Rethinking Fundraising Metrics

Data is increasingly driving the world of development. The ability to access and utilize data has changed how teams are shaped, how donors are engaged, and where resources are allocated. In addition, development organizations and major gift teams have rapidly expanded, and new data tools allow real-time fundraiser activity reports to evaluate fundraiser performance.

Simply tracking metrics to evaluate performance, however, will not always predict or measure real performance by these team members. Focusing on one key performance indicator (KPI) can lead to ignoring other meaningful activities and successes. Organizations that don’t reflect on the meaning and strategy related to metrics can inadvertently encourage inefficiencies and non-productive actions in development officers’ quests to meet their annual goals.

Additionally, organizations that don’t properly implement the use metrics to drive performance evaluation can create a disconnect between activity and strategic goals, causing managers to focus on tracking behavior over improving performance. According to BWF’s 2014 Survey of Frontline Fundraisers, approximately half of fundraisers believe that their metrics don’t reflect important activities. For those who have dual responsibilities (managing a volunteer program, leading a team, all while managing a portfolio, for example), there frequently are not concrete measurements for activities that make up sometimes over half of their workload. For others, uniform metrics do not adequately match the workload they face, depending on variance in the warmth of their portfolio, capacity of their prospects, or structural obstacles like leadership vacancies or lack of clarity on priorities that impede their performance.

Unintended side effects of poorly implementing three of the most common metrics in the industry are highlighted below.

Common Metric	Rationale		Unintentional Side Effect
Number of Visits	Fundraiser performance is closely correlated with the amount of time he or she spends in the field and in front of donors.		Development officers meet with the same donors repeatedly and do not focus time on discovery or solicitation.The quality of the visit declines, and few strategic objectives are met during meetings with prospects.
Number of Asks	Fundraisers should be expected to ask for gifts consistently and proactively.		Development officers ask too early in a relationship.Fundraisers ask for smaller than necessary gifts from high-capacity donors, seeking to get a gift on record over working for a long-term investment by the donor. Cultivation activities are recorded as “asks” when a meaningful solicitation has yet to be made.
Total Gift Income Raised	At the end of the year you look at what’s counted. Fundraisers’ primary responsibility is raising money.		High performers can be penalized for larger asks that are closed after the fiscal year.Low performers can be rewarded by large gifts that come in on their own but are assigned to their portfolio. There is a desire to “own” as many prospects as possible. Credit sharing is misused to “tag into” large gifts, creating the impression of performance.

The answer is not to abandon metrics altogether. Many of the challenges described above can be mitigated through proactive management by supervisors and accurate and thorough reporting on metrics. Measuring performance and especially facilitating feedback sessions with team members on the interpretation of those results is a critical component of talent management. Metrics need to therefore:

• Act as only one component of a larger system of understanding, creating accountability for, and evaluating performance.
• Take into account a development officer’s tenure and portfolio composition.
• Be created via collaboration between development officers and supervisors.
• Be implemented consistently and reported on frequently.

Discussions about areas for skill and knowledge growth and training needs should go hand in hand with this process. This way, professional development can be targeted towards and influence the right activities by development officers.

BWF’s TalentED practice provides customized training and workshop programs to help grow the capacity of development teams. For more information contact us at training@bwf.com.

Client Advisory – Effective Use of Fundraising Metrics

by Bentz Whaley Flessner on June 19, 2015 in In the News,Published by BWF

Originally published May 14, 2015

Copyright © 2015 Bentz Whaley Flessner & Associates, Inc.

Talent Management in Development – An Infographic Summary

5 Tips for Effective, Meaningful Performance Reviews

Originally published by Bentz Whaley Flessner on July 25, 2014 in In the News,Published by BWF

Client Advisory – June 25, 2014

It’s the end of June, ending many organizations’ fiscal years, academic terms, and fundraising cycles. Now is also the time of year that many organizations conduct their performance reviews, set goals for the next year, and think about how the next year’s budget might be allocated. With so many moving parts, it can become easy to treat performance reviews as just another part of the routine. Performance reviews, however, are one of the most effective tools for successful talent management and staff retention, especially in a competitive hiring environment.

BWF’s research and data have shown that staff greatly value and want meaningful management and goals.However, few organizations utilize performance reviews to provide this value to staff, with high-performing frontline fundraisers reporting more dissatisfaction with their performance review process than their peers. Below are five strategies that development organizations can use for more effective performance reviews.

