Fundraising Management: Sponsorship, Philanthropy, and the State
CharleneYY
fundraisingjourneylecture.pptxThe fundraising journey
Ccis should be aware of the kinds of funds available and what might be right for them
Let’s remind ourselves of the types of fundraising available, and some of their pros and cons
We will cover
Crowdfunding pros and limitations
Private philanthropy pros and limitations
Corporate sponsorship pros and limitations
Government funding pros and limitations
Foundations pros and limitations
Crowdfunding pros
Davidson and Poor (2015) argue:
Crowdfunding can be more democratic and can help artists avoid traditional gatekeepers.
Crowdfunding can support a connection between creatives and their audiences.
Crowdfunding can be responsive, and relatively simple to set up.
Crowdfunding limitations
Crowdfunders must project a positive image online, and continue to do so while they are funding a project – this is hard work.
Crowdfunding can engender “emotional labour” as crowdfunders must constantly work to maintain a strong connection with potential followers online.
Crowdfunding is closely related to successful social networking and often relies heavily on friends and family.
This means its difficult to ask for repeat donations, and arguably crowdfunding is not suitable for sustained fundraising.
Now there are new models of crowdfunding, like Community shares organisations
Private Philanthropy pros
Beth Breeze (2020):
Private (or individual) philanthropy has historically been an important source of funding for CCIs.
This is even more important within markets where there is less Government funding for the arts, for example the United States.
Private philanthropy is positive because it is more flexible – Government or foundation funding often has required outcomes.
For example, money raised through philanthropy can be used for rent, utilities and salaries.
Philanthropy is built on relationships and can be a source of long term funding.
Private Philanthropy limintations
Solicitation (asking for money) is one of the key mechanisms that drives fundraising, meaning that organisations must invest in fundraising in order to obtain philanthropy.
Organisations that don’t have resources in fundraising are less likely to successfully raise money through philanthropy.
Fundraising via philanthropists is really difficult to achieve successfully – this often requires professional expertise.
Some people critique the fact that philanthropists are the gatekeepers of what kinds of art gets funded. Philanthropists tend to give to already wealthy institutions, such as elite Universities, and well established CCIs.
Corporate sponsorship pros
Ryan and Blois (2014):
Can mean longstanding partnerships, with regular sponsorship packages (particularly when tied to annual events)
CCIs can gain management and marketing expertise from corporate sponsors
CCIs can gain marketing resources from corporate sponsors
Corporate sponsorship can also introduce CCIs to other third parties and potential sponsors.
Corporate sponsorship limitations
There may be tensions between what artists want to do, and what corporate sponsors are looking for – corporate sponsors may have special requirements and stipulations.
There can be reputational risks for CCIs when partnering with some organizations (eg oil companies).
Partnering with corporate sponsors increases the number of stakeholders that CCIs must be accountable too (in addition to the public, the Government).
Often funding organizations are in the more powerful position in sponsorship relationships.
Government funding pros
Arts Council Let’s Create Strategy:
Government funding is open access for anyone to apply to.
Will fund arts that profit-seeking firms may not find to be appropriate or desirable to fund.
Can offer a fair approach to the redistribution of income.
Works with vulnerable and marginalized groups, for example older people and children.
In some uses, government grants are not taxable.
Government funding cons
Rex (2020):
Government funding, like The Arts Council in the UK, is highly vulnerable to austerity measures and Government cuts.
In the age of austerity, CCIs funded by the Arts Council and Local Authorities are expected to improve their ‘resilience’ rather than reject austerity measures – for example in museums this has caused cuts to budgets, opening hours and staffing.
In the UK, Arts Council funding is imbalanced across England.
Increasingly, the Arts Council is focused on encouraging CCIs to partner with other sources of funding, which may come with their own drawbacks.
Foundations pros
Renz (1994):
There are a number of high profile foundations that are committed to funding arts in the UK, and in many other markets.
Foundations increase funding by making it more sustained and ‘official’.
