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Donor Baggage Revisited

December 21, 2016

by:

Joe Patti

I am going to be away for about a week for the holidays. As always, I have prepared some posts to fill in for my absence.

Since we are coming to the end of the year and non-profits are making last minute pushes for donations, I thought a piece I wrote in June 2008 about the baggage donors bring to giving requests might be particularly appropriate.

Particularly the following:

In any case the advice generally focuses on a somewhat formulaic planned approach. Just as dating tips rarely acknowledge that other people have the baggage of past dating experiences which will impact the relationship you are trying to cultivate, I rarely hear/read a similar acknowledgment in connection with fund raising.

One of the anecdotes mentioned in the story was about a wealthy developer who never gave more than $1,000 at a time to Temple. When Fredricks asked why, she discovered that even though he could afford to give more, he harbored fears about running out of money that went back to his childhood.

She recognizes that the people who ask for money like presidents and trustees also have varying degrees of comfort with the subject. “They should be treated the same way donors are—as individuals with different emotions about money—and given simple requests, she said. Instead of giving a reticent board member a list of prospective donors, Fredricks suggested starting out with the names and biographical information of two current donors and then asking the trustee to call them to say thank you.”

Audience Relations, Fundraising, Info You Can Use

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What We Know And How Well We Know It

December 20, 2016

by:

Joe Patti

Createquity just released a valuable tool for arts advocates. They compiled the data from all the studies they could find to provide a comprehensive report on Everything We Know About Whether and How The Arts Improve Lives.

I haven’t had an opportunity to dig deeply into the data and ponder what it all means. What I find most helpful is their graphical depiction about where findings about the value of arts fall on two axis – how strong the quality of the evidence is and does the evidence indicate that a benefit exists.

So you can easily see that there is low evidence that cultural engagement can help encourage healing after traumatic events and that the quality of the evidence is weak. On the other hand there is strong evidence that arts participation in early childhood promotes social and emotional development.

The good news is that no survey found that there is an absence of benefit to the arts. Some people may be disappointed to learn that there is very mixed evidence, leaning toward negative, that arts education may improve scholastic attainment in terms of test scores, grades, etc and that the quality of the research backing that is very strong. As recently as 2016 research has “found no or minimal effects for arts and cultural participation or education on attainment measures.” Even the positive research say “overall, the impact of arts participation on academic learning appears to be positive but low.”

I had heard things along these lines and had started collecting information to verify if this might be the case and assess how valid the findings were. Fortunately, the folks at Createquity have done a lot of the heavy lifting in this regard.

Despite what may seem like disheartening news, a large amount of the findings fall into the “evidence that a benefit exists” category with many having medium to high quality levels of research in support of the findings. Many of those in the low quality evidence sector are only there due to lack of research on the subject.

Createquity admits this project is a work in process. As more evidence emerges, they will update it. If they find that the basic premises and interpretations of the researchers is flawed, they will revise the materials.

So often we hear about so many different research findings about the arts it is difficult to assess the value of the findings. Createquity provides a much needed degree of clarity by putting the research on a continuum. Advocacy becomes much easier when you know what you are saying is corroborated with evidence and you know just how strong the evidence is.

Advocacy, Art(ist) Education, Info You Can Use, Leadership, State of the Arts, Working In The Arts

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Rethinking The Term Business Model

December 19, 2016

by:

Joe Patti

In Arts Professional (UK), José Rodríguez recently wrote about how non-profit arts organizations frequently misunderstand what a business model is.

The first misconception he lists is that only businesses need business models and since non-profit arts organizations aren’t businesses, ergo, they don’t need a business model. I don’t think I have ever heard a non-profit in the US suggest they weren’t a business, but he talks about a perception of “business” as a dirty word which is definitely something I have heard in the arts community.

The misconception he addresses that is worth attention is that business models are not necessarily related to moneymaking. My emphasis.

