Guide | Fundraising from audiences and visitors

Why and how to do it...

Let’s start with the ‘why’. Many in the arts still think primarily of trusts and foundations, EU and other public sources or corporate sponsors when scratching their heads about where to find new income. While fundraising from individuals has moved up the agenda recently, ‘philanthropist’ is still often thought to be synonymous with ‘rich’ and too many cultural managers shrug their shoulders and assume that because they don’t run the Royal Opera House, or are not based in London, there is no point bothering to look for

individual donations.

So why fundraise?

Well, even if you don’t regularly dine with millionaires (or even if you do!) you can still probably generate income from individual donations by looking at the people who show that they have a strong interest in what your organisation does in the most direct way possible – the ones that come to see or engage with your events and exhibitions.

Audience and visitor fundraising has many positive features:

  • They are not exactly a ‘captive’ audience but they do come to you, often repeatedly.
  • Donations can take the form of regular gifts via direct debit which means you can rely on it for years to come
  • Asking for donations requires you to explain your mission and work, engaging you more with your communities, even amongst people who choose not to donate
  • Once an audience/visitor fundraising programme is set up (see below), it can operate at good levels of net income indefinitely i.e. it is highly sustainable
  • Fundraising from many smaller donors forms the base of a pyramid of giving whereby higher-level donors are found within the audience base and all donors can potentially be developed upwards over time
  • Audience/visitor fundraising can be used as a solid base for the promotion of legacy donations, the great seam of gold which the sector has yet to mine seriously.

In summary: audience and visitor donations are accessible, sustainable and profitable.

Let’s move on to the ‘how’

The key issue in fundraising from individuals is relationship. With major donors one works over a period of time to engage a potential donor on a very personal level, but the same idea holds true for larger numbers of smaller donors too; although here the personal contact is often replaced for practical reasons by post, telephone and e-mail. Where there is a ticketing or CRM database, recorded customer behaviour allows relationships to be deduced and segmentation based on relationship can be used both to select for fundraising prospects and to set ask-levels. Where there is no database then surveys can reveal key behaviours and other mechanisms can be created to gather data (membership schemes, mailing lists, onsite donation-asks, Gift Aid forms). One key thing to realise is that audiences and visitors are not all alike – the stronger the relationship the greater the propensity to give money and the higher the average donation. Note that word ‘average’ – each individual is different but we are talking about relatively large numbers of people so we can talk about averages across the group when planning and analysing.

The importance of relationship is highlighted in the table:

Segment Number contacted Pledge rate (%) Total pledged (4 year value) Average per contact Average per definite pledge ROI

Friends

442 33.94 £27,625 £62.50 £184.17 10:1

Donors

470 25.32 £14,943 £31.79 £125.57

5:1

T5+

304 22.70 £11,040 £36 £160 6:1
T3-4 237 17.30 £5,793 £24.44 £141.28

4:1

T2 250 16.40 £3,978 £15.91 £97.03

2.5:1

TOTAL 1,703 24.66 £63,379 £37.22 £150.90

6:1

Note: T5+ means people who bought tickets 5 or more times over a 2 year period, T3-4 means three or four times in the same period and T2 those that attended twice. ROI stands for Return in Investment – income compared to cost.

This summary of a telephone fundraising campaign for a regional theatre notes two important things a) even people who had only attended twice in two years were nicely profitable (although this is not always true) and b) even the best group (Friends) had only a 34% pledge rate. The lessons here are that even irregular attenders may, on average, be fairly good donors and you only need a strong minority of people to give, at good average rates and you are in business.

This lessons in this example could apply to any arts organisation. If people are members of a loyalty scheme of some kind, or are subscribers or donors, then they represent your best prospects. Thereafter, the more frequently people visit, the more likely they are to donate and therefore the higher the average donation.

How do I know these things?

