Incentive To Throw An Expensive Gala

by:

Joe Patti

There was recently a piece on The Conversation which, contrary to my expectation, said that tax deductibility rules allow charities to throw high priced galas and still maintain a low fundraising expense ratio.

The costs of a fundraising event attributable to things donors enjoy, including food, drink and auctioned items, don’t have to be recorded as fundraising expenses. Instead they can, in accounting jargon, be “netted” against donations.

In other words, if a donor pays $1,000 to attend a gala but gets a swag bag of goodies that cost the charity $900, the event reflects a (net) donation of $100. It does not have to treat the $900 spent on the bag as a fundraising cost. That approach, in turn, helps keep the costs associated with throwing fancy galas under the radar of ratings agencies, since many of the costs are not considered fundraising expenses but instead are buried in the details.

And this routine accounting practice means that charities with incentives to be frugal are generally free to break the bank for special occasions.

[…]

Here’s the bottom line: While galas don’t automatically signal wasteful spending, you can’t count on the authorities or other experts to call it out when they do.

I had never really thought about the fundraising overhead ratio in this light before. On top of that, if some of the items in the swag bag was donated, the charity makes more money, thereby lowering the ratio even further. The donor still can only claim a $100 deduction because the fair market value of the contents are still $900.

While I opened this post using the term “deductibility rules allow,” the article authors characterize the rules as incentivizing large gala fundraisers.  So when the conversation comes up questioning why people hold these fundraisers when they rarely make money, it might be worth acknowledging that the way the accounting is handled allows non-profits to throw a big party and not suffer under the disapproving gaze of watchdog reporting.

The article also acknowledges that many charities are foregoing large charity events in favor of No-Go Galas where you donate the amount you would have spent getting dressed up and attending. In this way there is even less of a cost to the charity.  Basically it is asking for a donation with added context to encourage you to give more than you might to an annual appeal

Does Cultural Track Data Challenge Assumptions About Your Community?

by:

Joe Patti

As I promised in my last post, I took a deeper look at the Culture Track reporting over the weekend.  More specifically, I took at a look at both the Top Line deck and Supporting Data documents which are available for download. I didn’t review the raw data.

The Supporting Data document is presented with visual graphs which makes it easy to interpret. Though I also hungered for some analytical commentary from the Culture Track folks about what the greater implications might be.

A few observations from Supporting Data in the hopes of making the opportunity to dig in irresistible for readers.

First of all, the charts seem to belie the idea that Millennials are  abandoning cultural experiences. Except for watching TV (which includes streaming) they lead in every category. This is only one of three pages.

 

Now you may be saying, sure but participation once a year isn’t a high hurdle.

However, that generation also leads in frequency per month too.

 

If you remember what I quoted and wrote last week about the perceptions of those who were high frequency attenders, this has some important implications.

People who attend three or more cultural experiences per month are 94% more likely to cite “it doesn’t change” as a barrier to more frequent cultural participation compared those who attend one or fewer cultural experiences per month.

Given that what people define as a cultural experience is pretty broad, the chances that your average attendee is participating in three or more experiences a month is pretty good. Being 94% more likely to feel lack of change is a barrier to participation is pretty significant.

While you shouldn’t take all this information at face value without digging in and questioning the basis of the findings, the fact the data depicted may contradict your assumptions can be enough to get conversations started reevaluating long held beliefs.

The study authors slice and dice the data through a number of different lenses which make for interesting viewing. Most every question is presented in terms of generation, race/ethnicity, community size, education level, marital status and parental status.

So for example, the following information about where people get advertised and non-advertised information about cultural activities is presented in these contexts. (There is also a chart for offline information sources which I haven’t included)

 

Perhaps of most interest to different arts and cultural organizations, they break down motivators and barriers for participation for 12 different disciplines/cultural activities.

Below is a sample for art museums. There is also a chart with barriers for non-participants for each area.

 

 

NOTICE: The Response I Give May Only Reflect My Current Preferences

by:

Joe Patti

You may have already heard that the CultureTrack report was released yesterday. Compiled and released every three years by LaPlaca Cohen, the report helps track the ways in which attitudes toward culture are shifting.

I haven’t read the full report yet. Just looking at the summary on the animated and interactive site they set up for the report, I knew this would probably be something I returned to a couple times. So for your homework, review the site and we will talk about it more on Monday.

….Unless I get distracted by something else.

What first alerted me to the release of the study was an advance piece on Artsy titled “37% of Art Museum Visitors Don’t View Them as Culture,” which did its job in getting me to read more.

