for established consultants.
As I reviewed the results, I was struck by how thoughtfully many of you approach your business expenses. We’re all balancing careful spending with strategic investments that directly enhance our capacity to deliver great work.
I hope you'll find these insights helpful for your own practice. If you want to contribute to the survey (we’ll do an updated version in the future), you can here. And please reach out if you have questions or want to chat about specific findings. I'd love to continue the conversation.
Thanks for being part of this community. I'm grateful we get to figure out this independent consulting journey together. (Check out other community resources at the bottom.)
This is a free resource! Please share it!
Executive Summary
Based on our survey of independent consultants in the social impact sector, this report provides benchmarks, trends, and actionable insights on business expenses.
Key findings include:
Most consultants operate with lean expense structures, prioritizing tools that directly support client work
Productivity tools show the highest perceived value ratings
Significant disparities exist between newer and established consultants in marketing and professional development investments
Many consultants identify face-to-face interactions (events, meals with prospects) as their highest ROI activities
Methodology
This report analyzes data from a survey of independent consultants working primarily in the social impact sector. Respondents represent a range of experience levels (from just starting out to over 10+ years) and revenue brackets (under $50,000 to over $150,000 annually). The survey examined spending patterns across major expense categories, perceived value of different investments, and strategic expense management approaches.
Revenue and Experience Distribution
Our survey respondents represented a diverse cross-section of independent consultants:
Experience levels
Annual revenue
Service focus: We had a wide range of specialties, with Strategic planning, Marketing/Communications, and Fundraising/Development the most represented, with survey respondents also covered Coaching/Staff development, Talent/HR, Technology/Digital, Financial management, and Policy/Advocacy
Expense Benchmarks by Category
Average spend for each expense benchmark, and average value rating *for those who spent money on the item.*
Conferences and Events
Annual spending range: Most consultants (64%) reported spending nothing on conferences, while 27% spent $1,500+ annually. Those who did invest in conferences mentioned specific events like Netroots, ComNet, and the Nonprofit Technology Conference as valuable for business development.
Average value rating:
1.6 as participant
2.7 as speaker/presenter
Industry insight: Conferences appear most valuable for consultants with established practices seeking expansion opportunities rather than those in startup phase.
Top Conference: Netroots
Marketing and Advertising
Annual spending range: Marketing investments varied widely, with 30% spending nothing, 40% spending under $500, and 30% spending over $1,500 annually. Higher-revenue consultants ($150,000+) generally invested more in marketing, particularly marketing expenses focused on growth. Websites were mentioned by multiple respondents as their primary marketing vehicle, providing basic validation for their business rather than lead generation.
Average value rating: 2.3
Industry insight: The most effective marketing channels reported were:
Personal website
LinkedIn
Industry-Specific Tools and Databases
Annual spending range: Half of consultants reported no spending on industry-specific tools, while 30% spent under $500 annually. Fundraising consultants reported the highest spending and derived the most value from tools like Instrumentl and Kindsight. Other commonly mentioned tools included LinkedIn Premium, Guidestar, Adobe Creative Cloud, and journalism databases.
Average value rating: 1.8
Industry insight: Canva got the most shout-outs overall!
Productivity Tools
Annual spending range: Productivity tools received the highest value ratings across all expense categories. 60% of consultants invested in productivity tools, with ChatGPT, Chorus AI, and project management tools (Monday, Smartsheet, Trello) most frequently mentioned. Consultants consistently identified these tools as among the last items they would cut from their budgets if necessary.
Average value rating: 3.2 (highest among all categories)
Industry insight: AI tools like ChatGPT and Chorus AI are becoming essential infrastructure for independent consultants, offering outsized ROI for relatively modest investments. Trello also got a lot of love.
Professional Development
Annual spending range: Only 30% of consultants reported investing in courses or training programs. The highest investment ($1,500-$5,000) came from a consultant making over $150,000 annually who invested in professional coaching. Several consultants mentioned wanting to invest in professional development but cited cost and time commitment as barriers.
Average value rating: 1.4
Industry insight: Consultants often state they want more of this, but most don’t invest in it.
Client Acquisition and Retention
Annual spending range: Most consultants (70%) spent nothing on dedicated client acquisition tools or activities. Those who did invest mentioned client meals, travel for face-to-face meetings, and client gifts as their primary expenses in this category. Despite moderate spending, consultants who invested in relationship-building activities often cited these as providing their highest ROI.
