“Pay for performance,” while popular in corporate America, is the proverbial garden-party skunk at many nonprofits. But for the 16 major gift officers at the University of Pittsburgh, it’s now a way of life.
Pitt this year introduced a five-step salary scale that guarantees fundraisers a raise and promotion every three years — if they meet annualized targets on six measures of performance. Officials say the new pay system aims to answer a common complaint among major gift officers: that they have no clear career paths or tracks for advancement.
“Today’s young, talented employees are asking, ‘Where will I be in five years?’” says Elizabeth Cooper, senior executive director of development. “Prior to this, we weren’t able to answer them.”
David Dalessandro, associate vice chancellor for development and institutional advancement, says prospective hires like the metrics-based system because it explicitly defines performance expectations and related rewards. He says a new gifts officer from an Ivy League school told him, “I’d been there for five years; I had no idea how I would be promoted. I had no idea what ‘exceptional’ meant.”
Cara Quackenbush, vice president of research at Eduventures, an advisory firm for colleges and universities, says she has never before seen a pay scale tied so explicitly to metrics. “The exact measurement required for promotion is not usually this clear, and it is not guaranteed,” she says.
Here’s how the pay system works:
Performance targets. Pitt’s analytics team studied the work of more than 20 fundraisers in the university’s last campaign and identified six data points that most clearly distinguished the stars from others:
- prospect visits
- prospect contacts
- agreements submitted to donors
- agreements accepted
- gifts originated and closed with a new donor
- total dollars raised.
Evaluation cycle. Fundraisers are evaluated based on the preceding six metrics every three years. Awarding bonuses or pay raises based on a single year’s performance is “nutty” because of natural fluctuations in giving, says Mr. Dalessandro.
Five-step pay scale. Fundraisers move up in salary when they meet annualized targets in each of the six areas. Major gift officers at the bottom of the pay scale, for example, get a raise if they meet or exceed an average of:
- 45 prospect visits.
- 1,000 prospect contacts.
- six agreements submitted to donors.
- four agreements accepted.
- three origination gifts.
- $500,000 raised.
To reach the top of the pay scale, fundraisers must bring in $3 million on average over three years.
Big raises. Fundraisers will still collect university wide annual pay increases, which have been 1 or 2 percent in recent years. Pitt officials say the three-year performance pay bumps will be significantly larger.
Climbing the ladder.Performance expectations increase with each salary step, but Mr. Dalessandro says not all his fundraisers will be able to move up. “This isn’t a way to give everybody a raise,” he says. “This is to keep exceptional performers.”
An end to bidding wars. Because the new salary scale establishes exactly what fundraisers are worth, Mr. Dalessandro says, Pitt will no longer match offers that its major gift officers receive from other institutions.
Recruitment tool. Pitt, which will hire as many as 15 additional fundraisers in a new campaign, outlines its salary scale in a booklet given to job candidates. “We say, ‘This can be your future,’” explains Mr. Dalessandro. “We want people who want a career at Pitt, not just a job.”
