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MACKENZIE STRATEGIC
INSIGHTS • IDEAS • INNOVATIONS
ISSUE TWO • DECEMBER 2013
6 TIPS FOR TAMING TURNOVERSmall steps we can all take to increase employee retention.
9 WALKING THE TALKThe benefits of modelling and encouraging retention.
11 SIZE DOESN’T MATTERThe specific challenges of staff retention in smaller markets.
CONTENTS
CONTACT USFor more details please contact Brad Offman at: 416-967-2189 1-888-653-7070 [email protected]
This is a Mackenzie Investments Publication.
3 LIKE FUNDRAISING RESULTS, STAFF RETENTION DEPENDS ON BOARD INVOLVEMENT By Penelope Burk
Almost one in three development professionals who were planning to resign cited problems between them and their boards as the key reason for their early departure. What can your board do to influence staff retention?
2 HOW DID WE END UP HERE? By Janet Gadeski
In a profession built on committed relationships, in a sector built on trust among charities, beneficiaries, donors, governments, staff and the public, how did we end up here?
6 TIPS FOR TAMING TURNOVER By Maggie Leithead
We need sector-wide strategies to address the systemic issues that challenge our ability to retain great people.
9 WALKING THE TALK: THE BENEFITS OF MODELLING AND ENCOURAGING RETENTION By Janet Gadeski
An interview with the President & CEO and Chief Development Officer at the Princess Margaret Cancer Foundation, a fundraising team renowned for its longevity.
11 SIZE DOESN’T MATTER … OR NOT AS MUCH AS WE THINKEven in smaller communities, small shops don’t necessarily mean small opportunities.
13 COHERENT STRATEGY THE FIRST CASUALTY OF HIGH TURNOVER By Janet Gadeski
When people move through an organization quickly, the sense of attachment to an overall mission and vision may suffer.
15 SHORT RELATIONSHIPS SHRINK FINANCIAL SUPPORT By Brad Offman and Steven Plunkett
Charitable partners prefer if their point of contact at a foundation stays in place long enough to build a relationship.
17 SUPPORTERS AND STAFF TURNOVER: GIFTS MAY DRAG, WORK OFTEN LAGS By Janet Gadeski
Turnover packs a double whammy when it comes to major donors who are also fundraising volunteers.
ISSUE TWO • DECEMBER 2013
from Brad OffmanLetterWe are absolutely thrilled to be sending you the SECOND ISSUE of
Mackenzie Strategic Philanthropy.
Each issue has a theme that addresses the practical needs of Canadian charities. In this issue, we examine
the significant human resource issues facing the charitable sector – most notably, staff turnover. This issue
continues to confound charitable boards, management, volunteers, funders and of course, the hundreds
of thousands of Canadians who are employed by charities, both large and small.
The first step is to acknowledge the problem. Staff turnover affects an organization’s ability to function
effectively and its ability to build and retain relationships with key stakeholders. The next is to identify
steps that need to be taken in order to address the issue. The same folks that are confounded by the
problem are also largely responsible for the solution. Sector leaders, especially boards and senior
management, must take appropriate action.
This issue of Mackenzie Strategic Philanthropy addresses the issue of staff turnover from a number of
different perspectives and relies on the insights of key leaders . From simple tips to overarching strategies,
we hope to provide you with a variety of potential tools to address and mitigate the issue within your own
organization.
You may also notice that you are now able to order hard copies of the publication for your board. Please
refer to the link on the home page.
Feel free to spread the word about Mackenzie Strategic Philanthropy!
– Brad Offman
1
CONTRIBUTORSJANET GADESKIEditor, Hilborn Charity eNEWS President, Hilborn
Hilborn is a Canadian publisher of independent news and analysis for the social profit sector.
MAGGIE LEITHEADPresident & CEO, CharityVillage.com
Maggie Leithead is President & CEO of CharityVillage.com, Canada’s leading website connecting people with passion to jobs with purpose.
PENELOPE BURKPresident, Cygnus Applied Research
Author and researcher Penelope Burk just published her latest book, Donor-Centered Leadership, in which she explores the costs and causes of premature staff turnover.
BRAD OFFMANVice President, Strategic Philanthropy, Mackenzie Investments
Brad is Vice President, Strategic Philanthropy at Mackenzie Investments and Managing Director of the Mackenzie Charitable Giving Fund.
STEVEN PLUNKETTChair, Employee Committee, Mackenzie Investments Charitable Foundation
Steven works with a nationwide group of Mackenzie employees responsible for staff volunteerism, fundraising programs, and overall corporate philanthropy and community involvement.
ISSUE TWO • DECEMBER 2013
WE ACKNOWLEDGE WITH GRATITUDE THOSE WHO SHARED THEIR INSIGHTS THROUGH INTERVIEWS RECORDED IN THIS ISSUE OF MACKENZIE STRATEGIC PHILANTHROPY:
• Paul Alofs, President & CEO, Princess Margaret Cancer Foundation
• George Fierheller, philanthropist
• Sherri Freedman, Chief Development Officer, Princess Margaret Cancer Foundation
• Graham Hallward, philanthropist
• “Jane,” anonymous philanthropist
• Kent Hartshorn, Director, Development Operations, Advancement and Community Engagement, University of Saskatchewan
• Joyanne Mitchell, Manager, Development & Alumni Relations, Lethbridge College
• Andrew Watt, President & CEO, Association of Fundraising Professionals
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MACKENZIE STRATEGIC PHILANTHROPY.
