The Benefits of Budget Transparency in RFPs
In recent years, the museum field, like much of the nonprofit world, has faced a reckoning when it comes to salary transparency and equity, sparking change across the industry. Slowly but surely, advocacy around this issue has led to a push for salary transparency, and now the American Alliance of Museums (AAM) requires museums to include salary ranges for every job posted on their JobHQ board, all in an effort to promote more equitable hiring practices.
The Request for Proposal (RFP) is another hiring/compensation practice that could benefit from the same kind of transparency as salaries. RFPs are a standard hiring practice in the world of museum consultants. RFPs are a way for organizations to solicit bids from vendors for products or services. In many ways, RFPs are the most efficient and fair way to solicit services. When well written, RFPs clearly articulate what the organization needs and why. This means that all service providers who respond are operating with the same information, which makes it more likely that their proposals and bids are comparable.
However, there is one critical way the RFP process can be inefficient and inequitable: most (though not all) RFPs do not provide a budget amount or range.
I assume the rationale for hiring organizations to leave the budget out is that they believe it will help them to avoid price gouging and ultimately get them the best value for their money. But the pain of budget omission can be felt immediately by any consultant writing a proposal. From where I sit as the owner of a small museum consulting firm who regularly responds to RFPs, not knowing the budget puts me in a precarious position of guesswork and can lead me to spend a lot of time on something that may never have been a good fit to begin with.
Like salary transparency, budget transparency has a number of advantages.
Including the budget in an RFP makes it possible for consultants to judge whether there is alignment between themselves and the hiring organization. This, in turn, helps the consultant decide whether it’s worth putting in the time and effort to develop a proposal or whether it is better to decline.
Budget transparency makes the competitive process more fair. It creates an even playing field for service providers bidding against one another because they are all operating with the same information regarding costs.
Knowing the budget allows consultants to build out a proposal that is appropriate within the amount of money available, giving the hiring organization maximum value for the budget they have.
Transparency reduces tension and increases trust and understanding, which leads to a solid foundation upon which a hiring organization and a consultant can begin a new relationship.
I truly believe that the years of withholding information about money in the hiring process are coming to an end. We’ve seen significant changes over the past few years as an increasing number of states have passed, or are considering passing, salary range transparency laws. It only makes sense that with salary transparency should come budget transparency in RFPs. All of this will lead to more equitable compensation practices generally.
