Reading the tea leaves

A few observations and then a conclusion . . .

Some of the newer foundations, like the Bill and Melinda Gates Foundation, don't have an arts and culture giving component.  Since these new foundations tend to have a lot of influence in the field, I'm willing to wager that other new foundations will not have much of an arts section.

Foundations who do have arts giving are going to place an increased emphasis on funding partnerships and collaborations. 

They are going to be far more likely to give $30,000 to an collaboration that has three arts organizations involved then they are to give those three organizations $10,000 each on their own merits. 

Corporate philanthrophy is going to emulate the Chase and Pepsi giving models which really mix marketing and giving together.  No matter how you feel about Pepsi Refresh or Chase Giving, it's pretty clear that this is where the corporate giving world is moving.

Competition for "high net worth" individuals who give to the arts is going to be more intense then ever.

I think that's a reasonable set of observations/predictions

Here's the conclusion . . .

For the next decade, nothing is going to be more important than your ability to get people in the door and then turning a section of your audience into individual donors.

This isn't about cultivating a "rich person", it's about convincing that dentist in your audience to give $1,000 a year, or getting that mid level corporate executive to give $500.

Do programming that excites people, market effectively to get them in and then convert some of them into donors.

It's that simple and that complex.

Those that can do that will thrive, no matter how difficult the economy may be that any particular time.

Those who spend a large amount of time grant writing or chasing corporate dollars will be in a lot of trouble.

 

 

Comments

[Devonvsmith]

I think it's true that single-funder driven foundations tend to focus most of their giving on a narrow range of topics. Gates specifically wanted to be able to objectively measure his impact--something much better suited for education & health than the arts, at least thus far. This seems to be the bigger challenge for the arts--the lack of well defined metrics, and the reason why we're now shifting back in the direction of individual patrons (at whatever giving level) who are motivated by their affinity for the art, rather than trying to achieve a pre-defined outcome.

I agree that most foundations are taking a 'bet the farm' approach, rather than spreading the wealth around, but I think it's because we've seen over the past few decades that doling out small sums across a theoretically 'meritocratic' field don't work--it just kept everyone perennially under funded. Chase & Pepsi try to solve the "by whose definition of most important/needy/potentially successful" question via crowdsourcing, at the same time leveraging the social media buzz of a ton of orgs desperate for cash, to their own advantage. An arts org could do just as well to focus on not only the folks who come "in the door," but also the folks who are online, wherever they may be, and whatever their relationship with the organization IRL.

Most of the research (I've seen) has shown that Millennials are more engaged with causes than organizations, and their donations may be smaller per organization, but are roughly equivalent when summed over the course of the year. This would suggest that another strategy an arts org could take would be to lower the transaction costs of donating to $0, to ask for money immediately (and care less about "cultivating a donor over a long time period"), and to widen the circle of possible donors.

But I totally agree with that "do programming that excites people" advice :)

[Adam]

Glad we agree on something.

Actually I agree on pretty much everything you said. Particularly with the "metrics" conversation. I think that creating workable metrics in the arts, even if the metrics vary from one arts field to the next, is a key to bringing in funders, donors and even single ticket buyers who are looking for their dollars to have maximum impact.

[Tony Adams]

I don't think it's a next decade prediction. It's now, it's been true for a while now. Worth noting: last year, corporate giving was 4% of philanthropy. Foundations made up 13%. Individual donors made up 75% of US giving.

$14Bil vs. $38Bil vs. $227Bil*.

I wish more in the arts would get that. Individuals are what keep orgs healthy and thriving. Corporate, Foundation and Gov't giving is awesome. If you can get it. While it lasts. But any org that isn't already building relationships with people, should think about shifting some of the time spend chasing corporate money and start looking at exit strategies.

(from GivingUSA's most recent report)