Talented people are essential to assuring success in fundraising. Nothing tops talent. Your fundraising personnel are one of your organization’s most valuable assets. For too many nonprofits, however, critically important roles have become a revolving door.
Turnover of fundraising staff has become an epidemic.
A large national nonprofit association recently surveyed their 250 member organizations. A whopping 91% reported that turnover of fundraising staff is one of the biggest problems they face.
It is commonly accepted that the average tenure for fundraisers is eighteen months. That figure may be out of date, however. According to the 2016 Nonprofit Employment Practices Survey, the rate of turnover is up. Well-known author and researcher Penelope Burk of Cygnus Applied Research has data showing that the average tenure today is more like sixteen months.
A recent study by CompassPoint gathered data from more than 2,700 nonprofit CEOs and chief development officers. Among the key findings:
- Half of the fundraisers in the top job at their organization plan to leave their jobs within two years or less. 40% were not sure they would even stay in the field of fundraising.
- 53% of organizations report having difficulty finding qualified candidates to fill fundraising jobs.
- At many nonprofits, the top fundraising position has been vacant for months—or even years. Some organizations essentially have given up on finding someone, particularly after multiple rounds of hiring have been unsuccessful.
Turnover is much costlier than most people recognize.
A study by the Center for American Progress found that the costs associated with the turnover of an employee can easily amount to 100% of their salary cost. When you factor in additional costs such as lost productivity and the time/expenses associated with hiring and onboarding a replacement, the real cost can approach three times the salary for the position.
The loss of fundraising talent also places a tremendous burden on the organization. Co-workers must pick up the slack while the position is vacant, increasing the potential for burn-out. When a major gift officer leaves, all the relational capital they have built up with donors leaves with them (and all too often invaluable information about their donors evaporate, since so few organizations have good data information systems and practices in place). Turnover in the top job often leads to more changes in personnel and strategy; multiple leaders in quick succession can lead to donors and staff alike feeling whiplashed from all the changes.
WHY FUNDRAISERS LEAVE
CDOs and CEOs are not seeing eye to eye.
Many CEOs admit to having a persistently nagging feeling that they could be raising more money with someone different in the top fundraising job. Nearly a third of the CEOs in the CompassPoint study were dissatisfied with their CDO’s performance, and a quarter had fired their top fundraiser recently. At the same time, CDOs are all too often frustrated by their CEO’s lack of attention to fundraising. One in five describe their relationship with the CEO as weak or non-existent. Many also complain that they can’t get the budget they need to hit their targets. In Penelope Burk’s study, nearly a third of fundraisers said that lack of support and understanding from their organization’s leadership was a primary factor in their decision to leave a fundraising job earlier than expected.
Burnout is a real problem in most nonprofits.
A recent survey of more than 2,000 nonprofit employees by Opportunity Knocks found that fully half of those surveyed reported feeling “burned out” in their jobs. As funding needs climb, the pressures on fundraisers continually ratchet up. Fundraising staff often lurch from one project or event to another, with no time to celebrate the wins. Have a great year, and that becomes the benchmark for every year thereafter. It’s never enough, no matter how much you raise. This hamster wheel effect can leave fundraising staff feeling exhausted and disenchanted. Studies have consistently shown that employees who feel burned out are more likely to leave their positions prematurely.
Better-paying opportunities are around every corner.
There is intense competition for fundraising talent today. As you read this, there are thousands of job vacancies waiting to be filled, and organizations are getting more aggressive in recruiting for them. Nearly half of all fundraisers report feeling under-paid, under-appreciated, and over-worked in their current jobs. Nonprofits are characteristically slow to raise salaries for current employees, but new hires are getting paid top dollar. It’s not hard to see how this situation can lead to a high rate of turnover. In a recent survey of 1,100 fundraising professionals, 48% of respondents reported that the number one reason they left their previous position was simply because they received an offer with a substantially higher salary. In Penelope Burk’s survey of fundraisers, 64% said the main reason they considered leaving their position was because they were seeking better pay. Sadly, too many fundraisers need to change jobs to get the pay raise they deserve.
FIVE WAYS TO FIX THE PROBLEM
1. Improve your hiring practices.
Finding and recruiting high-performing fundraisers is both one of the highest priorities AND one of the biggest challenges most organizations face. You would think organizations are putting a tremendous amount of thought, planning, and resources into recruiting fundraising talent. But you’d be wrong. Fewer than one in four of all organizations surveyed by Nonprofit HR in their annual Employment Practices Survey have any formal plans, or even a budget for recruitment. Most just muddle through.
Here at DickersonBakker Executive Search, we know what it takes to do an Executive Search right. Recruiting for fundraising jobs is one of the most challenging assignments in executive search. Some search firms avoid it altogether. Others dabble in it. We specialize in it. When conducting a search for a fundraising opening, we have learned that a candidate’s track record is going to be the best predictor of his/her future performance. We have also learned not to take people at face value (everyone is “top of class” on their resume, after all). Do your due diligence. It’s not that hard, really, if you know who to talk to, what to ask, and how to ask it.
I am amazed at how carelessly some organizations make key hiring decisions. I once consulted with an organization that suffered through a year of woeful performance from their development director before finally firing him due to a serious ethical breach. This was just his latest entry on a resume dotted with short tenures. Four weeks later I was shocked to see on LinkedIn that he had a new, more senior-level job at another organization. I have seen this sort of thing happen more frequently than you can imagine, even at the highest levels.
