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Fundraising Strategies: Call in the Experts, or Build a Team?

 |  By Lena J. Weiner  
   April 28, 2014

Big paydays for fundraising consultants have some HR professionals and senior executives weighing the merits of consultants versus building and maintaining an in-house development staff.

"A study of 280 nonprofits released by the Chronicle of Philanthropy shows nearly 30 top fundraisers have been earning more than $500,000, and at least two surpassed the $1 million mark. The data is from 2011, the most recent year available. The top compensation went to Anne McSweeney, campaign director at the Memorial Sloan Kettering Cancer Center in New York City, who was paid more than $1.2 million in 2011." – ABC News

Reading this news item the other day made me think about whether it's better for healthcare organizations to keep development officers and professional fundraisers in-house or to outsource this important work to professionals.

It also made me wonder if I've made a horrible career mistake.

In one of my first jobs after finishing college, I worked as an outsourced fundraiser or professional beggar, as the old-timers on the staff called themselves. After a week of fairly vague training, I was handed a headset and thrown on the phones.

Some of us were good at getting people to part with their money, others weren't. But the company didn't seem to care about the integrity or quality of the people they hired; the object of their game was filling seats and turning over X-number of phone calls per hour.

That model of fundraising is not ideal for healthcare organizations, says Sarah Gnarre, vice president of development at Anna Jaques hospital in Newburyport, MA. "I think the bulk of fundraising should be by an in-house person who understands your organization from the inside out. Someone who knows the inner workings of the hospital, since that's what donors want to know," she says.

Can You Outsource Empathy?
Fundraising is a necessity for healthcare organizations, especially in community and rural settings. It can make the difference between keeping the doors open, or spiraling into bankruptcy. It can finance a new hospital wing, technology purchase, or service line.

But given the current business trend of outsourcing, cutting costs and aiming for efficiency, does it makes more sense to outsource fundraising or to hire staff to do the work?

Bill Mountcastle, president of the Health Philanthropy Services Group, a firm that offers philanthropic services to non-profit healthcare organizations, says, "fundraising is about relationships. A good fundraiser is someone who has confidence in building relationships. You want that unique individual who knows how to sit with very educated surgeons and doctors, but also has the empathy to sit with an 80-year old widow who recently lost her husband," which is impossible to outsource.

And that relationship-building process and major gift fundraising must remain in-house. Other tasks related to fundraising, such as follow-up phone calls, mailings, training, consultants, even lawyers and estate attorneys who help advise gift planning are all roles that an organization can consider outsourcing, Mountcastle says.

A Few Considerations
Outsourcing fundraising efforts comes with caveats, however, especially for smaller organizations.

While Bill McGinly, president and CEO of President of The Association for Healthcare Philanthropy, concedes that most healthcare organizations outsource some portion of their fundraising process, he warns against outsourcing too much of the work.

It's not unusual, he says, for fundraising organizations to say that they don't need any investment upfront; instead, they'll just take a portion of the funds they raise. Some will take 80 or 90 percent of the funds they bring in, which can ruin an organization's reputation for responsible fundraising.

"You never want to put your reputation at risk," he cautions.

Mountcastle raises privacy concerns as an issue, since many donors might not feel comfortable talking about the very personal experiences that led them to donate to anyone unaffiliated with the hospital. "You're dealing with private financial information and the sanctity of the patient-doctor relationship," he says.

And Gnarre offers yet another reason for fundraising to be kept in-house. Fundraisers are sometimes the first to become aware of hot topics, issues the community may have and the way the organization is perceived. "A fundraiser is often a liaison between the external community and internal world of the hospital. The fundraiser… is the person hearing everything," she says.

Fundraising isn't just a way to get additional funds for your organization; it's also a way to build relationships with patients, their families and the community. Outsourcing takes away an opportunity to gain feedback from the community and people who feel connected to your organization.

"It's been proven that investing in good people is a good ROI," reiterates Mountcastle. "If you get good people and give them the resources to be successful, the return on your investment will be good."

Is High Pay the Norm?
So, this brings me back to the matter of super-highly compensated fundraisers.

"I don't think anyone is throwing away money when they bring in a fundraiser, says Gnarre. The income of a fundraiser varies is pegged to the donations that come in and "fifty million dollar-donors don't come along every year."

McGinly isn't seeing evidence of widespread big paychecks either. "I'm not aware of very many people making that kind of money." The top-earning fundraiser cited in the Chronicle of Philanthropy study did her work for New York City-based Sloan Kettering. New York City, has a notoriously high cost of living. Also, he said, anyone that highly compensated is likely working very hard for their money. "With these jobs, you're going 24/7, all the time."

Perhaps the most important consideration is this, says McGinly: A fundraiser is an asset an organization doesn't want to lose. "Higher compensation speaks to the tenure of a staff. The relationships you have to grow as a fundraiser are very long-term, so you definitely want your fundraisers to stick around."

Lena J. Weiner is an associate editor at HealthLeaders Media.

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