In a profession built on committed relationships, in a sector built on trust among charities, beneficiaries, donors, governments, staff and the public, how did we end up here?
All this in a world where major gifts take up to two years to cultivate (Sherri Freedman, Princess Margaret Cancer Foundation) – and that’s after the charity has spent years building the relationship and proving itself with that donor’s smaller gifts.
Charities compete for staff. Recruiters hustle to meet clients’ needs. Boards demand immediate, stellar results. Professionals hunger for signs of respect and growth. And nearly everyone gallops on the ever-accelerated treadmill of client need.
Where do we find the seeds of solutions amidst all this? Despite the dismal statistics, there are reasons to be hopeful.
From Penelope Burk of Cygnus Applied Research, there is indisputable research on the extent of the turnover challenge and on what works to turn it around. From AFP President and CEO Andrew Watt, we have a deep understanding of the dysfunction that drives those statistics. In the stories of philanthropists, we hear how long-term relationships with key people
can affect their willingness to give and, especially, to open doors to other prospects.
And in committed fundraising-leaders, we find exemplars for the personal and organizational practices to transform those statistics, our fundraising achievements, and our organizations’ impact. Like them, we can move forward from “here.”
“HERE” MEANS “IN TROUBLE”
How did we end up
here?JANET GADESKI
“HERE” means a milieu where a charity (or its recruiter) will woo another charity’s CEO with six months’ tenure – and that CEO will accept. (page 2, board member account) “HERE” means a workplace where a laudable
focus on a mission somehow – too often – breeds organizational disinterest and lack of attention for the professionals whose efforts fund the mission. (Andrew Watt, President & CEO, Association of Fundraising Professionals [AFP])“HERE” means an environment where
development directors with an average tenure of between three and six months in their current roles hear from charities and/or their recruiters about other opportunities. (Penelope Burk, Cygnus Applied Research)
“HERE” means a profession where those under 30 have held their three most recent positions for 1.8 years at most, and their slightly older, presumably mid-level peers (30-44) stayed in theirs between 2.9 and 3.5 years. (P. Burk)
2
3
ISSUE TWO • DECEMBER 2013
Like fundraising results, staff retention depends on
BOARD INVOLVEMENT
PENELOPE BURK
Fundraisers rely on board members to play an active role in fundraising so that ambitious goals can be
met. Yet as I researched the underlying causes of premature job turnover among fundraisers, I heard
them describe boards who:
SET ARBITRARY GOALS without considering real
data or donor trends
OPT FOR HIGH-RISK
high-cost fundraising events
over building relationships
with major donors
ARE UNREALISTIC
about how long it takes to
build sustainable revenue
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ISSUE TWO • DECEMBER 2013
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MACKENZIE STRATEGIC PHILANTHROPY.
Board members acknowledge their uninspiring results. In my survey of 4,500 Canadian and American board members, while four out of five respondents admitted they have responsibility for raising money, they rated their boards’ collective performance in fundraising at a lacklustre 4.7 on a 7-point scale and their own personal contribution to raising money at 4.6.
A parallel survey with Chief
Executive Officers echoed board
members’ concerns with their own
performance. Only 30% of CEOs
surveyed said they were moderately
to fully satisfied with their board’s
efforts in raising money. The majority
(55%) admitted that convincing
board members to fulfill their
fundraising duties was the least
rewarding aspect of their jobs.
I have come to believe that defining
board members’ responsibilities in
fundraising differently will unlock
hidden potential among Canada’s
leadership volunteers – and address a
key frustration that drives senior staff
to the drastic act of resignation. As
the recent recession began to take
its toll on charities, my firm surveyed
25,000 donors about how they were
managing their philanthropy amidst
a deep financial crisis. We especially
wanted to know what charities could
do to make sure they stayed on
donors’ priority lists for funding if
they had to cut back on giving overall.
Donors offered many helpful
suggestions about restructuring
campaigns, communicating
differently and bringing a tone of
restraint to high-profile events. But
their number one recommendation
by far was this: If a leadership
volunteer asks me to give, it will be
almost impossible to say no.
What is it about volunteers – board
members, in particular – that makes
them able to mobilize donors
even in the depths of a recession?
Influence, it seems. Donors say that
volunteering one’s time and taking
responsibility for the welfare of a
charitable cause at the highest level
is the ultimate in community service.
Donors’ respect for leadership
volunteers translates not only into
a greater willingness to give, but a
willingness to give as generously
they can.
With the extraordinary power they
wield through the influence that
comes with the title, you would think
that board members would be eager
to capitalize on this asset to ensure
the financial security of the charities
they lead. But, for the most part,
there is more criticism than praise
about their work in fundraising from
their chief executive officers, from
professional fundraisers and from
board members themselves.
Almost one in three (31%) development professionals
who were planning to resign cited problems between them
and their boards as the key reason for their early departure!
1 On the 7-point scale, 1 represented “not at all effective” and 7 “highly effective”. A score of 5.2 or higher would be considered modestly effective; 5.7 or higher very effective.
