Every winning charitable or political campaign needs a good fund-raiser. Just how much or through what type of method they should be compensated is a tenacious question, however.
Some wonder if the performance or retention-based pay of some employees from the University of Minnesota Foundation, which ran Campaign Minnesota, are ethical. While the high pay development executive officers might get remains an issue, the foundation’s payment method is in keeping with standards.
While news reports have called the payments bonuses, the foundation said that is not an accurate label and instead calls them awards. The term “bonus” might lead some to think of commission-based compensation, the foundation claims. Its staff awards are not based on a percentage of money raised. Foundation employees eligible for performance-based awards only receive them if they’ve met measurable, predetermined criteria, which include more than just accomplishing a fund-raising goal.
In light of poor economic times at the University, the foundation’s top administrators voluntarily rejected the second half of their awards for the completion of the highly successful Campaign Minnesota. While this was a smart and perhaps noble move – we cannot judge intentions – the two still earned handsome salaries and past award compensation.
Performance and retention-based pay is not unusual for large organizations or campaigns, said Sondra Reis, associate director of the Minnesota Council of Nonprofits. They are in keeping with the Association of Fundraising Professionals’ guidelines, which rejects percentage commission and details how incentive compensation should be used. Reis cites strong competition for fund-raisers as one reason awards are used. Half of Big Ten schools have recently lost top chief development officers, said Linda Berg, campaign director for Campaign Minnesota. The supply and demand constraint for fund-raisers is not surprising, considering fund raising is in the laundry list of jobs most people would hate to do.
The foundation appears to be in the clear ethically. The question of how much is too much pay for top executives is another debate.