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White Paper: Incentive Compensation in Healthcare Philanthropy

In my experience with senior and C-suite level executive search, I have had the opportunity to look at various ways organizations aim to attract and retain talent. In an increasingly competitive market for fundraising talent, organizations have implemented performance incentive programs – which provide ways to increase pay beyond base salary – to boost their compensation packages. The questions often asked of me, however, is whether incentive programs are ethical or effective, and if so, how do they work. After conducting informal research, which consisted of asking peer nonprofit leaders for their thoughts on the topic, it became clear that there was an opportunity to further explore this area and understand more about how these reward programs work.   Particularly, healthcare institutions have found that performance incentive programs do encourage fundraising staff to meet goals.

Are Incentive Programs Ethical?

You may be surprised. Just the mention of incentives or bonuses tends to raise some eyebrows in the philanthropic sector, as these programs are often construed as receiving a “commission” based on the amount of money raised. And aren’t fundraisers supposed to be motivated by mission, not money? Despite a top fundraising association making a clear distinction between a “commission” and a “bonus,” many leaders remain unsure of how to reward high performance among their own staff.

Why This Study?

Because many people are simply unaware of how incentive programs work, how they are effective, and just how common they are, we decided to focus our study on the healthcare sector, where these programs appear to be most prevalent. We surveyed the top fundraising executives at 81 healthcare institutions, and our goals were to:

  • Understand specifically what healthcare institutions are doing to attract, retain, and reward fundraising leaders;
  • Learn the norms for compensation and performance incentives in healthcare philanthropy;
  • Examine the beliefs and perceptions of healthcare fundraising leaders surrounding performance incentive programs.

What Did the Survey Find?

We uncovered a lot of information on incentive programs. Our subsequent study report, which we discussed in depth at our recent webinar, provides an overview of existing incentive types, structures and perceptions surrounding them. Here is a sample of our findings:

  • Healthcare fundraising officers look favorably upon performance incentive programs. 64% of respondents said that they would be more likely to stay in their positions if they received incentives.
  • Organizational goals and performance are the most important factor in determining individual incentives. 96% of respondents with performance incentive programs reported attainment of organizational goals as influential to their incentives.
  • There is no clear standard for performance incentive structures. Incentives vary widely among institutions. Just one example: When asked how much of their professional income came from a past year’s incentive, responses ranged from as low as 3% to as high as 70%.

Take a look at Campbell & Company’s full report and listen to the recorded webinar, which expands on these initial ideas – from the use of “retention incentives” in multiyear campaigns, to next steps that your institution can take to advocate for and implement this kind of program.

We hope our work will help you as your team considers ways to recruit and retain fundraising officers at your organization! As you explore incentive compensation programs, please do not hesitate to reach out to us. We are happy to discuss further any questions or thoughts you may have.

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Dan Nevez
About Dan Nevez Dan Nevez has more than 30 years of professional experience in higher education, arts and cultural institutions, and retained executive search. As a search consultant, he has...
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