1. Encourage both parties to come prepared to the meeting. The evaluation forms (both supervisor and staff) can be completed and distributed prior to the review meeting with the staff member. This allows the meeting to focus on setting meaningful goals, discussing ongoing concerns, and addressing the most important topics first. Having access to the evaluations before the formal performance review also ensures that neither party will be walking into the meeting blind. Since one-on-one time focused on a staff member’s performance and development is rare and hard to come by, preparing the basic materials beforehand gives team members more time to effectively be heard by management and understand what their managers are asking of them.
2. Develop strategies behind metrics. Metrics are a hot topic for frontline fundraisers in particular. In many ways metrics drive activity. BWF data has shown that those fundraisers who are assigned outcome-based metrics perform better than their peers. Stronger fundraisers go on more calls, yes, but they also ask earlier and make more ambitious solicitations. During a performance review, dicussion can be on the overall strategies behind metrics. (What do the overall numbers for the year mean for a fundraiser’s average month? What percentage of time should be spent on top prospects? Etc.) For those who have not met or exceeded their metrics for the year, the performance review is an opportunity to discuss where the team member is spending his or her time, assess the strength and composition of his or her portfolio, and evaluate the adequacy of metrics in tracking the responsibilities and priorities of the individual.
3. Set long-term goals beyond metrics. Under-performers are going to be most focused on those short-term goals to get their performance up to par, but for high performers and average performers, short-term goals have less meaning. In the development field, we live in a world of long timelines and high turnover. Campaigns last seven years and up, philanthropic initiatives can be around for decades, large gifts are pledged over years, and decisions are made in months and years, not days. However, due to the competition for talent in the field, chief development officers and development staff are likely to leave before several of these big initiatives are met. Setting long-term goals (what you hope will be achieved by the end of and after the campaign as well as end-of-year and intermediate goals) communicates to your team that you expect them to be around for a while and that you have a plan for them to grow. Linking their personal goals to broader team and development goals links their behavior and activity back to the mission and impact of your institution, a factor that has been linked time and time again to driving engagement among non-profit employees.
4. Incorporate meaningful professional development and leadership opportunities. Most development shops have some amount of budget set aside for professional development, often designated for conference attendance of some variety. However, a performance review is the opportunity to discuss more long-term growth with team members, setting aside time and management buy-in not only to discuss event attendance, but also to brainstorm on implementation of newly learned skills, identify areas for career growth in leadership and management, and discuss mentorship and partnership options. So much professional development in this field concentrates on gaining technical skills (making the ask, learning a new database, etc.), but BWF data has shown that the professional development topic area most frequently requested by frontline fundraisers is team management and leadership. Leadership is not as easily taught in a conference session or periodic brown bag, and the performance review is a great opportunity to provide concrete next steps for team members to grow throughout the year.
5. Review communications and contact practices with management. One of the most frequently cited reasons for development staff dissatisfaction is the lack of access to or attention from management. From the management side this is easy enough to understand: senior managers in development shops are often overworked, managing full portfolios, large teams, and complex systems simultaneously. Regardless, we cannot afford to ignore staff needs: staff performance is too critical to our goals, and other job opportunities are too prevalent. The performance review is the ideal time to discuss how each team member can build more open communication channels to management and for the manager to evaluate his/her own responsiveness to staff needs. Addressing this regularly in performance reviews also can build standardization of communication across the staff and help the manager set the terms with which they are most comfortable being contacted proactively.

The five strategies above are aimed primarily at performance reviews for those team members who are already effective or very effective in their positions. Low performers require more guidance in clarifying what deficits are present and setting action steps for improvement. However, for all shops, performance reviews are a tool for staff satisfaction and retention that is underutilized. When these meetings are glossed over or lack strategy, the negative effects go beyond the lost opportunity of setting ambitious goals and growing the skill set of your team. Skipped or ineffective performance reviews communicate to your team members that they are not a valued priority of your organization. Since development is a relationship-driven and human capital field, that message should not be further from the truth.

Copyright © 2014 Bentz, Whaley, Flessner & Associates, Inc.