“ Emphasize the importance
of longevity. Don’t justify
turnover, take responsibility
and look hard at why
people are leaving. Is it the
manager? Are you hiring
strategically?“
— SHERRI FREEDMAN
“ Working at a nonprofit
means buying into the
mission of an organization
and helping their
investment in you pay off.“
— ANDREW WATT
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ISSUE TWO • DECEMBER 2013
HOW BOARD MEMBERS DEFINE THEIR FUNDRAISING RESPONSIBILITIESOur research found that very little
is expected of board members
regarding fundraising, and the
expectations that do exist do not
necessarily produce results. Board
members were expected to attend
meetings, sit on one or more
committees, and “participate in
fundraising” (though participation
was almost never defined in concrete
terms). So it is not surprising,
then, that when we asked board
members what they thought they
were responsible for, they were
unsure. They tended to claim
the safe ground, like attending
fundraising and donor recognition
events to meet and socialize with
donors. They also thought they
should be doing things that were
actually the responsibility of staff,
such as evaluating fundraising staff
performance or developing the
fundraising plan.
WHAT BOARD MEMBERS ACTUALLY DO BESTSince board members’ high-level volunteer status gives them considerable
influence with donors, their responsibilities should bring them into contact
with people who give in ways that produce results and build board members’
confidence. For some board members, that means occasionally doing
the adrenalin-pumping work of asking for generous gifts. But there are
many more ways in which board members can use their influence to raise
money and build solid relationships – saying thank you with a phone call
or a handwritten note, stewarding relationships with existing donors they
know personally, and welcoming and engaging donors at recognition and
information events, for example.
The more board members connect with donors in ways like these, the more
they will start to comprehend just how influential they are. This will raise their
confidence and make them willing to engage in even more ambitious work.
With the energetic participation of their leadership volunteers assured, staff
will close gifts sooner and build net profit higher and faster. The inevitable
result will be greater job satisfaction and longer tenure of professional
fundraisers and their CEOs.
Canadian donors say they have more money to give, but that they are holding
back. They are waiting, they say, for the right approach by the right person
for the right reason. For charities that are able to mobilize their leadership
volunteers in donor-centered ways, the future is very bright.
Data and conclusions are taken from Penelope Burk’s book, Donor Centered Leadership, available direct from the publisher at www.cygresearch.com.
The majority [of CEOs surveyed]
admitted that convincing
Board members to fulfill their
fundraising duties was the least
rewarding aspect of their jobs.
6
MACKENZIE STRATEGIC PHILANTHROPY.
TIPS FOR TAMING
MAGGIE LEITHEAD
Turnover
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MACKENZIE STRATEGIC PHILANTHROPY.
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ISSUE TWO • DECEMBER 2013
WHAT’S DRIVING TURNOVER?While some turnover can be
attributed to the demographic
shifts of Boomers leaving the
workforce, much of it is still the
result of perpetual sector struggles:
unstable and restrictive funding
that leads to temporary positions
and increased workloads among
core staff; comparatively lower
compensation than other sectors;
common organization sizes that limit
advancement opportunities within a
single organization.
According to Imagine Canada’s
most recent Sector Monitor report,
approximately one-third of charity
leaders predict that the relative
capacity of their organization will
decrease over both the near- and
medium-terms because of growth in
demands and decreasing or leveled-
off staffing. (Vol. 3, No. 2, 2013)
Almost half of the respondents to
the same survey agreed or strongly
agreed that their ability to provide
competitive wages and benefits
was a barrier to employee retention.
Likewise, two-thirds of employers
cite “low salary” as an impediment
to recruiting success in their
organization. (HR Council, Labour
Force Study, 2008 p. 17)
Within the next four years, more than half of Canada’s
nonprofit executive directors say they will leave their current
position. (HR Council, Staffing Trends in Canadian Charities,
2012, June 2013)
Yikes! With numbers like that, it’s no wonder we need to be
talking more about taming turnover and staffing in the sector.
Particularly with early career workers,
nonprofit employees are hungry
for development and advancement
opportunities (HR Council, Growing
younger, 2010, p. 15). With so many
small organizations in the sector,
internal advancement opportunities
are limited, and professional
development budgets are often the
first line items cut in times of restraint.
HOW CAN WE STEM THE TURNOVER TIDE?We need sector-wide strategies to
address the systemic issues that
challenge our ability to retain great
people. Umbrella organizations
are adding valuable research, tools
and resources to the conversation:
nationally, like Imagine Canada or
the HR Council (now housed within
Community Foundations of Canada);
and regionally, like The tHRive
Project in British Columbia, the new
Community Sector Council of Nova
Scotia, and many others.
That said, as leaders in individual
organizations, we can all take small
steps to increase employee retention
day-to-day:
Clarify expectationsRevisit job descriptions to make
sure that you are being honest and
realistic about what the position
entails. The quickest way to sap new
hires’ enthusiasm and send them
running for the door is by placing
them in a role that wasn’t clearly
defined in the first place.
Check out the HR Council’s toolkit resources about job descriptions.
Understand aspirationsWithout professional HR staff in
many organizations, orientation
often falls to the line manager who
hired someone, or even to the new
hire’s peers in similar roles. Many
people don’t make the time to
understand the career and growth
goals of new staff.