Foundations are more resilient to economic downturns than corporate giving more generally.
Similarly to private funding, grants from foundations are often more flexible and can be used for buildings, constructions and renovation.
Foundations may be more willing to take risks than Governments and corporations.
Foundations limitations
Like private philanthropy, foundations are subject to the whims of elite, wealthy people in society.
Some argue that foundations are ways for political elites to influence public policy in a top down process.
Although more sustained than corporate giving generally, foundations are still tied to market performance.
Foundation proposals can be labour intensive, and require special expertise.
To sum up
All funding models have benefits and limitations.
It is important to reflect on your specific organization, the cultural sector it belongs to, and the market that it operates within.
There are many academic resources about different funding models – I encourage you to look to these resources to help you critically think about the funding relevant to your case studies.
Now: developing a fundraising application
Developing a fundraising plan
Sargeant, A., & Shang, J. (2017). Fundraising principles and practice. John Wiley & Sons.
We are going to think about how you may start to prepare a funding plan
1) Writing a mission statement.
2) Conducting a PEST analysis.
3) Identifying competitors
The vision
A clear statement of the world that your organisation wants to see.
The mission statement
How you make your vision a reality.
To develop your mission you can ask the following questions:
Why does our organisation exist?
What business are we in?
What values will guide us?
Some examples of the mission statement
S1 art space mission statement
“S1 Artspace is an artist-led organisation providing studio space for over twenty Sheffield based artists and a project space, which presents an annual programme of contemporary exhibitions, screenings and events”
Site gallery mission statement
“Site Gallery is Sheffield’s international contemporary art space, specialising in moving image, new media and performance.
Pioneering emerging art practices and ideas, we work in partnership with local, regional and international collaborators to nurture artistic talent and support the development of contemporary art.
We connect people to artists and to art, inspiring new thinking and debate through our exhibitions, talks, events and other public activity”
Southbank centre mission statement
“We’re the largest arts centre in the UK and one of the nation's top visitor attractions. We seek out the world’s most exciting artists, from household names to fresh new talent, and give them space to showcase their best work”
The fundraising audit
1) Where are we now?
2) Where do we want to be?
3) How do we get there?
Start with: a pest analysis
1) Political factors
2) Economic Factors
3) Sociocultural Factors
4) Technological Factors
The data that I’ve used
The annual report “The Road Ahead” from the NCVO (National Council for Voluntary Organisations).
They have conducted a PEST analysis for UK fundraising sector in 2022.
Link: https://beta.ncvo.org.uk/ncvo-publications/road-ahead-2022/
1) Political factors
Policy changes, Government attitudes to funding creative industries.
International policies that could affect giving or the running of the CCI (eg Russian sanctions)
Changes that may affect the fundraising environment (eg changes to estate tax, or changes that will motivate giving such as gift aid in the UK)
Political factors (uk, 2022)
2022 should be a year of particular UK Government stability as there are (planned) major elections.
The fallout and uncertainty from Brexit and the pandemic should be stabilising and slowing down.
Levelling Up – this is a Conservative Government policy that aims to increase support to areas who have not experienced economic growth (particularly in the North)
If a CCI supports levelling up then then they may be able to access funding sources as part of this policy.
There are many cultural arguments that Non Profits may find themselves having to navigate – sometimes referred to as ‘culture wars’.
2) Economic factors
Current economic trends affecting:
Wealth
Employment
Consumption
Tax
Disposable Income
The Current economic outlook is uncertain (uK, 2022)
Prices and inflation are rising, and wages are not keeping apace with these rises.
There is a cost of living crisis, which is deepening inequalities between the richest in society and those in poverty.
Even wealthier households are seeing their savings decrease in real terms, and there are reported declines in charitable giving.
There is flux in the labour market, which could have implications for volunteer availability.
However, there a positive appetite for corporate partnerships for volunteer activity.
There was an increase in digital fundraising during the pandemic – these trends look like they will continue.
3) Sociocultural factors
Social attitudes to giving.
