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[ASK AN EXPERT] Should Fundraiser Salaries Correlate With How Much Revenue They’ll Generate?
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Our Ask An Expert series features real questions answered by Claire Axelrad, J.D., CFRE, our very own Fundraising Coach, also known as Charity Clairity. Today’s question comes from a nonprofit leader who wants metrics and advice on how to justify and calculate fundraiser salaries:
Dear Charity Clairity,
I am looking for some updated industry standards for fundraising metrics around staff positions. For example, a Jr. Fundraiser is bringing in % vs. a Sr. level Fundraiser – as this relates to salary, etc. I am looking to justify salary ranges, as well as appropriate metrics.
— Mixed up about Metrics
Dear Mixed up about Metrics,
Too often nonprofits tell fundraisers they must raise $XXX XXX or else! Some fundraisers are expected, at minimum, to raise their salary. Some are told they must raise double their salary. Or they’re told they must bring in X number of new donors at the organization’s major gift level. But all of this is arbitrary. Plus, it reeks of short-term thinking.
Mid-level, major, and legacy gifts are a long game. How much a fundraiser generates in any given year depends on numerous factors. Some are within the fundraiser’s control, but many are not.
Here’s what is not within a fundraiser’s control:
- The organization’s maturity and name recognition.
- The number of current major donors.
- The number of current mid-level donors.
- The number of repeat donors.
- The number of loyal volunteers.
- The board’s understanding of their role in fundraising.
- The executive director’s understanding of their role in fundraising.
- The finance director’s understanding of their role in helping put together compelling donor offers.
- A donor database and tools that facilitate one-to-one fundraising.
- The organization’s culture of philanthropy (or lack thereof).
- Whether they have necessary administrative support, without which half their time may be eaten up with non-donor-facing tasks.
Donors give because they have all three of the following: Linkage to the organization; Interest in the cause, and Ability to give. One factor alone (e.g. a high wealth capacity rating) won’t do the trick. So, handing over a bunch of “major gift likelihood” folks to your fundraiser and expecting them to raise major gifts from each of them is shooting them in the foot.
Another important point is that inclination to give is generally a result of a group effort. Perhaps the donor loves the ED or the board president. Perhaps they experienced excellent care by one of your program staff. Or they had a wonderful volunteer experience. Crediting the gift to one person alone makes no sense. In fact, if you insist on this, you’ll inevitably set up turf wars. It could be between departments (e.g., neurology, pediatrics, or oncology at a hospital; agriculture, engineering, or sciences at a university). Or it could be between internal functions (e.g., annual gifts, major gifts, or legacy gifts). The last thing you want is for one department telling another “Don’t touch my donors!” Or for the mid-level gift staff to “hold on” to a donor who should move into the major donor pipeline, just because they don’t want to lose revenue.
Here’s what is within a fundraiser’s control:
- Development of a strategic major (or mid-level) fundraising plan.
- The process of donor identification.
- The process of donor qualification.
- The process of portfolio development.
- The process of portfolio management.
- Deployment of individualized donor cultivation plans with meaningful “touches” and “moves.”
- Development and deployment of a donor love and loyalty plan that keeps gratitude flowing and builds stronger relationships over time.
If your fundraiser is doing everything within their control, and actively reaching out to build meaningful relationships with supporters, then you should reward them. And not for how much money they raise, but for meeting and, hopefully, exceeding their objectives.
The problem with monetary metrics
The problem with setting minimum dollar goals for fundraisers is, inevitably, it will cause them to leave money on the table. Ask yourself which of these scenarios is better for your organization over time? Which has the potential to be transformative, both for the charity and the donor? Which is merely transactional?
Scenario 1: Fundraiser asks previous $5,000 donor for a $10,000 gift, which they give. The donor had the capacity to give more, but the fundraiser didn’t take the time to really explore the donor’s interests and passions. The $10K seemed like a “win,” and got the fundraiser to their annual goal. Checked off the list!
Scenario 2: Fundraiser meets with $5,000 donor to explore their interests. They note when the donor’s eyes light up, and talk to them about programs they believe will mesh with donor’s expressed passions. They offer to set up a meeting with a program officer who can delve further into the details. The donor is going on a three-month vacation/sabbatical, but they set up a visit for when they return. This means the gift won’t come in by the end of the calendar year, but the fundraiser has their eye on the larger prize. When the meeting happens, the becomes even more engaged and asks about various ways they can help. Fundraiser and program officer begin to flesh out a few scenarios, constantly checking in with the donor to assess what appears most meaningful to them. As their time draws to a close, and the donor’s body language is more and more open, staff promise to draft some proposals to which they can put numbers. They also invite the donor to an on-site visit. After the visit, they refine the proposals based on donor’s interaction on the visit. This process continues for 18 months until, ultimately, the donor pledges a $250,000 gift. And, if appropriately stewarded, the donor (who’s passion has been unleashed) may move from annual four or five-figure gifts to annual six-figure gifts. And, ultimately, maybe even a legacy gift. Transformative gifts grow from patience and persistence.
The answer to which of these scenarios is better, I believe, is obvious. But, if you’re paying your fundraiser based on how much they bring in this year, this scenario will never happen. Short-term thinking begets short-term giving.
The benefit of setting behavioral metrics
When you chase the money, you don’t allow fundraisers the time to develop relationships. And this, essentially, is the foundation of successful major gift fundraising. Any metric that impedes a donor’s ability to give at their capacity, and on their timing, hurts a major gift program.
Here are a few behavior metrics that make sense:
- How many donors did the fundraiser qualify?
- How many personal meetings did the fundraiser have with qualified donors?
- How many donor meetings did the fundraiser set up with other staff, volunteers or board?
- How else did the fundraiser get the donor involved? (e.g., did they attend an event; go on a tour; act as an ambassador or advocate; participate on a committee, etc.?)
I’m not suggesting fundraisers shouldn’t be aware of closing gifts. They should. But readiness to be asked depends on numerous factors, and timing is a matter of judgment informed by listening.
When you simply chase the money – or apply this as your principal metric — you’re not being donor-centered.
— Charity Clairity (Please use a pseudonym if you prefer to be anonymous when you submit your own question, like “Mixed up about Metrics” did.)
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