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DAFs May Not Be Distributing Funds As Much As Juggling Them

May 12, 2025

by:

Joe Patti

Last week, Philip Cubeta had linked to a story on Inside Philanthropy analyzing the collection and distribution practices of donor advised funds (DAF).

I have previously written about problems with donor advised funds, one of the biggest being that people are able to receive tax benefits for placing money there, but unlike foundations there is no obligation to distribute the funds.

The Inside Philanthropy piece largely focuses on a recent report by the Institute for Policy Studies Independent Report on DAFs.

One of the issues the report raises is that while DAF industry reports a higher distribution rate (9.7% median rate in 2023) than the 5% required of foundations, there is a high degree of murkiness in the reporting. For example, since DAFs don’t have to make an annual distribution, the payout for 2023 might have been much higher than usual since there was a great need coming out of the pandemic.

Also, the methodology used to arrive this number tends to be a little unclear:

….the report notes that “DAF experts have estimated that the calculations used in DAF industry reports may overstate payout rates by more than 50%.” Acknowledging that payout rate is “a slippery concept to quantify,” IPS’s report uses the IRS calculation — outgoing DAF grants divided by the sum of year-end DAF assets plus outgoing DAF grants.

Source

What is defined as donor advised giving tends to be a little broad mixing the funds held by large financial institutions with workplace giving programs and funds passing through donation processors like Network For Good.

Perhaps most problematic is funds passing between different Donor Advised Funds rather then being distributed to non-profits.

“We don’t know why DAF-to-DAF transfers happen,” Collins said. “Maybe a donor changed their financial advisors or wanted to consolidate their DAFs in one place.”

Regardless of why the transfer occurred, if a report says that DAFs distributed a certain amount of money but fails to specify that some of that amount was transferred to another DAF sponsor, it can create the false impression that all of the money flowed to a working charity.

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There is a fair bit of public will for that money to be distributed. An Ipsos poll commissioned in 2024 found that 79% of respondents felt DAFs should be forced to distribute funds within 5 years. (It is not clear to me if that is all the funds within 5 years or start distributing within 5 years of the fund’s creation.) The article notes that the financial services industry managing these funds have a lot of incentive to lobby against such legislation and to discourage distribution by fund owners.

Finance, Fundraising

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Opening Doesn’t Provide The Opening Bands Hope For

May 6, 2025

by:

Joe Patti

Interesting bit of research by Jeff Apruzzese who looked at whether opening for a major band on tour provided a bump in fame to launch them to stardom.

Apruzzese had been a live musician on tour with the group Passion Pit for about six years. In his experience, going from doing your own shows in from of 3000 people to opening for a band playing in front of 15,000+ felt a little alienating.

Reality was different. After playing our own packed shows where fans cheered and called for encores, we suddenly found ourselves in 15,000-capacity arenas, where it seemed like everyone was ignoring us: chatting among themselves, still getting to their seats or waiting in line for food and drinks.

It was a wake-up call. The transition from being a headliner at a smaller music venue to opener for a major act didn’t feel like a step forward. It felt like starting over.

Source

He conducted a study of bands who opened for major groups and found there was often a surge of listenership on streaming platforms of 18-20%, with some even seeing a 200% bump. However, that listenership often faded relatively quickly after the tour was over. Success that was promised by hitching ones wagon to a big star rarely emerges.

Apruzzese suggests that musicians face a more difficult job trying to gain a following because people aren’t invested in curating their own listening experience leaving the choices to an algorithm.

In a landscape defined by passive consumption, there’s still something powerful about the shared experience of live music. A performance can create an emotional connection that a stream simply can’t.

Today, discovery often starts with a playlist. Someone hears a song and maybe adds it to their rotation. But they rarely click to learn more about the artist. Listeners follow the playlist, not the person behind the music…

Live performances offer something different. A great set can turn a casual listener into a true fan. I’ve heard countless people say a particular show changed the way they experienced that artist’s music, that it left a lasting impression and forged a bond with the singer or group.

That kind of loyalty doesn’t come from an algorithm…

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Audience Relations, Working In The Arts

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$11 Opera Tickets Are Back In Philly

May 5, 2025

by:

Joe Patti

When I made my post about the new TKTS booth in Philadelphia last week it occurred to me to check if Opera Philadelphia would be offering it $11 tickets for any seat in the house again this year. Sure enough, the next day, May 1, they started offering $11 tickets to subscribers, donors, and Opera Pass holders. Starting May 11, they open the $11 offer up to everyone else.

Prior to going on sale with the $11 tickets on May 1, they did offer fuller priced subscriptions to two of their venues ranging from $137-$666 for the series at the Academy of Music and $17-$166 for their Flex Package at two other venues. Both were promoted encouraging people to get their seats before the $11/seat subscriptions went on sale.

So to a great extent this is a matter of how important it is to you as an audience member to get the seats you want and how much you are willing to pay for them. If your risk-reward calculation suggests you can get acceptable seating waiting for the $11 on sale, then you wait and see.

There were some stories out about the return of $11 tickets in early April. There was also a video announcing the return of the pricing and addressing the critics. Essentially, they say they got the audience cross-section they were seeking and the attendees were invested in the experience. At the end a woman in an Instagram Reel says she saw everyone having a great experience. Opera isn’t dying, “it is just too daggone expensive.”

Audience Relations, Building Public Will For Arts And Culture, Pricing

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Discounted TKTS In Philadelphia

April 30, 2025

by:

Joe Patti

The iconic TKTS booth in NYC’s Times Square and London’s West End has branched out and started serving Philadelphia. The Philly branch provides discounted tickets for theater performances, though I also saw a couple dance shows listed as well.

According to the article, over the last five or so months, the booth hasn’t done a huge volume of sales for local organizations. From what I have read elsewhere, the service in Philly licenses the TKTS brand so it doesn’t have the resources of the Theatre Development Fund behind it. But on the other hand, those running it don’t have their attention and interest spread across multiple markets.

Previous efforts by other ticket discounters didn’t meet their promise and left the city. The TKTS booth is locally owned and run by the Philadelphia Visitors Center Corporation and so is more invested in the success of local organizations.

Those interviewed attributed the low sales volume passing through the booth to lack of awareness. but they have high hopes. Those using the TKTS service are counting on it to raise their profile and awareness among both locals and visitors.

Services like Gold Star and TodayTix “didn’t step up in my mind. All the work was on us,” Flannery said. ”But the genius of TKTS and what Visit Philly and the Visitor Center are doing is that it’s focused on Philly.”

Quintessence’s collaboration with the TKTS booth makes her hopeful. “It’s a win for Visit Philly, the Visitor Center, and a win for the bigger arts community,” she said. “It’s especially perfect for us because we’re in Mount Airy. We’re not in Center City, so it takes a little bit of city knowledge to find us.”

In time, Flannery said the TKTS booth could play an integral role in bringing Philly theaters back to pre-COVID numbers. But more broadly, she expects Philly arts to become a more recognizable part of the city’s identity, similar to the Rocky Steps and Liberty Bell.

Source

Audience Relations, Pricing

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