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Nonprofit Management

Newsletter 

September 2012
Getting Your Money's Worth From Your Fundraising Staff   
By Kelly Dunphy and Emma Kieran
 

 

The paradox every nonprofit faces involves the need to spend money on fundraising to obtain revenue and the need to report low fundraising ratios required by stakeholders. Additionally, every officer has a fiduciary duty to ensure that fundraising money is well spent.

 

The best way to resolve this paradox is to ensure that your fundraising efforts meet or exceed your specific requirements and broad nonprofit benchmarks. If you do not know how your front-line fundraisers perform against your competition, and you do not know your revenue return on fundraising expenses, then the odds are that you are under performing by paying too much -- or by not achieving the revenue you should.

 

Fundraising Financial Benchmarks

Financial reports and Form 990s provide basic and publicly available data for broadly judging fundraising performance. While each organization is unique and while different fundraising strategies will have different results, what follows are some fundraising financial rules of thumb and benchmarks against which you should evaluate your fundraising results.

 

  • Fundraising staff salaries and benefits are almost always the largest fundraising costs, and the fully-loaded cost for fundraising staff is usually about 200 percent of their salary
  • Broadly speaking, organizations generating revenues of $500,000 to $1 million should have at least one dedicated fundraiser with active support from the CEO and board
  • Depending on staff experience, you should budget an additional one to two fundraisers for each additional $1 million raised
  • After three years on the job, your director of development or major gifts officers should annually raise revenue equivalent to 5 to 10 times their fully-loaded costs.

 

Fundraising Operational Goals

Fundraising is not just about financials.  As everyone knows, fundraising is mainly about the process of building relationships and strategies that over time, persuade donors to give to your organization.  Setting standards and goals will enable you to judge both fundraising potential and performance.  The performance standards and goals should combine quantitative data (per above) with qualitative standards found in the best fundraisers. Those qualities include:

 

If you do not know how your front-line fundraisers perform against your competition... then the odds are that you are under performing.

 

 

  • Accountable: Produces regular, concise and useful reports for the CEO and board and "owns" the results
  • Strategic: Develops, executes and adheres to strategic fundraising plans and revenue goals
  • Leader: Motivates donors to give and inspires the rest of the fundraising team, the CEO and board
  • Relationship Builder: Initiates and deepens relationships with donors over time, resulting in increased involvement and donations
  • Experienced: Has broad fundraising experience necessary to lead the specific fundraising programs or, in the case of chief development officers and development directors, the entire fundraising operation.  
Implementing Your Fundraising Benchmarks and Goals

Since fundraising is both an art and science, you should implement both financial and operational fundraising benchmarks to ensure that you have strong, well-qualified fundraising staff and successful fundraising programs. The process by which you can set your organization's performance expectations is straightforward:

  • Determine the benchmarks against which you will judge your fundraising efforts
  • Implement hiring, review, compensation and promotion policies that are consistent with your fundraising benchmarks
  • Explain the benchmarks and the human resources policies to your fundraising staff and hold them accountable
  • Perform rigorous fundraising performance reviews at least annually and consider quarterly.

 

 * * *     

Strong fundraising staff and programs are critical to funding your mission and programs. If your fundraising staff is measuring up against benchmarks and goals, recognize and reward your staff.

 

On the other hand, no nonprofit has the time or money to waste on poor fundraising performance.   So, if your fundraising staff is not measuring up, now is the time to make some tough decisions so that you can fund your mission and programs in the near future.

  

 

Kelly Dunphy and Emma Kieran are Department Heads of Development at Orr Associates, Inc. (OAI). Together, they have more than 50 years of nonprofit management, event management and fundraising experience in board development, major gifts, corporate sponsorship, cause-related marketing and capital campaigns.

   

For more information on how OAI can assist you as you measure the strength of your fundraising staff and/or provide alternate solutions, please contact us at info@oai-usa.com or (202) 338-6100.  


About Orr Associates, Inc. (OAI)

 

OAI is a national leader in fundraising and development consulting, with a focus on campaign strategy, planning and implementation. With more than 21 years of experience working exclusively with nonprofit organizations, OAI has assisted more than 400 clients in raising hundreds of millions of dollars for their causes. With a staff of more than 50 professionals in Washington, DC and New York City, OAI is well positioned to assist its clients in achieving their goals.

 

See how we can help you today at www.oai-usa.com  

 

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