Hiring your first development staff at a small nonprofit can be daunting. On the one hand, you need the support! On the other hand, what if the new position doesn’t increase your bottom line, and your new hire just ate into your fundraising?

These are tough questions for the ED of a small nonprofit.

Yesterday, I was listening to the Joan Garry podcast Nonprofits are Messy and this question came up. (I recommend this show by the way. I love podcasts as a way to learn, which is why I will be-relaunching the Small Nonprofits podcast next month.)

The discussion about this was a small part of a larger conversation, and I hoped they would talk about it a lot more. But as it happens, the topic is something I’ve already touched on in the final pages of The Little Book of Gold: Fundraising for Small (and Very Small) Nonprofits so I decided to a brain dump and greatly expand on the few paragraphs I wrote there.

So, without further ado, here are seven steps for knowing when (and who) to hire to your first development staff at a small nonprofit.

Step 1. Master the basics yourself.

At a minimum, you should have mastered an annual appeal, an annual event, and sitting someone down and asking them for $500 (or $5,000—whatever the amount a “major gift” is for your nonprofit). You should know how to do all of this, and it should be working for your nonprofit. If you have an unsuccessful event, an unsuccessful appeal, and are afraid to ask someone for a gift, you aren’t ready, and your organization likely isn’t ready either. (As mentioned above, The Little Book of Gold could help you with this if you aren’t ready.)

Step 2. Contract with a consultant to set up your donor database.

Professional fundraising requires good data. I’ve said elsewhere that “fundraising isn’t about this dollar, it’s about the next dollar.” That means asking in a sustainable and professional way, but it also means having the data to go back to a donor next year. You can’t get the next dollar if you don’t know where this dollar came from.

Sure, it’s great that someone gave you $500 unasked. But if you can’t find them again, a lot of good it will do you. You need data, and you need a database. Excel is not going to cut it after a successful mailing, a major breakfast fundraiser, and cultivating major gifts.

Many donor databases are free or are relatively inexpensive (Salesforce for nonprofits comes highly recommended from nonprofit leaders I know, but there are many more), but setting them up can be a massive lift for a small nonprofit. Contracting with an expert will help you a lot here.

Note: if this one-time expense (likely in the range of several hundred to a few thousand) isn’t feasible, you likely aren’t ready for development staff.

Step 3. Hire from the bottom up.

Now that you’re ready to hire, you should NOT hire a Development Director, or someone with an equivalent title. Development Directors are expensive. They take a long time to justify the salary. A rule of thumb is that it will take three years of increased fundraising to pay for this position’s salary. And after three years in the grind at a small nonprofit, the person in this position is going to be ready for a raise that you can’t afford. So right when you should start to see the benefit of their relationships and good work, they’re gone.

In other words: small nonprofits have two strikes against them: they are strapped for resources and they have high turnover.

Instead, hire from the bottom up. A part-time data entry position might be the perfect first hire for you. Or a grant writer if you are heavily reliant on grants. A donor relations coordinator (not director, not manager, but coordinator) might take you to the new level of stewardship and cultivation. You’re hiring for the basic functions of fundraising so you, the ED, can spend more time on the big picture of fundraising. You have the vision (along with the board). Hire people to implement that vision from the bottom up.

A pyramid is built from the bottom up. A director of development is your last hire.

As an aside, there’s another reason we don’t want to go out and hire a Development Director first thing: if you hire the wrong person, that’s a hugely expensive mistake. Hire the wrong donor relations coordinator and that’s a much less costly error. This is one of those areas where being risk-averse is a pretty good idea.

Step 4. Skew toward data.

One of the biggest problems of small nonprofits is handling turnover. Imagine you have built your development office into something you can really be proud of. Your annual fund manager is superb. Your first major gift officer wows everyone. Your development director nailed your scrappy capital campaign.

You don’t get to keep these people.

You are a small nonprofit, and after only a few years anyone with these skills is going to be able to trade up to a nonprofit that can offer compensation above what you can deliver. That’s a problem, but it’s not an insurmountable problem—if you can keep the data.

Too often nonprofits of all sizes find someone great but don’t capture any good information on what that key staffer has done. Who have they been meeting twice a year in preparation for an annual gift? What’s the name of the donor’s beloved cat? Why is the donor so fond of your nonprofit’s program work, but could not care less about its education work? Your key staff member knows the answers to these questions! And all of it should be in a central database so the next person can benefit from the hard work of the development officers who came before.

It’s a truism that fundraising is about relationships, and yes, your new staff member might not be able to replicate the same relationships the departing staffer had. But they won’t get the chance if they don’t have the data. 

That’s why I think you should give strong consideration to finding someone who can work with data as your first development hire. While the specifics of who you hire is going to be dependent on the needs of your nonprofit, all other things being equal, I’d lean heavily toward someone who was capturing data from your events, appeals, newsletters, and other activities. That person’s effect on the organization doesn’t diminish when they leave. Instead, they enable others to be at the top of their game.

Your mileage may vary. But someone who is doing data entry a few hours a week and is helping you pull reports on prospects is going to help you be much more effective than you were before.

Step 5. Do you really need “other duties as assigned?”

It’s great that you have someone helping out now. But resist the urge to assign them the management of the Facebook page, “a couple hours here and there at the front desk,” and whatever else you think you need done. When it’s all hands on deck, as often happens in the nonprofit world, then sure—this staffer is there at your side like everyone else. But keep the non-fundraising clutter away from them! They have a job to do. Let them do it.

Step 6. Pay to educate your new staff member.

Whether you hire a data wonk or a grant writer or an annual fund coordinator, you should have a budget for regular education. You are likely not getting people with long resumes (you’re a small nonprofit with a small budget) so you’re looking for verve and passion and potential and other intangibles. You can hire good people this way. But they will need to be pointed in the right direction and equipped with good tools. So have a budget for education. Your development staff doesn’t need to fly anywhere for this necessarily. They don’t need to be at big conferences. Most towns and cities have networks of nonprofit leaders and some form of skill-building for all levels of positions. If in-person education doesn’t work, then turn to the Internet. However it happens, this should be a monthly or quarterly priority.

Step 7. Know where you’re going.

If you’re hiring from the bottom up, it helps to know what “the top” looks like. This depends on the specifics of your nonprofit, of course. One nonprofit might hire data entry first, then a coordinator of some kind, then a gifts officer. Another might hire a coordinator, then an events manager. Another is all focused on grants. How do you know what’s right for you?

It’s going to depend on several questions: Where is the money coming from now? Is it increasing? What are your needs? Do you expect a capital campaign in the next five years?

Look around for similar nonprofits and see how they are run. Find organizations that do the work you do but in a different city, and call the EDs. If you can’t envision how the organization should look, don’t be shy about asking for help.

Also, consider finding a local consultant who knows your community (or maybe even a national consultant who knows nonprofit systems and models) to evaluate this issue for you and make a recommendation. A cost of a couple thousand dollars for a roadmap is a small price to pay to avoid a mistake that could cost you tens of thousands of dollars in wrong hires and missed opportunities.

And knowing where you’re going will help you make sure that you’re building the right engine for growth instead of assembling the plane as you fly it.

I hope that’s helpful! As I’ve said in my book and as was mentioned several times on the Nonprofits are Messy podcast episode, hiring development staff doesn’t mean that you get to stop fundraising. You will always be active and be taking the lead. So don’t try to offload everything you do to a Director of Development. Start small, start from the bottom up, and let them support you and the board so you have more and more time to focus on the big gifts that will truly make your nonprofit fundraising efforts sustainable.