Nonprofit Strategies

Fundraising staff changes can be costly

October 18, 2012 

Nonprofits that can afford to hire development staff must be careful in creating the job description and expectations of the job. The average development officer stays in the job for three to four years. A survey by the Association of Fundraising Professionals found that those who raised funds who change jobs most frequently cite the stress from the demands of the job, especially from the board and chief executive officer, as the reason for leaving.

The Nonprofit Governance Index 2012 from BoardSource reports that CEOs rate board fundraising as the weakest part of board performance. Only 41 percent of CEOs report that board members are comfortable meeting potential donors face-to-face ( www.boardsource.org/   AboutUs.asp?ID=200).

The pressure to raise money trickles down from board to CEO to development staff.

What is the cost of turnover in these important positions?

Estimates range from 93 percent to 200 percent of the salary of the person who left, depending on skill and levels of responsibility.

Another way to project the cost of this turnover is to calculate the fundraising productivity during the search for a replacement and orientation of the new staff member. Executive recruiters state that it takes about four months to replace a fundraiser.

During the search process, production will be about one-third of the old pace. During the six months it takes for a new hire to come up to speed, production will be 30 percent to 50 percent less than before.

In other words, the loss of gift income to replace a fundraiser who generates $240,000 per year in gift income will be approximately $77,000. Add in the salary, benefits and training costs of the new person during the first six months, and the cost of turnover is substantial.

Implementing effective retention strategies for productive staff will prevent lost gift income. The cost of retaining someone is far less than the cost of replacing that person.

Barry VanderKelen’s Nonprofit Strategies column is special to The Tribune. He is executive director of the San Luis Obispo County Community Foundation. Reach him at barry@sloccf.org.

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