Four Principles for Better Fundraising Team Management

I’ve been thinking a lot about why talented team members leave lately. In the development world in particular, where it is relatively easy for a talented individual to find another institution it is very important to keep and support the talent that you do have. In a few studies of why fundraising professionals leave organizations one frequently cited reason beyond the “better job offer” explanations have to do with inadequate support from management and culture. Below are four key points that help prevent and combat staff dissatisfaction with management in fundraising.

1. Positive feedback and consistency will yield more results than punitive measures

A big difference between effective managers and those who fail to lead their team is clarity and consistency in expectations. There are few things more frustrating for direct reports than to have worked diligently on a project or initiative to be told after the fact that their work wasn’t on a top priority, or wasn’t what was actually wanted. In the metrics-driven world of development this can often become not only an issue of morale but of ineffective performance evaluations. Positive feedback is more than recognition and “good job” notices; it’s aligning the structures behind recognition and evaluation with the directives that are given. For example, fundraisers are often told to go on as many visits as possible, but may be also told that multiple meetings in office are mandatory. As a manager it is your responsibility to be clear on the degree to which the mandatory meetings are prioritized over prospect visits (only acceptable for top 25, never acceptable) and reinforce that decision when metrics may reflect time spent elsewhere.

2. Your body language and attitude matter more than what you say.

We as humans are often far more perceptive of body language and subtext in communication that the actual content that is delivered orally. Similarly, we are more sensitive to mood and atmosphere than we are to simple communications, because we attach deeper meaning to those aspects of work life. If a manager goes to compliment or discuss something with a team member while frustrated/tense/angry, even if that frustration is not due to the team member’s behavior, then the conversation will be remembered as negative and can do damage to a staff member’s job satisfaction and confidence. Being aware of your mood and how your approach influences the experience of your colleagues is a skill that is difficult to develop, but critical to long-term success and confidence in your leadership.

3.  Training and professional development are never complete

Often as a manager you can become overwhelmed by the sheer volume of things you have to deal with. When managing a large team, especially one where there are team members who need extra attention to have adequate performance, it is easy to rely on your top performers for consistency. Strong or experienced team members rarely require you to “put out fires,” but, while that makes it easier on you, it doesn’t mean that those individuals don’t have greater ambitions or even weak areas that they need to develop. Integrating training and professional development opportunities and discussions into your regular management routine helps communicate value to your fundraising team. Providing professional development and training to more seasoned individuals can also have a positive impact on the overall team, equipping those individuals with more skills and tools to be leaders and stewards of junior team members.

4. Development operations/advancement services are critical to office morale and culture

In development it is really easy to work in silos, whether they be between academic units at a university, programs in a development office, or leadership and staff. One of the most common “divisions” is between the teams who manage people (development, fundraising) and the teams who manage systems and data (advancement services, development operations). We’ve talked before about how important having strong development operations talent is. How that talent is treated, valued, and included can have a great impact on the overall effectiveness/satisfaction of your team. Open and clear communication between the two areas helps foster creativity in dealing with strategic and procedural challenges. Fostering a positive environment on the operations side increases the tendency for team members to be proactive in supporting and structuring frontline fundraising activity. On the other end, when your development team has both confidence and access to operations teams they are more likely to be better system and database users, collaborate more effectively with research, and reach out when new needs arise.

Something Worth Reading: “The Human Capital That Wins the War: Engaged Workers”

I stumbled over this article post today while perusing linkedin. In the past we’ve talked about how fundraiser performance doesn’t follow the traditional bell curve, well this article touches on a theory for why this is true not only in development, but across sectors: the lack of engaged workers. In particular Mr. Hope says:

You can hopefully call up the same list in your own heads right now. Many people would call this your 20/80 list. The 20% of the people who end up doing (and often even voluntarily signing up to do) 80% of the heavy lifting, consistently; within your company, government, organization, school, unit, department or group. I call this my 8-10 List. 

1-5 is mediocrity. Even the Bible suggests, “be hot or be cold, but if you are lukewarm I will spat you out.” Translation: even God does not like mediocrity. 

5-7 is entertainment. It’s the person you date, but you do not marry. 

8-10 is excellence. Not black excellence, or brown excellence, or white excellence, or male or female excellence, or Republican or Democratic excellence. It’s just excellence. It’s real leadership. 

