For the vast majority of the country’s more than 1.2 million registered 501(c)(3) organizations, the development function and fundraising professionals have always been of critical importance.
Today, while the profession itself faces challenges on a number of fronts, organizations face rising demand for qualified development professionals, the need to maximize their return on investment in fundraising staff and pressure to intensify efforts to attract and retain successful fundraisers.
The Landscape
Recent years reflect significant expansion of the nonprofit sector with the number of registered 501(c)(3) organizations increasing by 90% from 2006 to 2009. Given the current economic climate, these organizations are competing for fewer charitable dollars as individual, corporate and foundation giving have declined. According to a study released last month by the Association of Fundraising Professionals, 57% of American and Canadian nonprofits received less or the same giving dollars in 2009 compared to 2008.
While most organizations are, at best, cautiously optimistic that the economy will improve in 2010, it is reasonable to assume that charitable giving will lag behind any economic improvement. Foundation giving, in particular, is expected to remain flat in 2010 and improve only slightly in 2011 according to a recent Foundation Center report. Government funding for many organizations, particularly at the state level, has also significantly declined. Completing the perfect storm, the recession has led to increased demand for services from many nonprofits.
Changing Field
As if the economic landscape wasn’t challenging enough, fundraising professionals also increasingly find themselves in need of broader skill sets. A recent Chronicle of Philanthropy article summarizes the views of executive recruiters and fundraising experts who say that people skills alone no longer make for a successful fundraiser. Instead, emerging trends will create demand for development professionals who also possess entrepreneurial ability and spirit, who have cross-cultural and generational knowledge and who are strategic, analytical and technologically savvy.
Demand Rises
All of these forces combine to increase the demand for qualified fundraising professionals, and the job market for such positions appears to be on the rebound at least in some markets. The Association for Fundraising Professionals reports that listed job openings for fundraisers have increased every month since January and are now at November 2007 (pre-recession) levels. The job market is expected to continue to loosen especially for seasoned, broadly skilled development pros with a track record of success.
It Takes Money…
While development professionals are essential to a nonprofit’s survival, each fundraising position hired represents a significant organizational investment. The following table details the current median base salary among all organizations nationwide according to salary.com:
According to survey results released earlier this month by the Association of Fundraising Professionals, the median salary for all fundraisers nationwide was $66,000 in 2009, an increase of 3.9% from 2008. The survey found that highest salaries were paid to development professionals working for consulting firms, with a median salary of $80,000. Among charitable organizations, the highest median salary levels were found among fundraisers for educational institutions ($71,200), hospitals and medical centers ($71,000) and other health organizations ($67,000).
None of these figures include the additional expenses related to any bonus or incentive compensation, statutory and other benefits, and taxes.
Keeping Finders
As with any position, turnover brings even higher costs. Penelope Burk, a Chicago-based fundraising consultant, estimates it costs 65% to 83% of a fundraiser’s annual salary to replace him or her. In a presentation at the Association for Fundraising Professional’s annual meeting last week, she also agreed that turnover among fundraisers will increase as the economy improves previewing findings from recent research that suggest 48% of the 1,200 development professionals she surveyed would leave their current jobs for higher pay.
Ms. Burke reasons that this finding may provide an argument for organizations to increase rewards for top-performing fundraisers, but she also suggests other strategies for their retention including increasing their managerial responsibilities, creating succession plans and offering more flexibility and other non-monetary benefits.
In light of the economic and charitable giving climate, the changing nature of the development profession, and the need to compete for qualified talent:
- What demands face your organization’s fundraising function and professionals?
- Have your organization’s development staffing levels or needs changed?
- What is your organization doing to attract and retain high-performing fundraisers?
A version of this post originally appeared on the Mission Connected Blog on April 20, 2010.
photo credit: nDevilTV
Lately, it seems that any sentence containing the words “nonprofit” and “compensation” is related to the scrutiny of pay provided to the presidents and other top executives of organizations. However, for most nonprofit organizations, far more compensation dollars are paid to the broader, non-executive employee population.
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