Performing Arts –– Why is Marketing More Important than Fundraising?

Working with performing arts clients, I frequently observe a competitive tension between the marketing and development departments. Instead of an esprit de corps, I see yin and yang. If these two departments can’t play in the sandbox together, it will eventually show up at the board level–and even more disastrously, at the donor and patron level.

So what’s causing the rift? It’s largely due to the finite resources available in these

organizations, coupled with the sizeable growth goals each department is tasked to achieve. The problem with this “us versus them” attitude is that it hurts the organization, deeply, and it’s absolutely avoidable.

Many institutions choose the wrong course. To avoid the pain, they place marketing as the alpha and development second in command, sacrificing contributed revenue opportunities and strategies for a perceived increase in ticket sales. This eventually chokes off both efforts. But how can the relationship be synergistic when the goals for each department are so aggressive?

Step one: understand and accept the balance between the two departments and create a productive environment that helps both thrive.

The ticket buyer is not the primary customer; the other department is the primary customer. You’re both in the “acquire, retain, upgrade” business, right? The development office should keep in mind the large majority of donors are also ticket buyers, and should therefore greatly respect the marketing process.

Step two: acknowledge that marketing’s success is also development’s success.

Marketing has to be focused in the proper area – namely, subscriber growth.  If the marketing department successfully creates a pathway for patrons – from single ticket buyer, to a multi-ticket buyer, to a subscriber, then they are creating patrons. Patrons, who are not only good for frequent concert attendance, but also good for making philanthropic contributions. Once converted to a donor, we know that the value of a patron increases, as does their lifetime value. 

Step three: acknowledge that development’s success is also marketing’s success.

So, when do we convert a subscriber into a donor? While conventional wisdom says three years, RSC rejects that premise; we find it most effective to convert them almost immediately. Since a new subscriber has not fully defined their role, it becomes paramount to get an entry-level gift right away. This allows your organization to tell its story from the very beginning of the patron relationship and to reinforce it over time. By starting early, you’re able to share your mission and worth, and turn what would otherwise be purely an ‘entertainment option’ into a highly-valued, prized organization, worthy of support. 

If marketing and development want a harmonious relationship, they must look at each other as their single largest customer. Then, together, they can accomplish their larger mission: serving their community.

RSC can help integrate your organization’s development and marketing planning strategies to build a successful fundraising program. If you would like to learn more about how RSC successfully helps arts and cultural organizations reach their fundraising goals, call us at 317.300.4443 or visit our website.

Every Annual Fund Dollar – One Face but Two Names

I’ve helped dozens of performing arts organizations with annual fund campaigns. Sometimes my services are called upon when the goal’s already been established, and that makes me rightfully nervous. My first question is: how did you establish the goal? Sometimes I hear this methodology: we’ve figured out the gap and that’s our annual fund goal. Or, “last year we raised 6% over the prior year, so we’re aiming for 9% this year.” And

then there’s my favorite, “the CEO set the goal” goal.

Setting goals through arithmetic alone is a bad idea. Here’s the annual fund creed you need to post in big letters across the development department: One Face but Two Names.

Put another way, you’ve got to look at the ratio of prospects to donors when setting the

How many prospects do you have?

annual fund goal. Simply determine how many donors you’ll need to achieve your goal, then multiply that number by two – think of it as one face but two names. If the goal is $2M, for example, you’ll need $4M worth of prospects. These can be renewals, upgrades, or new donors. It sounds easy and pragmatic, but organizations often stray from this critical metric when they can’t balance the budget – and end up basing the goal on what they need instead what can realistically be achieved.

• Start the planning process at the beginning of the fiscal year. Thoughtful planning, not active desperation, is the reconciliation to the arithmetic problem. Putting your organization through the rigors of a sound process allows you to adjust your strategy and establish budgets and goals based on what the planning process says, not what the institution needs. 
• Engage volunteers to help supply new prospects. After rating your prospects, categorizing them in the right giving club, factoring in donor attrition, and identifying which ones you can upgrade (just don’t count them twice), can help you determine early on whether you need more names. Then, enlist the help of well-trained volunteers; they’re a valuable resource for helping you find more potential contributors.
• Adjust your strategy as appropriate. Maybe it’s a bigger challenge grant, modifying your timing, or changing your message. Just make sure your strategies are always aligned to achieving your goals, and you’ll be well on your way to executing a fiscally responsible annual fund campaign.

