Arts in Crisis: A Kennedy Center Initiative

Arts for LA, the California Community Foundation, and Center for Cultural Innovation presented Arts in Crisis: A Kennedy Center Initiative on Thursday, October 8, 2009 at the California African American Museum. The program featured Michael M. Kaiser, President of the Kennedy Center and renowned authority on managing non-profit arts organizations, interviewed by Tim Dang, Artistic Director of East West Players. Below are my notes.

Michael Kaiser has a mantra for the key to a successful arts organization: “good art, well-marketed.”

He presented one of the art industry’s greatest inherent problems: unlike other industries, worker productivity in the arts does not improve over time. (To illustrate this point, consider that Hamlet still takes as many actors today as it did in Shakespeare’s time.) Earned income potential is also limited – we can only sell as many seats as the venue holds. So the gap between the cost of creating art and the earned income potential has no possibility of decreasing, and in fact it increases year after year as the costs of personnel, rent, and equipment rise.

For many years, arts organizations have increased ticket prices to solve this problem. But that has just led to the arts becoming so expensive that they’ve lost audience members. That’s why fundraising is a better way to close the cost-income gap.

But what’s the key to raising money for the arts? Michael Kaiser has a strong opinion on this—one that I agree with: the key to fundraising is offering exciting programming and marketing it well.

So, why are programming and marketing essential to fundraising? Why can’t we just write really, really impressive grant applications and expect them to be successful?

Because ultimately people contribute to any cause because of passion. Great programs, marketed well, make people passionate.

That’s why Kaiser sees cutting programs during bad economic times as dangerous. The less you have to offer, the less interest people will have in your organization, and that will lead to less contributed income.

The good news is that marketing doesn’t have to be expensive. Tools like Facebook are “not just for kids anymore,” and Internet marketing is now more effective than traditional paid newspaper advertising, for example.

An enthusiastic board is also essential, because if your board members truly stand behind your organization, they’ll be excited about spreading the word. So find out whether your board members have negative feelings towards any aspect of your organization. Who can blame a person for not wanting to ask their friends for support if they don’t think the last few productions were very strong, or if they have to worry about whether their personal friends will be thanked in a timely manner for a contribution? Deal with these important issues; make your board members confident.

Part of offering exciting and excellent programs is deciding what exactly your organization intends to achieve. It is worth noting arts education programs at this time: if your organization includes education as part of its mission, but cuts these programs during a recession, you are sending the message that these programs are not very important to you after all. Spend time thinking about your mission and make sure your programs truly serve all aspects of your mission.

At a later time, I will post notes on the rest of Mr. Kaiser’s discussion, including his insights on how arts organizations of color can improve their fundraising during the current economy, plus innovative ways to motivate your stakeholders to stand behind your programs.

Drops in corporate giving exceed forecasts - Crain's New York Business

An eye-opening article from Crain's New York. It's no secret that corporate giving has been affected by the economy, but this article had good research on the subject.

Drops in corporate giving exceed forecasts - Crain's New York Business

So what's a non-profit to do? I say focus on the excellence of its programs and think of creative ways to maintain relationships with corporate donors who've cut their funding. Invite them to events or to participate in volunteer programs.

We've had corporations cut their funding and I believe the worst thing to do is lose touch with them during this down period. In other words, don’t be a fair weather friend to your corporate funders who are giving less right now. I stay mindful of their past giving as well as the potential for more giving in the future.


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The Power of Major Gifts (and some advice from a Major General)

Fundraising is a profession with lots of old wisdoms, like "Board members should give, get, or get out!" and "The biggest reason people don't donate is that they were never asked."

Another one I have heard frequently is this: Fundraising from major gifts should constitute the same amount as all other fundraising sources combined.

I know it sounds pretty extreme. But the longer I stay in this career, the more I believe in that statement.

Today I was analyzing the number of individual donors we had in fiscal year 09 versus the prior fiscal year. I knew that the overall dollars raised from individuals decreased in FY09, so I assumed I'd see a decrease in the number of donors as well.

Wrong. It turns out the number of individual donors increased from FY08 to FY09. And there was no major trend of people downgrading their donation amounts either.

This made no sense given that we earned less from individuals in FY09. And then I noticed the X factor: five of our top donors were hit by the economy last year, and they decreased their gifts. Out of over 1,000 donors, the donation decisions of five individuals was the deciding factor on our bottom line.

There is not much a Development Director can do about the economy hitting the largest donors. But this anecdote reminded me of the value of those major donors--the small handful of people that form a foundation for your organization. I'm going to make it a goal this year to talk to each of them at least once a month, tell them how much they mean to our organization, find out if they have any questions or desires. Keeping those relationships solid is essential.

I guess my point, therefore, is that it really may be true after all: You know your organization is doing well when its major donors contribute more than all other donors combined. I'm still working on this one, personally; any advice most welcome.

And one final quick thing. Since this post started out being about fundraising mottos, I happen to have a favorite. When in doubt, I follow the good advice of George S. Patton: “A good plan, violently executed today, is better than a perfect plan next week.”