The Phone Room have been engaged in fundraising from audience/ visitor databases for many years and, in that time, have analysed, segmented and worked with millions of records from ticket office data and smaller amounts from separate databases. From that experience I can offer some simple tips for fundraising from your audiences and visitors:

  1. Understand what your audiences/visitors value in you and your work – it may not be the same as what you value (see ‘motivations’ and identify your ‘need’ i.e. why do you need the donation? This allows you to create a convincing ‘Case for Support’ which speaks to them (and not just to you).
  2. Work out ways of capturing audience/visitor data if you do not have it already and create three to five rough segments based on the apparent strength of relationship you have, e.g. frequency of engagement.
  3. Set ask-levels by segment – the stronger the relationship the higher the ‘Ask’. For instance, starting at £5 or £10 per month for a regular gift or £20 - £40 for a single gift, depending on your audience and the segment characteristics you are targeting.
  4. Regular giving is best for obvious reasons (e.g. a £5 per month gift plus Gift Aid over a five year period vs a one off donation of £40). If for some reason you ask for or get single gifts then treat them as a first step on the way to a regular gift (see ‘Donor Development’).
  5. Decide on whether to use telephone, post or email to make the ‘Ask’. Telephone can work best because it is more personal but is also much more expensive. Post is good for older people but fairly useless for anyone younger, whilst email is free but easy to ignore. Maybe test them all out to see what ROI you get.
  6. Do a test. At first you won’t know what works but through testing you’ll soon see if your segmentation, ask-levels and communication media are right. If not adjust and go again.
  7. Say “thank you” - a lot - and keep your donors well-informed. This was their first gift, not their last.

Donor Development

This now brings me to the subject of donor development. Ideally you want donors to keep giving for a long time and to give more in the future. This means you have to get to know them personally, if at all possible, or at least by keeping good notes in your CRM. It also means you have to keep them informed and involved – they are now your friends and supporters, not just random attenders.

Donor development can include:

  • Upgrading the gift amount next time
  • Single to regular conversion
  • Finding potential major donors amongst your smaller givers (perhaps using wealth-screening)
  • Encouraging donors to remember you in their wills – legacy fundraising
  • Asking them to volunteer as well as donate – giving their time
  • Encouraging them to become advocates and fundraise on your behalf, e.g. donor-get-donor

Donor Motivations are as variable as the people themselves. What they value about your organisation may not be what you value and vice versa. Some people donate to make sure your café will stay open or because it is convenient for the shops; others because they met their spouse there many years ago, some because they really believe in what you do. Motivations in my experience heard on the phone include:

  • I love theatre/art/music
  • I don’t much like theatre/art/music but I think my town should have a theatre/gallery/orchestra
  • I want my children to have the chance to enjoy what you do
  • I always pop into the toilets whilst shopping on Wednesdays, so much cleaner than the local Council ones
  • Your ushers are so friendly
  • I want special treatment (this one is less likely to be expressed so directly!)
  • I don’t want special treatment but just want you to carry on the good work
  • If I give you some money maybe you will finally get your act together
  • If the Tories don’t want you to survive then you must be doing something right
  • If I give you some money then Labour won’t waste tax-payers money on the arts

……you could continue writing the list yourselves. The point is that £50 from any of these people is still £50! Get the money first and educate them later – in fact once they have donated you have every excuse to tell them more about your work.

Friends Schemes

I have talked so far only about donations in this article. Some think that ‘individual donations’ equals ‘Friends Scheme.’ In fact Membership/Friends schemes are problematic because the same terminology is applied to wildly different programmes. Some schemes are simple marketing offers (‘toofers’, for example) which have no donation element (and attract VAT and do not qualify for Gift Aid).

Some are, in effect, marketing schemes but are described to the public as ‘support our work’, even though the benefits outweigh the money paid. Other schemes simply use the word ‘Friends’ where the word ‘donor’ would do just as well. Some cite the success of some Friends schemes as proof of their efficacy but usually donors are given no choice of other giving methods by the organisation and so this analysis is a logical-loop. The real question is whether the complexity and cost of running a scheme brings significantly more income than just asking for donations – I imagine you can tell from my tone that I often think they do not!

Ultimately arts organisations are losing funding from the public purse (and of course many never had any at all) and now need to look around for other ways of generating income. This is not easy and requires different ways of thinking and new skills but there are also many opportunities. Raising donations from individuals who already engage has the very positive effect of strengthening relationships with audiences, visitors and the wider community and requires an arts organisation to analyse why it is important to all those people (rather than why it is important to a handful of funders) and to explain itself in ways which they will understand, rather than in ‘artspeak’ - one could even call this a ‘democratisation’ of arts funding.