We're a small nonprofit without any fundraising program. Are there ever any conditions where it makes sense for us to hire a fundraiser that gets paid a percentage of what they raise?
It's an understandably seductive question. It seems to contain the promise of great financial gain with limited or no cost.
That itself should raise a red flag, shouldn't it?
I was asked this question twice last week, so I thought I'd address it again. (The last time I blogged about it seems to be this percentage based fundraising post in 2007!)
Here's an actual copy of my answer over the weekend to this "percentage" question. It was written on my phone so it may read a little choppy.
Great question. I know of no professional that operates that way. It is expressly against the Association of Fundraising Professionals Code of Ethics.
A fundraiser worth hiring for your nonprofit will have worked to develop a skill set and knowledge base worth investing in. Also, success in fundraising is very dependent on the leaders & board of the nonprofit actively participating. Paying on percentage can unfairly penalize a professional for the organization's lack of follow through.
There should be some money paid upfront. If there isn't, it is reasonable for the professional to question the organization's commitment to fundraising.
You may be able to hire someone with a base pay and more at agreed upon benchmarks. I don't have any experience working that way so I am unable to advise you there.
Finally, I am sure there are people that will work for a percentage. Please be careful in hiring that way if you choose to.
Do you agree?
Do you think I covered the reasoning soundly? Or am I off-base? Should nonprofits ever hire someone to solicit money and pay them a percentage of what they raise?