Average value rating: 1.6
Industry insight: This is an under-developed area for most consultants. We lack sophisticated techniques and playbooks for driving client acquisition and retention.
Administrative and Operating Expenses
Insurance costs: Typically under $1,000 annually (80% of respondents)
Accounting/bookkeeping: $500-$1,000+ annually (60% of respondents)
Legal services: Under $2,500 annually (all respondents)
Additional expense categories mentioned by consultants included:
Subcontractors/freelancers (up to tens of thousands annually)
Office rent/coworking space
Equipment and supplies
Bookkeeping software (QuickBooks)
Strategic Expense Management Insights
Highest ROI Investments
When asked about their highest ROI investments, consultants consistently mentioned:
Face-to-face relationship building: Event marketing, prospect meals, and travel to meet clients
Productivity tools: Basic software that improves efficiency (Office, Adobe, ChatGPT, Chorus AI)
Subcontractors/freelancers: Enabling capacity expansion
First Items to Cut When Budgeting
Consultants identified these expenses as first to cut when facing budget constraints:
Office rent and physical space
Professional association memberships
Subscription services with low utilization
Last Items to Cut When Budgeting
Conversely, these expenses were identified as most essential to maintain:
Tax preparation and financial services
Core productivity tools (Microsoft Office, Adobe, AI assistants)
Website and digital presence
Investments Under Consideration
Consultants reported considering but not yet committing to these investments:
Professional development courses
Marketing beyond basic website
Conference attendance
Time commitment and uncertain ROI were cited as the primary barriers to making these investments.
Key Insights by Consultant Experience Level
Early-Stage Consultants (Under 3 Years)
Spending pattern: Minimal expense structure, focused on essential tools
Highest value investments: Productivity tools
Areas of underinvestment: Marketing, client acquisition, conferences
Early-stage consultants typically operate with lean budgets, focusing primarily on tools that directly support client work. Many report hesitancy about investing in growth-oriented activities like marketing or conferences due to uncertainty about returns. Professional coaching stands out as a high-value investment for those who can afford it.
Established Consultants (4-10 Years)
Spending pattern: Moderate investment across categories, strategic focus on growth
Highest value investments: Client relationship activities, productivity tools, strategic marketing
Areas of focused investment: Face-to-face relationship building, event hosting/participation
Mid-career consultants show more strategic expense patterns, focusing investments on areas that directly support client acquisition and retention. Many report shifting from passive marketing (websites) to active relationship building (hosting events, strategic partnerships).
Veteran Consultants (10+ Years)
Spending pattern: Substantial investment in growth and leverage
Highest value investments: Subcontractors, industry-specific tools, conferences
Areas of emphasis: Capacity expansion, efficiency optimization
Veteran consultants with higher revenues show greater willingness to invest in infrastructure that enables business scaling, particularly through subcontractors and specialized tools. They also demonstrate greater comfort with larger investments in relationship-building activities.
Recommendations for Optimizing Business Expenses
Based on our analysis, we recommend the following strategies for independent consultants seeking to optimize their business expenses:
For Early-Stage Consultants
Prioritize investments in productivity tools with clear ROI, particularly AI and project management tools
Consider professional coaching as a potential high-value investment, even at lower revenue levels
Focus marketing efforts on low-cost, high-touch activities rather than passive channels
Carefully evaluate conference opportunities, prioritizing speaking engagements over attendance
For Established Consultants
Increase investment in face-to-face relationship building activities
Consider hosting proprietary events as an alternative to conference attendance
Evaluate industry-specific tools that could enhance service delivery and client outcomes
Begin exploring subcontractor relationships to expand capacity
For All Consultants
Regularly review subscription services for utilization and value
Consider converting monthly subscriptions to annual plans for cost savings
Prioritize investments that directly impact client work or acquisition
Maintain adequate financial and legal infrastructure (accounting, insurance) while seeking cost efficiencies
Other Community Resources
Rate Report: a survey about prices, fees, and payment terms
Tech Stack: recommendations for all of the key software independent consultants to the social impact space need
Time & Resources: a survey about how independent consultants spend their time and resources, and the challenges to getting things done