How Much Pro Bono Work Is Too Much?

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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Maybe you went into business for yourself because you had a million-dollar idea. Or you wanted to set your own hours. Or you wanted to exercise your right to turn away clients who wouldn't recognize integrity if it slapped them upside the head.

Whatever your MO for going solo, you probably hoped to make that proverbial difference in the world, no matter how small. Chances are, though, your desire to pay it forward has led you to bite off more pro bono work than you can chew somewhere along the way.

Get in over your head with non-paying clients and, at best, your schedule and quarterly earnings take a beating. At worst, you realize you're dealing with an ungrateful, opportunistic customer, at which point resentments flare, fur flies, and bridges burn.

So how much pro bono work should you accept? How should you choose which customers to donate your services? And most important, how do you ensure these friendly freebies don't land you in the scope creep sinkhole?

Set Firm Freebie Limits

For the sake of argument, let's assume you have a strong grasp on how much billable work you need to bring in to meet your monthly nut and your desired profit margin. (If not, get out your financial records and get yourself to the nearest hourly rate calculator, gross profit margin ratio calculator, or cash flow worksheet.)

No one knows your monthly availability, overhead, and profit margin as well as you. That's why only you can determine how many freebies you can comfortably fit in each month (or quarter, or year) without sacrificing revenue and sanity.

For Monique Tatum, owner of Beautiful Planning Marketing Group, a seven-employee communications firm based in New York City, that pro bono sweet spot is 15 hours a month. But rather than put her senior people on the case, she has her interns do the bulk of those donated weekly hours.

It's good training," Tatum says. "So it isn't a waste of billable time at all. We kill two birds with one stone.

Things get squishier, however, when you're a business of one. You may think, "For a good cause, I can probably spare five percent of my billable time." But do the math first. If you're billing clients for 35 hours of work each week, 5 percent of that is 1.75 hours a week, or 84 hours a year (assuming you take four weeks of time off a year). If you regularly bill clients at $150 an hour, that's $12,600 of billable hours donated, which you may or may not be able to afford. (Contrary to popular belief, services donated are not tax deductible in the United States, though the expenses you incur doing the work are.)

Rather than try to maintain ongoing pro bono projects throughout the year, many businesses of one will allot a day or so every three to six months for such freebies — just enough time to design a postcard, create a quick social media strategy, or prepare and deliver an hour-long speech.

Choose Donees Wisely

Sure, you'll want to vet the mission of a possible pro bono client and the type of work they need help with. But those aren't the only considerations. Equally important are the timeline, project scope, and professionalism of the organization.

To better assess requests for bono help — and to make saying no easier — some business owners require freebie-seekers to fill out an online application. After years of taking on pro bono projects "in a random manner," Trevor Yager recently went this route, enlisting his six employees to help evaluate pro bono requests.

Every staff member was asked to rank the requests on a scale of 1 to 5, with 1 being 'I don't want to work on this project' and 5 being 'I definitely want to work with them.'

We took into account the scope of work, personal passion toward the organization, future opportunities for additional work, and creative potential. We then calculated each organization's score and ranked them.

Not only has this two-year-old system helped TrendyMinds ensure each freebie benefits both the company and the client, it's given the 15-year-old firm the structure needed to increase its pro bono offerings. Yager says:

In 2009, we awarded $50,000 worth of services to eight non-profits," Yager says. "And in 2010, we've awarded $150,000 worth of work to 12 organizations.

Adjust Your Expectations

Above, Yager mentioned considering opportunities for future work when choosing pro bono clients. But if you're counting on turning a pro bono client into an eventual paying customer, you're setting yourself up for a terrific disappointment. More often than not, your non-paying clients won't be able to afford your full rate any time soon.

Philip Chang, a partner at Carbon, a Chicago-based PR firm says:

There is a fallacy that doing charity work will earn you the business of its board members. Non-profits are a terrific networking opportunity, but not a new business opportunity.

Instead of trying to guess which charity will have the fullest coffers 12 months from now, go for pro bono projects you know will boost your exposure.

That's what Karen Renzi did when deciding which unpaid project Beyondus Design, her 15-person web design firm, would accept this year. The winner? Buffalo Central Terminal, a major landmark and a media darling of Buffalo, N.Y. Renzi says:

We love to be associated with it not only from a creative standpoint," says Renzi, whose firm is based in Niagara Falls, N.Y., "but also for the potential visibility that could come with it.

Create Some Ground Rules

Aside from getting in over their heads schedulewise, common grumbles from firms burned by pro bono work include donees taking advantage of their generosity, wasting their time by missing meetings and deadlines, and not giving credit where due.

There's an easy remedy for this: State your ground rules up front, just as you would with any paying client. If one pro bono customer can't meet your terms, surely you can find another that can.

For David Langton, principal of Langton Cherubino Group, Ltd., a six-person design firm in New York City, the top non-negotiable for pro bono projects is the timeline:

We need to have more time. The organization has to be okay with waiting a bit so we can fit the work in around our other assignments.

Jo Murray, owner of a public relations firm with offices in San Francisco and Sun Valley, Idaho, established her pro bono ground rules to head off project inefficiency at the pass. Murray explains:

I need one coordinator at the client on a pro bono account, as opposed to receiving conflicting instructions from various board members. Plus, I will not work late on a pro bono account because the client did not get me the necessary information in time.

And to ensure TrendyMinds comes away from a pro bono project with a portfolio piece the agency is proud of, Yager lays down these ground rules:

TrendyMinds would have full rights to any work created. We have control of the production schedule. And we have the final say on all creative work.