STRATEGIC - Mackenzie Investmentsgiving.mackenzieinvestments.com/wp-content/uploads/2013/...Letter from Brad Offman We are absolutely thrilled to be sending you the SECOND ISSUE of

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.


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

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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.


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)

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3


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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4


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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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


TIPS FOR TAMING

MAGGIE LEITHEAD

Turnover

6


7


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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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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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.”

10


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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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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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


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

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14


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


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


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


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


18


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


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


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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