Certified Fund Raising Executive (CFRE) Practice Test

How should a fund development director establish their annual salary?

1. Based on volunteer input

2. According to the comparable salary ranges and experience

3. By consulting with donors

4. On average salaries in the nonprofit sector

The correct answer is: According to the comparable salary ranges and experience

Establishing an annual salary for a fund development director should be grounded in the analysis of comparable salary ranges and experience. This approach ensures that the salary is fair and competitive, taking into consideration the specific skills, qualifications, and accomplishments required for the role. Researching salary benchmarks allows organizations to attract and retain qualified professionals, aligning compensation with industry standards and the financial context of similar positions in the nonprofit sector. Evaluating comparable salaries helps organizations remain competitive within the job market, which is particularly important in the nonprofit sector where resources may be limited, and staff turnover can strain fundraising efforts. Considering experience is equally important, as it directly impacts the potential for effective fundraising leadership. A well-defined salary based on these criteria not only acknowledges the value of the position but also aligns expectations for performance and contribution to the organization's goals.