What are some examples of acceptable incentive compensation?
In terms of acceptable incentive compensation, there are three models that AFP recommends: 1. Percentage of Salary For example, if a fundraising professional exceeds budget or fundraising goals you would give them 10% of their salary. 10% X $60,000 (salary) = $6,000 incentive compensation. This model is the simplest and most straight-forward. 2. Incentive Compensation based on non-financial indicators such as: Number of new donors acquired Number of gifts upgraded Number of “asks” made Etc. In this model, these non-financial indicators are determined and agreed to at the beginning of the year. For example, If the indicators are achieved the fundraising professional would receive a $5,000 bonus. If the indicators are exceeded the professional would receive a $10,000 bonus. 3. Weight and Rate System This system is more complicated and it must be determined in advance by the CEO and the fundraising professional. Assume that the organization does annual fund, special events and major gifts
