Lies, damned lies and statistics… the trouble with the arts is that we don’t have a lot of robust data to help us know how we’re really doing in relation to arts fundraising.
Unlike other sectors, such as Higher Education and the brilliant Ross-CASE survey, there is currently no resource that allows arts organisations to benchmark their performance, or more importantly to decide where efforts and resources should be expended.
Too often I see arts organisations feeling like they are failing if they are not developing fundraising on every front – trusts, individuals, corporates, crowd-funding and social investment – and too often this stretches already tiny resources so thin that nothing meaningful is achieved.
It’s an obvious thing to say, but it’s much better to focus on two key areas and to build the relationships and depth needed, than to overpromise across several fronts.
But how do we decide what to invest in? And what might be surprising in relation to our knowledge about arts fundraising? Are there any publically available statistics that we can rely on?
Only 1% of charitable donations from individuals in the UK goes to the arts.
The estimated total amount donated to charity by UK adults in 2014 was £10.6 billion. But just 2% of donors give to the arts, accounting for just 1% of the total amount donated.
Of course, this statistic makes for depressing reading, and can make us all ready to give up and go home. How on earth do we position our causes against the ‘big three’ causes i.e. medicine that receives 13% of the total giving, children’s causes which accounts for 12% and hospitals at 11%? The short answer is that we can’t – but we can remember the competition, be mindful that arts organisations are charities too and seek to build a case for support that is as robust as possible.
And on the plus side, income from individual donations to ACE National Portfolio Organisations increased by 20% between 2012/13 and 2014/15. So there is light at the end of the tunnel.
If arts organisations work together, we can make a change in drawing the arts as a cause more into the public mainstream. We all have a responsibility to outline to the general public just how important work in the arts is to the economy, tourism and the local community and to build the collective case for support.
Regular small donations to the arts are relatively high.
The typical monthly amount given by a donor in 2014 was £14. After religious causes, the arts achieve the next largest typical donation of £12.
So whilst we might be doing poorly in comparison to other sectors in terms of overall giving – there is definite mileage in a ‘lots of little’ approach. In the current psychology of the individual donor, the arts comes high up in the small regular donation stakes and therefore our strategies for securing flexible monthly donations, should come to the fore.
Securing sponsorship income is getting harder.
Income from sponsorship to ACE National Portfolio Organisations fell by 2% between 2012/13 and 2014/15. It’s well recognised that the area of corporate giving is getting harder. In the recent breakdown of contributed income by strands for the national average for ACE National Portfolio Organisations, sponsorship equated to just 16% of income, as opposed to 48% of income from major gifts and 36% from trusts and foundations.
Therefore investment in this area needs to proceed with caution. Many relationships will start in-kind and the savvy arts organisation will be targeting in-kind relationships that are genuinely budget relieving – for example helping with digital development, offsetting marketing costs etc.
Corporates are also shying away from old-fashioned brand and hospitality sponsorships with many looking for a highly creative approach, needing an arts organisation to curate activity that is bold and different on modest budgets. This needs a new type of mindset with many arts organisations drawing from their artistic resources to build these programmes, rather than the more traditional service and relationship building mindset of the traditional fundraising team.
Arts and cultural organisations are over-reliant on trusts and foundations.
In the latest Arts Quarter LLP survey it is estimated that 80% of cultural organisations feel that grants from trusts and foundations offer the greatest potential area for growth up to 2018.
Of course we know that Trusts and Foundations are an essential source of contributed income across the arts and cultural sectors. Arts Council England figures show that in 2014/15, National Portfolio Organisations collectively received £55.3 million from Trusts & Foundations, an average of 4% of their total combined income.
However, as statutory funding declines, there will be more competition for Trusts & Foundations funding, and as interest rates remain low, organisations reliant on interest from endowments will have less money available to distribute. In fact many longstanding Trusts are now looking at their own income generation strategies as their endowments perform poorly – Trusts are therefore becoming ‘poacher turned game-keeper’ and may themselves start competing for funding!
Arts Council England statistics show that income from Trusts & Foundations in 2014/15 actually represented a fall compared to 2012/13 (£55.3m), whereas income from donations increased from £70.6m to £84.5m in the same period. We need to diversify strategies. A trust portfolio might comprise of between 30% – 40% of an arts organisation’s contributed income, and anything more might be considered too risky in a more competitive environment.
Arts Council England has re-commisioned the Private Investment in Culture Survey, and the survey results will be available soon. These will give us further intelligence on levels of fundraised income achieved across the cultural sector from individuals, corporates and Trusts & Foundations.
Many Trustees still fail to recognise their responsibility for fundraising.
In the House of Commons PACAC report into the 2015 charity fundraising controversy, The Charity Commission’s guidance on fundraising is made clear.
Trustees are “legally responsible for making sure that your charity’s fundraising is carried out in compliance with your legal Trustee duties” and that “your approach to fundraising and your fundraising plan reflect the charity’s values”.
There has been much progress in Governance and Trustees recognising their role in fundraising, but there is still a long way to go. In my view, the first key role of a Trustee is in supporting strategy – to help the Executive Team shape strategy and to challenge thinking, particularly in organisations that are underresourced, or with small numbers of staff.
The second key role is as an ambassador – somebody that can always talk positively and knowledgeably about an organisation, from its key message and purpose, to its financial needs. A good Trustee should provide support in every way they can: financial, time, and contacts (current as well as new ones), all essential roles of supporting the fundraising effort.