If you would like to engage RSC to learn how to evaluate and set up a successful Annual Fund to meet your fundraising goals, call us today at 317.300.4443 or visit our website.

The Conundrum: Annual Fund or Endowment? Which is More Important?

It’s not a trick question.

RSC regularly receives calls from prospective performing arts clients who are interested in pursuing an endowment campaign. With the long-term cash flow needs, who can blame them?  However, too often the desire for an endowment campaign is based on other revenue areas failing – or at least not keeping pace with the institution’s needs – and are not exactly the ideal environment to launch a successful major gift effort.  So, in most cases, our answer is the same -- don’t launch an endowment campaign if ticket sales and annual giving are trending in the wrong direction. Why do we so often make this suggestion?  It’s simple...

Endowment campaigns don’t define an organization – rather, they are a reflection of that organization.

The number of subscribers / members and annual donors are two key indicators to judge the health of an arts organization.  If they are both trending upward, the stage is being set for major gift advancement.

But what if the patronage is in decline – isn’t that when an arts organization needs a major gifts campaign the most? Of course, but there’s little leverage to cast vision, or inspire and draw major donors near.  Once your campaign becomes primarily ‘needs’ based, inspired leverage is lost.

So, broadening the base, while not necessarily more important, certainly takes first priority.  But growing the base isn’t easy and you have a limited pool from which to draw.

Arts institutions don’t have the same luxury as, say, higher education in terms of number of available prospects. Depending on size, a college can access thousands of ready-made prospects, adding to the base year after year.  Eventually, this group expands to perhaps hundreds of thousands of alumni from across the country (or world) with affinity for that institution. Conversely, most arts organizations have a very narrow demographic that represents a miniscule segment of the metro area. Due to their scarcity, these donors are expected to give to annual, membership and endowment campaigns, make planned gifts, attend special events, purchase tickets, and so forth. 

Endowment campaigns start off with the largest donors who give substantial gifts, which dictate the overall amount you can expect to raise. The remainder of the campaign is made up of many smaller gifts but keep in mind with large or small donors, these are the same people who also support your Annual Fund.

If you are asking for a hefty gift in the endowment campaign but that person’s Annul Fund gift is also essential, you need a thoughtful, approach to the ask. Again, because of volume, colleges and universities can run endowment and annual campaigns exclusive of each other without needing the same level of coordination. So the object for an arts organization is to broaden and stabilize the Annual Campaign as much as possible and then carefully integrate and balance a major gifts campaign.

So really, broadening your annual donor base and increasing gift frequency becomes the bedrock for all giving initiatives.

Look at it this way -- setting up the proper Annual Fund is like the daily physical training necessary to participate in a full marathon. This daily work has incremental benefits that are essential to complete the marathon. The endowment campaign is the big race and the Annual Fund is the conditioning that is necessary to run that race.

The first step to winning the race is to assess your current Annual Fund. Are the trends up or are they down? If down, it’s imperative to generate a three-year plan to reverse that trend. After you have three years of successful growth in the broad base, board, sponsorships and other corporate giving, you are well poised for endowment activity.

The second step is to commit to building lasting, quality relationships. There is no shortcut for the investment of time and energy needed to tell your story repeatedly, and to, over time, bring others into it.

If you would like to engage RSC to learn how to evaluate and set up a successful Annual Fund to meet your fundraising goals, call us today at 317.300.4443 or visit our website.

Twenty-Four Hours of Magic in Omaha

contributing writing by RSC Senior Consultant Jeremy Hatch, cfre

At RSC we are frequently asked to counsel on the viability of online giving efforts, Facebook solicitations, special auctions and other “gadget” fundraising activities. As our clients can attest, we are often skeptical of these “innovative” fundraising approaches. Why? Because innovation is sometimes used to replace the fundamentals of a disciplined and well-executed annual campaign, leading too often to predictably poor results and critical time lost. We define the annual gift as – say it with us – Reliable and Renewable Support.

