Pay for performance: Unethical ... or next big thing?
File under: Paying a freelance copywriter a bonus for her/his surprisingly great results? Thumbs up ... or nyet?
Brian asked:
"Since my e-appeals did uncommonly well, is it fair to ask for a bonus?"
Well, you can always ask. Here's what happened...
"Last month, I wrote a half dozen fundraising emails that raised more than $50,000 for a local [U.S.] Christian ministry [working in Africa]. They paid me $2,000 in addition to my usual $1,500 monthly retainer as an on-call copy editor. I asked for a total of $5,000 [i.e., a bonus of $1,500 more, based on these good results] and was rejected....."
Brian's client said no. In effect: "If your emails had a great day at the inbox, be very, very proud of what you've accomplished ... and the extra good you've done. But that doesn't change your compensation. We had a contract."
Fair enough.
But that's not the whole story ... at least not for growing charities.
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BIG no-no, say NGO ethicists.
Here's what the National Council for Nonprofits has to say on the topic: "It is NOT appropriate for a nonprofit to compensate a fundraising professional based on a percentage of the money raised." The Association of Fundraising Professionals agrees; CFRE, too, I suspect.
True confession: personally, I never quite understood why this "percentage of money raised" prohibition was taboo.
But that's my background showing. I spent 15 years in commercial marketing. In that world, incentives — such as a "percentage of sales" arrangement — make perfect sense.
Clearly, there's a reason the percentage taboo exists. Some fundraiser did something unworthy at some point in time. And it damaged the fragile credibility of our entire sainted sector.
So now NGO ethicists have carved in stone an industry standard, to keep our Augean stables clean and prevent that bad behavior from happening ever again.
Nonprofits have a real stake in being "holier than thou." We always walk a trust tightrope ... which showed a bit o' sag in 2022, as this article in NonProfit PRO reports.
Oh, by the way, giving to Giving Tuesday 2023 is also down. Though it's good to see that CNN treats the Giving Tuesday results as a legitimate business story.
Scarcity vs. investment: these two mindsets yield different results
Let's assume the National Council for Nonprofits is right and righteous: "It is NOT appropriate for a nonprofit to compensate a fundraising professional based on a percentage of the money raised."
Then, how MIGHT your charity keep and incentivize a stellar fundraising staff?
Can I talk to you, bosses and boards....
You DO realize that a high-achieving fundraising staff is rare and worthy of reward?
Fundraising is a tough trade. The drop-out rate is high. The learning curve is steep. The win rate is elusive. Truly top performers are well-trained lifelong learners, sophisticated, passionate, daring and enchanting ... on a level with Cirque du Soleil performers.
These are NOT common hearts, bodies and minds. They're uncommon. For one thing, they can withstand a daily grind that would make an oyster weep tears, not pearls.
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Charity's scarcity mindset
Me to Brian: The fact that your local Christian ministry wouldn't bonus you the full $5K? Not surprised. Provisions for adjusted compensation were NOT in your contract, alas.
But is the ministry's just-say-no response short-sighted?
I'm guessing they'd love Brian to repeat the same miracle next year. I'm also guessing the ministry has no idea how lucky they are to have his services.
A brain like Brian's is rare. He's a veteran journalist who took the risk to get professional training in direct-response fundraising ... and can now deliver results that exceed industry norms. If there are two hundred writers as well trained across America, I'd be shocked. That would average out to four go-getting fundraising copywriters per U.S. state.
Brian's a talent.
Given his results, I'd have coughed up the extra $1,500 he asked for ... with sprinkles on top and bouncing unicorn party balloons ... because I want him with us again next year and all fired up!
Charities? Boards? Bosses? Don't skimp on competence.
Invest in talent. It matters to your mission's growth.
A scarcity mindset (everything's a cost that must be kept as low as possible) ... that's the grim reaper. Anyone can pinch a penny 'til it screams ... that's safe and easy. But are you stunting growth?
An investment mindset, on the other hand? (I.e., Where you spend money to make money?) That CAN lead to a bigger, broader future ... a future where your .org does far MORE of its good mission.
My best, recent, real-life example: a regional community foundation's board agreed (with trepidation) to invest $50,000 in a well-grounded multi-year campaign to promote charitable bequests in northeastern Virginia.
What happened next? Within 10 years, this foundation had banked $78 MILLION in new charitable bequests. Its legacy society is full to bursting.
Results, of course, vary.
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