Podcast 2: How We Negotiate Contracts When Working With Nonprofits
One of our post popular blogs was written about contracts in 2012. Since then it’s received about 4200 hits so we decided it was time to revisit the topic. In this podcast we talk about how we created our contracts, how we negotiate contracts with our nonprofit clients, and and why our contracts are vital part of getting paid for our work. If you’d like to see more of this kind of podcast leave us a comment below or send a note to firstname.lastname@example.org.
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Laura Elizabeth Pohl Hi. I”m Laura Elizabeth Pohl.
Crystaline Randazzo And I’m Crystaline Randazzo.
Laura Elizabeth Pohl And today we’re going to talk to you about contracts. Well we get quite a few emails from people who have questions about negotiating their contract or about what to put in their contract so we thought we’d talk about what we’ve done.
Crystaline Randazzo Yeah. So let’s get started. For a technical note, Laura and I are recording in two different places so there may be little glitches in the audio so just be aware of that.
Crystaline Randazzo Why don’t you tell me why contracts are important?
Laura Elizabeth Pohl I think contracts are important because they help set expectations both for you and for the client. I think sometimes clients who maybe have never used a photographer or filmmaker or storyteller and have never had that kind of contract think oh they’re trying to get me some how but that’s not what it is. It just sets expectations for both sides.
Crystaline Randazzo I’ve learned this the hard way but you should never start a project until you have established those parameters and everybody agrees and knows what they are supposed to be doing. You know that’s really the point of a contract.
Crystaline Randazzo So can you tell me about what contract you use and how you got started?
Laura Elizabeth Pohl So I use a contract that I created myself kind of. I started with a template but then as time went on and I started having more clients and having more contract issues come up. I started taking pieces from other contracts that I got. So for example, when my husband and I got married we had a contract with the wedding photographer. And she had some really interesting clauses in there that I thought would work for my business so I decided to write those into my contract too. And then when I’ve worked with certain other clients they’ve have certain clauses in their contract that I also thought would be beneficial to my business so I thought let me write something like that and put it in my contract. How about you? How have you come up with your contacts?
Crystaline Randazzo I mean similarly, I started with a contract from lawtog.com which specializes in building contracts for photographers. So I started with their baseline and I have changed things over time. Now I think this is where we put in our disclaimer and we say that Laura and I are not lawyers. When we say this is something that we’ve done, we’re not necessarily advising that you go and go change all the wording in your contract because it does change the legalities of things but there are certain clauses that I’ve added in, in terms of I don’t know late fees for example.
Laura Elizabeth Pohl Yes and actually my original contract also didn’t have a late fee clause and I added that in because I was running into issues of not getting paid on time. Another thing that I’ve added over time and this is maybe the most recent big one is if the clients cancels the job how much do I still get paid. And that’s based on you know how much time we are for the date of when I’m supposed to work.
Crystaline Randazzo The more you work with clients, the more you start to realized that you need to have certain processes within the contract and that’s probably why it morphs a bit. I would really recommend starting with a templated contract and that’s especially if the organizations you’re working with don’t have a contract. If they don’t have a contract, you need to definitely have contract.
Laura Elizabeth Pohl So we’ve talked about our own contracts a little bit but what do you do if the NGO gives you a contract? So Crystal, what do you usually do in that situation? Do you just go ahead and sign it?
Crystaline Randazzo I definitely never just sign it. I usually look it over very thoroughly. There are certain clauses that I’ll want changed. For example if it’s a work for hire, I almost never do work for hire contracts. I work on a licensing basis so unless they’re going to pay me more money I don’t do work for hire and give them exclusive license to my images. So if that was in a contract, I’d want to negotiate. We’d have to talk it out and come to an agreement on how we want the licensing to read. For me what that normally is a two to three year license that the organization gets to use my images. What do you do?
Laura Elizabeth Pohl Well I mean for me that’s a place that I get stuck with clients sometimes on the contract is the copyright and the work for hire and the organization doesn’t want to pay for a copyright buyout. And there have actually been instances where I have just turned down work because we can’t come to an agreement on that part of the contract. So I’d say about probably 80% of the organizations and the people I work with they have their own contact and like you I look at it very thoroughly and if there is something I am not quite comfortable with I bring it up. To me I feel like a contract is a starting point for discussing our expectations and they can negotiate with me I can negotiate with them and we should come to a mutual agreement where we all feel comfortable about what’s going to take place.
Crystaline Randazzo I know this is so scary right? I can remember when I got my first contract and I was just terrified. I didn’t even know what you could ask for. Can I do this? I don’t even know. I just have sign it or else I don’t get the job and
Laura Elizabeth Pohl I remember that feeling uhh.
Crystaline Randazzo It’s the worst right. I’m mean what I’d advise if you’re new to contracts is it seems like we get caught up usually in the same things. So licensing is always an issue. If they want everything they need to pay for it if they aren’t willing to pay for it then they don’t get everything. That’s a very typical discussion I’ll have with the client in the contract process. It’s really important that you don’t get intimidated right out the get go because you have a contract. You still have to advocate for yourself. You still need to make a good business decision. Don’t agree to a bad contract just because you want the gig. And it takes you being really hard nosed and note being afraid of loosing the gig and it’s something that comes through experience.
Crystaline Randazzo Laura, have you ever had anything bad happen to you because you didn’t have a contract?
Laura Elizabeth Pohl No I haven’t had anything bad happen to me but there was a situation where having the contract really saved my butt and this was a situation where the client wanted me to go to a certain country and said I could get a visa on arrival and so I started flying, got to my first stop and had a really long layover there to get to the final destination, and then when I tried to check in for that final flight they wouldn’t let me on because I didn’ t have a visa. I was trying to troubleshoot this whole situation, figure out what to do, and in the end I didn’t go and because the contract said they had to pay me a certain percentage if a job got canceled due to no fault of my own. They still had to pay me. Actually they still paid me one hundred percent. And that was their contract. It actually wasn’t my contract. And after that happened, that’s when I added that kind of clause to my contract.