Again, the HR Council toolkit has some helpful hints for managing onboarding.
2/3 of
employers cite
“low salary” as an impediment to recruiting success in
their organization.
1.
2.
“ Employers aren’t fools.
They look for both range
and depth. It’s very hard to
prove your ability within 16
months. Employers want
to see willingness to invest
in an organization.”
— SHERRI FREEDMAN
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MACKENZIE STRATEGIC PHILANTHROPY.
Recognize the power of recognition
We know that people don’t join
the sector to get rich; they join it
because they want to have a positive
impact on the world through their
work. Beyond a simple “Thanks.
You helped us achieve our goals,”
do you make sure that every
employee understands how their
individual contribution ties into the
organization’s annual goals and
supports the mission?
Vantage Point in Vancouver has some terrific resources to help connect the dots between individual activity and mission success. www.thevantagepoint.ca
Get serious about compensation
Sector employees are mission driven,
we know. We also know that financial
stresses are a common reason why
people leave the sector. Make time
to benchmark your organization’s
salaries against sector norms to
ensure that you’re in the right
ballpark. Large salary bumps may
be difficult in any organization, but
that doesn’t mean that you can’t get
creative with compensation in other
forms, such as non-cash benefits,
flex time, or other meaningful perks
that won’t break the bank.
Consult position-specific salary data developed by related professional associations, or check out the national perspective in the 2013 Canadian Nonprofit Sector Salary and Benefits Study.
Get more creative about enrichment opportunities
Look for ways to provide more
growth opportunities for employees:
training, stretch assignments or
formal mentoring programs. You
can keep it simple too: try lunch-
and-learns, plan do-it-yourself
professional development days, or
ask for a seat in the training session
of a corporate partner.
Resources to help with professional development:■ Online training■ DIY professional
development days■ Professional development events
from coast to coast■ Professional associations
Get your Board on boardBoards can play an important role
in getting and keeping great staff.
They can also be powerful advocates
who help address some of the
broader systemic issues that lead
to chronic turnover problems. Get
them engaged in the process if you
haven’t already.
The HR Council toolkit has some tips. Imagine Canada’s Standards Program also offers a good checklist of staff management standards.
Remember, we’re all in this together
If we want to ensure the sector
thrives in the long run, we each
have to work on both the macro
and micro changes needed to help
attract and retain terrific people. Our
work is too important and our goals
are too large to keep setting these
conversations aside.
3.
4.
5.
6.
7.
“ Even for your first job,
target something you’re
passionate about and
do your due diligence.
How long has senior
management been there?
If not long, is that really
where you want to work?”
— PAUL ALOFS
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ISSUE TWO • DECEMBER 2013
Walking the benefits of modelling and
encouraging retention
talk:the
JANET GADESKI
Senior leaders who want to keep and develop their staff teams had better demonstrate commitment and longevity in their own careers. That’s what qualifies Paul Alofs and Sherri Freedman to speak with such conviction about the importance of employment stability. As President & CEO (Alofs) and Chief Development Officer (Freedman) of the Princess Margaret Cancer Foundation, they lead a fundraising team renowned for its longevity. And they have been in their own positions for 10 and eight years, respectively.
As Alofs and Freedman reflect on
their own careers and modestly
discuss how Princess Margaret
Cancer Foundation has achieved
such consistent team longevity, two
things become clear: Staff longevity
and long-term fundraising success
share a single, solid base. And both
the organization and the individual
are responsible for continually
building the elements of that base.
“The board, senior management, the
staff – the whole organization needs
to elevate this dialogue about the
importance of staying put,” Alofs
notes. “We need the kind of leaders
who encourage people to stay, work
and develop.”
That includes the Board of Directors.
“If there’s a new CEO every two
years,” he asserts, “the entire Board
needs to be replaced! Boards should
be responsible for hiring and keeping
a great CEO and great senior leaders.
Boards should hold themselves
accountable for hiring right and
keeping those people around.”
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MACKENZIE STRATEGIC PHILANTHROPY.
LONG-TERM COMMITMENT FOSTERS TRUST, GIVING“A very significant gift last year
was the result of the work of a
development officer who’d been
here 12 years,” Sherri recalls.
“The donors gave at higher and
higher levels, finally giving $50
million. When there’s longevity,
you know things about the donor,
the family dynamics, and whether
they care about recognition.
Those donors also know that if
they open the door for a friend,
family member or colleague, the
fundraiser will treat that person
with the same respect.”
“Major donors hate to see a
new person every year or two,”
Alofs confirms. “Consistency
and longevity matter in any
relationship. At Princess Margaret
Cancer Foundation, the average
tenure on the major gift team
is eight years. That stability is
reflected in the many donors
who have made multiple gifts
and written the institution into
their wills. At organizations where
there have been many short-
term CEOs, major donors will be
less confident. Turnover works
against you in terms of building
confidence with major donors.
It’s striking how simple and how
important that is.”
HOW TO BUILD A CULTURE OF LONGEVITYIf you value longevity (and you
should), it’s important to say
so. “We recognize long service,
and we make a big deal of it,”
Freedman says. The longest-
serving member of the Princess
Margaret Cancer Foundation
team, Alof’s executive assistant,
has been with the Foundation
over 20 years. Alofs notes
that Princess Margaret Cancer
Foundation’s Board models
longevity as well. Members can
serve up to three terms of three
years, and most of them stay for
the entire nine years.
