By Jeff Jones

Government funding cuts, a soured economy, and attempts to fill pending revenue gaps isn't generally the greatest of news.

It's a bit easier to accept if you're an experienced fundraiser, because a need for more revenue means you're a hot commodity. Fundraisers are more important than ever because organizations have to raise additional money due to funding cuts, said Colette M. Murray, president and CEO of the executive search firm Paschal Murray in San Diego.

"There is a huge demand for skilled, ethical fundraisers," she said. "We're seeing more turnover than we would like because there's not enough skilled fundraisers to go around. Rather than stay where they should and build relationships, we're seeing people move because the salaries are increasing."

Salaries are jumping in California, particularly southern California, where mortgaging a home can sometimes seem like purchasing the Hope diamond. "You move here from Ames, Iowa (where) you could have, for $400,000, the biggest house in town," Murray said. "Here, it doesn't buy anything."

Some California organizations cope by giving senior level hires mortgage assistance or one-time housing bonuses that range from $5,000 to $50,000, Murray said.

All but one of the senior fundraising positions from the western region in this year's NPT Salary Survey are projected to see salary gains this year.

Nationwide, survey tallies tell a slightly different story; planned giving officers' average salaries will decline 6.3 percent and major gifts officers will see an average of $415 less in their salary. And, there can be wild deviation within a state.

Tim Wolfred, director of Executive Leadership Services at San Francisco-based CompassPoint, said some people are willing to work for less than what they demanded just a few years ago. "The nonprofit that was hoping to hire someone at mid-$70,000 a couple years ago would have had trouble finding one or two well-qualified people at that level," Wolfred said of a hypothetical nonprofit with a $2 million budget. "There was a lot of pressure at that point to get the salary level up. Now a nonprofit can hold steady at the lower end of their pay scale and have several well-qualified" candidates.

Health care costs

Rapidly rising healthcare benefit costs also stresses salaries and nonprofit services. Health insurance premiums climbed for 91 percent of NPT Salary Survey respondents by an average of nearly 20 percent. Only 6 percent of organizations said insurance premiums didn't increase, and 2 percent said they didn't offer health insurance benefits.

In 58 cases where health premiums jumped, employees paid a mean rate of 18.9 percent of the organization's health insurance hikes. The organization paid the tab for additional premiums in 119 cases. In 60 examples, nonprofits made changes in benefit levels to deal.

"The rising costs of healthcare is impacting and taking money away from what could be put in salary increases," Wolfred said. He added CompassPoint had to curtail some of its services because of costs.

Murray acknowledged health care is a big cost and smaller nonprofits that don't provide it have difficulty recruiting anyone, but generally escalating healthcare costs aren't hurting salaries.

Succession plan

It seems elder executives are thinking more about what happens to the organizations after they retire.

One trend surfacing in the past nine months is retiring executives who think about a replacement and develop a succession plan, Wolfred said. CompassPoint is working with roughly 10 agencies in that category. Last year it had zero.

This is leading to a generation shift in which baby boomers transition out and people aged 35 to 45 fill spots. Younger executives tend to bring additional technology savvy and a stronger business background.

"When I went to school, and I think it's true of my peers, we studied social sciences and thought nothing of developing any sorts of financial or business skills," said Wolfred, who is in his late 50s.

Some former dot-com employees who enter the nonprofit sector experienced a higher learning curve than expected. "The problem is they think if you're nice to people the money will come in," and haven't spent enough time learning the nuances of fundraising, Murray said.

David Edell, president of New York City-based DRG-Development Resources Group, sees more interest by people in the private sector exploring positions in the nonprofit and public sectors. He stressed it's only interest at this point, and doesn't see increased hiring in that area.

Instability in private sector employment and people thinking about the nonprofit world differently now are contributing factors to this interest, Edell said.

A desire exists for nonprofits to meet with people who have different experiences, fresh approaches, or a creative way of thinking about managing an organization's business and operations, Edell said.

Counter offer

Competition for qualified fundraisers feeds another trend -- the counter offer.

The "unethical" technique of fishing for counteroffers is gaining prominence, Murray said. Here's how it works: A person interviews for a job and receives a salary offer. Then that person returns to the current employer and asks for a raise.

"I know we're going to see more of it," Murray said. Paschal Murray asks candidates how they would handle a counter offer, which often hinges on salary with benefits, such as a car allowance coming into play at times, Murray said.

Edell stressed that job candidates should be truthful with current and potential employers, but that doesn't exclude a current employer from offering a sweetened package to keep an executive. Nonprofits searching for a candidate should also determine that person's motivation. Is it to move toward something better with enthusiasm or escape the current job, said Edell, whose executive search firm works exclusively with nonprofits.

Murray said fundraiser turnover is rising, because they're willing to jump ship for better salaries, or for younger folks it's a combination of better money and title.

Constant leap-frogging to the next best job can be advantageous for a young worker seeking a glitzy title or more money; it's anathema for senior level fundraisers.

A few organizations for which Paschal Murray is handling a search make an adamant plea that a candidate's job pattern doesn't look like a cross-country Greyhound itinerary, with many stops along the way. The organizations want a candidate who will stay and who is committed, Murray said. When senior level executives bound about, people often wonder if they've burned bridges or burn out easily.

Murray warns against it.

"Much as I'd like to see people stay longer, I do understand why they move early in their career," Murray said. "But when people get to be more senior level and they're still doing that, that's a red flag."