That said, we recently witnessed a wonderful example of creative – and yes innovative – community engagement by the BLUEBARN Theatre in Omaha, Nebraska where RSC is providing counsel to the Progression capital and endowment campaign to support building Omaha’s first new multi-purpose theater in a generation.

Omaha Gives, a first-year program of the Omaha Community Foundation, presented a 24-hour challenge with all gifts made online via credit card in a one-day blitz. Organizations competed for the most new donors, most dollars raised (based on budget size) and other benchmarks, with matching funds on the line from foundation and corporate sponsors. The results? An astonishing $3million was raised from more than 19,000 donors in 24 hours!

BLUEBARN Theatre pursued the opportunity with flourishing creativity, encouraging their patrons, fans and friends to give by promoting the 24-hour campaign via curtain speeches at performances, imaginative storytelling in email, social media and other channels, and through a motivated leadership group that wanted to see a smaller non-profit compete (and succeed) against some of Omaha’s largest organizations.

By May 23 the results were in, with an amazing $15,000+ raised from 140 donors, many making their first-ever gift to the BLUEBARN. “We were optimistic based upon the enthusiasm of our board and the buzz the program generated in the week before May 22 but this surpassed everyone’s expectations. We are thrilled to have dozens of new donors to cultivate over the next year,” explained BLUEBARN Director of Development Kevin Mahler.

As we celebrate this inspiring and effective idea you may ask, “Should my organization pursue some similar innovative approach -- especially in the closing weeks of our fiscal year?”  RSC says, “Only if you are ready like the BLUEBARN!”  Read on:

• The BLUEBARN was already poised to reach this year’s fundraising goals.  Special fundraisers rarely fix a broken goal or budget, so they are best used for a campaign that already has momentum. Understand that these efforts also take preparation and can sometimes distract volunteers from cultivating relationships and making leveraged asks from their peers. 

• Make sure there is urgency. BLUEBARN knew that the Omaha Gives effort would be effective because the compressed intensity of the campaign (24 hours) and the chance to receive matching funds would resonate. Conversely, longer “special campaign” efforts of 30-45-60 days (or more) often lose steam, so it’s better to stick to your Annual Plan.

• Keep it Simple. BLUEBARN did a great job of promoting the blitz while not being drawn away from their “core” annual and capital campaign solicitations.  They also successfully used the tools that were already at their disposal – people, performances and p.r.

• Always say “thank you”.  BLUEBARN showed genuine appreciation to their donors. No matter how you get the gift, make cultivation and stewardship your hallmark, with personal thank you calls, handwritten notes, and follow up activities to engage new patrons.

RSC can help your arts organization navigate the bold new world of technology and innovation in fundraising, while keeping focused on fundamentals and proven methods for long-term growth. Give us a call (or send us a tweet) today!

Have You Reached Your Limit?

A recent television commercial boasts, “More is better. We want more!”.  Arts and cultural organizations have meditated on this mantra for years – they can always use “more.” More money. More staff. More donors. More everything. But, can there be too much of a good thing? In some cases, RSC says, “yes”.  Take, for instance, the tenure of a board member and the idea of term limits.

What -- No Bait Left?

Successful non-profit boards and staffs build their fundraising programs through “relationship-based” fundraising. Simply put, it’s about asking people who you actually know to support the organization.  When done correctly, it provides very effective fundraising leverage. The down side is that each board member has a finite number of relationships – the “black book” is only so thick. In the long run, the less your organization rotates board members, the fewer new relationships you’ll have over time – and your fundraising efforts will certainly suffer.

For that reason alone, your organization should exercise term limits on its board. Loyal and active board members sometimes balk at this idea, but RSC’s conclusion is that a board member serving 20+ years has likely tapped his/her community connections – and the well of new names ran dry years ago. So, exercising term limits to make room for new relationships becomes essential.

Your fundraising isn’t the only thing to suffer. Good governance is also at risk. Each board member comes with a limited set of views, ideas and solutions. A mix of seasoned and fresh perspectives is a great recipe for creative problem solving and relationship building – but quickly gets stale when the board doesn’t change.

