Tag Archives: BeyondTheNumbers

Let’s Talk About Compensation – Broadly Speaking

By David A. Mersky

I have written a lot these past few months about the importance of employee retention, in large measure because the process of hiring somebody is so expensive and time consuming.

We have talked about employee onboarding and about corporate culture, both of which are critical to enhancing the self-worth of your new hire by helping them feel you are truly invested in their success and longevity with the organization.

One thing we have not yet covered explicitly is today’s topic: compensation.

I suppose one might think that nobody goes to work at a nonprofit in order to make a lot of money. That may be true. However, nonprofit organizations compete against one another for talent. Some of these, depending on their location, mission, and prominence, may seem more attractive to potential staff than their counterparts.

Compensation is one area in which nonprofits with lower profiles, or that do not operate in major metropolitan areas, can compete effectively for the best and brightest. Focusing on performance-based compensation — not commissions — is one way to compete for talent.

More Than Just Money

I am well aware and endorse the point of view of fundraising professional associations that argue against paying commissions to fundraisers. The media is replete with stories of consultants who charge based on dollars raised and who end up taking more in compensation than whatever incremental benefit they provide to the organizations that hire them.

Fundraising is, after all, a relationship-based field, like financial services or real estate. Fundamentally, it is designed to have one person advise another as to how best to advance the mission of an organizationabout which they both deeply care. Donors need, and want, to know that the money they give goes to support the homeless, the hungry, the sick, the scholars, the athletes, the doctors and researchers, etc. — and does not simply line the pockets of the fundraisers themselves.

All that said, and provided it is not budget-busting, we often recommend performance-based incentives (for development or fundraising staff in particular) as a means of both hiring and retaining quality staff. Here are some things to keep in mind when structuring such a program…

#1. All for one and one for all.

Compensation should be focused on team or department achievement, as opposed to that of the individual. By prioritizing success in this way, you will create an environment where everyone is more likely to work collaboratively and to support one another in their respective roles. In this way, it is never about the individual gift itself, but about the collective work of the team.

#2. Involve staff in the setting of metrics and targets.

Resist the urge to dictate goals from on high. Rather, engage staff — across all functions — to create goals that are both meaningful and achievable that advance the work of the organization. You are much more likely to motivate the team if they are heavily involved in whatever targets are set.

#3. Look beyond the numbers.

Many of the metrics developed will no doubt be quantitative in nature— total cash raised for the college’s annual fund; rate of alumni participation by class; number of face-to-face visits (virtual or in person); percentage of increased gifts in the portfolio versus decreased gifts; to name just a few. Fundraising is numbers-based and quantifiable goals are appropriate.

However, not everything that matters can be put into a spreadsheet. Many of those who contribute significantly to the overall effort do so in non-donor-facing roles. Supervisors, record-keepers, researchers, and those involved in accountability and stewardship are also essential parts of a successful effort. Be sure you find ways to measure and include the work of these important players.

#4. Compensation is a broadly defined term.

A healthy work culture is one in which team members feel supported;that encompasses much more than just financial compensation.

For example, it may mean helping staff strike a balance between professional requirements and personal life by providing compensatory time off when evening or weekend work is required.

Or, it might include your investment in their professional development, whether that means encouraging attendance at workshops and conferences, internal mentoring programs, or more formal educational programs.

Supporting them with quality, up-to-date technology so that they can perform their jobs effectively and with a minimum of hassle is another area that can play an important role.

“Compensation” is whatever you do to invest in the skills, experiences, and work satisfaction of your hardworking staff.

Your Employees Have Choices

As a nonprofit, you operate in a competitive environment. Just as you compete for the attention and resources of donors, you also compete for the time, energy, interest, and commitment of those who work and may one day work within your organization.

Are they there solely for the money? Rarely. But, in most cases, they are also not there solely for the mission. They are evaluating the entire package of what it means to join and stay in your organization.

A well developed, generous compensation plan can offset structural aspects of your organization that are more difficult to modify (size, location, prominence, etc.), resulting in a well-functioning, long-serving group of development staff at every level. This is how you enhance revenue and achieve the mission, vision, and values that are the hallmark of your enterprise.