The latest developments in development don’t all point in one direction or the other.
Fundraising, both in the nonprofit sector and in theatre in particular, is not like a Shakespearean comedy, where despite some confusion and mishaps, everything moves smoothly toward a happy ending. Nor is the current situation like the Bard’s tragedies, where greed and rivalry lead to painful and bloody demises.
To stretch this metaphor to its breaking point, the latest fundraising trends may be more like Shakespeare’s problem plays, say, Measure for Measure or The Merchant of Venice: complex and ambiguous, with cause for both hope and concern in the short and long term.
In many ways, fundraising for theatre faces the same patterns and pressures as other nonprofits. But in recent years, numbers have emerged indicating that theatre may be in considerably better shape than other kinds of organizations chasing the same dollars. Zannie Giraud Voss, director of the National Center for Arts Research (NCAR) at Southern Methodist University, gives a sanguine report.
“Theatres have been able to continually make investments in fundraising that generate additional contributed revenue, which is not the case for many of the other sectors,” Voss says.
The bad news, as Theatre Communications Group’s Theatre Facts 2016 reports, is that even as contributed income climbed a healthy 22.3 percent from 2012 to 2016 (after adjusting for inflation), the chief source of income—revenue from subscriptions and single-ticket sales—remained essentially flat. And single tickets sales declined. All that puts even more pressure on development offices.
Fortunately, development offices seem up to the task. The NCAR’s research shows that, from 2013 through 2016, theatres’ return on fundraising increased 13 percent—more robust than in music and opera, the only other arts and culture sectors to also show growth.
“Theatres are becoming increasingly effective,” Voss says. “Other organizations will be looking at theatres and asking, How did they do it?”
Jill Garland, former senior director of development for New York City’s Public Theater, who now runs her own nonprofit management consulting company whose clients include TCG, confirms Voss’s judgment. “Theatres are getting smarter about how to raise money—they’re learning from other kinds of organizations, like universities,” Garland says. “Both large and small theatres are getting a lot more serious about strategic planning, knowing it’s no longer enough to articulate a mission and live it through your work.
“People love to get behind a plan,” she continues. “As you become more reliant on contributed income, you need to become more sophisticated.”
That trend is exemplified in places like New Orleans, where the city’s leading professional company, Southern Rep, is building its first permanent home in a historic church building. Southern Rep recently hired Charlotte D’Ooge away from the world of social justice—she’d been development director of the American Civil Liberties Union of Louisiana—to become its first director of philanthropy. Under the deft leadership of artistic director Aimée Hayes, the company has also added a new staff job, called patron services coordinator, and expanded an existing P.R. position to function as director of communications and strategic partnerships.
While other nonprofits may indeed soon be studying the tactics theatres are using, most nonprofits in arts and culture are already following the same broad outline.
“You need a balanced portfolio, with some corporate, government, and foundation giving, but especially a strong board of directors and strong individual giving to make your budget balance,” says Andrew Hamingson, lecturer in theatre management at Yale School of Drama. Hamingson knows whereof he speaks, as previous executive director of St. Ann’s Warehouse in Brooklyn and the Public Theater, managing director at NYC’s Atlantic Theater Company, and director of development at Manhattan Theatre Club.
But that balance is inexorably shifting: In recent years there has been, in most parts of the country, less money from corporations, and (especially in the arts sector) less from the government and foundations as well. The result has been an increased emphasis on the individual donor.
Voss says corporate giving has “never been a great panacea,” typically covering just 2-3 percent of the average arts organization’s total expenses. And while all philanthropy, especially corporate giving, has always been transactional in nature, Hamingson says globalization has changed the approach in New York, where theatres no longer think of themselves as “local” companies, while in markets like Hartford or Minneapolis, the community bond remains stronger.
Echoing Garland, Berkeley Repertory Theatre managing director Susan Medak makes the point that corporations and foundations have shifted away from the concept of arts support as a gesture of civic value.
“The idea of giving money for the sake of an aesthetic value has almost completely evaporated,” Medak says flatly. “It has profoundly shifted away from that toward the idea of culture as a tool of social change. They want to know, what is the socially transformative good?”
The problem, Medak says, is that when foundations and other donors start looking for “measurable outcomes,” the arts just can’t compete with other sectors. And she warns that as new generations take over family and institutional foundations, their preference for these recognizable outcomes means that “they are redirecting their giving away from culture.”
Theatres have one edge in this situation, Garland points out: that they are becoming increasingly “like community centers,” hosting a wide range of events.
That is especially true in certain markets; New Orleans offers a good example. “Community engagement is incredibly important in New Orleans—foundations want to know you’re engaged, and Katrina is still on their minds,” says Southern Rep’s D’Ooge, referring to the hurricane that engulfed the city 11 years ago. Southern Rep’s new multi-venue home will be in the 7th Ward, a still-struggling area, and “the idea of being a community center, not just plopping down and gentrifying an area, is important.”
