A New Study Reveals One Weird Trick for Arts Organizations to Raise More Money: Spend More Money!

Individual donors are a "vital source" of contributions, according to the report.

The Brooklyn Museum at dusk. Courtesy of the Brooklyn Museum.

A new report on national fundraising trends in the arts says that organizations are spending less on their fundraising efforts—and are getting less in return per dollar spent as a result.

Overall, the amount of revenue generated from every dollar spent on fundraising by the nearly 1,900 organizations surveyed went down from $8.80 in 2014 to $8.56 in 2017.

“Our analysis has shown that when organizations invest more in fundraising, they raise more money, indicating that smart investment is key,” says Zannie Voss, director of SMU DataArts, which organized the study. “We encourage organizations to use this report as an effective management tool to set goals, make strategic decisions, and contextualize their performance with key stakeholders.”

The study identifies individual donors as a “vital source” of contributions and noted an uptick in giving in the past four years.

“The findings that we saw with respect to individual donors are really heartening,” Voss told artnet News in a phone interview. Average individual contributions rose each year between 2014 to 2017, the period under study, meaning a smaller pool of donors gave more. “This could be explained by the average organization allocating 62.4 percent of fundraising expenses to staff, up from 54.4 percent, which allows for further relationship development with donors,” Voss says.

According to the report, seven cultural sectors—including performing arts companies, orchestras, and operas—saw an increase in return on fundraising over the course of the period under study. But art museums, dance companies, and theaters saw a decline.

Dr. Zannie Voss, director of SMU DataArts.

Dr. Zannie Voss, director of SMU DataArts.

With a 20 percent drop over the period, art museums faced the greatest decline in return on fundraising, which Voss says is an impetus for further study.

“We would like to be able to get out and talk with museum fundraisers, including those who are perhaps bucking the trend, to find out what they’re doing different and share this practical knowledge with the field,” she says.

The report finds that numerous sectors hit a ceiling of about $8.50 raised for every dollar spent on fundraising, and that small and medium-sized organizations increased the return on their investments in fundraising. The return for larger organizations, on the other hand, declined steadily.

Perhaps surprisingly, considering the amount of wealth concentrated in New York, the state had the highest percentage of expenses covered by government support, at nine percent. Washington, DC, had the second highest rate, at eight percent, and Chicago had the lowest, at two percent. Foundation support, however, was strongest in Chicago, covering seven percent of expenses.

New York organizations also had the highest average number of corporate donors at 12, while Los Angeles had the lowest, at four. And while New York institutions got more foundation grants than those in any other market, they only covered three percent of expenses.

SMU DataArts is a joint project of the Meadows School of the Arts and the Cox School of Business at Southern Methodist University in Dallas. 

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