A Metric System for Development Directors

17 Jan A Metric System for Development Directors

This month I have been posting about hiring Development Directors. On 3 January, I made the case that hiring passion/talent and training skills was a more effective approach in general that hiring skills/experience and hoping that the successful candidate falls in love with your mission. Last week, I advocated for NOT hiring a Development Director as the organization’s first development position, but rather hiring a detail-oriented Development Coordinator instead. I emphasized the need to take training seriously and advocated for aggressive pay increases when the newly hired Development Director is meeting goals and expectations. Incumbent in both cases is that the goals and expectations are very clear, realistically derived, and consistently monitored.

This week, I want to write about metrics for Development Directors. Let’s assume that you have a Development Coordinator in place and that the fundraising mail, event logistics, foundation and corporate grant tracking is covered, and the filing is getting done. Also assume that you have just hired a Development Director whose primary job will be direct donor contact – “high-touch” fundraising, rather than “high-tech” fundraising. How will you set expectations? How will you measure their work? How will you justify the aggressive salary increases I advocated last week?

In the 23 March 2006 issue of The Chronicle of Philanthropy, Holly Hall described a point-based assessment metric that measures fundraising job performance for full-time Major Gift Officers (MGOs) not only on results (which though important, is too focused on short-term goals rather than long-term strategy), but also on contacts, proposals, and appropriate use of Board members. The assessment was created by Richard Dupree at Indiana’s Kelley School of Business in Bloomington. Keep in mind that MGOs at Indiana are working from an alumni list that is already warm, but seen as a starting place for developing your own system, it is provocative.

I liked Dupree’s system a lot because it forced the Major Gift Officer to focus on activities that really mattered. I modified it somewhat for application to smaller organizations who didn’t have the luxury of multiple MGOs, but rather had a single Development Director whose job included direct donor contact.

In Dupree’s system, there is a maximum total of 100 points. If a fundraiser is doing the work, the fundraising goals will be met. Scores of 75 or less warrant remedial measures, and even dismissal after consecutive years of such performance. Scores of 76-85 warrant cost of living increases only. Scores of 86-plus earn the aggressive salary increase schedule mentioned above.

Here is the system as I modified it:

1. Meet Dollar Goal – 25 points
   All or nothing; you made it or you didn’t. You can survive in a job when you aren’t making your fundraising goals, but not very long, and you’d better be doing everything else really well.
2. Face-to-Face contact with donors – 25 points
   One point for every four contacts. The expectation is that a Development Director is meeting with two donors, on average, every week. So what constitutes a “contact”? Contacts count when they are in-person or on the telephone, written-up with a clearly defined follow-up course of action, and filed in the donor file. Written or email contacts can count if a response is secured, follow-up is clearly identified, and the exchange is printed out and filed in the donors file. However only 10 of the 25 points may be accrued by this method. This is really hard to do, but it is very likely to be the most important possible work the Development Director can do. DoDs cannot raise money from behind their desk. They MUST get out the door. Note that this does not necessarily mean contacting 100 different donors. Many donors will be contacted several times during the year. Also, note that contact with Board members counts only when the contact is related to their capacity as donors.
3. Proposals Submitted – 25 points
   Proposals may be literally written proposals to foundations and corporations, but should also include in-person asks of individual donors. All proposals of $5,000 and more count one point each. Proposals of $20,000 and more count two points each. The driver here is that many organizations waste far too much time preparing proposals for $1,000 and less. It takes just as much time to ask for $5,000 as it does for $1,000. This metric forces us to focus our time on the opportunities that will yield the most benefit.
4. Proposals Funded (at any level) – 5 points
   One-half point for each funded proposal. The proposals do not have to be funded at the requested level to count. Metric 3 measures quantity of proposals. This one measures quality.
5. Percentage of funds raised that offset operations expenses – 5 points
   The 5 points is earned when the percentage is greater than 20 percent. Ten to twenty percent earns 2 points instead. Almost every proposal should include funding for operations. Proposals to fund specific projects should include a paragraph that 20 percent goes to fund general operations. (I usually ask Boards to pass a resolution to that effect. Obviously it has to be OK for donors to refuse, but at least the stipulation is out there.)
6. $1,000 annual donors whose gift exceeds their previous year’s gift – 5 points
   First five result in one point each. I restricted this to donors who either gave nothing last year and gave $1,000 this year, or who gave $1,000 or more last year and increased their gift this year. We want to continually ask our most important donors to increase their commitment and their giving.
7. Use of Board Members – 5 points
   One point for the first five calls which both resulted in a gift and in which a Board member was involved in the ask. Most Development Directors are comfortable going on a call with their Executive Director, but the longer term benefit for the organization is for the Board members to shed their discomfort with cultivation and fundraising. This metric rewards including Board members in the development work.
8. Staying within Budget – 5 points
   This is pretty simple. All or nothing; you stayed within budget or you didn’t. Note that this metric implies that the Development Director knows what his/her budget is and has control over it.

The Executive Director should meet with the Development Director to review progress against these metrics at least quarterly to head off any problems and issues and to reinforce an overall environment of accountability.

One last thought on the topic of metrics: Board members should have metrics also. Board members could be held accountable for:

• Meet fundraising goals
• Make 2 contacts per quarter or 8-10 contacts per year
• Make 2 or more “asks” of $5,000 or more to qualified prospects each year
• Include at least 20% in each proposal for unrestricted operations funding
• Receive funding from at least half of the donors solicited
• Include the Executive Director or Board Chair in the cultivation/solicitation process

Thoughts on how to measure the job performance of your development staff? Please share by commenting below or emailing me directly: fundraisinghelp@sbcglobal.net.

Cheers,

-da

Photo: Snowshoeing Along the Trail, Walt Kaesler