End the Churn, Part 2: Setting Goals and Other Financial Expectations

Some of the most recent literature indicates that the average tenure of a Development Director is eighteen months, and the level of turnover at the junior staff levels aren’t much better. While high turnover remains a steadfast hurdle for nonprofits, it may prove even more widespread considering this year’s overall staffing trends. Achievers’ most recent Employee Engagement and Retention Report highlights that approximately 52% of employees will look for a new job in 2021, which is 43% higher than the 2020 and 2019 data.

Staff turnover is literally and figuratively costly, especially when it comes to your development department.  Every time a fundraising team member leaves your organization, in addition to losing a person who likely brought a slew of intangibles to your community, you’re also losing someone who managed relationships with your donors, oversaw the logistics of soliciting and acknowledging gifts, and probably held a great deal of institutional knowledge as well.

There are a number of reasons why staff members may leave their organizations, and turnover rates for development staff members have historically been especially high. Sometimes, unfortunately, there is just nothing you can do—a young or mid-career team member is looking for an opportunity for growth and your organization might not be structured to allow for a promotion. But, in many other cases, the culprit is something else: working conditions. Your staff might not feel like you are investing in them and their professional growth. They might not have goals and financial expectations clearly outlined for them, or they simply might not have the freedom to communicate their needs transparently with their supervisor or the organization’s leadership.

Luckily, there are changes that you can make in all of these areas that will end the churn in your development department, specifically by improving working conditions and morale for your employees.

In the second of our 3-part series about ending the churn in your development department, we’ll tackle the subject of setting goals and other financial expectations.

In order to get everyone on the same page, it’s important to start by agreeing to shared definitions of terms. Let’s cover four essential ones that your development team will need to be aligned on:

• Budgets

• Goals

• Stretch Goals

• Revenue Projections

Budgets

The budget, both for expenses and income, is your organization's financial roadmap approved by the board. It is your expectation for what you are going to raise and earn. All the numbers in your budget should be backed up by history, research, and reasonable assumptions so that when the actual income and expenses vary from it, you can identify exactly what happened. 

Depending on your organization’s sources of earned revenue, your work might live and die on how effectively your development department raises toward the lines of your contributed revenue budget each year. That’s no small burden on your team of fundraisers, especially if communication gets murky and not everyone is on the same page about what numbers they are working toward. Setting clear expectations is a key part of keeping your development staff engaged, ensuring department morale stays high, and supporting the work your fundraisers are doing to help them meet your organization’s financial goals.

Goals

More ambitious than your budget, a contributed revenue goal gives your development staff motivation for prospecting, donor acquisition, and upgrades that may happen throughout the year. The goal is the number that they are aiming for, one that may be above and beyond what is outlined in the budget as the baseline for ensuring your financial operations stay on track.

Like a budget, a goal should be driven by history and data, but it can be designed (by the fundraiser) in a way that allows for a little bit of dreaming about what can be accomplished in the fiscal year. As your development staff considers their goals for the fiscal year, one question to ask is what they might need from you in order to accomplish them. It might be more face time with certain donors, more flexibility in sharing information about organizational plans and vision for the future, or a better set of tools that allows them to do their work more efficiently or effectively.

Stretch Goals

Fundraisers or fundraising teams may want to set stretch goals for themselves. They may even set levels of stretch goals that they are not going to share with senior management until they feel confident that they can hit them. Consider this a reach-for-the-stars goal, a number that drives many fundraisers to push themselves to the next level. Most importantly, this is an area where the fundraiser must be driving the bus themselves. If a stretch goal is handed down to the fundraising team from senior management, rather than being initiated by the fundraisers themselves, it will be deflating rather than motivating, and runs the risk of feeling like an impossible task rather than an invigorating challenge.

Why is this? For one thing, it may create the perception that senior management is measuring the fundraiser’s performance against this stretch goal, rather than against their primary responsibility, which is to raise the budget (the very first item on this list!). For another, the development team members are closest to the donor community and are best suited to judge where there are opportunities for fundraising growth. By keeping stretch goals in fundraisers’ hands, they become empowered to make the most data-informed decisions that actually lead to the most fundraising wins.

Revenue Projections

Your revenue projection may change throughout the year, based on a combination of what your development department has already raised, and what they feel confident they can raise throughout the rest of the fiscal year, all with the information they have at a given time. This is totally normal.

Fiscal year 2020 was a prime example of how revenue projections changed massively for everyone in the nonprofit space. It was also an important illustration of the need for regular check-ins about projections. You may have lost significant earned revenue through ticket sales for cancelled events and performances, seen a decrease in contributed revenue because donors were tightening their belts, or experienced an influx of donations because you represent a mission to which many were turning their attentions. Regardless of your situation, things were changing on a weekly or monthly basis, and the only way to make good fundraising decisions was to have a clear picture of projections for the remainder of the fiscal year.

At the beginning of any given year, your revenue projection will be aligned with your budget, but as upgrades, downgrades, acquisition, and attrition play out during the budget period, the projection will continue to evolve. Moments when you are reviewing projections are a time to ask yourself and your team: do we need to pivot our strategy? Are there gaps we need to fill? Or, are there updates we need to provide our funders? Having these conversations about your organization’s financial health will keep you and your development team in active dialogue and on the same page.

Once you’re on the same page about the language you’re using to describe your work, open communication around your financial goals can go a long way toward supporting morale and employee retention in your development department. The effect of not having these conversations is potentially huge, especially if a staff member leaves and the position sits empty for several weeks or months. Save yourself the stress and costs of high development staff turnover by getting yourself and your development team on the same page today.

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A previous version of this article was posted in June 2018.