Looking at your own development shop – who are the 8-10s as described by Mr. Hope? What is different about their behavior? Do you treat these individuals any differently? The most effective development shops are those who can find those strong workers and retain them. But, what Mr. Hope does touch on, is that sometimes the difference between a 5-7 and a 8-10 is not potential or intelligence; it’s engagement. Great leaders are often expected to be leaders and given the freedom to use their creativity to solve interesting and new problems. What leadership expectations are we putting out there for development professionals? Has the era of metrics and benchmarking brought measurability at the expense of creativity and performance?

Five Types of Ethical Non-profit Incentive Pay Structures for Fundraisers

An excerpt from a lively LinkedIn discussion on incentive pay

We’ve talked about what we do know about incentive pay in the non-profit fundraising sector. I knew this was a hot topic in our field (hence the desire to discuss). The response online (I regularly post this blog in a few linkedin groups), however, demonstrated just how passionate (and articulate) both sides of the argument are. Many of those who opposed incentive pay showed great concern for bonuses negatively influencing fundraiser motivations and behavior.  An ethical incentive pay structure would need to be aware of and account for that concern.

We have seen non-profits who have successfully used incentive pay as a component of their talent management strategy. In general these organizations have structured bonuses in one or a combination of the following five scenarios:

Development Office-wide Bonuses (1)

Most non-profits try to increase overall giving each year, with many boards setting macro goals that are quite ambitious. In the for-profit world this model is often referred to as “profit-sharing”, where the entire team gets an even (or clearly striated) cut of profit over goal each year. In non-profits this type of bonus is uniform across the full development staff (for example: a $2,000, award which is either paid to all eligible participants or to none). The decision as to whether to pay the bonus at the end of the year is based upon predetermined office-wide criteria and goals. In many cases of this model staff participate in the selection of the relevant goals – one of which is always the comprehensive dollar target for the year. The bonus is paid at the end of the year to all staff without regard to individual performance. Either the entire staff receives the bonus or none receive it.

Individual Bonuses based on metrics and goals (2)

Since so many development shops already devote a lot of time towards fundraising metrics  and goal-setting it follows that those who pay individuals bonuses can use those same metrics to determine incentive pay. In this scenario the most common set-up looks at performance versus original goals in 4-5 categories (major gifts secured, proposals presented solicitations, visits, team work, etc). This system is formula-based, with those fundraisers who reach 100% of or exceed all goals to receive the maximum bonus (most frequently 4-5% of base income) and those who fall below goal receiving a calculated, lower payout.  In some cases manager input and qualitative goals do apply here, but they become very difficult and controversial to measure related to actual income.

Team-based incentive payouts (3)

Many institutions, especially those decentralized amongst units and programs, prefer to structure incentive pay around overall team performance in meeting goals, securing income, and building constituent relationships. In about half of these cases incentive pay is determined  by the unit or program’s leadership, while the remainder still have central control over incentive pay. Bonuses are also often divided in these cases into two categories of staff: fundraisers and support staff.

Superstar individual financial recognition (4)

This model is almost entirely used in conjunction with the other incentive pay systems described above.  Usually modeled extensively towards top talent retention and recruitment this type of bonus pay is used to reward those few individuals whose achievements far exceed those of their peers (reaching 110%+ in all goal categories for example). Qualification for this level of recognition is set and known to all staff members and typically less than 4 individuals at an institution qualify each year. The actual payout of the bonus can vary widely, but usually amounts to an additional 25-30% of the bonus level set up by the base incentive pay system.

Hybrid Incentives with Multi-level Goals (5)

This is perhaps one of the most interesting types of programs one can find in incentive pay.  In order to encourage more teamwork and organizational cohesion while stimulating individual performance several institutions set up a set amount for bonuses that is tiered and divided by several categories of performance. An example of how this would look would be:

• First, if the development office fails to meet  its goal all bonuses across the board would be decreased by one third.
• Second, if the team failed to meet its goal, bonuses for all members of the team would be reduced by one third.
• Third, if the individual failed to meet personal goals, there would be no bonus for that individual.

 

 

You’ll notice that none of these scenarios tie bonuses directly to a percentage of gift income, much less individual gifts. In many cases any income or pay is coupled with “softer” incentives such as flex-time, vacation, etc.  AFP’s argument against such practices remains widely accepted by the non-profit community, even those who implement incentive pay.