The best way to solve the problem of turnover is to make sure you are hiring right in the first place. Hiring practices for fundraising positions are too often woefully inadequate. It should not come as a surprise, then, that in the CompassPoint study, nearly a third of CEOs said their fundraisers lacked the skills and experience needed for the job. Nearly one in four state that their fundraisers are not a good fit for their organizational culture. If they had done more due diligence in the first place (BEFORE they hired), they would have saved themselves a lot of grief down the road.
2. Pay more attention to fit.
Fit matters. In fact, we have found it to be one of the most significant predictors of long-term success. Not everyone is cut out for a career in fundraising. As you can imagine, people who feel that their personal characteristics and abilities are a good fit for fundraising are most likely to remain committed to fundraising as a career. Fundraisers who fit well with the culture, mission, and values of their organization stay in their positions longer. And not all fundraisers are cut from the same cloth. The characteristics that made one person successful in their last job may not be the characteristics needed to succeed in the job opening you have available.
In our executive search practice, we pay closer attention to “fit” than we do to anything else. We routinely use job fit assessments and testing, behavioral interviews, and thorough background checking to determine if a candidate will fit the opportunities our clients have available. Job skills can be learned. But there is simply no substitute for job fit.
3. Pay people what they are worth.
Brent Hafele, Vice President of Client Services at DickersonBakker identifies four flaws in nonprofit thinking that prevent them from becoming vibrant organizations. One flawed way of thinking is to value thriftiness over stewardship. Thriftiness is about saving money. Many organizations sacrifice their future by being thrifty. Stewardship, on the other hand, is about investing resources wisely. Vibrant organizations understand that they need to invest in their organizations, and above all, they need to invest in their people. By getting the best, not the most, your money can buy, you’re investing in your nonprofit’s future.
In salary surveys, four out of five nonprofit chief executives say that the main reason they struggle to recruit good fundraisers is because they can’t afford to pay competitive salaries. Truth is, they have it wrong. They can’t afford not to.
One of the biggest mistakes a non-profit can make is to under-invest in fundraising. Most spend as much of their revenue as possible on desperately-needed programs and services. Well-intentioned as they are, they are starving those very programs of future resources by prioritizing spending on programs versus investments in fundraising. A dollar spent on programs can only help you solve a dollar’s worth of problems. A dollar invested in fundraising typically produces between $3 and $10 in future returns. According to a recent study, a dollar invested in major gift fundraising produces, on average, $24 in lifetime value.
If your nonprofit has limited funds, investing money in fundraising is one of the smartest things you can do. Above all, invest in talent. Because when it comes to growing success in fundraising, talent matters most.
4. Agree on expectations.
A recent Nonprofit Times article – “Half of Fundraisers Flee” (July 2013) – highlighted a study showing that 75% of chief development officers and 62% of chief executive officers believe unrealistic expectations are a primary cause of turnover. CDOs by and large think expectations are unreasonably high (34% of fundraisers in Burk’s study, for instance, said that unrealistic fundraising goals were a top reason why they left their last positions), while CEOs think they are coming up short.
Some CEOs have a hard time delineating between goals and expectations. It is good to set ambitious – even audacious – goals. It is even better to provide incentives to help motivate your team to achieve stretch goals. But any CEO who does not manage goals and expectations separately is setting his or her fundraisers up to fail.
There is no magic formula when it comes to setting appropriate fundraising expectations. Every organization is in a different situation. The important thing is for CEOs and CDOs to work together to reach consensus on setting reasonable expectations, and to make sure that there are sufficient resources and a plan in place to accomplish your goals.
5. Collaborate more.
Collaboration is an important ingredient of a healthy, “fundraising-friendly” organizational culture, which helps provide a fertile soil for fundraising to flourish. Talented people want flexibility in how they do their work, to be part of a high-performing team, to do interesting work, and to stay creatively challenged. They want to be treated with respect, to feel valued, and to know that they are making a difference.
Too many fundraisers report feeling isolated from the rest of their organization. Fundraising cannot succeed in isolation. The highest-value forms of fundraising are built on relationships. Your relationships with donors should not be dependent on one person. That is not sustainable, nor is it effective. Relationships between your organization and its donors should have multiple connecting points, beginning with the fundraising staff but extending out to your CEO and other leadership team members, your front-line workers, your Board members, and even out to peer-to-peer relationships between donors. Your fundraisers also need to know how to communicate what you do externally, and need to be able to show donors how their giving is making an impact. They can’t do that without collaboration with others throughout the organization.
Encourage more collaboration between your fundraisers and the rest of your staff, involving your fundraising staff in more of what you do as an organization, and your fundraising leadership in strategy and executive decision-making, and your fundraisers will not only stay in their jobs longer, they will likely raise more money too.
If you want to succeed in fundraising, it is critical to have people who are appropriately gifted with the right combination of competencies, experience, vision, and drive, and who are well trained, properly equipped, motivated, accountable, and the “right fit” for your mission, culture, and values. Embrace these five principles and you will see a difference — you will make better hires, and your staff will stay in place longer. Over time this will begin to snowball, as talent becomes magnetic over time – with talented people tending to attract more of the same.
Serving the nonprofit sector is not just part of what we do. It´s all we do.
We have the marketplace knowledge, understanding, expertise, and access to networks and relationships that are critical to succeed in recruiting top talent. Why not put our team to work for you? Contact us today to see how we can help your nonprofit reach it’s goals.