Crystaline Randazzo Yeah, I think you’ve just convinced me to add that clause to my contract too. I guess it goes either way right? Bad things can happen when you don’t have a contract. It’s not good when a shoot doesn’t go through but at least you didn’t waste your time and not get paid.
Laura Elizabeth Pohl I mean I feel like I wasted a little time but at least I got paid. There’s a longer story to that, it was a crazy time. What about you? I mean, has anything bad ever happened because you didn’t have a contract or because you got a contract later in the process?
Crystaline Randazzo It has happened only once or twice because I got really strict with myself. I think I tend to be an enthusiastic starter so when somebody reaches out to me and they have the paperwork I tend to want to start right away. But I’ve really had to reign that in because I have had one or two clients where I did a little bit of work and then didn’t end up getting paid for it cause the contract didn’t go through. And I guess it’s a percentage right, there’s a certain number of contracts that are just not going to go through. So now I just wait. And once it comes through, I’m officially hired and happy to do whatever I need to do.
Laura Elizabeth Pohl Have you ever turned down work because you couldn’t come to an agreement on the contract?
Crystaline Randazzo Oh absolutely. I think big nonprofits tend to understand licensing terms but I find it more frequently with small or medium nonprofits where they don’t quite understand what licensing means. Like they think I pay you for a service and you give me photos. It does take a bit of time educating my clients and it does usually pan out when I explain you get to use it forever you have to pay more for it. You only get to use it for three years you pay less. But I find with my nonprofit work, most of my clients are only using my images three to five years after they are taken because programs change so I can make a good argument for why the three year licensing is a good deal for them. I’ve definitely walked away from a bad deal. And I’d recommend that everybody walks away from bad deals. Cause if you take a lot of bad deals, your business is sunk anyways.
Laura Elizabeth Pohl And that can be hard. I remember the first contract I ever got for nonprofit work going overseas. I’ve written about it on the blog. And I was I just wanted it. But I also I knew like academically I couldn’t take a bad deal but I also was just like uhh…I just want to work. And even if it’s just a little bit of money I’ll do it. In the end, it was a good contract. I took it. Everything was fine. But I definitely had that feeling of I just want to be in this industry. Let me in!
Crystaline Randazzo It’s really hard to walk away. But you know it’s just not good for you as a professional and we do have to think about what’s good for us as professionals. Within reason right? I don’t think we’re being unreasonable. These are industry standards that we’re sticking to.
Laura Elizabeth Pohl And I think it’s better to establish these standard practices early in your business because it doesn’t get much easier as you go on. I mean, every time I know I’m gonna have to negotiate a contract because I don’t like one of the clauses. It’s like I have to gear myself up for that conversation. It’s like…Ok Laura you can do this. It’s gonna be fine. They’re not going to hate you. You’re not going to hate them. And making sure you’ve done that from the beginning, it just gives you confidence that you can do it.
Crystaline Randazzo And it’s sort of a fallback position, right? As soon as you get that contract and you see that clause- the work for hire clause- I mean you already know that conversation is going to take place.
Laura Elizabeth Pohl Or any other clause you don’t like.
Crystaline Randazzo Any other clause that’s in there that you just think like nope not going to do that.
Laura Elizabeth Pohl We have 180 days to pay you. Nope that’s not going to happen.
Crystaline Randazzo You sort of learn how to CYA I guess. That’s what you’re looking for in the contract. I think we’ve learned a lot from each other in terms of and probably from our clients as well from looking at their contracts. So actually reading over all these contracts from different clients is good for you. It’s beneficial to you because it helps you realize areas that you should have in your contract. Is there something that you or the top three things that you would definitely have in every contract?
Crystaline Randazzo It’s important to all of us. You can’t underestimate the amount of time we spend chasing payments. That’s actually a
Laura Elizabeth Pohl Oh my gosh.
Crystaline Randazzo A really great thing to focus on in your contract. If you’ve been freelancing for any amount of time you’ll learn quickly that a lot of time is spent chasing payment. And a lot of that time you don’t get paid for because you didn’t put that into your invoice that you were going to spend eight extra hours trying to figure out where your money is.
Laura Elizabeth Pohl Can I say something. People please share your stories with us of how you try to make sure your clients are going to pay you within a reasonable amount of time. If you have any tricks of the trade, share. Please. I think we’d all like to know.
Crystaline Randazzo This is about contracts and not payment but they’re related. You know Laura and I have talked in length about different ways to do it other then what we’re currently doing. I get 50% up front and then 50% on the backend. I’ve thought about doing it in phases but because the logistics of payment for nonprofits can be so complex. I have a hard time imagining doing it in more than two stints even though I know a lot of business professionals like graphic designers they do it in phases. But there is so much paperwork already. We are very interested to know if somebody has the secret sauce in chasing payment so we’re obviously using contracts to ensure we get payment. But it’s a big problem and a big time suck for our businesses.
Laura Elizabeth Pohl Totally agree. I use contractors too in my work. So people that help me with maybe like graphic design. And I make sure to pay them like the day they send me the bill. Because I know what it feels like to wait 28, 29, 39, 40 days to get paid.
Crystaline Randazzo It’s a brutal part of the business. And I think we can only all be honest about it and that’s probably why we have so much in our contract about payment.
Laura Elizabeth Pohl So we really want to hear from you guys. We want to know if this kind of podcast was helpful to you, and if you have any specific questions that Crystal and I didn’t answer. You can always email us at email@example.com or just leave a comment below. Thanks alot you guys!
Crystaline Randazzo See you later.