This is perhaps one of the most common reasons for a phone call to me from a nonprofit or charity. Very often the call is from a nonprofit’s Board member following a board discussion that goes something like: “We just can’t raise enough money for the organization. We just lost a grant and are thinking of hiring someone on a commission basis to raise money for us.”
This are red flags for me. Questions that comes to mind: What is the organization currently doing to raise funds? Just how comprehensive and diversified are current strategies? Are all the proverbial eggs, like grants, in one basket? What is the Board doing to address the situation?
Second, while it might seem like a logical approach to hire a fundraiser with the expectation of raising what they earn and more for the organization, good fundraising does not happen on a commission basis. Why not? In essence, it is not just about the money, it is about the relationship between the organization and donor. The commission approach demonstrates a lack of understanding of a good fundraising process, of the fundraising profession and about donors. Donors are not ATMs from which funds are simply withdrawn. Good fundraising is about building a culture of donor trust, support and loyalty. This simply takes time and genuine efforts. But the benefits are worth it.
Increasingly donors are looking for greater accountability around impact of their support. Fundraising and administrative costs are under close scrutiny as never before. Donors will simply not accept expenses that show a significant percentage of their support going to pay a fundraiser’s salary. In Canada, those expenses are identified on a charity’s tax return (T3010) and are addressed in guidelines on Canada Revenue Agency’s Charities Directorate.
Finally, fundraising is a profession. Commission-based fundraising is strongly discouraged by the Association of Fundraising Professionals (AFP) in its code of ethics. A CFRE (Certified Fund Raising Executive) accredited professional may be disciplined for working on a commission basis. All holders of the CFRE credential pledge to abide by the CFRE Accountability Standards, International Statement of Ethical Principles in Fundraising, and the Donor Bill of Rights.
Would you expect your doctor, engineer or dentist to work on commission? No, so beware of a “fundraiser” willing to accept a commission. It is not in your organization’s best interest to bring in a person with questionable professional skills and/or no relevant experience, just to save the cost of a fundraiser’s salary.
- Look at what resources already exist. Are board members participating in fundraising themselves? Is there a volunteer or staff member who has the potential to enter the fundraising field, especially if receiving some training and coaching? Can job responsibilities be reviewed to create dedicated time for fundraising?
- Start Small. If you can’t afford the cost of a more senior fundraiser, begin by hiring a less senior professional, such as a grant writer or a donor relations coordinator on a part-time basis to develop some areas of fundraising. You may find that your junior fundraiser grows in expertise and you can justify adding additional hours and salary.
- Hiring Counsel to Help With Strategy and Coaching: A dedicated in-house fundraiser can be a longer term goal. However if you can’t yet get there, you may want to consider working with a consultant to develop a fundraising strategy and provide training and coaching. Perhaps start with an analysis of your existing funding model.
Fundraising is a profession. Good qualified fundraisers are in high demand and command fair compensation. You need to look at all the fund development options for your organization before you jump to conclusion that you need to hire a fundraiser to solve your problem.