2. Business models are only about money

There are many definitions of business models, which sometimes makes it difficult to understand what we are actually talking about, but what most of these definitions have in common is the central role of value creation. And here lies the main difference with what people usually think about business models. It is not only about how your organisation makes money, but about how it creates value and organises itself around its value propositions.

Value is defined as ‘the regard that something is held to deserve; the importance, worth or usefulness of something’. Value can be money, but it can also be many other things. Value is what is important for you and your stakeholders. And for being able to create value, we need to understand the desires, needs, challenges and problems of those that we are trying to serve: audiences, community, employees, volunteers, customers, funders, sponsors, etc. Keep it in mind: Business models are not (only) about money, but about value.

[…]

So what is a business model?

A business model is a vital concept determining the success of any organisation and not a complex formula relating to its profit-making mechanisms. A business model is just a story explaining who your audiences and customers are, what they value, and how you will be able to sustain the organisation in providing that value.

At its most basic, every business model has three components, which respond to a few simple questions:

Which stakeholders do we serve? Which of their needs do we seek to address?

What do our stakeholder groups value? How do we create that value for each one of them?

How do we generate income, and attract other necessary resources, to be able to create value for our stakeholders in a sustained way?

Since it is in the last paragraph of the article, it can be easy to miss but an important feature of business plans is that they are temporary. Since the stakeholders you serve may change, the things your stakeholders value may change or the way you are able to create value for your stakeholders may change, then of necessity your business model must change.

By his definition, making changes to your business model doesn’t necessarily mean a change to your tax status unless you significantly change the way you generate income. Conceiving of business models in this context may help you operate in a more flexible, nimble manner since it moves you away from thinking you need to act in a set way to stay within certain strictures.

Audience Relations, Business Models, State of the Arts, Working In The Arts

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Giving Without Getting In Return

December 14, 2016

by:

Joe Patti

No, this isn’t a moral posting about how it is better to give than get during Christmas.

I have been writing a lot recently about the transactional view of arts and culture, namely value is based in economic exchange either directly or in terms of the economic activity it may generate.

Given that context, I was interested to read Joan Garry’s video/blog post expressing a similar view about fund raising and the belief people won’t give unless they get something in return. She uses the example of two hypothetical pitches to a friend. In the first, she asks someone to attend a $500/plate fund raising event, extolling the virtues of the organization it it will support. In the second, she simply asks for a $500 donation, again citing the value of the organization it will support.

Okay. There they are, both of them. One of them is going to cost… If he buys a ticket $500. It’s going to cost the organization at least thirty cents on every dollar. On the other hand, maybe I bought him a cup of coffee, maybe he even paid. One of those gifts will stick and one of them will not. If Joe’s not available next year he won’t go to that gala, right? If he gives the gift of $500, what happens? Then about six or nine months from now I have a touch point with him where I tell him something remarkable, a great story about something that happened at the Ronald McDonald House and at the end of that email I will say, “Your fingerprints are all over that work.”

Hear the difference? Feel it? See it? For some reason it’s so much harder for board members. They think selling a ticket to an event that it’s a I can’t ask somebody to spend $500 unless I’m giving them something in return. What they’re missing is that by making that $500 gift out right Joe is getting something in return. Right? The donors get as much as they give. Maybe more, because they get an opportunity to be invited into a community of people who care about an issue that is meaningful in Joe’s community. That should be easier than selling them a ticket to an event, where there might be a b-list celebrity.

I am sure she is not unaware that some times people attend big gala fundraiser in order to leverage being seen there by others into some sort of advantage. A large number of non-profit organizations would probably be happier to remain focused on their central goals and employ a direct ask with a higher ROI rather than diverting staffing time, energy and money toward executing an event.

If we want to argue about cost effectiveness and overhead ratio as a basis of giving, this might be one area in which these conversations have some validity. But it is probably also the area in which that economics based argument would fail in the face of a board or staff’s emotion based conviction that people won’t give otherwise.

Despite it being widely known that one person will give without expecting anything in return…