How Much Salary
(Added 8/2/2010)
The fundraisers, including planned giving officers, in our organization receive a bonus every year. This past year the bonus was small - but most people, as far as I know, got one. Whatever the amount is, however, it always seems to be correlated to the amount of money we've raised over the year. My concern is, after reading the fourth point in the Model Standards of Practice for the Charitable Gift Planner, whether our bonuses are really commissions, as they are tied to what we bring in. Is this right?
The average person might wonder why anyone raising money for a charity should get anything above his or her salary. The argument that there was enough left over that, in effect, the organization was flush after the end of the year doesn't always resonate with people who are told that charities never have enough money, which is the explicit message in a fundraising drive. (Some people wonder why people at charities are paid anything at all but that's a different kettle of fish.) Fundraisers are hardly average people, however, and many are quite used to receiving a bonus for a job well done.
Each charity has to live with itself. Its leaders must weigh the value of money to be used for programs against honoring and incentivizing those who bring in the money. A bonus is a very capitalistic - as distinct from a nonprofit - concept. Even though fundraisers work for nonprofits, it's still a jungle out there for those who sell the product.
It could be that the word 'bonus,' when everyone's is related to what was raised, is simply a substitute for the dreaded word 'commission.' It's a fine line. The concern when both the CGP (then NCPG) and the AFP (Keeping track?) ethics committees were originally meeting was that donors get the correct impression that charities don't squander their money on salaries and other forms of payment to individuals at the expense of programs. A commission is seen as especially unseemly - more so than a high salary - because the fundraiser presumably has an incentive to scalp unsuspecting donors to line his or her own pocket, the point of the exercise furthering the mission - lost in the heated greed of it all.
Another issue, especially for planned giving officers, is that the money raised is not equal to the money placed in hand. The money in hand is often zero, so how do you pay a bonus based on that? And, yes, bonuses, if they are to be, should be paid from money in the bank and not based on imprecise promises to be made good well into the future. Major gift officers face a similar dilemma: pledges.
In a pure world, there would be no bonuses. Salaries would reflect good work; dismissals would reflect poor work. But the search for ethics cannot require purity in all, or even most, cases. So, in the end, a bonus, properly evaluated, even though it may be connected to the performance of the fundraiser, can be a legitimate way to say thank you. A solution might be to calculate the bonus amount from all the charity's revenues and what the budget will bear, and grant everyone the same dollar bonus. Or delineate two or three categories of amounts. Or go to work for New York Life.
A determination at the end of the year separates the amount from the success of any one transaction, and that determination can take into account the work if not the amount actually realized fundraisers perform to acquire commitments of both current and future gifts. (And, no, a bonus should not be tied to the bequest from the billionaire who died last winter, the one who was originally cultivated eleven planned giving officers ago.)