If recent events were testimony, then one would conclude that Australians are very good at putting their hand in their pocket, and giving. But does that trend extend beyond times of crisis?
A recent report published by Creative Partnerships Australia (CPA), looked at the private giving landscape across the arts in Australia, asking the vital question, how can we better grow awareness of need, and value in giving.
Fiona Menzies, CEO Creative Partnerships Australia, told ArtsHub: ‘Fundraising has to be an all-of-organisation concern – it’s all very well to trust the fundraiser, but you need to know that the vision will be realised.’
Private support – which is defined as donations, grants, sponsorship and volunteering – is increasing.
The report, titled Giving Attitude, found that in 2017 $608 million was contributed in support to arts and culture from the private sector. While this data might come across as dated, it is the first accurate benchmark established since 2009, when that value was sitting at a mere $221 million.
This report is the first in what is intended to be a biennial survey of private sector support for the arts in Australia, allowing organisations to build capacity, but more importantly, a shift perception.
The numbers today show that around 25% of organisational funding comes from the private sector. Menzies believes that realistically we can grow that figure.
She said the arts receive a lot from high net wealth donors, alongside education and medical research. ‘Recent indications are that the environment is emerging as a competitor for these funds, which brings me back to the point that the arts need to articulate their case for support and their impact in order to continue to attract donations from all levels of donors.’
This is one of the reasons CPA felt it was vital to better chart private giving activity within the arts – to be more competitive.
‘[This report] is a tool that helps us demonstrate to government why what we’re doing is important and having an impact; and it informs the programs and services that we develop to help the sector,’ said Menzies. ‘And for arts organisations, it enables them to see what’s possible and to benchmark themselves against other similar organisations.’
Menzies said this data should be informing organisations in their funding policies, but also in the people they appoint to their boards, and the expectations they give those appointees.
‘Most government arts agencies are telling artists and arts organisations that they need to supplement government funding with other sources of funding, so they need to understand what is happening and what the challenges are,’ added Menzies.
The greatest challenge to giving within the sector
The report showed that the biggest challenge for arts organisations wanting to obtain private sector support is their capacity to employ skilled fundraising staff.
The reason is twofold: firstly, because organisations are sometimes reluctant, or unable to direct resources towards employing fundraising staff; and secondly, because skilled fundraisers are not choosing to work in the arts.
There are nowhere near enough good fundraisers in the arts, mainly because people in the arts seem reluctant to take on these roles.
Fiona Menzies, CEO, Creative Partnerships Australia
The report showed that knowledge in raising funds from the private sector was low (4.8 out of ten), which suggests that more help may be needed to build the capacity of organisations.
Menzies continued: ‘Fundraising is not rocket science, but it is an interesting mix of being methodical, strategic and having great people skills. We have plenty of training available [through CPA] for those willing to give it a go.’
Staffing is a tough one because it is not only skills learning, but it is also about building a network of contacts and most importantly, trust. Menzies believes that we can start to better groom that trust in a next generation of giving, both within organisations and from patrons.
‘We now have a number of really experienced, highly successful, senior arts fundraisers, so I hope younger people can see it as a valid professional path to follow,’ she told ArtsHub.
‘I was once told by a programmer to “sit in my corner and get the money” and it just doesn’t work like that,’ said Menzies, adding that it has to be a company-wide attitude to value the role of fundraising.
beyond the numbers
The perception is that our giving market in Australia is not huge, but there are a lot of people who have the capacity to give who are not being tapped.
‘I think there is a perception in some parts of the small to medium sector that it’s too hard and they don’t have the resources to do fundraising well,’ said Menzies.
The report found that arts and cultural organisations earned most of their income through box office and sales (40%), while government support was 27% and private sector support nearly on par at 25%.
Competition for effective fundraisers in the broader not-for-profit sector is high, and arts organisation that want skilled fundraisers need to take this into account when considering the resources they give their fundraising staff.
‘There is no question that larger organisations are better able to secure private sector support, primarily because they’re able to invest in teams and tools to help them do that. But we are now seeing that smaller organisations that do invest in fundraising, do see results from that,’ Menzies said.
‘You can’t assume [today]. You need to articulate that case [for support] and the impact of what you do. And this is becoming increasingly important for the next generation of donors,’ she continued.
Increasing muscle, increasing dollars
Curiously, the ROI (return on investment) in arts and culture fundraising is below the national benchmark, $3.50 raised for every dollar spent, compared to $5.00 for fundraising more broadly in Australia. Menzies says that you definitely need to invest in order to make money in fundraising.
‘This may include a dedicated staff member and tools such as a database, as well as marketing and communications and so on. And if your organisation is new to fundraising, it’s important to also invest time – earning more than you invest may take three years, but after that will continue to grow,’ Menzies said.
While the amount of funds raised has grown, the cost of fundraising has grown faster.
‘I’ve seen many organisations give up after one year when their new fundraiser doesn’t make enough in their very first year. Fundraising is ultimately about developing relationships, which take time to develop, which needs to be taken into account,’ she told ArtsHub.
The report also showed that large organisations spend more on fundraising, raise more funds and achieve higher returns. Nearly nine in ten (85%) of large organisations employ dedicated fundraising staff.
In contrast, micro-organisations, with a turnover of under $50,000, make up 45% of the sector, many of which depend upon volunteer and pro bono support, some 75% of their income. In a wry twist, just one in ten micro-organisations have dedicated fundraising staff – organisations that are perhaps most reliant on private support.
Menzies says this is where CPA comes into the picture, to help those smaller organisations build capacity and skills. ‘This includes our Plus 1 matched funding program, the coaching and advice given by our state managers, our mentoring programs that match experienced, senior arts fundraisers with S2M organisations, and our workshops and masterclasses and other thought leadership events,’ she explained.
Sponsorship verses donations
Many organisations wonder where they should be targeting their efforts, especially when resources are limited. Data such as this report can offer a pathway.
The report showed that within the private income pool, 45% came from donations and 37% from sponsorship. Menzies explained the history behind the numbers: ‘The evidence we’ve seen both through Giving Attitude and the long-running annual AMPAG Private Sector Support Survey is that income from sponsorships is plateauing, while income from donations is increasing.’ She expects this trend to continue.
‘Businesses are applying very different considerations to their sponsorships than they did twenty years ago, with some applying a marketing lens and others seeking to use partnerships to engage their staff. There is also a trend of businesses giving more in-kind than in cash. This can work well for some organisations, but if it’s untied cash you’re after, the best place to get that is through donations.’
What is the real role of Boards in private giving?
The report showed that boards play a key role in the private giving process, with one in ten suggesting that boards, in fact, could be doing more. But Menzies said there is confusion around our perception of the role of boards in fundraising.
‘Board members get worried that it means that they’ll need to be asking all their friends for money and they’re not comfortable doing that,’ said Menzies.
The view at CPA is that income generation should be a standing agenda item for boards. ‘Your board should be involved in developing a fundraising strategy that links in with its overall strategy, and boards should ensure that the organisation is resourced properly to do the fundraising required.’
‘As for board members giving themselves, I would argue that it’s hard to expect other people to give to your organisation if you don’t give to it yourself, at whatever capacity you can,’ Menzies added.
The full report Giving Attitude (pdf) is available on the CPA website.