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Re:  To bonus in development (or not....)

Fortunately, this is a set of questions addressed in the code of conduct
for the Association of Fund Raising Professionals:
COMPENSATION AND CONTRACTS
21. Members shall not accept compensation or enter into a contract that is
based on a percentage of contributions; nor shall members accept finder’s
fees or contingent fees. Business members must refrain from receiving
compensation from third parties derived from products or services for a
client without disclosing that third-party compensation to the client
(for example, volume rebates from vendors to business members).
22. Members may accept performance-based compensation, such as bonuses,
provided such bonuses are in accord with prevailing practices within the
members’ own organizations and are not based on a percentage of
contributions.
23. Members shall neither offer nor accept payments or special
considerations
for the purpose of influencing the selection of products or services.
24. Members shall not pay finder’s fees, commissions or percentage
compensation based on contributions, and shall take care to discourage
their organizations from making such payments.
25. Any member receiving funds on behalf of a donor or client must meet the
legal requirements for the disbursement of those funds. Any interest or
income earned on the funds should be fully disclosed.
-----
So, bonusing is not considered unethical, but it is bounded by "common
practice" among culturals in your area.  Where is your board coming from?
--Fundraising is not another word for sales.  It is relationship building.
 Donors of all kinds -- government, individuals, foundations, corporations
-- are being asked to support the mission of our organization.  So, are
they being asked to support the mission...or are they being asked to
support a staff bonus?  Is there a self-interest at work here?  If there is
even a hint of self-interest, donor/gant relationships are disrupted.  And
even if this worst case scenario does not play out, other negative
consequences can result. Here's an example from one of my colleagues who
works in major gifts for a large national charity.  "It's coming up to June
30th and I needed another $100,000 for the top bonus. So I asked four
$25,000's and got them.  I hate this system.  Each one of them was worth
six figures if I could have more time to cultivate them."
--Are you really seeing bonusing in your area culturals? Working
nationally, I often see bonusing hourly frontline staff selling
memberships.  I see it in outsourced phone sales, even gala producers.  I
have seen development staff hired because of their experience with the
foundations, corporations, and government agencies that fund culturals...as
well as many of the "frequent flier" major donors.  These desirable
development candidates could see bonusing as an oddity, or even a red flag.
 There are so many idiot nonprofits who think they should hire a
development officer, put them in an office and shut the door so they can
"raise money."   High performing professionals watch for these
dysfunctional nonprofits where staff and board members don't understand
that they have key roles to play in development.  And they won't take a
position with them.  It's too much work to turn them around.  It's bad for
development resumes. And it makes for miserable years in one's career.
 Development is a highly competitive field.  There aren't enough
experienced professionals to fill all the positions.  So good people don't
need to take bad jobs.  I think bonusing can make your job look like a
"bad" job if it is not typical of the compensation practices of the most
respected culturals in your area.
----------
Now, let's think for a minute about your board.  They are coming from a
world where bonuses are common (and, where a recent study reported in the
Harvard Business Review reports just 28% of employees with a passion for
the Fortune 500 company for which they work)  We work in a high
passion/high commitment field. Does your board really think you are going
to hire an unmotivated person?  If they want to gauge performance, the
standard practice is to hire a fund raising consulting firm whose practice
includes diagnostics and ask them to run an audit comparing your shop to
similarly-sized cultural development shops.
Beyond adequate development staffing, do you have key resources in place to
take development to the next level:
1)  foundations, corporation, government grants:  well networked, well
credentialed staff and strong programs
2)  corporate sponsorship:  strong brand + strong programs
3)  government discretionary:  politically active/connected trustees
4) events:  socially and/or corporate-connected board
5)major gifts:  socially, corporate-connected board
An experienced development officer can help the board with recruitment and
leadership development.  They can train staff and build a high-volume
yera-round development calendar.  This is an ongoing process, and funds
raised will notch up as staff capacity and board development notch up.

*See you at Fund Raising Day in New York, June 7, 2013!*

Marilyn Hoyt
110 Sixth Avenue
Pelham, NY 10803
914-815-0671*


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