The buzz in the nonprofit sector right now is all about “donor engagement”. This makes perfect sense, because the fiscal realities of government reduction in program spending; salary restraints and budget shortfalls require decision-makers to bridge funding shortages.

Determining how to get existing donors to increase their donation levels, and/or how to attract new donors or funding for the organization has become a priority. As a manager, you also want to ensure that every dollar gained from your donors is spent efficiently.

Unfortunately, if employee engagement is ignored, donor gains will be eroded.

Disengaged staff will erode donor gains

The cost of staff’s lack of engagement is not always readily apparent. This hidden cost, however, can result in substantial losses. A research study of more than 7,000 organizations conducted by Aon Hewitt, suggests that one disengaged employee costs an organization an average of $10,000 in profit annually.

Nonprofit organizations (NPOs) may not be in the business of driving profits; however, you are committed to ensuring that each donor dollar received is translated into sustainable services and programs for the causes you serve and care about. Focusing your attention on employee engagement is one way to reduce the erosion of donor gains.

What is employee engagement?

Employee engagement, as noted by Aon Hewitt, is an employee’s emotional and intellectual involvement that motivates the person to do their best work and contribute to their organization’s success. It is represented by what individual staff members Say, if they Stay and do they Strive. Engaged employees do the following:

Say — An engaged employee advocates on behalf of their organization and speaks positively about the services and programs offered by it. They are proud to work for the organization.

Stay — Engaged employees are very committed to the organization. They have a great desire to continue membership within the organization and it would take a lot for them to leave the organization.

Strive — An engaged employee exerts extra effort that contributes to the organization’s success. They feel energized and are motivated to do their best work.

Are the people working for your NPO truly engaged?

There is a commonly held perception that employee engagement is very positive in the nonprofit sector. This perception has some merit because it’s a fact that most people working at a nonprofit hold a positive regard for their organization and are continuously advocating and promoting their sector and organization. Nonprofit employees are also fiercely proud of the noble causes their organizations undertake. Finally, those who work in this sector are often attracted to their organization because of its mandate. Our perceptions often lead us to assume that NPO employees are motivated and will remain engaged simply because they are working for a good cause. This may not be the case.

Some people have stayed with an organization for many years. They have been steady performers and appear to be committed to the organization. Based on these facts, we make the assumption that these employees are engaged because they have stayed. But it should be noted that although they are present at work, they might not be very productive. “Presenteeism” does not necessarily suggest that people are striving to do their best work.

You can determine if staff are engaged through employee surveys designed either specifically for your organization or standardized studies in the marketplace. While employee surveys will provide factual data on engagement levels, it’s important you also rely on managing by observation to gauge the engagement pulse of your organization.

While managing by observation, you may want to consider answering the following questions:

• Do your staff members appear to be bored and burned out?
• Do they feel overworked, overlooked and underappreciated?
• Are people being underutilized?
• Are staff very critical of the organization?
• Do they find fault and consistently resist any new ideas?
• Are they feeling connected with their leaders?
• Is there regular communication between leaders and the entire staff?
• Are staff given opportunities to learn and develop?

Engagement changes over time

Keep in mind that engagement levels are not consistent throughout an employee’s tenure with an organization. A TowersWatson publication, Driving Business Results Through Continuous Engagement, reported that employee engagement levels decline with tenure. Engagement levels usually start high and decline by 9% after the first year of employment and more than 12% after five years.

Since employee engagement levels are not consistent, differing strategies and tactics are required to sustain continuous engagement of your staff. To develop and implement these tactics, you must first be able to differentiate the engaged from the disengaged employee. Again, there are tools available from human resources professionals and service providers specializing in employee engagement that can help you differentiate between those who are unhappy in their jobs but have no plans to leave; employees putting in time; those who are great at their job and will leave the industry for greater compensation and personal gains; and, of course, the totally engaged employee who is motivated and will say positive things about the organization, stay long-term and strive through the learning and development opportunities provided by the organization.

Why employee engagement matters to nonprofits

According to TowersWatson, highly engaged employees generate 26% higher revenue for their organizations and are twice as likely as their less engaged employees to be top performers. Additionally, the majority of engaged employees exceeded performance standards and missed fewer days from work due to illness.

Organizations with highly engaged employees find it easier to attract new staff. People want to work for an organization that has a good cause and also allows them to strive. If individuals are attracted to an organization, less resources and time will be allocated to recruitment and selection. It’s then easier to access a ready pool of employees to replace both voluntary and involuntary leave. Funds previously allocated to recruitment and selection projects maybe dispersed, either to funding programs or donor campaigns.

Employees who are engaged are more likely to “go above and beyond” to achieve organizational objectives, says Aon Hewitt. If employees charged with the responsibility to increase donor engagement “go above and beyond,” this would translate to achieving or exceeding targets, including those set for donor participation and funding campaigns.

Finally, implementing strategies and tactics to improve employee engagement may provide greater visibility for your organization and the nonprofit sector as a whole. Some organizations that actively measure their employment engagement levels do so by participating in national employee surveys. These surveys give participating organizations an opportunity for benchmarking their results to industry or national standards and also help them to gain visibility as best employers. For example, The Best Small and Medium Employer study conducted by the Queen’s Centre for Business Venturing, the Queen’s University School of Business and Aon Hewitt is published in Maclean’s magazine. Other surveys are published in newspapers such as the Toronto Star and The Globe and Mail.

And there are further benefits: gaining recognition as a best employer provides a positive brand for any organization. Potential donors may be more inclined to partner with organizations that actively engage their employees and also have a positive brand.

Donor engagement is very important to secure the funding necessary to support many nonprofit organizations. On the other hand, failing to keep staff interested and doing their best will result in both hidden and visible costs that will only erode the gains made on the donor side. It is important that you keep both donor and employee engagement in your line of sight.

Tips to engage or re-engage your employees

1. Gain leadership (board members, CEO, executive directors and senior management) commitment to create an environment that supports continuous engagement.

2. Measure engagement as one of the performance indicators used to evaluate and ensure organizational performance, resilience and sustainability.

3. Involve all the organization’s stakeholders in the process. This is not just a human resources initiative.

4. Analyze data on employee engagement to develop appropriate strategies and tactics.

5. All employees are different, so build strategies and tactics that address people’s individual needs and talents.

6. Involve all stakeholders (employees, board of directors, senior management) in the development of the strategies and tactics to address employee engagement in the organization.

7. Communicate regularly with all employees in the organization, so they understand their role in working with the organization to improve engagement levels.

8. Measure the results of all new strategies and tactics and adjust them to improve the organization’s success.

Carla Moore MIRHR, CHRP, is a Human Resources Consultant, The MoreDen Group & Founder of Teens with Senior Deans. Write to Carla at ckamoore1@sympatico.ca.