UNDERDEVELOPED – the Canadian perspective

publication date: Feb 27, 2013
author/source: Andrea McManus

High turnover. Positions vacant for longer. Few candidates for senior positions. The blogosphere and twitterverse are full of responses to these highlights of UNDERDEVELOPED: A National Study of Challenges Facing Nonprofit Fundraising.Andrea McManus photo

Conducted by CompassPoint and the Evelyn and Walter Haas, Jr. Fund, the study is the first ever of its type on fundraising. It highlights the feedback from over 2700 executive directors and development directors of American nonprofit organizations. Though they were intentionally diverse in terms of budget and staff sizes, mission types and geographic representation, they had one key thing in common: a senior-level development role on their organizational chart, whether that position was currently filled or vacant.

The findings are no surprise. In fact, they reflect what we have all known for some time. Considerable problems with development director positions exist throughout the sector. But the challenges that undermine nonprofits’ ability to raise funds go much deeper than just the chief fundraising position.

While the report is a US-based study, much in it relates to the Canadian nonprofit sector as well.  In fact, some concerns may be even greater on our side of the border simply because our fundraising profession, its tactics, and our organizations’ need to engage in fundraising and philanthropy are generally more recent than in the US.

Consider these findings:

Vacancy rates

The average vacancy rate for director of development (DofD) positions in organizations with budgets under $1 million is 12 months; budgets between $1 million and $5 million, four months; and over $10 million, 2 months.

Since the DofD position in Canadian nonprofits is generally mid-level (as opposed to a larger organization offering greater scope and responsibility), this mirrors the difficulty we are seeing in recruiting qualified mid-level candidates. And if the mid-level candidates are becoming scarcer, where will we find really experienced fundraisers in the future?

Turnover expectations

57% of DofDs in organizations with budgets of under $1 million anticipate leaving their current employment within two years. Comparable numbers for organizations with budgets of $1 million to $5 million, 51%; over $10 million, 38%. Even worse, 40% of the  DofDs surveyed indicated that while fund development is their current profession, they are not sure if they will stay in it as a career.

What does this instability mean for nonprofits’ ability to achieve the sustainable systems that lead to sustainable fundraising? We know that cultivation can take many months (more than our leaders and volunteers think) – so what does this potential drain from the profession, and from job to job, mean not only for organizations but for the credibility of our profession? (For more thoughts on that, see my blog of October 29, 2012.)

Disappointment with performance

Nonprofit executives have an equally disturbing perspective combined with a lack of confidence in their key fundraising staff. Only 27% of leaders in the $1 million and under category are very satisfied with their DofD performance.

While that figure rises to 41% in organizations with budgets over $10 million the general feedback is that development directors lack key fundraising skills. Yet paradoxically, professional development is often the first thing to go in budget cutbacks!

Disengaged boards

Board member engagement is another area of shocking findings with only 18% of nonprofit executives with budgets under $1 million deeming they have sufficient engagement of their boards. This rises to 22% in organizations between $1 million and $5 million, and 35% with budgets in excess of $10 million. 

Someone is clearly not doing a very good job at educating board members about the value of the profession and of what we do.  Or perhaps, the right people are just not listening.

These are only some of the findings of UNDERDEVELOPED. The report also has some spot-on analysis pointing to the unadorned fact that many nonprofits are not creating the conditions for fundraising success that indicate a strong, sustaining culture of philanthropy. 

Calls to action

UNDERDEVELOPED lists 10 calls to action to help break this vicious cycle by adopting a “profoundly different stance towards fundraising.”

  1. Embrace fund development – a mental model shift across the sector
  2. Elevate the field of fundraising
  3. Strengthen and diversify the talent pool
  4. Train boards differently
  5. Apply the transition management framework to the Development Director position
  6. Invest strategically in grantee fundraising capacity
  7. Leverage technological innovation – embrace creativity
  8. Set realistic goals for development
  9. Share accountability for fundraising results
  10. Exercise fundraising leadership

Is it all our fault?

Assuming that this state of affairs is the fault of flighty fundraisers is too easy – and frankly it is both unfair and inaccurate. The Agitator, that wonderful and slightly irreverent blog by Tom Belford and Roger Craver, conducted its own research in response to UNDERDEVELOPED, focusing particularly on the nonprofit CEOs’ lukewarm assessment of their development directors.  Read the full post here, but  to whet your appetite consider these responses.

Only 22% of respondents would “nominate your CEO for The Agitator’s BEST CEO Award.” (50% said no, and 29% ticked “are you guys nuts?”.)

Answers to: “Rate your CEO’s understanding of and commitment to effective fundraising. He or she is …”

  • A superstar – 16%
  • Gets the basics, but not a leader in this area – 38%
  • Pretty hands-off – 23%
  • More of a hindrance than a help – 23%

Asked which statement best described fundraising planning “at the top” in their organizations, fundraisers said …

  • Program goals are discussed, with fundraising an integral part of the discussion – 26%
  • Tell us how much you can raise – 17%
  • Here’s what we need … go raise it – 58%

There are other, more pointed responses but it’s important to know that these comments are “from fairly seasoned fundraisers - almost half (47%) in the biz more than ten years; 71% over five years. Working in good-sized nonprofits - 27% with $1[million to] $5 million in private contributions; 30% with over $5 million.”

Good grief – as Tom and Jeff say – perhaps we need a marriage counselor! At the very least, hedgehogs we cannot be!

What you can do

UNDERDEVELOPED may be the most important piece of research in the last few decades about fundraising for nonprofit organizations.  If you do just three things . . .

  • Read the report – NOW;
  • Share it with your executive leadership and board members;
  • Start the conversation within your organization about the study’s findings and how they apply to you . . .

. . .then we may have a not-to-be-missed opportunity to start, strengthen, expand, enhance, embrace or spread a culture of philanthropy that will have long-lasting and far-reaching consequences for the sector, our organizations and our profession.

Andrea McManus is President of The Development Group, a full-service, Calgary-based philanthropic consulting firm which has worked with clients throughout Canada and the Caribbean to build their internal capacity and philanthropic culture.  She was the first fundraiser outside of the United States to serve as Chair of the AFP International Board (2011-12) and is a passionate believer in and speaker on the role fundraising plays in growing philanthropy worldwide.

For more information, www.thedevelopmentgroup.ca, email her, or follow @Tdgandrea

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