For his part, Hamingson believes that theatres can still find government funding if they know where to look. “The NEA and state councils are eroding, but there are positive stories to tell,” he says. New York’s Department of Cultural Affairs is flourishing under Mayor Bill DeBlasio, adding tens of millions of dollars, with an emphasis on spending across all five boroughs, in contrast to the Manhattan-centric approach of his predecessor, Michael Bloomberg.
“The untapped resources in New York and in other cities are the local legislators, like the New York City Council,” Hamingson says. “They all have pockets of money they can give to arts organizations in their community. I’ve been advocating that on a grass-roots level you have to do some advocacy work and help your local politicians understand what your organization is doing for your local area.”
The education programs many theatres have built to mitigate arts programming cuts in local schools can be assets. As Hamingson says, an Off-Broadway theatre working with schools in Brooklyn and Queens can tell politicians, “We’re in your backyard using our money, and we need some help. That’s the case in any major city you can name—I don’t think it’s just a New York phenomenon,” Hamingson says. And local politicians typically use their positions as stepping stones to higher office, where they may have bigger pots of money at their disposal.
Still, while there are ways to pry loose foundation and government money, the spotlight now undeniably shines brightest on the individual donor in all nonprofit sectors. The result, Voss points out, is an increase in time and resources spent wooing contributors, both on and off a theatre’s board of directors. “There’s now more of a sense of relationship-building, of raising a donor’s understanding of what is needed in terms of commitment to an organization, and nourishing that commitment over a period of time.”
Apart from the added time commitment, some recent trends in individual giving have been worrisome. “Individual giving looks a lot like the country,” Medak points out, “in that there is a smaller middle class, so the broad base of individual giving has declined.” The middle-class donor still gives small gifts, and those in the top 5 percent often still “give until it hurts,” she says. “But we are seeing very little from the top 1 percent, which is a very different philanthropic pool than it used to be.”
Medak contends that while Baby Boomers still support culture for its civic good and believe in the virtues of institutions, the “new money,” belonging to Gen Xers and the oldest millennials, is in the hands of people who work in technology and hedge funds, and they have a very different outlook. “Their wealth came from being disruptive, so their self-identity involves being disruptors,” she says. And the difficulties that have beset dynamic start-ups as they grow into legacy businesses have contributed to a mindset antagonistic to the kind of lasting relationships with potential donors that an organization—be it a school or museum or theatre—needs.
They’re not just individual donors, in other words; they’re individualistic donors. As Medak puts it, for this class of wealthy professionals “the idea that something needs to be sustained is totally antithetical. They started out to create new order and new structure, and anything that reeked of institutionalization was the very thing they were trying to unsettle. The last thing these disrupters want to do is to sustain anything. They might give enormous amounts, but their money has repeatedly been one-off. They don’t say, ‘These are programs that work well and we want to maintain them.’ It’s about effecting change, not sustaining anything.”
Voss concurs. “They’re social entrepreneurs, and they want to see what happened with the money they gave,” she adds, explaining that it’s challenging for arts and cultural organizations to demonstrate impact in a quantifiable way. “The sectors that can more easily quantify those things are going to attract more of the philanthropy pie. And that’s going to make it increasingly difficult for arts and culture to maintain their overall share.”
But Medak goes further, arguing that the drive to measure efficacy will increasingly cause arts groups to lose money. “Even with a theatre education program, you can’t say, ‘Because of this experience all these children will go to college, and none of them will end up in jail, and each of them will be more empathetic.’”
Of course, the theatre field is not a monolith, where all theatres take the same approach or share in the same successes. The largest theatre companies tend to earn more income and rely less on contributed income, while the opposite is true for smaller ones; those in the middle tend to struggle more and have suffered the most severe fundraising setbacks in recent years.
“The small organizations have a core group of supporters, so it is easier to maintain relationships,” Voss says. “They are nimble, despite their resource scarcity. But as the organization grows, the portfolio of donors typically grows as well, and it becomes more difficult to manage. When you are a medium-size theatre, you are in the uncomfortable middle, where you don’t have the resources or name recognition of the larger organizations. You want to grow, but you must make the expenditures to get the return.”
Voss points to some innovations that can help. “Theatres are becoming a lot more sophisticated in terms of data mining and predictive analytics, looking at donor behavior attributes to help them hone their fundraising efforts,” she says. “They didn’t really have that level of sophistication 5 or 10 years ago.” She says that understanding how to use data will help theatres sort out “what it’s going to take to motivate millennials to get involved and to give.”
The Alley Theatre of Houston has embraced the change, beginning with a pilot project in 2013 that has blossomed into full-blown use of predictive modeling. Tineke Franck, director of individual giving, says the firm the Alley hired had to customize its approach, because theatre needs “something dynamic that would automatically update information.” That’s because ticket buyers are different each week, a dynamic that a nonprofit like a hospital or social justice organization wouldn’t worry about. “We have thousands of ticket buyers and limited staff,” Franck says. “We use predictive modeling to bring the right proposal in front of the right person.”
