Six steps to getting the process right
1. Put someone in charge
Appoint one person to oversee the development of the RFP. This individual should be knowledgeable about your organization, its mission, and the relationship between the organization and the investment assets.
The appointed individual will need to be able to devote sufficient time to the project (a rough guideline might be 20 to 30 hours). He or she should work collaboratively with a small multidisciplinary committee, including representatives from the finance, human resources, communications, donor development and other areas, as applicable, to support these efforts.
2. Be specific
One of the most important goals for the RFP document should be to express in specific terms what your organization is — and is not — looking for. If you use an existing RFP template, make the necessary changes so that the form reflects your organization’s goals and objectives; otherwise, you may receive responses that lack the information necessary to make an informed decision. It may be helpful to provide candidate firms with a sample asset allocation to ensure that you’ll be able to objectively compare returns and cost estimates. Firms should also be instructed to specify whether the returns presented include fees, are hypothetical, are based on a representative client or are composites that include multiple accounts.
3. Decide on weighting factors early
What matters more to your organization? What matters less? Are investment services more important than administrative services, or are they equally important? Does your organization place a high value on a firm’s ability to provide strategic consulting services in addition to investment management? Make your priorities clear to the candidate firms. Describe which service aspects are most important to your organization so that they may provide in-depth responses in those areas.
4. Consider a face-to-face meeting
Apart from objective factors, considerations such as “fit” — the comfort level that you have on a personal basis with your provider — can play an important role in your final decision. To determine comfort level, organizations typically require an in-person interview (often referred to as a “finals presentation”) to be delivered by the top three prospective providers.
5. Spell out schedules and expectations
Make sure to clearly state the timeline for proposal submission, evaluation, presentations and decision-making.
6. Allow sufficient time
Give the respondents at least three to four full weeks after receiving the RFP document to respond to your questions. It may also be useful to build in a period during which you’ll take questions from respondents before they submit their proposals. Finally, it’s essential that you leave sufficient time for your RFP committee to deliberate so it isn’t rushed during the important evaluation stage.