Four Ways Managers Can Better Motivate Fundraisers and Support Development Officer Growth

We spend a lot of time in this field talking about the struggles of hiring new development officers and fundraisers and devote even more time dissecting and understanding what motivates donors and volunteers, but little time has been spent discussing what actually motivates and inspires fundraising staff members. 

High fives, unfortunately, are not on the list.

 

Earlier this week we talked about incentive pay and we will see several follow-up posts on the debate of the role of fundraiser “bonuses” in the non-profit sector. For now, however, I’d like to spend some time thinking about how organizations can motivate and drive performance of their fundraisers outside of an incentive pay structure.  Below are four ways that managers and organization directors can motivate and inspire better performance from their fundraisers:

1. Provide leadership and be a fundraiser’s ally in the office.

Running a development shop can be  a handful and it is easy to forget that fundraisers, even those with a decade plus of experience, need leadership and support. Managers can prioritize being available and visible for fundraisers, listening to their feedback and being an ally in reforming systems and structures to better facilitate development work. In a recent survey of a client’s staff nearly half of those surveyed reported low job satisfaction. When asked to detail the reasoning behind their answers the most frequently cited concern was a lack of leadership attention and support. As one fundraiser stated:

I would …like to have a resource on the senior team, someone to hear my opinions and guide me in a career path, rather than someone who I do not even have a regular weekly meeting with.

Senior teams can get so preoccupied with running an office that they lose sight of the challenge and complexity of the day-to-day work of their staff members. Fundraisers who have regular contact with senior managers feel more comfortable discussing difficult prospects, job concerns, and bringing in others for donor relations and solicitations. This, in turn, improves overall results.

2. Connect team members to programs and the impact of your organization’s mission and work.

I have yet to meet someone who decided to work at a non-profit to make money. One close contact of mine left a career in venture capital to serve as executive director for an organization supporting homeless families. He is closely connected to his work and can talk for hours about the lives impacted by his non-profit. It’s genuine passion that drives what he does. Donors and board members recognize that passion and respond accordingly.

Fundraisers can get stuck in the day to day cycle of scheduling meetings, reviewing reports, and delivering rehearsed messaging. Those who more regularly participate in and facilitate the communication of a non-profit’s impact find the work more rewarding and are motivated to do more. Managers should ask themselves if their fundraising teams get the chance to see the mission realized of the organization. In a meeting with a new hire or job candidate the topic of a specific mission and non-profit’s good work will almost always be featured as a driver for why they sought a position with you in the first place.  If you asked your seasoned fundraising team to tell you why they work at your institution now, would the mission or impact feature in the top 3-4 reasons listed?

3. Recognize and celebrate outstanding work.

We spend a lot of time talking about metrics (and with good reason). Most fundraisers are very familiar with the statistics and numbers behind their goals and performance reviews (assuming that their managers are communicating those metrics clearly as they should be). They realize what benchmarks define “success” for the year. However, the most effective managers are those who treat metrics as a baseline expectation for performance, not the highlight.

Some people feel wary acknowledging fundraiser performance because it can feel callous to celebrate and congratulate an individual for the generosity of another, but recognizing performance doesn’t have to happen in such a rote manner. If a fundraiser comes up with a creative way of stewarding a planned gift that dramatically improved the relationship with a donor that should be celebrated. When board members specifically call out someone on your team as helpful or wonderful to talk to that is an achievement. You team should know that you notice and valuable the intangible qualities they bring to their job in addition to meeting expectations for gift income. Furthermore, when ambitious goals are met and surpassed that doesn’t just mean that the fundraiser did an outstanding job but that new relationships were forged in the interest of a larger mission for good. That’s something to be celebrated. When staff members feel that their efforts are being noticed and appreciated they, in return, commit more energy towards their work.

4. Support creativity and team brainstorming.

In that same survey mentioned above we found that, even though many staff members felt low job satisfaction, nearly everyone provided concrete ideas for new projects and systems improvements. The nature of fundraising itself requires adaptability and creativity; why not translate those skills towards team building and collaboration? Creative people find work most rewarding when there is room for innovation and they can think critically in a positive way. Development offices that provide an outlet for that energy and allow staff members to work together and lead change within a program (within reason of course) foster a more rewarding environment for employees. The nice side effect of this practice is you often see improvements in structures and efficiency as well as build rapport between teams.

What do you think? What do you think drive development officer performance?

When you suggest revising DO metrics