Friday, April 24, 2009

Is $400K a fair salary for AFP?

In the three months since seeing Dan Pallotta speak about his book Uncharitable I've been waiting for a reason to blog about it.

Well it would seem today is the day. The Association of Fundraising Professionals (AFP) is having to make some tough decisions. See the full article in the The NonProfit Times

When I read that the AFP CEO Paulette Maehara earned around $400K my jaw dropped to the floor. It was a classic supremely "uncharitable moment" and a huge surprise.

It is ironic because just yesterday I had a conversation with someone who was thinking about coming over the "bright side". I told her she could make real money doing good. I even let her borrow my signed copy of Dan Pallota's book.

Dan is on as he describes it and "Al Gore type mission" to level the playing field between the corporate sector and the charitable sector. This is good brain food and I encourage you to spend eight minutes listening to Dan's video below.

He is right. Intellectually it all makes sense. AFP needs a good leader right now and that leader should be compensated well for the challenges she will face. This is what my head tells me. Yet, the do gooder and AFP member in me had a very real and emotional reaction from the heart about how much money we members pay her.

Watch Dan's video and you tell me. Is a $400K salary package fair for an organization like AFP?

Thank you for spending time here.


  1. I'm not sure you've asked the question thoroughly enough. I'd also add to this. What are the goals and vision for the organization? What are the qualifications and expectations of the person being paid that salary? How will the individual's performance be measured?

    What are the goals of the organization? What will happen if the individual making that salary doesn't meet expectations?

    I know that the fundraising community is very leary of performanced based pay that is directly tied to revenue - but I think it's wrong.

    I don't know anything about the woman in your blog and I really don't know a lot about AFP's organizational structure, goals, vision, leadership expectations, measurement tools etc.

    Might be a reasonable salary - might be gobsmakingly absurd. Depends on many factors, only some of which I've mentioned above.

  2. Bleh - typed too fast. Ignore the type-o's. Sorry!

  3. Glad to have inspired such quick fingers.

    You are right of course. Many of those questions occurred to me too. Truth is Laurie, the information is probably available...I just haven't cared enough to ask...until now.

  4. Another note: the unethical bit about a performance based salary is based on a percentage of funds raised. Perfectly acceptable as I understand it to negotiated a bonus at the end of the year based on deliverables.

  5. I was referring specifically to revenue - as opposed to general deliverables.

    I personally think it's nonsense to think that fundraisers would act any more or less ethically because they have the potential to increase their income based directly on how much money they raise. There is no less pressure for fundraisers who often worry about losing their job if they can't meet their goals.

    In fact, I would argue that people are far more likely to act out of desperation and in an unethical manner, when they're in fear of losing their job than they would be to earn a little extra cash for increased performance. I honestly don't understand the objection to this type of remuneration within the charitable sector.

    I think it's important to maintain the trust and respect of donors - but I do think we need to look long and hard at what we want from charities and how we expect them to succeed. And not just in the area of salaries.

    I've not read the book yet - but as soon as I saw it, it went on my "must read" list.

  6. uhmmmm Laurie. If I start to make a percentage for every donation I raise I may as well go sell used cars for a living.

    Targets are set based on what I think I can deliver giving all sorts of factors consideration.

    A percentage of $'s raised would set the entire profession back.

    Great debate though.

  7. I disagree entirely for pure fundraisers (i.e. those people whose only function is to raise funds). And I'm not suggesting that we don't provide salaries.

    The whole used car sales thing is such an old and misinformed stereotype. Most professional sales representatives today earn very high salaries plus commission/bonuses. They are stewardship heroes - because you have to maintain your existing customer/sales base and grow.

    So if you lie or mislead customers, you will fail.

    The difference between a great sales representative (in most industries, not all) and a great fundraiser are almost nil: build relationships/cultivate, make customers a part of your product development (i.e. mission/vision), treat people well, thank them, encourage them to become champions of your product (i.e. volunteers).

    Purge your mind of the stereotypes and myths of sales and sales people - and you'll find these worlds are far closer than you think... The non profit world just uses different language. The basic principals are identical.

    Blogged about it ages ago - perhaps it's time to update it.

  8. And no fundraiser delivers alone. As a CEO who raises money but is not a "pure fundraiser" I can't see how you can justify earning a percentage on $$ raised. Why would the fundraiser whose success depends in part on non-fundraising or partially fund-raising staff be entitled to such a pay-off when others aren't. Quite different is the negotiated performance-based bonus Kimberley talks about. And as a donor I disliked the practice intensely.