Levels of trust and confidence in the charitable sector.
This can also include broader social changes, like changes to family structures, or changes in working patterns.
4) Social factors (uk, 2022)
The pandemic has increased many forms of social inequality, for example education (eg there is a widening gap between public and private school exam results).
There has been sustained declines in volunteering, particularly from older people and disabled people who are vulnerable to COVID.
But: A greater number of people are choosing to volunteer motivated by community factors, such as a motivation to support their neighbours and community wellbeing. For these people (who may be working) volunteer flexibility is the key.
There are some key changes that make it easier for organisations to be taken into community ownership – eg community share organisations.
4) Technological factors
Technological changes in society and in the nonprofit sector.
This may apply to:
Workflows
Communications
Banking and payment
Reporting
In the uk (2022)
There are data protection considerations for fundraisers (GDPR) – this is EU legislation but the UK is developing its own regulation of data storage.
Cybersecurity concerns related to those in CCIs working at home.
5G, AI and other technological advancement which may make certain forms of technologies and work more accessible (eg transferring video)
CCIS can consider uses of blockchain and cryptocurrency.
The use of social media for communications, connections and transparency.
The use of digital payments
The British museum is selling nfts
Non Fungible Tokens are unique digital assets stored on the blockchain.
The British Museum is selling digital prints of art made by Katsushika Hokusai, including his artwork the Great Wave of Kanagawa.
The sale of the NFTs are used to raise money for the British Museum
PEST ANALYSIS: REFLECTIONS
If you are looking at a small CCI, then there may not be a long list of relevant factors. This is OK! The important point is to consider all of the environmental factors.
If you are planning to aim towards one form of fundraising (eg Arts Council or corporate funding) then your PEST analysis should focus on this.
Ensure your PEST analysis is supported by trusted and accurate data.
Analysis of competitors
This will help you figure out similar organisations to yours, and even borrow some of their good ideas.
1) Industry leaders
Outstanding in areas of fundraising activity, probably longstanding and innovative, with a dedicated fundraising team on staff.
These organisations can be learned from in terms of their creative and practical ideas.
They are inspirational to look at, and may not be exactly the same size or kind of organisation
For example, looking at the London Symphony Orchestra, or the British Museum.
2) Ccis in a similar field
These will be of similar specialism, and may be in direct competition (eg if you are working with a theatre, this will be other theatres, probably in your area).
You may wish to review these organisations’ strategy and performance.
You can gather data to assess your CCI’s performance compared to these organisations.
You can review what their activities are, the quality of their promotional materials, the cost effectiveness of their fundraising.
3) CCIS OF A SIMILAR SIZE
CCIs in the same field may be bigger or smaller than your organization, leading to inappropriate comparisons.
To address this you can look at what is being achieved by originations of a similar size.
You can look at what fundraising they do, promotional materials produced, and the performance achieved.
This can help you to highlight areas of weakness for improvement in your organization.
Across all kinds of competitors you may wish to consider
Financial performance (e.g. levels of various income to identify what organisations are doing particularly well at fundraising)
Competitor objectives and ambitions (eg identify if this organization is planning to grow, and how that might affect their position as your competitor).
Past, present and future strategies (e.g. what kinds of fundraising have they done, how successful were they? What is unusual or distinctive about their fundraising?
Understanding your target audience
Market factors
Who donates to your organization? Are there particular demographics or lifestyle characteristics? Are there foundations that are more likely to give than others?
What are donor motivations? What do they expect in return? How can you meet those motivations within fundraising communications?
Donor needs/ preferences/ interests: What kinds of communications do donors find appropriate? Do they like the communications that they receive?
Donor behavior: Are some donors more likely to terminate their support than others? What are the primary reasons why they may terminate their support? Can this be addressed?
To sum up
A PEST analysis can help you determine the specific opportunities and challenges in your sector and market.
A competitor analysis can help you with benchmarking, and can help you generate ideas and inspiration.
A market analysis will help you understand who your donors are, and how you can meet their needs.
