The Scramble to Hire Big-Gift Fundraisers

Todd Bigelow, For the Chronicle

Curtis Yarlott wants the organization he has run for nearly two decades, St. Labre Indian School, to deepen its relationship with its most loyal donors, a pool of supporters it began building with a direct-mail effort in the early 1950s. So the private Catholic institution is hiring a fundraiser to oversee its work to secure planned gifts and other big donations. The new hire would supervise a fundraiser who now handles gifts of $2,500 and up; eventually another development staff member will be hired to tend to potential big supporters.

The problem: Lots of other organizations are also on the hunt these days for just that kind of talent.

In recruiting candidates, St. Labre must grapple challenging geography as well as fierce competition. The main campus of the 132-year-old school, which serves mostly students from the Northern Cheyenne and Crow tribes, is situated in an isolated corner of Southeast Montana. The nearest airport is about 125 miles away, in Billings. The donors the school hopes to court live largely in California and on the East Coast.

“Because of where we’re located, it’s difficult for our donors to come to us,” says Mr. Yarlott. It makes the planned hires all the more essential: “With major-gifts officers, we try to take a little bit of St. Labre to them.”

The school, he says, is thinking about opening an office in Billings to help draw the right candidates.

An ‘Evolution’ of Fundraising

Mr. Yarlott, whose school raised $35 million in private support last year, says demographics are behind his staffing plan. As more and more baby boomers reach retirement age, he sees a prime opportunity to court donors for large gifts, as do many other charity leaders.

Driving the trend too: the cost of recruiting donors en masse via direct mail and other tactics, and the emergence of sophisticated data tools that help charities more easily find the supporters who can and will give the most.

A Career Courting The Rich

Moving in the world of wealthy donors can be tough for young fundraisers. But Jeremy Cramer jumped right in. At 21, he saw a segment about the ALS Therapy Development Foundation on 60 Minutes. He persuaded the group, located in his hometown of Newton, Mass., that “they should hire a young kid to raise millions of dollars with them” and was brought on board as the charity’s major-gifts manager.

Mr. Cramer, now 38 and chief development officer at the education group Facing History and Ourselves, calls the experience “extraordinary.” He credits mentors at the medical charity — donors and volunteers as well as staff members — with helping him overcome early growing pains and build his career, with later jobs at United Way and City Year.

He advises other major-gifts novices to “find the absolute best and most respected fundraising professional in their market. Ask for their time once a quarter. Sit down, have a lunch. Ask what mistakes they have made. Ask what their tricks of the trade are. Ask about their professional journey. And then that young professional can filter everything they’re hearing through the lens of what their hopes and aspirations are and ultimately become a better professional for that.

“All of the trends in the economics of the country right now are basically mandating that nonprofits spend their time with a smaller segment of the population that can spend very significant sums of money” on philanthropy, says Jeremy Cramer, the new chief development officer at Facing History and Ourselves, an international education group.

Mr. Cramer just left a job leading major-gift efforts at City Year, where he created a group called the Red Jacket Society for donors who gave $10,000 and up. In the society’s first year, annual revenue doubled at the nine City Year affiliates where the effort was piloted.

“I know of many organizations looking to ramp up their major-gifts function,” he says, “and I think it’s very sound business practice.”

As she drives to interview major-gifts candidates for a client, recruiter Heather Eddy echoes Mr. Cramer’s observations. In the past year, she says, more nonprofits have been calling her company about hiring fundraisers to work with their biggest donors.

“It’s a continuing evolution of the profession of fundraising, and a recognition that the return on investment is far greater than on annual funds, or events, or in some cases grants,” says Ms. Eddy, president of Alford Executive Search, a division of KEES.

More charities these days realize that they need to be more strategic in how they raise their money, she says.

“Higher ed, health care, larger institutions caught that wave 10 or 20 years ago,” Ms. Eddy says. “Mid- and smaller-sized institutions, particularly human service institutions, are realizing, ‘Hey, there’s something between an annual fund and a planned gift. We should catch a donor in between there, not just when they first learn about us and when they pass away. We need to make the most of the relationship that we can with them.’”

Gray and Green

But the smaller and mid-sized charities seeking to hire major-gifts officers are competing with the big nonprofits that have traditionally hired those fundraisers — and those larger groups are also staffing up.

“It’s the hardest position to fill,” says Marian Alexander DeBerry, director of executive search at Campbell & Company. “Almost every type of organization that relies on philanthropic support is looking for a major-gift officer.”

Demand for such fundraisers far outstrips supply, and that’s “not going to change for a while,” she says. “It’s not a trend. It’s here.”

Mark Stuart, president of the Foundation of San Diego Zoo Global, is among those hailing what he calls the “silver tsunami” of aging boomers and hoping to catch the wave by adding more major-gifts experts to his staff.

“For years we were told that the passing of the parents of baby boomers and those older than baby boomers was going to happen, and that it would be trillions of dollars passing from that generation to the next, to charity, and also to Uncle Sam,” says Mr. Stuart. “And we’re now fully experiencing that.”

With donors living longer, and more reaching their peak giving years every day, “I believe this is the best time to be alive as a fundraiser,” he says.

The zoo foundation is seeing longtime ties to older supporters pay off: In November it launched the public phase of its first-ever capital campaign, a $400-million push called Roaring Forward, for which $291 million had been raised as of December 31.

