As small organizations grow, they grapple with the need to raise more and more money. Inevitably, they must consider hiring someone to take charge of fundraising. This is a difficult decision. A group is gambling that the investment of salary – money they often barely have – will generate much more money than they currently raise. And it will, if the person is effective, the board already accepts its role in fundraising, and the organization has its basic infrastructure in place (up-to-date records, clear goals and objectives).
However, there is little margin for error. What if the person isn’t skilled enough, or isn’t a good worker? What if everything is in place, but the program takes longer than planned? How will the organization support itself in the meantime? Before deciding to hire fundraising staff, an organization should clarify a few issues.
Fundraising vs. Development
First, the role of a fundraiser or development director must be clear. Many people wonder why the task of fundraising is described with many different job titles, such as “fundraising coordinator,” “development director,” or “resource developer.” In many social change organizations, the fundraising coordinator is called just that. In other, usually larger organizations, this position is called the development director. Although small groups sometimes think this title is a sign of elitism or an attempt to disguise the crassness of raising money – similar to saying “your support” rather than “your money” in fundraising appeals – there are important differences between fundraising and development.
Fundraising staff works to bring in the money an organization needs to carry out its programs. The development director’s primary responsibility, however, is to oversee fundraising, rather than to actually raise money. This person may write grants, research foundations and corporations, and oversee or implement other fundraising strategies, but she or he works mostly behind the scenes, establishing a structure for effective fundraising.
One development director characterized it this way, “In fundraising, you make do with what you have. You keep the organization going and out of debt. In development, you start with what you have and you help it grow.”
There must be clarity about what you want a development director to do for your organization. Development often includes: evaluating the organization’s future financial needs and goals; creating a long-range fundraising plan and updating it yearly; instituting a public-relations program; maintaining and frequently evaluating a process for adding new board members; training board, staff, and volunteers in fundraising; maintaining fundraising records; writing and sending fundraising letters; sending thank-you notes or overseeing that task; reporting to foundations or large donors on specific projects; and visiting major donors.
The development director works closely with the board or fundraising committee and helps members make and fulfill fundraising commitments. Many board members and staff imagine that hiring a development director will save them from further fundraising tasks. But “Let’s pay someone to do this so we can do the real work” is a potentially fatal suggestion. All staff and board members must stay involved in and conscious of fundraising, or become even more so, for the expanded fundraising program to succeed.
Finally, it must be clear that hiring a development director will actually solve your organization’s problems. To determine whether your problems lie in fundraising or need other solutions, answer the following: a) Is your board active in fundraising? Does every member participate in fundraising in some way, whether organizing special events, getting mail appeals out, or asking for money face to face? b) Does it sometimes seem that board and perhaps staff spend more time planning for fundraising than actually raising money? c) Do board members and other volunteers involved in fundraising seem to suffer from a lack of knowledge of what to do, rather than a lack of enthusiasm? d) Is the executive director or other staff constantly pulled away from program development and organizing to fundraise? Does she or he feel torn about setting priorities? e) Is your budget over $200,000, or do you need to raise more than $100,000 from non-government, non-foundation sources?
If the answer is yes to three or more of these questions, you should seriously consider hiring a development director. This person would direct and kindle the board’s fundraising energies, plan for fundraising, train others in fundraising, and enable program staff to focus more on program work.
If your list of needs includes a better and more involved board, however, you need to strengthen your board and provide motivational training before hiring a development director. If you need help with data entry, compiling financial reports, answering the phone, handling checks, sending thank-you notes, etc., consider hiring a secretary or office manager. If you want help with a time-limited project, such as a direct mail or major gifts campaign, consider hiring a consultant.
Paying Development Directors
Imagine this scenario: An organization is considering hiring a development director but has little front money. A handsome stranger appears and offers to raise $150,000 (the group’s budget). If he doesn’t succeed, he explains, they are out nothing; however, he receives a 20 percent commission for any money he raises. He says he can do it in six months.
While a small organization with little money may feel that hiring on commission is less risky than hiring staff, paying on commission is highly frowned on in fundraising and by the trade associations for fundraisers, such as the National Society of Fundraising Executives and the Council for the Advancement and Support of Education, for several reasons.
First, all other staff members receive a salary in recognition that their work is a process; they may be very good at it without showing much immediate progress in ending racism, stopping pollution, etc. And paying on commission tends to distort salaries; in this case, the fundraiser would be paid the equivalent of $60,000 a year – more than even the director makes.
Further, this person’s whole livelihood depends on donors saying yes. Even a totally honest fundraiser working on commission would be tempted to distort information, seeing his rent check in the eyes of each prospect. He may also be more interested in getting a gift quickly than in taking time needed to cultivate relationships with funders (which can lead to bigger donations).
This person will not bring his own contacts, but will work with the organization’s donors. If he does bring contacts from previous jobs, are they appropriate for your work? And do you want him taking your donor information to his next job?
Finally, the person coordinating fundraising should absolutely believe in the cause and be part of the team. Even if this person is honest and successful, he should not be the only one raising money for an entire campaign. When he leaves, the group may be $150,000 richer, but no wiser about fundraising.
The development director’s salary should be based on other staff salaries. If you have a collective salary structure, it is the same as everyone’s. If there are pay differentials, it is less than the director’s but more than the office manager’s. While some groups may believe they have to pay “a lot” for a capable person, this is not true. A good person for your group is someone who first and foremost believes in your work and wants to be involved.
Finding a Capable Director
When you begin to search for a development director, you should be able to create a fair and accurate job description in one page. Think about essential skills, as opposed to desirable ones; avoid deterring candidates by adding too many duties unrelated to fundraising or public relations.
Advertise in publications geared to nonprofits. Post your job description at the nearest Foundation Center Collection* and in places where social change activists hang out, such as coffeehouses, alternative bookstores, and progressive churches and synagogues. Send the announcement to other nonprofits and tell directors and development directors that the job is available.
Don’t be stuck on hiring someone with all the “right” experience. If you can’t find your ideal candidate, look for skills related to fundraising, such as running a small business, teaching, or managing personnel – any job requiring self motivation, good organizational skills, and planning and working with diverse groups.
If you hire a development director with little fundraising experience, however, be willing to send the new staff member to fundraising classes or hire a consultant for a few days to help the person get a running start. Theories and how-tos of fundraising are not particularly difficult to learn, though they take a lot of work to implement. Getting someone underqualified but bright, committed, and eager to do a good job is almost as good as getting an experienced person with the same attributes.
* Foundation Center Cooperating Collections are libraries, community foundations, and other nonprofit agencies that provide Foundation Center publications and other related fundraising materials. The Foundation Center also operates reference collections in five cities. For more information, call 800-424-9836.