Staff turnover, particularly in the area of fundraising, is a struggle for most nonprofits.
Attracting, retaining, and motivating high-performing fundraising professionals, regardless of your nonprofit’s size, or the cause you champion, is a challenge.
In the book, Burk identifies the three primary reasons fundraising professionals leave, provides insights into the impact of their departure, and what charities should do to mitigate staff turnover, and the loss of talented leaders.
We had the opportunity to sit down with Burk to talk about the culmination of research and the book. Here are some of the salient points she shared, along with some fascinating snippets from the book.
About Donor Centered Leadership
Drawing from five years of research with over 12,000 professional fundraisers, non-profit CEOs, leadership volunteers, and donors, Donor Centered Leadership gives us real data that puts a dollar figure on what it costs, tells us why it’s happening and gives us clear solutions on how to mitigate it.
The book is an important contribution to the sector that should be read and shared by non-profit professionals, especially those in higher levels like board members, executive staff, and Executive Directors.
The Problem of Staff Turnover
For years, Burk says, she was perplexed by an inconsistency in her research findings: There was a discrepancy between donors willing to give planned gifts or seriously consider it (35% range, which is very high), and those who actually do assign a bequest in their wills or offer some other form of planned gift (fewer than 10%). She wanted to get to the bottom of it, and this was the motivation behind the research.
It concerned her, she says, because this discrepancy of 25% equals trillions of dollars in lost revenue for non-profits. Planned gifts, she says, are the “meat of fundraising,” with people often giving 10 times what they would have given in cash.
Among other things, her research found that there are simply too few trained, experienced professional fundraisers working in planned giving, meaning that lucrative opportunities are being missed. When she investigated further, Burk found that too many fundraisers were leaving the profession entirely before evolving into this top end of the business. At the same time, she observed an overall problem with staff retention and high turnover in every kind of fundraising job.
34% of respondents in the study said they were planning to leave their jobs at the time they participated. And young people, Burk says, “are staying on average 16 month and it takes 12 months to get up to speed.”
It’s no wonder planned giving doesn’t materialize the way it should. Non-profit professionals don’t stick around long enough to get to a place where they can handle planned giving, and non-profits are understaffed to deal with this type of fundraising.
The Extraordinary Cost of Staff Turnover
The cost of losing high performing staff however, Burk says, is more than just a loss of talent in planned giving. It’s extraordinary. Once you start adding up all the costs, it becomes clear just how big the problem is.
“Above the line it is easy to see the cost of advertising a position, or the fee for hiring a recruitment firm, or the increased salary required to attract the best candidates. But, below-the-line costs are much more significant.
They are, first and foremost, a factor of time – time from the departing employee diverted from raising money to winding down operations and preparing for his successor; time from the manager to handle hiring, orientation, and closer supervision of the new staff person; time from other members of the fundraising team to help their new colleague get up to speed.”
The numbers are shocking, and probably a lot more than you imagined. Here is one of the several charts included in Chapter 3 of the book that spells out the losses in great detail, accompanied by dollar amounts:
Accrued vacation to departing employee, based on a $42,500 salary.
Direct Hiring Costs for advertising the position
Salary increase to new hire @ 5%
Business application training for new hire
Productivity gap for money not raised due to staff turnover as a percentage of $175,000 goal based on 240 work days per year.
Wind-down period (5 days, based on annual salary of $42,500
Job vacant for 1 month
Productivity gap in Year 1 for new employee (20%)
Support from colleagues to help the new staff member get up to speed over 5 days
Total cost to replace a non-management employee
Cost of staff turnover as a percentage of salary
Cost of staff turnover as a percentage of annual goal
The Top 3 Reasons Fundraisers Leave
The good news is “25% of respondents, in referring to their most recent job, said they could have been persuaded to stay” and there are some very specific things managers can do to hold onto their high performing staff longer.
It’s not about solving the problem of staff turnover, Burk says. It’s about mitigating it. If you can extend the average stay of employees by even a year or two, then you are saving a lot of money over the long run. The key to getting them to stay, Burk says, is knowing why they leave. Here are the top three reasons:
1. Money – “Among survey respondents in every job category, ‘to obtain a higher salary’ was the top reason why they left their last job (47%).” According to Burk, even though many said they were adequately or generously paid, it didn’t stop them from looking over the horizon to see what they could get paid somewhere else.
Her advice: If you are not offering competitive compensation, it’s a good idea to start moving in this direction. If you can’t pay what others are paying, then offer other benefits that are meaningful to fundraising professionals to make the working environment better. For example: offer flex hours, company paid cell phone, laptops, the opportunity to work from home. Benefits that are meaningful to fundraising professionals, Burk says, are normally things that are related to time and time saving.
2. Lack of Opportunity – The number two reason cited for leaving was a lack of opportunity for advancement. Unfortunately, in many organizations, there are just one or two people making all the decisions, Burk says, but a much larger number of staff on the front lines. Fundraisers quickly conclude that there isn’t any opportunity to build their careers, so they move on. From the book: “37% of respondents left their last job for a more senior position; 23% left to work in a
Development operation where they would learn a new skill.”
Her advice: Start giving less experienced staff more opportunity now to mitigate staff turnover. 50% of senior professional fundraisers Burk surveyed will retire within the next decade. When the baby boomers leave, the next generation of fundraisers has to be ready to take their place. Training less experienced staff to shoulder more responsibility now not only satisfies younger employees and persuades them to stay, but it also gives their bosses some much-needed relief right now. Most management-level fundraisers Burk surveyed say they work 8 to 12 hours overtime each week.
Clash of Culture – “40% of professional fundraisers said that conflicting opinions over how to raise money caused them to leave their last position.” This clash of cultures is nothing new, Burk says. While professional fundraisers understand that fundraising is relationship-based and is played out strategically over time, boards and CEOs want the money now, so they “try instead to reach ambitious goals by appealing to a large volume of supporters through mass marketing.” Fundraisers are frustrated with this higher-risk and higher-cost approach to raising money: 36% of respondents said they left their last job to get away from the old-school fundraising culture of “we have to have the money now.”
Her advice: “Part of the responsibility for changing this mindset lies with fundraisers themselves. Presenting decision-makers (Boards and CEOs) with reliable forecasting based on research and testing that shows how a longer-term approach to fundraising is more lucrative than chasing immediate cash, helps the people who control the budget make better decisions.”
Conclusion: If your nonprofit is struggling with a staff turn over problem with fundraising professionals, take a look at Burk’s research, and try some of these methods to combat it.
Penelope Burk is the President of Cygnus Applied Research, celebrated speaker, fundraising expert, and author of Donor Centered Fundraising. You can get more information and purchase Ms Burk’s latest publication, Donor-Centered Leadership, here.