Why Not Work on Percentage, Bonus or Commission?
I have long and unyieldingly stood against any form of contingent-pay in the non-profit sector — having an organization’s staff development officer working for compensation based on a percentage of funds raised, a bonus, or a commission.
Such arrangements, and any variations, are denounced by major “for-the-profession” associations. They go so far as to state, emphatically, that contingent-pay is unethical.
Most development professionals themselves think it’s a bad idea. But I do far more than just cite high standards and strong ethics as good reasons to have nothing at all to do with the contingent-pay practice.
I let the contingent-pay principals know of the very real harm possible when working in that way. In my article on the subject I list a number of very real and damaging consequences that may befall both parties when working to such an arrangement. (See: The Argument Against Paying Development Professionals Based Upon The Amount Of Funds Raised For Non-Profit Organizations)
My hard stance against contingent-pay was bolstered even more by a personal experience, several years ago, when I was engaged as a fundraising consultant for a major organization. Sadly, it represents what appears to be an ever-growing issue.
During my several months serving the organization, I conceived, developed and produced fundraising plans where there had been none. Annual, endowment, capital, sponsorship, and underwriting campaigns were all fully developed and were being phased into the duties of the organization’s new and first-ever Director of Development … whom I helped hire.
The individual was hired at a straight annual salary basis while I was nearing the end of my consulting term. Soon, the Director of Development was up and running very well and I concluded my consulting engagement.
In a routine phone call some months later, just to check in to see how that individual was doing, it became readily clear that the several key development initiatives I had set out for the organization had not progressed much, if at all, except for the Annual Fund.
There were no ongoing cultivation activities. Recruitment of a volunteer fundraising team was abandoned. There was nothing in place to ensure opportunities for long-term funding. What was clear was that the Director of Development was dead set only on meeting the Annual Fund goal.
Why? Because after I left, the next salary review with management allowed the D.O.D. to work toward a bonus of $5,000, contingent upon meeting the Annual Fund goal by the end of the campaign/fiscal year.
Just about all of the warnings I cite in my article were at work in this case. Money was being raised only for this year. There was no thinking/planning for tomorrow.
When I see all the wrong that can befall an organization, or an individual, in contingent-pay schemes, I cannot imagine for the life of me why anyone would want to go that route.
What do you think? I’d be interested in your comments.