Arts & Entertainment and Nonprofits

Changes in giving mean retooling for arts organizations

Donors are asking: ‘What’s in it for me?’

June 14, 2013
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Recently the East Bay Express, a San Francisco based and focused publication, published an article, “The Bacon-Wrapped Economy,” that explores how the growing population of young, wealthy people in the region is impacting the philanthropic culture of the city.

Though the article is specific to San Francisco with a broad exploration of the effects of the young and wealthy on the city, and often accompanied by a scathing critique of the generation, its look at arts philanthropy provides a microcosmic view of trends happening nationwide.

Donor expectations are changing, with many expecting more involvement in the organizations to which they are giving, as well as unique experiences.

Social media and fundraising sites like Kickstarter create even more competition for donor dollars as they impact and alter fundraising approaches and models. Rewards are a common feature provided to donors in exchange for their contribution, developing a “what’s in it for me mentality.”

Finally, corporate giving has joined the realm of marketing and public relations, which means organizations have to follow a different approach to solicit donations, tailoring sponsorship packages to fit a company’s community outreach strategy.

Carla Hill, president and CEO of the West Michigan Symphony, said it operates on a budget of approximately $1 million per year. Only about 36 percent of its revenues come from ticket sales. The rest comes from patron donations, corporate sponsorships, grants and other revenue streams.

“We have an annual fund drive, an ongoing ask of all of our patrons to contribute to the annual fund to help support our operations,” Hill said. “That’s putting the orchestra on the stage, renting the hall, hiring the musicians, hiring the guest artists — all of those things are part of the overall operations.

“We had some pretty tough years, obviously, during that big downturn in the economy in 2008 or so, but I feel that things feel better right now, and we have had a major fundraising capital campaign and it’s done remarkably well. We are astounded at how people have responded.”

The capital campaign funded the move of the WMS office to a new space in downtown Muskegon and the addition of a small, intimate hall for concert performances and programming.

Though the capital campaign was successful, Hill said the organization is adapting to changes in philanthropic culture, and the small performance space is, in part, a tool to help WMS cater to a new demographic it wants to attract — a demographic that requires a deeper engagement with the organizations it patronizes and supports.

The small concert hall, known as The Block, is intended to reach out to a different audience than the orchestra’s traditional concert space: the historic Frauenthal Theater.

The 1,800-square-foot space was designed to be flexible for both performances and audiences. It is described as a place where “music pushes the boundaries of tradition and expectation and encourages investigation,” and promises “an intriguing, cross-pollinated mix of music that can be intimate or explosive, but always entertaining. From timpanists who perform on cardboard boxes to klezmer-meets-Bollywood with a splash of bluegrass to jazz and Broadway influenced cabaret performances.”

“It really is the creative and the branding and the performances and the way that the performances are presented — just the atmosphere that we are going after,” Hill said.

“I’ve done a lot of research. I’ve worked with a team to help me brand this whole thing, so what you are going to be seeing is, in part, to be attractive to a different demographic.

“They are looking for experience. They want it to be something that they are part of. It’s not something that happens to them but it’s something that happens with them. So we are looking for ways of doing that with this new product.”

WMS is not alone in its efforts to pull in new patrons by expanding performance offerings, educational programs and other community engagement and service efforts. Most arts organizations have seen the cultural shift occurring for several years now and are adapting in ways they hope will make them sustainable into the future.

St. Cecilia Music Center is the oldest continuously operating arts organization in the region, and adaptability has been one of its keys to survival.

“The world of philanthropy is changing a lot right now,” said Cathy Holbrook, executive director at St. Cecilia’s. “It used to be that you could write a letter to someone of means and say really warm and fuzzy things about the things that we do, and they would write you a check. Those days are becoming much less and less. More and more, you have to prove what you are doing: ‘This is the experience we are creating for people and this is why it’s important.’

“I think that the younger generations of people who are going to take on the major philanthropy role expect to know more about the organization they are giving to.”

Donors also are becoming accustomed to getting something in exchange for their donation, whether it’s a T-shirt or an invite to a special VIP event.

Holbrook said arts organizations have to balance engagement of current donors with beginning to build relationships with future donors. That means finding ways of appealing to both groups.

Many arts organizations have come to the conclusion that they have to create an audience and donor pipeline through youth outreach.

St. Cecilia is increasing its School of Music, a music education program that teaches kids about music through learning how to play an instrument and developing an appreciation for music they might not be exposed to otherwise.

Individual donors aren’t the only philanthropic givers that are changing. Corporate giving also has changed significantly, with much of a company’s giving now tied to its marketing efforts.

“It changes how we approach companies,” Hill said. “We go in with two approaches: pure philanthropy, or ‘is this coming out of your marketing budget?’ We want to make sure that what the company is looking for is something that we can deliver.

“Some have just gotten out of the business of supporting the arts altogether,” she added.

Holbrook agrees approaching companies for support now requires a more tailored approach.

“You have to give them the right exposure to the right audience for it to make sense to them because that is what they are doing now to be part of the community,” Holbrook said. “We try to create sponsorship packages and opportunities for businesses to showcase themselves here, as well. We understand that they are giving to us because they believe in what we are doing, but they need the community to know they are doing it.”

Finally, foundation giving also is changing. Many of the same factors that individuals require are a requirement of granting organizations.

Hill has been involved in evaluating grant applications for arts programs and said there is now a greater emphasis on how the organization meets the needs of its community and how it is inclusive and attracts a diverse audience.

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