What drives the retention record at Princess Margaret Cancer Foundation? Spend some time with Alofs and Freedman and you won’t hear a word about salaries. Instead:
Everybody has access to good donor opportunities –
the senior fundraisers don’t skim the cream off the top. It’s definitely an anti-diva culture.”
— FREEDMAN
We promote people regularly. One of the promises we need
to keep is that if people do a great job, they will be promoted. We want people to see a career path here.”
— ALOFS
We emphasize integration. For example, everyone takes
part in the Weekend to End Women’s Cancers. No one says, ‘That’s not my portfolio.’”
— FREEDMAN
Innovation is embedded in our culture. We constantly
change our lottery, our weekend walk and other initiatives. That comes in part from the people in the cancer centre – we get inspiration from them to innovate constantly.”
— ALOFS
When it’s not possible to promote to team leader roles,
we give people projects and other leadership opportunities.”
— FREEDMAN
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ISSUE TWO • DECEMBER 2013
In the mega-urban worldview that sometimes skews Canadian fundraising, it is easy to overlook the specific challenges of staff retention in smaller markets.
It’s just as easy to assume that it
must be even more difficult to find
and keep good fundraisers in smaller
markets. But the reality is more
complex: while some fundraisers
perceive drawbacks to smaller
centres, others find them more
appealing. The allure of bigger jobs
at bigger institutions is universal; the
only difference is that in a smaller
centre, professionals often have to
leave town to “move up.”
Kent Hartshorn’s 21-person
fundraising department at the
University of Saskatchewan is the
largest in Saskatoon (population
240,000). He’s keenly aware of the
impact that job enrichment and
opportunities for promotion have on
retention. “My biggest challenge,” he
reveals, “is having all 21 positions filled
and staff on a career path that meets
their needs and lets them achieve
both personal success and success
for donors.”
The U of S fundraising team has,
at first glance, a commendable
retention record with an average stay
of between six and seven years. But
the picture may change. Though the
university offers a competitive total
compensation package and flexible
work environment, Saskatchewan’s
booming economy and some
university policies make it hard to
create new, more challenging roles in
time to satisfy professionals who can
readily find opportunities elsewhere
in the city.
size matterdoesn’t
or not as much as we think
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MACKENZIE STRATEGIC PHILANTHROPY.
GREAT LIFE IN A CITY THAT’S A WELL-KEPT SECRETHartshorn’s pool of potential hires is
smaller than he would like.
There are only 20 Certified Fundraising Executives in the entire province and we have four of them already,”
he explains. Saskatoon is a growing,
prosperous community, appealing
enough that fundraisers tend to stay
there and move among its charities
rather than away from the city. But
it’s also a well-kept secret.
“We have to make people aware of
Saskatoon’s vibrancy,” Hartshorn
believes. “I would like to attract more
fundraisers from outside Saskatoon.”
At the time of his interview, Kent
had five vacant positions. He notes
that two universities in larger Prairie
cities have started to post positions
for special campaigns. As their
fundraisers visit Saskatoon alumni,
he has no doubt they will meet with
some of his staff as well.
“Not a week goes by without
someone receiving an email about
available positions,” he observes.
And as he points out, that’s true
everywhere, in charities and
communities large and small.
SMALL SHOP, SMALL TOWN, BIG GOALSEven in much smaller communities,
small shops still don’t equate to
small opportunities. Joyanne Mitchell
is Manager Development & Alumni
Relations at Lethbridge College.
She lauds the benefits of her role
with a capital campaign team of six
fundraisers, as well as support staff
for Olds College in Olds, Alberta
(population 8,500).
I was exposed to the entire range of fund development practices during a $43 million capital campaign,” she recalls. “I saw everything. I was always involved in decision-making, and the school had a great reputation.”
Beyond her own institution, Mitchell
felt professionally isolated. There
were very few other fundraisers
in Olds. The National Society of
Fundraising Executives, predecessor
to the Association of Fundraising
Professionals, exposed her to other
professionals and best practices. To
stay connected, she willingly drove
95 kilometres to the nearest chapter
in Calgary so that she could be
an active, learning member of her
professional organization.
Lethbridge’s population of 100,000
makes it much larger than Olds, but
the city contains only a few people
who already have the required skills.
Joyanne looks for “people we are able
to train who already have the required
transferable skills and personal
characteristics,” whether or not they
already have a fundraising background.
There are barriers though: widespread
unawareness of fundraising as a
profession inhibits sector switching,
and established fundraisers are
reluctant to move to a community
where they don’t perceive a growth
path in responsibility, title and pay.
KEEP THE STAFF, WIN THE GIFTSThere’s one significant common factor
among all philanthropy-dependent
institutions, regardless of location or
size. Trust built with a donor over a
long tenure equals success.
A senior fundraiser here was stewarding an individual from another province. Over a number of years, those consistent contacts have led to this donor giving ongoing transformational gifts totaling tens of millions of dollars,” Kent recalls. “Some donors give regularly, love the institution, and would give no matter who called. There aren’t a lot of those though. The trust built up with that kind of fundraiser continuity is paramount in receiving significant gifts”
Joyanne agrees. In Olds, she
came to know a donor who had
been considering two or three
postsecondary institutions as
beneficiaries of his estate. “We
secured his bequest commitment
because of our mission,” she reveals.
