Lack of Perks Don’t Make Or Break Donor Relations

Advisory Board for the Arts just sent out a summary of four takeaways about what motivates arts donors based on interviews conducted this past November and December.. While this post is going to be quote heavy, it isn’t going to include all their observations so I encourage you to take 2-3 minutes to read the whole thing.

The first takeaway was basically  “first impressions set the tone for the whole relationship.” Once someone makes a donation, future donations will generally fall in the same area. The amount donated is fairly dependent on their perception of what a person like themselves has a duty to donate.

“…which is a combination of what they can afford to give and what they believe is their duty to give, based on factors like marital status, whether they have children, and how much they get out of the arts. When prompted to discuss whether he would consider increasing his giving to arts organizations, for example, one interviewee said that increasing “would probably be appropriate for a couple or a family. Just being single, $1,000 is already a high tier.”

The second takeaway probably holds no big surprises. Donors like to support different organizations, but they have a core group of entities (~2-5) with whom they concentrate their support and perhaps up to 20 others which they vary their support.

The third takeaway is very promising for organizations during and after Covid. While people may donate at a certain level to gain perks, taking away those perks won’t cause them to reduce their giving, by and large.

A handful of donors we spoke to pointed to benefits like free parking and access to donor lounges as reasons for their giving — but across the board, donors indicated that they would not change their giving habits if those perks were significantly reduced or removed entirely (as has been the case for many during the COVID-19 pandemic)… Many donors expressed a desire to help their communities, including by attracting business and building a vibrant local economy, through a demonstrated commitment to the arts. They stated their views clearly: the arts are not a luxury. They belong — they are needed — as part of the social fabric of every community…

The last takeaway is also probably not a surprise. Relationships and connections matter–both with the organization and other participants.

…the opportunity to meet and to know other people is what brings them back each year. Interviews revealed they have an acute awareness of what would be lost without those relationships.

Importantly, donors emphasized the difference between arts organizations’ (often costly) initiatives to foster community-building and the community itself. One interviewee summed this up succinctly when she told us that “perks like donor parties and receptions create community, and that is one of the satisfactions people get from donating. It is something people get besides the altruism of giving to the arts. But there are a lot of ways to create community without parties.”

We spoke to some donors who had met lifelong friends through the opera or symphony; we spoke to other donors who jumped at every opportunity to speak with artistic directors and performers and curators. They weren’t planning on discontinuing those relationships anytime soon. To do so would be to leave the community that had brought them those friends in the first place.

Decision Not To Grow≠Failure To Grow

An article on Daily Yonder making an interesting point came across my social media feed last week.  They noted that part of the reason why rural communities are characterized as being in decline is that those communities that eventually grow much bigger are no longer classified as rural, they become a metro.   It is almost like claiming that the life expectancy of caterpillars is getting shorter despite the increase in available flora without acknowledging that the abundance of flora allows the caterpillars to transition into butterflies earlier.  This is a form of survivorship bias.

“Rural America is reported as declining in part because we no longer count as Rural those counties that grew into a Metro classification. We are measuring those counties that stay Rural which, by definition, have not grown,” stated the report.

[…]

Those that remained rural are far from homogenous, but the report stated that “they often have some economic specialization or dependence. Counties that stayed Rural and lost population tended to depend on farming, mining, or oil and gas. Counties that stayed Rural and gained population (though not enough to switch to Urban) tended to be recreation-dependent and/or retirement destinations.”

The way rural counties are classified and reclassified contributes to a skewed image of “struggling rural America.” Policy makers should consider this as they look for ways to help rural counties succeed.

This reminded me of the frequent complaint that the success of an organization or company is predominantly measured in growth. Is the number of people served or funds raised/earned greater than it was in the past? A lot of us know it is the less easily quantifiable depth and quality of the experience that can create deeper impact and lasting impressions in participants.

Heck, at about 4 pm this afternoon I got an email at my day job saying our outdoor fire escape concert series has been nominated for a special Covid Cultural Award. I would argue that a primary criteria for that was just “able to do something this year” rather than anything to do with growth.

I strongly suspect there is a dynamic at work in the non-profit sector as a whole, and the arts and cultural industry in particular, similar to the one observed in the Daily Yonder article. There are rural communities that see growth, but remain rural but there is often no differentiation between them and those rural communities that are doing poorly.

If you make a conscious choice to stay small or only grow large enough to provide sustainable salaries to staff and then reinvest resources into providing better and better experiences, you end up in the same category as groups that are just entering the field or entering your size classification.  As a result, the perception of your organization is shaped by sweeping generalizations about your category.

If others in your category are struggling to deliver quality programs or lack the capacity to do good work, then by default the belief is you are as well despite having developed an extremely stable foundation over the course of decades.

This dovetails with my frequent discussion of how economic impact is a bad yardstick by which to measure the value of the arts. Just as the authors of the study of rural communities say different measures and different solutions should be applied to rural communities, a single standard of success is not appropriate for all arts organizations.

