In December 2016 Arts Council England published an updated Private Investment in Culture Survey, commissioned from MTM London. This gives an analysis of three years’ worth of fundraising data - 2012/13 to 2014/15 - supplied by over 1,300 arts and cultural organisations across England. This Survey offers some important insights for Theatre organisations as they develop and grow their fundraising strategies.
The Survey gives some headline analysis on the variation in fundraising across artforms. It will be no surprise that Theatre is significantly behind Visual arts and Music organisations in terms of levels of fundraising income - these two sectors are dominated by large organisations with mature fundraising strategies that have excelled in securing income from major donors. Visual arts organisations secured £104m from donors; Music organisations £67m, whilst Theatre organisations managed only £28m.
The Theatre sector has lagged behind in major donor giving, and whilst it is making real inroads in lower level giving, Theatre organisations are only now putting in place a major gift cultivation strategy, which tend to chart at least a two-year timeline from cultivation through to donation.
The Survey demonstrates that 50% of all private investment came from individual donors. This is also the area that has seen most growth over the three-year period from 2012-2015 in Survey across participating organisations. It is an unassailable fact across the charity sector that individual giving is by far the most important form of fundraised income. The Association of Charitable Foundations’ Giving Trends 2015 Report shows Individual and Major Giving accounting for 65.9% of all private charitable giving.
Due to their significant earned income capacity, Theatre organisations, even those that are charities, operate primarily as businesses. This means that they often do not publicly communicate their charitable status and cause, and Trustees and Executive team are reluctant to invest precious time and resources into fundraising as they do not see it as an important future income stream.
These factors have led Theatre organisations to focus on fundraising from Trusts & Foundations - a perceived ‘safe’ area of fundraising, which can be undertaken by more junior development staff or non-specialist staff. The Survey demonstrates that Theatre and Dance organisations have the greatest reliance of fundraising from Trusts & Foundations, with their total proportion of fundraised income from this source at 43% and 54% respectively.
But we know that this is a hugely risky strategy, as the pressure on Trusts & Foundations increases due to the decline in public funding. The general success rate for Trusts & Foundations stands at around 20%, and it is lower for some of the most important culture-supporting Foundations. There may well be some correlation between Theatres’ dependence on Trusts & Foundations and its small growth in levels of fundraised income over the three years. The Survey shows Theatre’s growth at 2%, much, much, lower than any other artform.
Theatres have made inroads into lower level giving, particularly through members’ schemes. But the Survey shows that, of the total income from individual giving, only 12% came from these kinds of schemes, whilst 79% came from individual donations. Theatres are not going to raise significant amounts from individual donors through schemes and buckets. They must begin to prioritise major giving strategies.
The Private Investment in Culture Survey is a timely reminder for the Theatre sector that fundraising is all about building long-term relationships, and that requires strategy, staff and sustained effort.
Theatre organisations are fantastic businesses; they must also operate as highly efficient charitable bodies and prioritise individual giving strategies for future financial sustainability.