“Then we suggested adding a small
component of ‘here and now’ giving
to create an annual student award.
Next, he started a designated
endowment. Our steady contact
over the years allowed us to share
extensively about the College and
encouraged him to continue adding
to his endowment. Because he didn’t
have to change contacts, he built a
lasting trust in the College.”
To stay connected,
she willingly drove
95 kilometres to the nearest
chapter in Calgary so that she could be an active,
learning member
of her professional
organization.
“““
13
ISSUE TWO • DECEMBER 2013
Coherent strategy the first casualty of high turnover
JANET GADESKI
A long-term history of staff turnover in a charity’s fundraising department is debilitating. Association of Fundraising Professionals (AFP) President & CEO Andrew Watt sees three trends among charities worldwide, but particularly in North America:
Very few charities can change direction in under five years – a period longer than the average
tenure of many fundraisers and executives. When strategies are developed by one set of people,
implemented by another and followed through by a third, awareness and coordination are lost.
Turnover at high levels demoralizes a charity’s entire staff. Strategic issues are tweaked
constantly. The lower ranks, unable to keep up with constant changes, focus on their own jobs
rather than the big picture.
People are not looking at the resources and skills that are available internally. The outside
experience that external candidates can offer often swamps valuable internal experience.
2
1
3
13
ISSUE TWO • DECEMBER 2013
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MACKENZIE STRATEGIC PHILANTHROPY.
LOW OVERHEAD MORE IMPORTANT THAN HIGH RETENTION?The impact of turnover on donors is more
difficult to measure. An organization may be
quite good at promoting its mission and vision,
but can’t maximize the impact that donors
and volunteers make, for example. There’s an
opportunity cost, Watt points out, of delivering
less-than-optimal support to donors and
fundraising volunteers.
“If donors were more aware of the impact on
potential, they would be much more vociferous
about the need for good working conditions
and the high value of employees,” Watt states.
“But the prevailing view is that staff costs, as
part of overhead, must be tightly controlled.
It’s a short-sighted double standard. People
working for a charity must feel like they’re living
up to their maximum potential.”
TO GET RESPECT, ORGANIZATIONS MUST GIVE RESPECTWatt suspects the lack of importance and respect accorded to
fund development may feed the frustration that leads to job
hopping. “Most nonprofits are very focused, rightly so, on the
end result – what they want to achieve. If they weren’t mission-
driven, we wouldn’t want to work for them. But that means it’s
very easy to rate people involved in service delivery much more
highly than staff in resource development. Resource development
staff don’t warrant as much interest or attention. That’s woefully
short-sighted.”
Many organizations don’t understand they’re investing in human
capital. “They see their staff as a commodity – if they don’t fit, the
organization doesn’t try to make it better,” Watt laments. “Beyond
the executive level, charities also need a strong board commitment
to building the best possible staff teams and employment policies.”
“If senior leaders aren’t interested in offering a solid, strong work
environment,” he concludes, “it’s hardly a surprise that people
don’t become loyal or stay long.”
Among AFP’s members, the average tenure of U.S. and Canadian fundraisers is 3.2 to 3.3 years. That’s a bit
higher than Penelope Burk’s findings, but still disappointing when compared to the relationship-building
requirements of long-term fundraising success. Burk’s sample, Watt believes, may be broader in terms of the
range of organizations covered and include some respondents who are not AFP members.
to earn a higher salary
for more responsibility and authority
frustration with the work environment
to engage in more interesting or challenging work
due to greater opportunities for career advancement elsewhere
20%23%29%34%39%
MANY REASONS TO GOAFP’s own statistics reveal a myriad of motivations for changing jobs. In the association’s 2013 survey, the
most frequently cited reasons for considering a job change among both Canadian and U.S. members included:
There is no sense of attachment to the overall mission and vision at every level when people are
moving through in two or three years,” Watt reflects. “When people know they may not be there in
three years, they’re keen to change things immediately and long-term insights are lost. It’s critical to
get long-term buy-in throughout the organization, yet that can’t happen without staff retention.”“
15
ISSUE TWO • DECEMBER 2013
SHORT RELATIONSHIPS
FINANCIAL SUPPORTS H R I N K
BRAD OFFMAN AND STEVEN PLUNKETT
The Mackenzie Investments Charitable Foundation isn’t one of Canada’s largest corporate foundations. But we like to think that our relationship-based approach to granting is unique.
Every Foundation volunteer (that is,
every member of the Foundation’s
Board of Directors and its Employee
Donations Committee) plays a role in
deciding which charities will receive
grants. All Foundation volunteers are
Mackenzie employees.
The review and recommendation
process isn’t all that unusual, nor are
the Foundation’s giving guidelines
(we grant to small social services
organizations with a focus on
children and families at risk). What
is more unusual is that each of the
30 grant recipients is assigned a
Relationship Manager (RM). The
RM is a member of the Donations
Committee or the Board of Directors,
and becomes the charity’s point
of contact for site visits, volunteer
opportunities and any other matters
affecting the charity’s relationship
with the Foundation.
