Development departments suffer from a “revolving door.” Quality staff cycle in and out—for understandable reasons—stagnating growth and hurting donor relationships. Nonprofit managers and directors need to prioritize retaining top talent.
Fundraising has two simple objectives—keep your donors and find new ones. Doing that, however, is not so simple with the “revolving door of development turnover.” Surveys indicate that half of development directors anticipate leaving their job in two years or less—and the smaller the nonprofit, the higher rates of turnover and loss of talent. What’s more, forty percent of development directors are not sure if they will even continue in this career path at all.
Development turnover is a crisis for nonprofits large and small—and shutting that revolving door should be a top priority.
One study identified the average tenure of a fundraiser is 16 months. In an industry profoundly reliant on relationships, the revolving door of development staff is dramatically constricting organizational growth—and the ability to advance important missions.
The cost of development staff turnover
It’s tempting to focus on the direct and indirect costs of finding a replacement ($127,650, if you’re curious), but the loss of relationship capital—which is central to donor stewardship and fundraising success—cuts the development efforts off at the knees. In other words, if fundraising is about keeping and finding donors, managers and directors have two other internal objectives: keep your talented development staff and find new quality staff.
And, just as retaining donors is cheaper and more valuable than finding new donors, keeping and retaining good employees is cheaper and more valuable than findings new ones.
One executive director articulated the phenomena as “some kind of self-perpetuating cycle. On one hand, the jobs are really hard and not that many people are successful at them. Then there is the issue of salaries: they just keep going higher and higher. So development directors who are good can write their own tickets and command what they want. And the larger institutions pick off the best. Then there’s scarcity, so all of us have to pay more for a shrinking pool of people.”
Getting the right people on the bus takes considerable time and effort, and to continually pour time and resources into that endeavor without being able to maintain high-quality talent compromises stability and growth. A key takeaway in the American Philanthropic 2019 Fundraising Performance Report is that “success begets success.” As nonprofits grow, they become significantly more efficient at fundraising, and they realize increasing returns for development staff time-on-task. We found that the typical development officer at the largest organizations raises ten times as much money than a similarly situated officer at a smaller organization.
The revolving door phenomenon is not complicated. The Underdeveloped Study—an important and extensive study by CompassPoint and the Eveleyn and Walter J. Haas Fund—captures the reasons for turnover: unrealistic expectations, lack of investment in fundraising tools and systems, unengaged leadership and board, and a poor culture of philanthropy.
I interview a lot of fundraisers, and I review hundreds of resumes. The turnover phenomenon is a real problem. It’s not uncommon to see fundraisers jump around and, frankly, speaking with them confirms that obstructive leadership makes an already difficult job nearly impossible. The most experienced and successful development professional will not be successful for long if they do not have a budget to create materials, send direct-response appeals, leverage a professional database to track gifts and relationships, train staff and volunteers, cultivate relationships through personal contact, and continue their own professional development.
So here’s your priority, as a nonprofit manager or director: focus on what you can do to stop the revolving door. Regardless of the state of your organization, high-quality talent is looking for two things: to be challenged and to be properly compensated.
Keep your staff challenged and compensated—in order to keep your staff
A healthy organizational culture comes down to the same thing that enables you to raise money: relationships. Here are three principles to keep your staff. In other words, here are three principles to keep your staff challenged, compensated, and committed:
- Top talent—the employee you want—is looking for the next level of growth or opportunity. Talk to your development staff and see what that might be for them. Consider giving junior staff more responsibilities. Identify training opportunities and ways in which to promote and reward internal talent.
- Fundraiser burn out is real. Build in staff retreats and social activities to help your staff like their job—and like each other. Consider having a third-party consulting firm lead a retreat and/or professional development training. Internalize this as a rule: an investment in personnel is an investment in the organization—and your mission.
- The main reason fundraisers leave is money. Get the buy-in of the board to offer competitive salaries for development staff. Consider creative bonus structures that incentivize both the individual and department overall. Of course, compensation can be an uphill battle, so look for other perks, like working from home and flex hours.
There’s no denying that investing in attracting and retaining top talent is not easy—and that a vicious circle is always right around the corner: underinvesting in employees loses good employees, which cuts off the revenue growth to invest in good employees…and so on.
But the first step to getting better is admitting that you have a problem. Acknowledge the revolving door and do as much as you can to end it. Be creative and invest in relationships internally so that your staff can invest in relationships externally.
It’s my goal to help purpose-driven organizations achieve their fundraising goals—and retaining top talent with your development staff is essential. Let's talk about how I can help you recruit top talent or strengthen your current development department. Feel free to shoot me an email at email@example.com, or check out our consulting services online at AmericanPhilanthropic.com.