Challenges in Arts Fundraising:

3 Areas of Focus for 2021

As we dive into work on our next signature study, Redefining the Donor Value Proposition, our research team has had the opportunity to speak with heads of development at arts organizations across the world to learn more about the challenges they are facing. While each institution brings their own unique context, there are many shared obstacles and concerns across the industry. Read on to hear some of the challenges we will seek to help arts organizations overcome in our research.

Development offices must strike a balance between donors with transactional mindsets and those more focused on philanthropy ⁠— all while the pandemic makes offering tangible benefits a challenge.

While donors to arts organizations all share a connection to the artform itself, there are still differences in their motivations for giving. One of the most prominent variations seen across the many institutions we surveyed is between donors who are driven by benefits, and those who are compelled to give for more philanthropic reasons.

A donor acting upon either of these two mindsets is valuable to any organization. However, in our calls, arts leaders expressed that — despite efforts to do so by reshaping giving tiers and membership levels — it is extremely difficult to move a donor out of their tendency to give for either transactional or philanthropic reasons. 

As one development officer explained, “I think that propensity to give is just inherent in people through their environment, experience, and means.” Therefore, it is crucial for arts organizations to understand the motivations of their own donors, and how best to serve them.

This year has made shifting donor mindsets urgent. In a time when most arts organizations are unable to offer the same benefits they would in-person, there is a heightened need to encourage a philanthropy mindset among all donors — even those who typically are more invested in the tangible benefits they receive.  As a result, arts organizations have been adjusting messaging to highlight the impact of gifts and connect with their donors on a more personal level.

High-touch stewardship is key to building strong donor relationships. The effort required to provide it can limit expansion of the donor base.

Most arts organizations described donor loyalty similarly: it is more often the result of a donor’s relationship with the organization than of their connection to the art itself. The closer the donor feels to the institution, and the more special and valued a member of the community they are made to feel, the more likely they are to engage in sustained giving. 

As several development officers framed it: “it seems that donors appreciate when things are about them, not about us.”

It is time consuming to maintain the level of stewardship necessary to reach this sense of personal connection for donors, and many arts organizations reserve this service for their top level of supporters. Finding solutions to create the same sense of loyalty in lower-level supporters will be crucial, especially given the influx of smaller donors that arts organizations have had during this time of crisis.

Arts organizations recognize the need to attract a new generation of donors, but must navigate doing so without jeopardizing existing donors.

One of the most persistent questions in the philanthropy space is how ⁠— and when — to find the next generation of large donors. Right now, many arts organizations are hesitant to explore new avenues; with closed doors and increased competing social needs, most view this as a moment where all their energy must be focused on managing relationships current donors even more closely. 

There are, however, some who see an alternative perspective: as one development director put it, “our older audiences are going to be the last to come back to us so we need to be thinking about our younger audiences a lot, especially now.”

This has proven more easily said than done. Not only is it challenging to prioritize extremely limited time away from current donors who require high-touch stewardship, but many donors in the new generation want different things out of their giving experience:

• Several organizations found that younger donors are more inclined to want to really “roll up their sleeves” and get involved, and to see the impact of their investment. 

• Others believe that an interest in philanthropy has not been passed down to this next generation of donors.

In either case, finding ways to satisfy or attract new individuals means taking time away from existing relationships. Finding a way to speak to both of these constituencies in a meaningful but streamlined way will be essential as current donor bases age.

For more resources on fundraising, visit our Donor Engagement Center here. ABA members can also contact their Member Advisory for further information about our upcoming study