Arts Fundraising 3.0: getting to grips with donor and performance data

Howard Lake | 10 November 2014 | Blogs

• Tagged with:
• arts
• data
• Major gift
• Prospect research

As 2014 draws to a close the arts fundraising landscape has changed dramatically. Arts Council England funding has been slashed, private foundations have raised the bar for accountability, corporate donations are increasingly tied to narrow CSR programmes, and individual giving has been squeezed by shrinking disposable income.
Which is not to say it’s ever been easy. The challenges faced by today’s arts fundraisers, however, demand a new approach. The key to overcoming them may already be at your fingertips.

Hidden Gems

A report in 2012 by Arts Quarter (found that of the 126 UK arts organisations whose databases they analysed, an average of 3.4% of individuals had personal wealth over £1m (not including the value of their homes). As might have been expected, this was highest in London (5.4%) but even in the region with the lowest number (North East & Yorkshire), it was 1.3%.
Imagine a database of 50,000 customer records – 1.3% still represents 650 individuals. If you were to solicit annual £1,000 donations from just 10% of them, that would amount to £65,000 each year.
Those numbers are incredibly compelling, but surely it’s not that simple? This can’t be an easy task.
Fortunately, UK databases of high-net-worth individuals already exist and there are consultancies that can audit your database (free of charge) and tell you how many wealthy individuals it contains.
There is then a cost to purchase the data, but if budget is an issue, you could start with a subset of your database, focussing on the data for the four most viable segments:
• Regulars (Visited 3+ times in the last year)
• Irregulars (Visited 1-2 times in the last year)
• At least once (Visited at least once in the last 3 years)
• Never (Not visited in the last 3 years)
Using this segmentation scheme and the results of the audit, you could buy the data for your Regulars segment first, and purchase the others at a later date. When the data comes back you may need some assistance from your system supplier in order to write the new information back into your database.

The DIY Option

There are others ways to spot potential donors too – including some without additional cost. If you offer the option to give a donation at the checkout, then identifying individuals that included (or increased) a donation at this point may provide a good place to start. Alternatively, purchasers of premium seats could be a good indicator of high discretionary income. And of course their postcode will also provide information about average wealth in the area (though obtaining this data will likely come at a cost).
While it’s no doubt harder to make the case for raising money in the arts than it is for addressing extreme poverty in Africa or fighting cancer, we do have advantages over other charitable sectors.
We start with knowledge of individuals who have demonstrated a proven interest in our organisation – by virtue of their having attended an event or production. Additionally, we know about individuals that are local to our communities. In both cases, we know we can make an appeal based on personal relevance.
This is also why it’s crucial that once we’ve identified potential major donors, we continue to take a personal approach. Key to this is using the data we have about them. For example if you have a group of potential donors who regularly come to your family shows, you might consider a cultivation event around this.

Success in Numbers

The overall strategy of putting your data to work in this way is relatively straightforward – and it has been a proven success. I spoke with fundraising consultant Caroline McCormick, who pointed to the Natural History Museum’s campaign for the new Darwin Centre.
‘We were able to deliver the campaign target in the context of a very limited annual revenue income base at that time, because the database had been carefully invested in over a number of years by diligent team members,” she said. “This meant that even though we often had to rapidly grow donors through first gifts before approaching them for major gifts, we did have the knowledge asset base to work from to do so.”
Knowing the theory is, of course, just the start. Ultimately, the future of arts fundraising lies in better use of data and technology to support the real reason we do what we do: promoting the joy, exhilaration, sense of fulfilment, and the deep and enduring meaning that results from supporting the art you love.
The first major step is to recognise that there is significant hidden wealth amongst the individuals in your database, and that uncovering it is relatively straightforward and inexpensive. Once uncovered, you have data at your fingertips that can help you develop personal approaches to these individuals to start them along a path towards becoming a major donor.

Michael Nabarro, Spectrix

About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale. He is the founder of Fundraising Camp and co-founder of GoodJobs.