The foundation is hiring two new fundraisers to seek commitments of $500,000 or more. They are the first fundraisers the organization has added in the last five years, says Mr. Stuart.

At Texas A&M University, Mark Klemm is also adding people to help attract large gifts, which his institution tags at $25,000 and up. He runs the university’s $4 billion Lead by Example capital campaign, and he says the major-gifts staff will grow about 40 percent over lifetime of the drive, which began in 2012 and will wrap up in 2020.

It’s not the ongoing campaign that’s fueling that expansion, Mr. Klemm says. The graying of America and Texas A&M’s explosive growth in past decades have produced some daunting math: Though it currently has roughly 19,000 living alumni over age 70, by the campaign’s end, that number will balloon to about 30,000.

“We are adding staff to address the demographic change in our donor base, rather than doing it for the campaign,” Mr. Klemm says. “But the fact that these two are coinciding is wonderful.”

St. Labre Indian School

Return on Investment

Not everyone is convinced that demographics are driving the rush to commit more resources to winning major gifts. John Westfall-Kwong, director of development at Lambda Legal, thinks the rising cost of direct mail and membership programs has made it clearer to charities why they need to focus on big gifts instead.

“It’s becoming more and more costly to acquire new donors, and I think that’s a phenomenon throughout the direct-marketing industry for nonprofits,” says Mr. Westfall-Kwong, whose organization is seeking to add another senior-level major-gifts officer. Currently, eight of the nonprofit’s fundraisers work with donors who give $5,000 and up.

As a result, there’s a greater return on investment for soliciting more support from current donors than for seeking new ones. Lambda Legal raised $15.3 million in private support in fiscal 2015, says Mr. Westfall-Kwong; in any given year, more than half of its giving from individuals comes from its top 1,300 donors.

Focusing too much on the biggest donors carries risks, however. “All gifts are important,” he says, and organizations should maintain a mix of revenue to keep its base of support broad.

And sometimes low-dollar donors surprise organizations with outsized bequests, Mr. Westfall-Kwong notes. “We’ve seen it happen within the last year, with a donor who never gave more than $100 in their lifetime but then gave a sizable, six-figure planned gift. We think it’s super important to keep all kinds of communication touch points out there.”

Data-Driven

The trend toward major-gifts hiring, says Mr. Cramer, of Facing History and Ourselves, is happening in part because of the emergence of new companies that measure the giving capacity and habits of charities’ donor pools.

“They can literally quantify how valuable someone’s network is and encourage staff to spend their time where the theoretical yield is greatest,” he says.

In addition, nonprofits are beginning to invest more in prospect researchers and data analysts. “They’re having a much greater role in helping staff manage their pipelines, move relationships forward, and be donor-centric,” Mr. Cramer says. “Because it’s only through analytics that we can truly be donor-centric.”

At Second Harvest Food Bank of Orange County, the numbers have helped push the Southern California nonprofit to hire the first major-gifts officer in its 33-year history. The charity, which raised $5.7 million in fiscal 2015 from private sources, sees an opportunity and is eager to tap it.

“Individual giving has grown significantly for us over these past five fiscal years, with a compound annual growth rate of 18 percent,” says Gloria Jetter Crockett, the food bank’s chief development officer. “We’re looking at these numbers and saying, how can we build our capacity as it relates to fundraising?”

Another set of numbers, courtesy of Feeding America, helped make the case that Second Harvest needed more help wooing donors.

The California charity is a member of Feeding America, which did an analysis of more than 23,000 people who gave to the food bank from 2010 to 2014. Ranking donors by their giving history, the report uncovered more than 2,400 supporters who scored 25 or better on a scale of 1 to 30.

“It told us that there is this group of individuals who are ready to learn more about us,” says Ms. Crockett.

Second Harvest subsequently got a $20,000 grant from Feeding America to help develop its major-gifts program; the grant will help pay the new hire’s salary. (The food bank benefited from a new program at Feeding America aimed at helping its members make the most of their donor networks. Ten food banks have thus far received grants from the program, and more than 60 member groups have been offered services through it, says Diana Aviv, Feeding America’s chief executive officer.)

Demands by donors that their contributions produce results might be an advantage for nonprofits like Second Harvest as they seek bigger gifts. Because social-service charities work in the donors’ own community, Ms. Crockett says, supporters see the tangible results of their gifts “right away, in comparison with some other types of organizations.”

Adding a ‘Missing Piece’

The San Francisco Child Abuse Prevention Center is also looking to hire a fundraiser to seek big gifts but is doing it without adding another person to its payroll.

Kate Frankfurt, the social-service group’s chief development officer, has restructured its fundraising operation to accommodate someone who can solicit big donations. “It seemed like the missing piece,” she says.

Her nonprofit has been looking to hire since October, she says, and recently turned to a search firm for help: “The market is incredibly hot right now.”

The group, which raised $3.7 million in private support in 2015, is feeling the pressure to raise more money to help it carry out its mission. “If we’re not raising the resources that are necessary, we either don’t have enough people doing that program work or the quality of the staff we are able to hire is impacted,” says Ms. Frankfurt. “You get someone right out of school for a much lower salary, but you get someone who doesn’t have the experience you need.”

She sees a lot of other Bay Area charities expanding their major-gifts fundraising. “I think people are trying to figure out how to maximize the resources that do exist in this area. There’s also huge competition for funds — there are many, many, many nonprofits.

“And, essentially,” she adds, “we’re all looking at the same folks.”