 

It’s More Than Just Naming A Minster of Culture And Other Measures To Help Creative Industries

To continue where I left off from yesterday’s post about the UNESCO document, Culture in crisis: Policy guide for a resilient creative sector, the next section addresses providing support for cultural and creative industries in the wake of the Covid epidemic. Whereas the policies covered in yesterday’s post were more targeted toward helping individual artists and organizations, this section is more focused on broader sectors. This part of the document has seven separate sections, but I don’t intend to take screenshots of them all.  Some of the proposals aren’t as relevant to non-profit arts organizations so I will summarize rather than going into detail.

The measures proposed in this section include: Accelerated payment of aid and subsidies; Temporary relief from regulatory obligations; compensation for business interruption losses; relief from taxes and social charges; stimulating demand; preferential loans; strengthening infrastructure and facilities.

Since I am writing from the bias of a U.S. based non-profit, some of these measures aren’t as significant as others.  Accelerated payment of aid is basically the suggestion to pay disbursements on grants already in place rather than waiting for final reports or the completion of services in order to allow organizations to remain liquid and finish all that stuff.

Relief from regulatory obligations as described in the document are focused on broadcast networks. I am not sure there are a lot of regulations in the U.S. that are inhibiting organizations from staying liquid and aren’t important for protecting workers and participants (i.e. those that deal with employment, health and safety, supervision of children in camps).

Similarly, relief from taxes doesn’t impact a lot of non-profit arts organizations. In some locations where the organization is making a voluntary payment to local government to support infrastructure, some discussion about payment is probably worthwhile. For those organizations that pay local/state sales tax, getting that removed in a time when tax receipts are way down is probably an extremely difficult conversation.

The preferential loans section is a valuable proposal, but the content of that section can be summarized as: The loans should be made, but the banking sector has insufficient understanding of the variations in creative organizations necessary to evaluate them for creditworthiness for loans so the banks need to be trained first.

Compensation for business interruption loss of course is a big issue, especially in terms of insurance paying claims. This section definitely is definitely worth reading since it is so relevant and balances the concerns of both government and industry.

Stimulating demand is a really interesting section and something folks in the U.S would love to see the government embrace. Look at that first line “The State is sending a clear message that the art and culture are essential services to which all citizens must have access.”

I appreciated the fact they noted change and results wouldn’t happen immediately and counseled a long term view.

I also think the observation that ministries of culture (or the NEA in the case of the US) does not have the expertise to stimulate demand is valuable to note. This is something extremely important to acknowledge when it comes to discussions about elevating arts & culture to Cabinet level position in the U.S. government. It isn’t enough to have someone in the position, the overall policy and practice of the government must be aligned toward cultivating both supply and demand. Even if the culture secretary/minister portfolio doesn’t have the ability to stimulate demand, government policy should be that those that do work hand-in-hand with the culture secretary/minister toward that end.

I debated whether to take a screenshot of the Infrastructure section because it states the well-known and easily summarized “Edifice Complex” truism. People like to fund impressive looking structures, but don’t want to fund the programs or people or programs that will inhabit the structures. However, I feel like we can all use the vindication:

Budgeting More Money For Culture, Despite Covid. You Can Probably Guess Where

Last week Artnet reported that Germany’s 2021 draft budget held an increase in funding for cultural organizations in the country.

You may recall that I made a post in May that clarified German cultural organizations didn’t receive $54 billion in aid as had widely been reported.

German arts administrator Rainer Glaap had brought the misunderstanding to my attention and provided links to stories that explained that the money was spread across a wide swath of industries and that since each German state had their own programs and interpretations of how funding was to be used benefits to cultural entities varied wildly with freelance artists often receiving short shrift.

The most recent story seems to be more specifically focused on funding for cultural entities since the budget numbers cited are $2.26 billion and it quotes the German culture minister

Culture minister Monika Grütters says that such a strong budget for the final year before the German elections underscores the country’s commitment to culture, especially on top of its existing billion-dollar coronavirus rescue program.

“Especially in times of crisis, culture is the foundation of our social cohesion,” Grütters says in a statement. “Art, culture, and the media make us aware time and again of our great privilege to live in a country of freedom of the press, culture, and opinion, where controversial debates are possible, desired, and endurable. The protection of these freedoms remains the highest principle of federal cultural policy.”

The German government’s cultural budget has grown by about 60 percent since Grütters took office in 2013, and 85 percent since the German chancellor Angela Merkel came to power in 2005.

The story doesn’t really get into whether the different states were taking steps to make sure freelancers and small business groups were better able to access funding or other supports than previously.

 

While the erroneous $54 billion amount had caused no shortage of envy among arts and cultural professions last Spring,  I wanted to point out prioritizing culture is not an outlier. Not only has improving funding for cultural organizations been a priority this year, it has been a priority for over a decade. It should be noted, this budget has to be approved by the German Senate before it is put in effect.

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