What’s A Fundraiser Worth?
The Chronicle of Philanthropy sheds light on this question, publishing a report on salaries of about 430 fundraisers from about 280 nonprofits with $35 million plus in revenue. The Chronicle relied upon IRS 990 forms filed by nonprofits in 2011.
Without a doubt, this report will stir up passionate conversations around water coolers throughout the US nonprofit community … probably at a cost to fundraising productivity for the coming week. The next few days will be tough on nonprofit CEOs as they face hostile media and ‘underpaid’ development directors!
Two fundraisers — for Sloane Kettering Cancer Center and Columbia University — topped the $1 million mark, both on the strength of performance-related bonuses. More on that in a moment.
A total of 29 fundraisers made over $500,000 and an additional 154 earned $250,000 or more.
I have nothing whatsoever against paying effective fundraisers high salaries, assuming those are in fact proportionate to the scale of program activities their work enables.
I suspect most of the best-paid run diversified, complex fundraising programs, meaning they have responsibility for the entire gamut of fundraising — direct response, major gifts, bequests, foundations, cause marketing, events etc — and possibly for the relevant communications and member/donor service activities that support these efforts.
In the corporate world, sales people are typically very highly paid, with most of their pay coming from commissions, precisely because they are the folks on the front line whose success gets the bills paid.
But note that I did emphasize the word ‘effective’.
When it comes to large nonprofits capable of supporting $250K pay checks, high performance, measured against demanding metrics, must be mandatory.
No one should earn that level of income without a portion of the pay being tied explicitly to performance. I’m not merely talking about “She got great scores on her 360 degree review” … I’m talking about measured improvement of key fundraising metrics. Part of that paycheck should be at risk.
And by the way, performance pay should apply to the CEOs of such nonprofits and charities as well.
Agree?
Tom
P.S. OK, I’ll admit a bias here … I don’t believe any nonprofit worker should wear a hair shirt for the ‘privilege of doing good’. I used to. In my very first job, I campaigned against our organization having a retirement plan for staff. Oh, the idealism of youth! If one can afford to volunteer their time to a cause, that’s spectacular. It should not be a job requirement.
5 responses to “What’s A Fundraiser Worth?”
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Yes, indeed. How are the assessors of these fundraisers (presumably CEOs), evaluating performance? I know CEOs who penalize fundraisers when goal isn’t met. But the fundraiser cannot control everything…for example, the economy. Effective fundraisers don’t rob banks. I also know fundraisers who don’t know (let alone apply!) the body of knowledge re: loyalty, neuroscience, communications.
Tom, I like your P.S. here. The idea that nonprofit employees should not make large salaries, no matter how effective and talented they are–it’s frustrating how prevalent that mindset is among not only the public, but among some nonprofit leaders themselves.
Let me tell an unfortunately true story as an example. My local AFP chapter has a fellowship program that provides free training for development staff at small nonprofits. I mentioned this to a friend who regularly volunteers with an animal rescue in our city, and I asked if they had any paid fundraisers who could apply for the fellowship. No, just volunteers. In fact, this nonprofit has no paid staff at all, just volunteer leaders. This isn’t surprising since the organization is only three years old with a limited budget.
However, I expected that the rescue had a goal to add paid staff as they expanded…or at least pay the volunteer executive director who puts in the amount of time you would expect from a full-time employee. This animal rescue has made a huge impact in our city given its resources, and it fulfills a real need. I was excited to imagine its future growth.
But alas! Apparently this organization considers its lack of employees a badge of honor. My friend PROUDLY told me that the rescue had no paid staff, unlike that “rescue across town” that use donations to help pay salaries. The horror!
I was shocked into silence, but I should have asked this question: Your rescue has made such an impact with so little. What if hiring employees could increase the number of animals you save? Wouldn’t that be worth it?
Or to be a bit more harsh: Isn’t saving animals more important than being able to look down your nose at that other rescue in town because they don’t run solely on volunteers?
Established nonprofits like charity:water perpetuate this mindset when they advertise that 100% of all public donations go to water projects. It’s just a shell game. Their operations are funded by other donors, and those donors aren’t any less generous for supporting administration and salaries.
Sorry to go on a rant, but you’ve clearly hit a nerve! The measure of a great nonprofit is how well it fulfills its mission, not how well it fulfills the stereotype of the well-intentioned but desperately cash-strapped organization.
I also applaud your P.S. and I LOVE Heather’s rant. You go girl!
The hair shirt mindset is destructive. Plus, it also has the effect of nonprofit staff not feeling any need to donate to their own cause. After all, “they’re overworked and underpaid.” This internalized sense of suffering and feeling downtrodden is the opposite of feeling uplifted. If you don’t feel uplifted, how can you lift up potential donors?
Truly exceptional and effective nonprofit staff could be doing a lot of other things. If we want them to stay in the social benefit sector, and do the work that needs to be done to make our communities a better place to live and work, then we need to pay them appropriately.
I wholeheartedly agree that nonprofit staff should be appropriately compensated for their work in both salary and benefits. I also agree that organizations advertising 100% of donations go to programs perpetuate a destructive (and prevalent) view that paying for admin, infrastructure, and non-program staff is wasteful and should be kept to a minimum. However, I don’t believe that all nonprofits should or need to aspire to have paid staff. Even if that means they could do more. An all-volunteer model is valid and works well for many groups. The professionalization of nonprofit work has downsides and groups that are run exclusively by volunteers should not be pressured to hire staff nor should it be expected that the group would be more effective if they had staff. In fact, the opposite could be true.
I would appreciate feedback on the practice of paying bonuses to fundraising staff that exceed regular goals and hit stretch benchmarks. What is a fair and reasonable way to determine the size of such bonuses? Is it a math calculation?