The Cost of A Development Director

She is committed, good at her job, raises a lot of money, and is woefully underpaid.  So, so did the reasonable thing—based on her performance, she asked for a raise.  Oh no, said the organization (well, the person representing the organization).  We don’t have money budgeted for any raises.  So she did the next most reasonable thing.  She went out on the market and got a job at a much higher salary.  Now the first organization has to do a search for a replacement development director.  The cost of that is high.  First there is the cost of business lost.  With no one stewarding the development director’s current donors, cultivating the prospect list, and prospecting for new potential donors, the pipeline is pretty stagnant. Finding a new hire is always costly both in time and money.  Once a new person gets hired, there is that getting up to speed time.  Beyond that, my experience is that 50% of everyone you hire turns out not to be what you expect.  Sometimes that’s a good thing as the person turns out to be even better.  But half the time, that person is a bomb.  And then the reality is that they will probably be paying this new hire more than they were paying their dear departed staff member.  And maybe even more than they could have paid to keep what they had.

There is a lot of talk—there is always a lot of talk—about the high turnover in development.  The average development director lasts about 18 months.  This is not nearly long enough to make a difference.  Clearly it does not bode well for stability.

Development directors leave for lots of reasons, and not all of them are self-inflicted.  But many times it is salary and the lack of raises that causes them to leave.

“I loved my job,” a friend told me.  “I thought I would stay at the organization until I retired.”  But life interrupted.  Her salary, never large, diminished as salaries were frozen and sometimes furloughs enforced.  Meanwhile, her reputation grew.  Other organizations began recruiting her, and finally, she said yes.

The day she handed in her resignation letter, her boss tried to get her to stay.  He offered first a 7% raise, then one at 10%,  Her new salary would be higher still; even so, she thought about it.

“In the end, it was anger, not money, that motivated me,” she noted.  “Why couldn’t they do the right thing when I was there?  Why did it take my leaving to make them change?”

Indeed.  Organizations need to recognize the actual cost of doing business.  Not giving raises to productive employees is not a wise fiscal move;  more often than not it ends up costing more than the hoped for savings.  People deserve to be paid for the work they do—good work should be rewarded just as bad work should be penalized.  Too often, the opposite happens.

Good workers get stuck in a system that doesn’t recognize what they do; bad workers benefit from their employees lack of will to do what they should.  Bad workers may not get a raise either, but they also don’t lose their jobs.

Fundraising ethics rightly don’t pay commissions or bonuses based on dollars raised.  There is no ethical issue, however, in paying and rewarding for work well done.  Development officers who identify new prospects, cultivate them well, make appropriate asks and then keep these donors connected to the organization are worth gold.  When will we learn to pay for that?

Janet Levine works with nonprofits and educational organizations, helping them to increase their fundraising capacity and build stronger, more committed boards.  Learn more at http://janetlevineconsulting.com.  While there, sign up for the monthly newsletter