Once a charity begins to receive
funding, it can expect to receive
support for approximately five
to 10 years (although officially,
our Foundation does not provide
formal multi-year grants). More than
anything else, the RM structure allows
our Foundation to get a full picture
of the charity’s inner workings, over
and above any stewardship report
or financial statement. Furthermore,
our charitable partners like it because
they know precisely who to contact
with any issues or opportunities that
might arise.
Almost one in three (31%)
development professionals
who were planning to resign
cited problems between them
and their Boards as the key
reason for their
early departure!
16
MACKENZIE STRATEGIC PHILANTHROPY.
More often than not, turnover shortens the funding period, turning it from a potential
decade-long relationship into one that lasts only a year or two.
WHO’S ON FIRST THIS TIME?Here’s the problem: our point of contact at
the charity changes. It changes often … in
fact, far too often.
This excessive turnover invariably impacts
our relationship and the Foundation’s overall
opinion of the charity. More often than not,
turnover shortens the funding period, turning
it from a potential decade-long relationship
into one that lasts only a year or two. The
personnel transitions may be relatively
seamless, but constant turnover makes us
question the charity’s overall efficiency and
leadership, even if the roots of the problem
are elsewhere. It’s a very, very big deal.
Since our RMs act as the primary contacts,
their opinions of the charity and its staff
weigh heavily when considering future
grants. It is important for us to know that
our grants are used to create impact in the
communities where we provide funding.
When there is heavy staff turnover, it is
difficult for the RM to build a strong and
lasting relationship with the charity.
VALUABLE INFORMATION MISSED“As donors, we do have an obligation to make sure our grant
recipients know of our requirements and deadlines,” notes Rob
Neish, a Committee Member and RM since 2006. That can be
difficult without a working email contact. Many RMs cited email
“bounce-backs” (due to staff turnover) as a major source of concern,
especially when they occur without an indication of who to contact
moving forward.
While new staff at the charity often take a proactive approach to
donor development, we too often feel that the introductory call
fails to acknowledge the breadth and depth of the relationship. “It
almost feels like they are re-introducing themselves to us rather than
acknowledging our past support,” says another Committee member.
This is not ideal.
Our RMs keep in touch with our charitable partners regularly, even
monthly or bi-weekly. They also try to match the volunteer needs of
the charity to the volunteer interests of our employees. When there is
staff turnover, this component of the relationship often fails.
Sometimes the turnover in staff creates a catastrophic shift in the
relationship between the charity and its donor. Sometimes there
is no effect at all. More often, however, the shift is categorized by
small nuances that chip away at the relationship between charity and
donor. While staff turnover is inevitable, it is clear that it needs to be
both managed and mitigated.
17
ISSUE TWO • DECEMBER 2013
Supporters and staff turnover:
GIFTS MAY DRAG, WORK OFTEN LAGS
JANET GADESKI
To probe the impact on giving and volunteer commitment, I spoke to three active
philanthropist-volunteers. Their causes range from health care through arts organizations,
independent schools and the United Way. I also spoke with someone uniquely positioned at
the crossroads between funders and charities. Their insights offer a window into the minds and
hearts of our donor-volunteers.
So far in the charitable sector, there has been much more research on how turnover affects charities and individual professionals than on how it affects key supporters. But both supporters and professional staff acknowledge that turnover packs a double whammy when it comes to major donors who are also fundraising volunteers.
17
ISSUE TWO • DECEMBER 2013
18
MACKENZIE STRATEGIC PHILANTHROPY.
THE MORE CRITICAL THE ROLE, THE BIGGER THE PROBLEMMargaret Dickson, Director TCI
at Tides Canada, oversees many
relationships between funders
and staff implementing charitable
programming. “Some overlap time
will help,” she advises. “Introduce the
new person to key relationships and
processes. Don’t let the outgoing
person keep everything in their head
– that can lead to the funder feeling
their relationship is not being cared
for properly.”
“I don’t think there’s any question
that stability of staff helps build
and maintain relationships,” she
continues. “That helps fundraising,
granting and everything else you do.
It’s costly in both time and resources
to lose staff because you lose
continuity. The more critical the role,
the bigger the impact.”
Those closest to the organization
understand that some staff change
is inevitable even in the most
successful charities. Philanthropist
Graham Hallward says that charities
with effective stewardship programs
for both donors and volunteers
have the best shot at mitigating the
impact of turnover.
“Stewardship is critical with major
donors who are also key volunteers,”
he explains. “If you lose them, you
lose not only their future gifts but the
doors they could have opened. You
can’t separate volunteer stewardship
from donor stewardship. There’s a
very high leverage in having happy,
highly engaged volunteers because
they can multiply their own giving
five to ten times.”
INFORMATION AND ACTION MAKE THE DIFFERENCEWhen stewardship principles are
applied to managing turnover,
he continues, an outgoing senior
executive might call him to say
goodbye and ask, “What can I tell
my successor so that the relationship
[with the charity] can be seamless
for you?”
But all that goes down the drain if
the new person doesn’t absorb and
act on the information that’s passed
on. Graham describes having to
orient a new charity executive to
the terms and status of his multi-
year gift. “Those terms had been
documented,” he recalls. “It’s in the
charity’s interests to cover them off.
