Dealing With the Nonprofit Sector’s Biggest Challenge in 2019
Statista shows statistics relating to the biggest challenges for nonprofit organizations in the U.S. and Canada in 2019, as stated by nonprofits. Based upon frequency of respondents, the number one challenge was transitions in staff. Executive Search & Recruitment points out that fundraising personnel is one of your organization’s most valuable assets. For many nonprofits, staffing has become a revolving door. According to the “2016 Nonprofit Employment Practices Survey Results,” data shows the average tenure is close to 16 months.
A recent study by CompassPoint shows data from 2,700 nonprofit CEOs and chief development officers. The key findings from this study are as follows:
- Half of fundraisers in the top job at their organization plan to leave their jobs within two years or less.
- Fifty-three percent of nonprofits report having difficulty finding qualified candidates to fill fundraising jobs.
- At many nonprofits, the top fundraising position has been vacant for months or even years.
A study by the Center for American Progress found that the costs associated with the turnover of an employee can easily amount to 199% of a salary cost. All relational capital staff build-up with key donors and volunteers evaporate. Co-workers must pick up the slack, which has the potential for their burn out. Many chief development officers leave because of their CEOs lack of attention or focus on fundraising.
In fact, a fundraising colleague, who had a very high-paying job in Florida, left for a higher paying job in California. He stayed three days and returned to Florida as he felt his tenure in the new job would be amazingly short. He was obviously right as he quickly secured a better job as a chief development officer in Florida. High turnover typically trickles down from chief development officers to their staff.
Bloomerang states that much has been written about development director turnover. The Lilly School of Philanthropy research points out, however, that higher turnover occurs earlier in a professional’s career. Three main reasons why development staff seek new opportunities are development is not adequately funded beyond a staff position, board members and executive directors abdicating development responsibility, and they expect too much, too quickly. Recommendations to help ensure stability in tenure include setting clear and reasonable expectations at hiring, connect employees with mentors or continuing education, and don’t micromanage.
Staff turnover is a complex problem with no single solution. Nonprofit HR asks the question: What makes employees happy? Organizational culture is one way to make employees happy. Seek to build employee engagement by matching their values with organizational values. Make the physical environment one that fosters a positive experience for the employee. Seek to build a competitive compensation package, provide an array of benefits that employees can use and strive to build an employer reputation as one that values their people.
According to Ter Molen Watkins & Brandt, development professionals have come to expect turnover within two years of new hires being on staff. Losing staff can put a serious dent in fundraising. Penelope Burk, fundraising expert, puts the direct and indirect costs for replacing fundraising staff at 117% of their annual salary.
Six ways your organization can address staffing instability are:
- Share values, goals and connection to the mission. Seek to make the fundraising staff excited about their work.
- Develop positive relationships in the workplace. Organizations should prioritize building real, meaningful relationships between staff members.
- Create an environment that is open to new ideas and disagreement. Make sure staff member input is heard, valued and acted upon.
- Take the time to mentor and promote professional development with your staff. Strive to make your employees feel challenged.
- Plan regular raises for staff. Work with HR to make sure this happens as revenue producers are very important.
- Promote and hire from within. Train subordinates with an eye on eventual senior departures and replacements.
According to the U.S. Bureau of Labor Statistics, the median number of years that wage and salary workers had been with their current employer is 4.2 years. Generally, median employee tenure was higher among older workers than younger ones. For example, the median tenure of workers ages 55 to 64 was 10.1 years. Workers ages 25 to 34 had a tenure of 2.8 years. Fundraisers who are younger in age, typically have shorter tenures at organizations.
As a nonprofit leader of development staff, your job is to make your organization a place where others would like to work. Seek to recruit well, train well and get to know your staff. If you know what makes them tick early in their tenure with you, seek ways to keep them stimulated, and their tenure could be longer. If greater compensation is not possible, seek benefits and perks “outside the box” that your staff would appreciate. Support them in every way possible and give them mentoring and continuing education options. Treat your staff as professionals, and they will respect you.
The tenure challenge will continue to remain with us. You need to understand this fact and continue to find successful solutions to this challenge. Your long-term organizational success will depend on it.
Duke Haddad, Ed.D., CFRE, is currently associate director of development, director of capital campaigns and director of corporate development for The Salvation Army Indiana Division in Indianapolis. He also serves as president of Duke Haddad and Associates LLC and is a freelance instructor for Nonprofit Web Advisor.
He has been a contributing author to NonProfit PRO since 2008.
He received his doctorate degree from West Virginia University with an emphasis on education administration plus a dissertation on donor characteristics. He received a master’s degree from Marshall University with an emphasis on public administration plus a thesis on annual fund analysis. He secured a bachelor’s degree (cum laude) with an emphasis on marketing/management. He has done post graduate work at the University of Louisville.
Duke has received the Fundraising Executive of the Year Award, from the Association of Fundraising Professionals Indiana Chapter. He also was given the Outstanding West Virginian Award, Kentucky Colonel Award and Sagamore of the Wabash Award from the governors of West Virginia, Kentucky and Indiana, respectively, for his many career contributions in the field of philanthropy. He has maintained a Certified Fund Raising Executive (CFRE) designation for three decades.