RSC believes successful nonprofits are aligned with their community’s needs. One way to build that continuity is to expand the board in a way that allows a variety of people (with a variety of community backgrounds) to serve. Over time, allowing this broader group to own the ‘organizational mission’ creates more stewards and caretakers throughout the community. More ownership means more buy-in. More problem-solving. More support.

Is there a downside to enforcing term limits? Perhaps – but there are also plenty of opportunities, too.  Institutional history is a valuable resource – so keep it! Just because someone is rotating off of the board doesn’t mean they have to rotate out of the organization. Keep them engaged in an advisory capacity as your organization looks to the future. They have an emotional connection that inspires others. Channel that dedication by implementing a succession plan that engages these long time supporters in new ways. Create an advisory board to keep long-time members engaged. Put them on a committee or a task force.  Just create an engagement strategy for those who want to be engaged beyond board leadership.

If your board does not have or exercise its term limits, ask “why not?” Start the conversation in your governance/nominating committee meetings. Research and outline the important reasons for change. Determine an adequate board size and build a strategy to reach your organization’s goals over the next few years. Be sure to develop and nurture a quality board volunteer experience that also benefits your organization. The board should always lead this conversation – not the staff.

Change can be uncomfortable and it takes time, so take the long view. When bringing on new board members, invest in their learning curve, even if it doesn’t feel efficient at first. Building productive momentum takes time, but the payoff is meaningful – organizational sustainability and broader ownership of stakeholders.

During any board transition, a thoughtful process is needed – and RSC can help. When done correctly, your board members will be happy and productive, even as their role changes and matures. New supporters are eager to be engaged as volunteers, and over the years, new energy permeates and strengthens the entire organization.

Healthy leadership. Healthy organization. Sustainable future. There’s no limit!

Client Spotlight: Back from the Brink with the Shreveport Symphony Orchestra

2012 was a challenging year for the orchestra business with too little good news or much encouraging

progress. However, for the Shreveport Symphony Orchestra (SSO), 2012 proved to be the year of the turnaround.  Partnering with Robert Swaney Consulting (RSC) through a combination of a development assessment, interim staffing and ongoing counsel, the SSO began the process of rebuilding its annual fund, sponsorship program and peer-to-peer fundraising climate.

Shreveport’s arts and cultural scene is robust – from theatrical and visual arts offerings to family festivals and musical offerings, including the Shreveport Symphony.  Over the years, the arts in Shreveport have struggled financially, and the Symphony has not been immune.  While artistically valued, the SSO has grappled with fiscal challenges for the better part of two decades – becoming a fraction of its former self, with reduced programming, greatly reduced staff, and a budget of just over $1,000,000.  Having barely survived a musicians’ strike during the 2008-2009 and 2009-2010 seasons, a new fight for survival quickly developed.

In July 2011, Lois Robinson was appointed as the SSO’s new permanent Executive Director.  Ms. Robinson came equipped not only with arts management experience, but also prior to that she was a practicing attorney and a double bass player.  Considering the dire circumstances of the SSO, Ms. Robinson’s unique background was immediately put to use. 

As the SSO approached 2012, it faced a variety of challenges – including some startling news about the organization’s non-profit status.  Shortly after Ms. Robinson’s appointment, the Symphony received notification from the IRS, revoking the Orchestra’s 501(c)3 designation due to failure to submit IRS 990 tax forms for the previous three years.  Other tax-related issues followed – donations to the SSO were no longer tax deductible and the organization was ineligible to receive vital operating support grants from foundations.  

As 2011 drew to a close, it became clear that the donor base had eroded substantially from their pre-strike levels, though some generous individuals, corporations and foundations continued their steadfast support.  To further complicate this, the patron database had been neglected for years, making it extremely cumbersome to identify and solicit past supporters.  Finally, the Fiscal Sponsorship arrangement negotiated that fall with the local Arts Council (SRAC), while essential to saving the situation by allowing donors to make designated tax deductible gifts to SRAC in support of the SSO, made the communications and messaging challenges with donors immensely complicated and delicate. 

  

With these challenges, most organizations might have given up, but Lois Robinson and the SSO’s board of directors took bold steps to move forward.

