Nonprofits Face Entrenched Fundraising Challenges, Study Finds

Many nonprofit organizations are hobbled by entrenched fundraising challenges that include high turnover and instability in key development positions, a dearth of qualified candidates to fill those positions, and a lack of organizational development capacity, a joint study by CompassPoint and the Evelyn and Walter Haas, Jr. Fund finds.

Based on a survey of more than twenty-seven hundred nonprofit executive directors and development directors, UnderDeveloped: A National Study of Challenges Facing Nonprofit Fundraising (36 pages, PDF) found that nonprofits tend to rely solely on their development director to raise funds; that fully half of the development directors surveyed said they expect to leave their current job within two years; and that 40 percent of development directors surveyed said they were not committed to a career in development. At nonprofits where the development director position was vacant, positions stayed open six months on average, while 16 percent of nonprofits reported that the post had been vacant for more than two years.

The study also found that nonprofits faced an inadequate talent pool when hiring a development director, with 53 percent of executive directors reporting that their most recent search attracted an insufficient number of qualified candidates. In addition, nearly one in three executives are lukewarm about, or dissatisfied with, the performance of their current development director, although leaders of organizations with operating budgets of at least $10 million tended to be more satisfied, with 41 percent saying they were "very satisfied," than leaders of organizations with budgets of less than $1 million (27 percent).

To break the cycle in which the absence of conditions for fundraising success lead to short tenures and volatility in the development function, which in turn prevent the organization from sustaining the revenue streams needed for success, the report calls for nonprofits and their stakeholders to embrace development as a critical organizational function, think creatively and leverage technological innovation to strengthen and diversify the talent pool, and share accountability for fundraising results.

"This study shows that the fundraising problems facing nonprofit organizations are more extensive and more entrenched than anyone imagined," said CompassPoint CEO Jeanne Bell, who co-authored the study. "As a sector, we need to elevate the importance of fund development as a leadership issue, invest in a stronger talent pool, and strengthen the ability of nonprofits to develop the systems that enable fundraising success."

"National Study Sounds Alarm About Nonprofit Fundraising." Evelyn and Walter Haas, Jr. Fund Press Release 01/14/2013.