Editors Note: As part of our new blog on fundraising, The Ask, we're inviting guest contributors to weigh in with their ideas and strategies. Stephen K. Orr is Managing Partner of Orr Associates, Inc.
The environment around nonprofit fundraising has changed over the past few years. The traditional model, hiring talented and qualified people in-house, continues to struggle with turnover at the highest levels. The average turnover rate of nonprofit fundraisers is sixteen months, according to Chronicle of Philanthropy. The direct and indirect cost of finding a replacement is a staggering $127,650.
This turnover has ramifications beyond the dollar cost and time spent recruiting new talent. The main cost to the nonprofit may be a less quantifiable one: its impact on fundraising. Turnover not only impacts revenue, but also the relationship and the momentum of annual fundraising.
Today, nonprofits are faced with the difficult task of attracting fundraisers, who in addition to being pursued by other nonprofits, are also being recruited by the for-profit sector. The net result is a revolving door problem at many nonprofits. Although new hires bring impressive credentials, the departure of their predecessors can lead to often abrupt resets in fundraising. The relationships built by the predecessors over their tenures are in many cases very personal. Thus, donors who may have supported the vision, direction, and momentum of a fundraiser may not be as vested in the nonprofit under new leadership.
A solution to these issues is a 2.0 model, an outsourced solution. This sophisticated approach to shared services and competencies allows for an independent and comprehensive analysis of the nonprofit to provide a roadmap on the future direction of the organization, and to put in place the right people to carry out the plan. My firm, Orr Associates, Inc. (OAI), is often called upon to help during turnover transitions and at other times when the organization wants to avoid the financial, human and timely costs involved in hiring, on-boarding, losing, and rehiring fundraising leaders. One of the key benefits of the outsourced model is the ability to step in quickly with "boots on the ground" to keep philanthropic revenue flowing.
OAI’s management model is unique in that we provide each client with a team composed of senior fundraising professionals, mid-level consultants, and junior staff, so a client is, in effect, buying a piece of each employee with various levels of experience for one fixed price. Our team approach allows us to distribute a large amount of work to a group of people who work closely together to assign responsibilities, meet deadlines, and achieve results.
When OAI started working with College Summit, the nation's largest nonprofit dedicated to transforming the lives of low-income youth by connecting them to college and career, fundraising had become a burden to the organization. College Summit lacked the necessary infrastructure to support an effective fundraising program, and raising money was more important than ever at this stage of development. College Summit attempted to hire a fundraiser internally without much success. Jo Smith, President and Chief Operating Officer of College Summit, said it was extremely challenging to find great fundraising leaders as demand in the industry was high. Smith needed a strong development team that could quickly figure out how to raise a lot of money. She turned to OAI to help fill that deficit, and outsourced College Summit’s national development along with several other roles.
Smith said “OAI staff members are an integral part of our team, and they are as invested in us emotionally and financially as we are. Our success is their success.”
OAI is truly an embedded partner to College Summit. In place is a team of 10 fundraisers who work seamlessly amongst College Summit’s staff daily. OAI staff represents their outsourced national chief development officer, executive director at the NY/NJ Region, major gift officer, and corporate officer, among others. OAI’s team-based approach brings a wide range of fundraising talent to the table. When College Summit needed a senior executive to develop its fundraising strategy, I worked closely with Smith on this plan. When others were needed for research, administration, and event planning, OAI had an abundance of talent across all of these areas. Smith admits it would have been a tremendous challenge for the organization if she had to fill these gaps on her own.
Among the projects in the works: planning College Summit’s first gala in 10 years, which is expected to generate significant revenue for the nonprofit. OAI also started planning last October for bringing on new national board members, and has placed five new ones this year. We have created a robust pipeline of terrific national board members, as tapping into the board’s networks is crucial to executing a successful fundraising program. After just one fiscal year, Smith credits OAI with exceeding her fundraising goals last year (raising more than $11M nationally), along with exceeding her expectations and instituting a culture of philanthropy.