SMU Data Arts: The Fundraising Report 2019

Fundraising Insights

What is this Report?

fundraising-roi-smudataarts-2019-1_Page_01

This report is Southern Methhodist University (SMU) Data Report Fundraising Report. The report looks at 2017 fundraising results for 2,421 organizations in 11 arts and culture sectors in the US. There’s also data about 1,888 organizations from 2014-2017.

What are the Key Findings from the Article?

  • On average, arts and culture organizations earned $8.59 for every dollar spent on fundraising. However, 2017 ROI was lower compared to the past three years. SMUData Arts attributes this decrease to the decrease in spending on fundraising in 2017 (when adjusted for inflation). Most organizations spent the majority of their fundraising expenses on staff, which increased each year in the study. The report repeats the old adage: You have to spend money to make money.
  • Over the four-year period, individual giving was the only category that saw an increase from 7.0% in 2014 to 8.3% in 2017. Other categories (government giving, trustee giving, foundation giving, and corporate giving) stayed constant or dropped slightly.
  • However, when adjusted for inflation, 5 of the 11 sectors saw a decrease in total contributed revenue over the time period: Art Museums, Dance, Opera, Performing Arts Centers, and Symphony Orchestras. Other museums (not art museums) and arts education saw the largest positive change.
  • More opera companies in an area raises total contributed revenue for all arts and culture organizations, but having lots of art organizations in the area lowers it for the sector. Having more arts organizations in an area causes fundraising expenses to go up but having more opera companies drives down the fundraising expenses. “In other words, more intense competition leads organizations in this sector to spend less on fundraising.”
  • “Fundraising expenses are higher for organizations in communities with higher percentage of young adults, Asian Americans and African Americans. Also, the fundraising expense level tends to be higher in places with elevated socioeconomics. On the flip side, the fundraising expenses tend to be lower in communities with higher total population and median age. The increased individual philanthropy also lowers the spend on fundraising.”

What Can I Do as a Result?

SPECIAL NOTE: This report was published before the pandemic created direct economic consequences for so many arts and culture organizations. If there was ever a time to take risks and fundraise differently, now is the time. We’ve provided some ideas below, but will continue to seek out case studies and other reports on fundraising differently in the digital age.

  • It’s important to stay connected with your donors and constituents. While the writers of the report affirmed the adage that you have to spend money to make money, the arts and culture funding environment has dramatically changed with the coronavirus. Many organizations have to make hard decisions about their organizations, including their fundraising. But many experts agree that nonprofits need to keep their constituents and donors informed about what is going on, what you are doing ,and depending on the circumstances, what you may need. Donors and constituents will remember how you treat them in a crisis.
  • Engage first, then ask. In a recent Gravty webinar “Fundraising During A Crisis 2.0”, experts reminded nonprofits to help bring community together. Arts and culture nonprofits are especially suited given their resources, such as videos of performances, pictures of art works, even art classes. This will help your community feel a sense of togetherness and hope. Other nonprofits leverage their resources, such as West Virginia University that encourages supporting WVU alumni businesses, professional development and more.
  • Nonprofits should continue to fundraise. Right now, in the middle of the COVID-19 pandemic, arts and culture organizations have had to cancel live performances, exhibitions, classes, etc. Experts recommend that they need to continue fundraising, but may have to take extra steps to connect with donors. In a recent webinar “Fundraising During A Crisis 2.0”, experts suggested including a humanity step into the donor pipeline. In other words, check in with your donors and see how they are doing. Don’t assume they won’t want to give, but don’t be tone deaf. Also be aware of what is happening at your organization.
  • Nonprofits might want to check in with their fundraising volunteers. While the report found that smaller organizations had a better ROI than bigger organizations, the report ascribes part of their success to their reliance on volunteers. Checking in on your fundraising volunteers is the right thing to do and it’s important to continue fundraising. Experts believe that nonprofits that rely on volunteers (such as service organizations) may have issues with continued social isolation, but that might impact volunteer fundraisers differently. If volunteers cannot continue fundraising, your organization may need to pivot (more than it has already).
  • Consider implementing a ‘digital fundraiser’ position. Way back in 2018, Josh Birkholz of Bentz Whaley Flessner argued that “An emerging trend will be the digital fundraiser with a portfolio entirely comprised of social platform prospects.” You probably are using social platforms such as Facebook, Instagram, and peer-to-peer fundraising. While you might not have implemented digital-touch portfolios before, as you practice social distancing it might be easier to conceive of ways to integrate digital fundraising into your overall development plan.

Additional Resources

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.