Archive for August 26th, 2011

August 26, 2011

Does CFRE Have a Future?

The Certified Fund-Raising Executive credential was created in 1981 to promote professionalism in fundraising practice. Now, on the 30th anniversary of the creation of CFRE, I thought I would take a few moments to consider whether CFRE has a future.

One might automatically think that CFRE will enjoy a bright future. After all, the credential has a 30-year track record. The market of fundraising professionals is growing worldwide. In the United States alone, the number of nonprofit organizations required to file with the Internal Revenue Service grew from 246,733 in 1999 to 315,662 in 2009, a 28 percent increase. (These numbers do not include the hundreds of thousands of religious congregations not required to file or the hundreds of thousands of nonprofit organizations that raise less than $25,000 a year; the numbers also do not include tens of thousands of foundations.)

The idea that fundraising is actually a profession has also taken root in recent decades with the dramatic increase in educational opportunities including college and university certificate and degree programs in nonprofit management and fundraising. As the nonprofit sector takes fundraising more seriously, as the number of nonprofit organizations grows thereby increasing the number of fundraising practitioners, one could conclude that the rapidly growing potential market for CFRE would mean a rosy future for the credential.

Another sign pointing to a healthy future is the CFRE recertification rate. Among those who hold the CFRE designation, satisfaction seems to be high with “a healthy recertification rate well above the average rate for voluntary certification programmes,” according to CFRE International, the credentialing organization for CFRE

Unfortunately, the future for CFRE is not automatically secure. Today, there are 5,322 holders of the CFRE credential, including myself, of which 4,422 reside in the U.S. Assuming that every reporting 501(c)3 has at least, and no more than, one person doing fundraising, that means that CFRE’s market penetration in the U.S. is about 1.4 percent! After 30 years, that’s a rather lackluster market penetration rate, suggesting the credential is crawling rather sprinting into the future.

The average number of newly certified professionals has averaged just 445 worldwide from 2007-2010, according to the 2010 Annual Report from CFRE International. While this number grew over the previous three-year period, it’s certainly not a number that realizes the potential. Between 2007 and 2010, the worldwide number of CFRE holders grew by just one percent!

The CFRE credential faces a number of serious challenges including:

Competition: Other credentialing programs exist including the Chartered Advisor in Philanthropy and the Advanced Certified Fund-Raising Executive. In addition, master’s degree programs compete with the CFRE credential. During a recent conversation on Twitter hosted by #fundchat (a weekly discussion on Twitter about fundraising issues that is held every Wednesday from 9:00 – 10:00 PM, Eastern time), a number of participants questioned the value of obtaining a CFRE designation if they’re going to get a master’s degree related to the profession; the thinking was that a related master’s degree is at least as strong a credential as a CFRE.

Economics: CFRE is a voluntary certification. Government regulators do not require it. The decision to obtain a CFRE, is purely up to the individual professional. Making the decision to pursue a CFRE comes with a big price tag. First-time certificants must pay $618, if they are a member of a participating organization, or $778, if they are not. Those recertifying must pay a fee of $360, if they are a member of a participating organization, or $453, if they are not. Many employers are unwilling to pay for their employees to become certified, and many development professionals are unwilling or unable to pay the significant fee themselves. I suspect this will be particularly true in these tough economic times.

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