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
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|
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 has 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:
- 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).
- 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.
- 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.
- 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’).
- 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.
- 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.
- Say “thank you” - a lot - and keep your donors well-informed. This was their first gift, not their last.
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