Sure enough the article notes that,

“For many respondents, going to the park or eating at a food truck counts as a cultural experience, while attending a museum does not.”

This wasn’t far off from some of the responses my organization got last winter during our listening tour where people listed going to the speedway as a favorite cultural experience.

Another interesting finding highlighted in the article was largest motivation to engage in cultural activities was to have fun.

Cultural activities continue to be a source of leisure and relaxation for many. The survey found that 81% of audiences are motivated to attend a cultural activity because they want to have fun. A desire to feel less stressed was tied in third place, along with “experiencing new things,” with 76% citing both as reasons for participation. 71% cited learning something new as a reason to participate in culture.

This doesn’t mean that levity must replace education at museums, noted Harnick, but rather that the two cannot be divorced from one another. Culture offers the opportunity to connect with other people and take a pause from daily life—today’s audiences are full of anxiety and looking for a chance to relax, a conclusion that gels with other findings that show high levels of anxiety among the general population.

I spoke to someone today who suggested the current political environment in the country might be contributing to that sense of anxiety.

In terms of barriers to participation, feeling that the experience wasn’t “for someone like me” topped the list.

I can’t really cover all the findings I found interesting, but here are a few to consider.

In terms of loyalty, people rated trustworthiness, consistent quality and customer service as the top three factors. Pricing and discounts were fifth and sixth. Social media and advertising were 10th and 11th with 15% and 13% of responses, respectively. So pricing and advertising aren’t big factors in building loyalty.

Since there is a discussion about whether people want to experience culture as a passive observer or an active participant, I was interested to read that 28% of people wanted their experience to be active and 24% wanted their experience to be calm. But as with everything, there was a bit of nuance illuminated by the data. (their emphasis)

Cultural audiences—like everyone—are multidimensional, and they have different needs and wants at different times, or even simultaneously. In fact, 15% of cultural consumers who chose “calm” as one of their top-three descriptors of an ideal cultural activity also chose “active,” while 24% of those who chose “reflective” also chose “social.”

In the same section, was another valuable insight about the desire for new experiences by active culture consumers (Their emphasis).

People who attend three or more cultural experiences per month are 94% more likely to cite “it doesn’t change” as a barrier to more frequent cultural participation compared those who attend one or fewer cultural experiences per month.

Given that what people define as a cultural experience is pretty broad, the chances that your average attendee is participating in three or more experiences a month is pretty good. Being 94% more likely to feel lack of change is a barrier to participation is pretty significant. I hope there is something in the report that provides more detail about what types of experiences people are participating in and what they feel isn’t changing. Is it the programming? The overall experience?

The section on the role of digital technology in a cultural experience was also quite interesting. People responded that they felt digital enhanced their experience, provided deeper understanding and allowed them to share their experience with friends.

However, the lack of opportunity to use digital made people feel they were able to focus and become more invested in the experience, made the experience feel more authentic and less complicated.

There is a lot more to learn from the detailed study. Or perhaps it is better to say, there is a lot more I hope to learn from the detailed study.

Perhaps the takeaway is, people are more nuanced than the feedback they are giving you at the moment. Whether it is an audience survey, a comment made on social media, or to the box office a statement should be view as “this is how I feel right now, but in other times and situations, my preferences may contradict what I just said.”

Watch How You Step

by:

Joe Patti

A friend of mine sent me a link to a YouTube video that suggests that the way humans walked changed with the evolution of footwear. For Europe this shift started around the 1500.

People apparently shifted from stepping toe first to stepping heel first as the bottoms of their shoes became sturdier to deal with urban environments.  Heel stepping was a gateway drug to poor calf definition and bad posture because it is a more forgiving mode of movement that allows for a degree of laziness.  You’ll fall over if you have bad posture while toe stepping.

What does this have to do with the arts you ask? Well there are pictures in the video of artwork and fencing manuals created prior to the 1500 which show people moving toe first.  This reminded me of a lecture I heard years ago that said ballet was based on the idealized movements of members of the (French, I think) court. The speaker made a particular point in discussing how the clothing of the time dictated how people moved– the necessity of holding your arms away from your body, etc.

Seeing this video made me think that perhaps the footwear and attendant walking style of the time were also elements that entered ballet.

I also got to thinking, has the fact that people no longer walk toe first contributed to a sense that ballet is not relevant to people’s lives? Not that we move around in the fashion of really any type of dance. It just got me wondering if lacking familiarity with toe stepping as a mode of movement adds an additional layer of alienation.

Check out the video.

https://youtu.be/EszwYNvvCjQ