Poor transition due to staff turnover
doesn’t reflect well on governance or
board leadership.”
Staff turnover … can lead to strategic drift, campaign delays, annoyance, stagnation, and markedly slower giving.”“
(continued on next page)
19
ISSUE TWO • DECEMBER 2013
Internal promotion can help to
smooth the transition. The new
person knows the organization and
its key networks, and can often pick
up relationships more effectively.
Donor-volunteers like Hallward
enjoy seeing a bright, ambitious,
personable junior make the most of a
new opportunity. Internal promotion
also happens to be a great strategy
for retention. Everyone wins.
One retention strategy, though,
can backfire if it’s not explained
properly. When job enrichment
means that individuals are regularly
transferred from one set of
program funding responsibilities
to another, donor-volunteers may
read it as a sign that the program
they value is a low priority for the
organization. Like other concerns,
that misconception can be addressed
through stewardship: helping
donor-volunteers understand
the apparent turnover is a staff
development strategy and ensuring
that information and guidance are
properly passed on to the new officer.
WANDERING IN THE VACANT WILDERNESSPerhaps the worst impact of staff
turnover is felt when the position
is not immediately filled. Here’s
philanthropist George Fierheller
on the struggle to lead a capital
campaign for a hospital just as it
was forced to merge with two other
hospitals and lost its CEO:
“I spent several years handholding.
There wasn’t much else I could do.
They brought in temporary staff
from Ketchum that effectively
reported to me. That kept the annual
campaign going. It can be very
disruptive when the CEO leaves.
It takes way too much time to get
things back into place.”
“Jane,” a board member and
fundraising volunteer who prefers
anonymity, recalls a similar experience:
“Our foundation CEO was hired, and
then was lured away after six months.
That was a shock to the system. She
had developed a capital campaign
strategy, and suddenly there was
nobody to run it. One year later,
we found someone wonderful, but
there was a real gap, a year when
we couldn’t make progress, define
roles or set up teams. When there’s a
leadership vacuum, it’s awful. There’s
nobody to tell you what to do; what
your portfolio is.”
Sometimes, however, turnover can
create an opportunity. Jane supports
a hospital that gave her treatment
she couldn’t have received anywhere
else in the country. When “her” donor
relations officer left, the foundation
CEO didn’t just hand the entire
portfolio to an incoming hire. She
reviewed each donor looking for a
good fit with another development
officer, not necessarily the new
person. Jane says her current contact
is “much like me” – a risk-taker with a
sense of humour. “That,” she affirms,
“was a positive transition.”
ABILITY TO GIVE, WILLINGNESS TO OPEN DOORS MAY BOTH SUFFERIt’s clear that while the downside of
staff turnover is seldom measurable,
it can, depending on the vacancy
and the particular donor-volunteer,
lead to strategic drift, campaign
delays, annoyance, stagnation, and
markedly slower giving.
Like most philanthropists, Jane,
Fierheller and Hallward have
seen the good, the bad and the
ugly sides of staff turnover and
related stewardship of donors and
volunteers. It’s clear that for all of
them, the cause is paramount. Jane
is profoundly grateful to the hospital,
and focuses on her contacts with
doctors more than her contacts
with fundraising staff. Fierheller
and Hallward believe deeply in the
institutions they support. As long
as the mission continues, Jane,
Fierheller and Hallward will do and
give what they can.
But “what they can” can vary
significantly. Some have had their
giving delayed when the record of
their previous interests and support
was not considered. All have been
unable to work to their potential at
times when their staff relationships
are interrupted. As donors, they are
willing to make allowances for the
charities they love – but they are
not willing to make excuses to their
friends and networks when they put
on their volunteer fundraisers’ hats.
“ Moving every couple of
years is not going to give
you the skills and job
satisfaction you’re looking
for. You should be able to
succeed by staying in your
job. In a senior role, you
should be looking at a 10-
year commitment with an
organization.”
— PAUL ALOFS
20
MACKENZIE STRATEGIC PHILANTHROPY.
Source: 1 Donor-Centered Leadership, Penelope Burk, 2013 | 2 Penelope Burk, Cygnus Applied Research | 3 Sandra Paquette, SearchSmart
Stats&facts
say they delay making gifts, give less generously than planned or don’t give at all due to the frequent turnover of relationship officers.1
13%
of major donors
On average, development
directors spend just
three to six months
in a new job before being recruited for
another.1
41% of fundraisers under the age of 30 left their last job for a position with more senior responsibilities, and
39% left to work for a nonprofit with more opportunities for advancement.1
It costs about
It costs charities
It costs more than
$370,0001
in outright expenses and lost or deferred revenue to replace a major gifts officer whose fundraising goal was MILLION
$5
65% to 83% of a fundraiser’s annual salary to replace that person.3
12 to 181 months.
The average length of stay for major gift fundraisers is
For more statistics, see
Coherent strategy the
first casualty of high
turnover on page 13
her salary to replace a front-line development officer who stays only 16 months in her first or second job.1
1.2 times
MACKENZIE INVESTMENTS180 Queen Street West Toronto, ON M5V 3K1
416-967-2189 1-888-653-7070 [email protected] twitter: @bradoffman
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