The idea is not just to look at a person’s assets, she says, but how they interact with the theatre: what shows they see, whether they volunteer, and any patterns in their giving history.
In 2014, the Alley started doing hard-hat tours during building construction for major donors. The model list gave them 100 names to target. These people, later invited to a range of other events, gave combined gifts of $200,000 in 2013, and now give $325,000. The analytics are now being refined to focus on potential donors’ interests, whether the attraction is new plays or education or buildings. “One lady gave $5,000 every year, and we appreciated her consistency, but after we found she was interested in new works, we began inviting her to specific new-work events—and now she gives $25,000,” Franck says. [Note: This report was completed before the sudden departure of longtime Alley artistic director Gregory Boyd amid a storm of harassment allegations. – Ed.]
Franck has been speaking with numerous other theatres interested in using this new tactic, and Garland concurs that predictive modeling holds promise. “It says something about our field that we’re beginning to explore this—very smart, I think. Predictive modeling can do the work you can’t do with the manpower you have.” Garland reasons that larger theatres, with more potential donors and more difficulty maintaining personal connections with each, may find this most useful. And, of course, they are more likely to be able to afford it (which harbors the danger of worsening the field’s inequities).
Voss views analytics this way: The smallest theatres are more informal, with a development person who “knows everybody personally and has it in their head,” while predictive analytics requires a systematic approach and clean data. “There are small organizations that can take advantage of it, but for most it’s all they can do just to make it from day to day,” she reasons. “You can feel the pain, because they want to be able to be more knowledgeable about their own operations.” As smaller organizations struggle to embrace the technology, she fears, larger ones will only “accelerate their growth.”
Not every theatre feels the need for a data-driven approach, D’Ooge points out. “I don’t think those kind of numbers are as helpful in a place like New Orleans, where it really is about who you know and how to frame the conversation,” she says, adding that while the personal touch matters more, she is looking to modernize Southern Rep, which had only a ticketing database and some Excel spreadsheets to monitor its fundraiser database.
There is no turning back from the shift toward individual donors, but with every theatre in need of its own Medicis, there are some potential pitfalls. Donors exerting influence over programming, Hamingson admits, “is always a danger,” but he’s confident that most artistic directors wouldn’t allow donors to exert pressure on theatres in this way—steering clear of a specific controversial topic, say. A more insidious worry is the chance that theatre leaders will program artists or plays they think might impress the people with deep pockets. Medak, for one, is worried that theatres may be tempted to mount splashier projects simply because they will be the easiest to attract funding for. “But some of what we do is unsexy, and we still have to fund those projects,” she says. “If you don’t choose a play because it’s not sexy enough, then that’s real censorship.”
As a practical matter, Garland points out that relying on individuals is far more labor-intensive than trying to elicit funding from the government, corporations or foundations. “That’s work you can get done during the day—writing grant proposals, or visiting council people, or making a marketing pitch to corporations,” she says. “But most theatres are doing their work with individuals at night, maybe with a dinner and then the theatre. I call it the second shift.”
Garland has been trying to get her clients to meet with these potential donors during the day, in their homes and offices, the way a hospital or university development executive would. This puts them on equal footing with those competitors, and also eases the strain on development staff. “It can be very hard on people, and they leave the field because they can’t take the schedule,” she says.
But Hamingson says that the long day’s journey into night is an inevitability in the job of development—it’s a key part of the arsenal. “Even if you go to their workplace for the solicitation, the direct ask, the cultivation, and stewardship has to be done in the lobby at intermission, or sitting next to them in the theatre, and maybe that’s after having dinner or drinks with them beforehand. You are trying to connect the art and the donor, and to be in situ is what’s ideal.”
Still, for all these concerns, Garland says there are ways to make the most of working with individual donors, even those looking for transactional and transformational one-off gifts. “It’s about saying, ‘Do our needs match what they’re interested in?’” she says. “If we have a big project, and if someone can come in and make a difference, and if it’s not going to disrupt the organization or sacrifice the donors that need care and feeding—then we should be doing it.’”
Medak agrees that theatres need a smart plan for nurturing relationships with philanthropists. “It’s a transactional world, and to think we’ll be protected from that as nonprofits is a little naïve,” she says, adding that perhaps some of those she describes as disrupters will change their outlooks as they age and realize they “have become the establishment and might want to keep the things they built.”
In the meantime, she contends, there should be no shame in being “more opportunistic” about projects with appeal to the younger generation of donors, all the better to build relationships with them. The key is figuring out how to piggyback funding for less sexy projects, and for ongoing operating support, onto the big-ticket items.
In other words: A little theatrical sleight of hand might be in order.
Stuart Miller is a freelance journalist in New York City.
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