Reinstating its 501(c)3 status and satisfying the IRS were chief “back office” priorities for the SSO.  Simultaneously, and against all odds, the SSO had to develop new approaches that would attract new sources of revenue to allow the Orchestra to continue to play.  

The SSO didn’t have the necessary fundraising expertise in place to meet these extraordinary challenges, nor did it have the luxury of time to search for and hire a new Development Director.  So in November 2011, the Orchestra engaged Robert Swaney Consulting (RSC) to provide an immediate fundraising architecture – including plans, strategies, coaching and support – all needed to quickly rebuild the SSO’s contributed revenue program. 

RSC’s priority was to quickly build an effective Annual Fund program, with a philanthropic, yet “cash now” mentality, with a case for support that would rise above the organizational challenges. RSC’s approach was multi-faceted but remained basic to accommodate an organization with few resources.  Our focus was to carefully but quickly redevelop the fundraising fundamentals at every gift level by developing a plan, case and timeline that offered a series of structured, yet intense and compressed activities that would provide immediate results.

Working with the SSO leadership, RSC began to leverage volunteer resources, target individual and corporate gifts of various sizes, create an environment of “positive urgency” via a challenge grant and a fully redeveloped case for support to address the challenges while emphasizing a bright future.

Board and staff were focused on rebuilding relationships with the local influential stakeholders.  Well-designed messages to the public became more intentional and more frequent. Local leaders took notice and began to recommit themselves to support the SSO’s efforts in a variety of ways.  The database issues were improved to expedite regular communications and gift asks to the SSO patrons.

The results have been overwhelmingly positive. Overall, the SSO’s Annual Fund surpassed both its Individual Gift goal of $265,000 and its Corporate Sponsorship goal of $140,000 – an astonishing achievement considering that for most of 2012 the organization was burdened with a suspended 501(c)3 status and didn’t launch its fundraising program until  almost halfway through the fiscal year.

“RSC’s work had to be fast, precise, yet nimble – especially in the early stages – because the SSO’s needs were great, and the dynamics changed daily,” said Bob Swaney, Founder and CEO of RSC.  Swaney continued, “It was apparent that, despite the dire situation, the board and the community clearly wanted its orchestra and the SSO’s leadership was ready to do the work necessary to quickly redevelop community interest.  They simply needed a strong partner like RSC to guide their fundraising efforts during a most difficult period.”

Staff, board and musicians were in sync and according to RSC Senior Consultant, Jeremy Hatch, “No one was dragging their feet. The community was enthusiastic as they saw a beloved organization turn itself around to play another day. While the budget didn’t quite balance in 2012, the SSO closed much of the gap, addressed some serious issues, and created an ‘environment of asking’ that will help them continue to grow.”

SSO Executive Director, Lois Robinson said, “I am grateful for the Board’s dedication – and tremendously appreciative of board chair Brian Hebert’s leadership since my arrival.  I’m also grateful for RSC’s partnership.  We had so many challenges, all needing to be addressed at the same time.  Jeremy and Bob kept us on track with fundraising and made sure we stayed focused on only those things that would give us immediate return.  RSC has been a huge part of our success!”

“That sentiment is mutual,” said Swaney.  “I had the pleasure of working with Lois while she was at the Louisiana Philharmonic Orchestra.  She was the perfect choice for Shreveport, and she’s doing an outstanding job to reenergize the SSO and to reengage the community.” 

Now celebrating its 65th season, Shreveport Symphony Orchestra, under the artistic leadership of Michael Butterman as Music Director, presents classical, pops, holiday and family offerings to an appreciative community.  The base of support is growing, and while struggles remain, the SSO has laid the groundwork for a brighter future.

Established in 2006, Robert Swaney Consulting, Inc. (RSC) is a national provider of contributed revenue growth strategies and hands-on interim management for arts and cultural institutions. The firm has offices in Indiana, Georgia, and Missouri, with clients across the country.

If you would like to learn more about how RSC has helped the Shreveport Symphony or how it successfully partners with arts and cultural organizations to reach fundraising goals, call us today at 317.300.4443 or visit our website.