Nonprofit Theaters Becoming More Adept at Cultivating Individual Donors

January 23, 2018; American Theatre

It’s no secret that corporate and government support of the nonprofit arts sector continues to decline and that shifting foundation priorities have taken a toll. Increasingly, arts groups are looking to individual donors to fill in some of the gaps in contributed income. Writing for American Theatre, Stuart Miller notes one promising development in the development field: theater companies “may be in considerably better shape than other kinds of organizations chasing the same dollars.”

Research from the National Center for Arts Research (NCAR) indicates that from 2013 through 2016, “theatres’ return on fundraising increased by 13 percent—more robust than in music and opera, the only other arts and culture sectors to also show growth” in this category. This trend also helps to offset essentially flat earned income from subscriptions and single-ticket sales, as documented in “Theatre Facts 2016” by the Theatre Communications Group.

So how are theater companies succeeding in cultivating individual donors? Miller offers several insights:

• Consultant Jill Garland, formerly senior director of development for New York City’s Public Theater, notes that one way theater-company fundraisers are generating results is by “learning from other kinds of organizations, like universities.” This means being more strategic about the kinds of projects and programs donors most care about, as well as being more strategic about describing long-term planning and funding opportunities, including capital campaigns.
• Zannie Giraud Voss of NCAR notes that development staff in the theater sector are learning from business practices too. “Theatres are becoming a lot more sophisticated in terms of data mining and predictive analytics, looking at donor behavior attributes to help them hone their fundraising efforts.” Citing work that began in 2013 as a pilot project at the Alley Theatre of Houston, director of individual giving Tineke Franck explains that predictive modeling looks at more than just an individual’s assets; it also tracks what shows they see, whether they volunteer, and any patterns in their giving history. Using these tools, one cohort of Alley donors increased their collective annual giving from $200,000 in 2013 to $325,000 now. And one specific donor—who had a particular interest in new plays—increased her annual giving from $5,000 to $25,000 after the staff began inviting her to events that focused on new works.
• Charlotte D’Ooge of Southern Rep in New Orleans, which is raising funds for its first permanent home in a historic church building, notes that one advantage theater companies often have is that their facilities are perceived as community centers, offering space for other types of events that matter to local residents—and to donors. Southern Rep’s new home will be a multi-venue facility located in the 7^th ward, which is still recovering from Hurricane Katrina. So, being able to provide space for other activities helps fundraising efforts because the story is bigger than the work of the theater company, and more impactful than, as D’Ooge says, “just plopping down and gentrifying an area.”

This is not to say that theater companies will not continue to seek funding—and strategic partnerships—with corporate, government, and foundation sources, but they will have to continue to adapt their strategies with these funders. For example, corporate funders investing in the arts no longer do so “as a gesture of civic value,” but expect more of a “socially transformative good.” Foundations and government sources are increasingly looking to check off multiple boxes with their grants—for example, expecting arts education/outreach programs to have measurable impacts (despite the challenges of measurement) on overall youth development and neighborhood life. All of this means individual donors are likely to account for a larger slice of the contributed income pie (chart) for theater groups.

Miller notes that the newer approaches to donor cultivation that have been successful for nonprofit theater companies are also more labor-intensive—sometimes requiring additional development staff, other times requiring more flexibility from development staffers in terms of when they work, adding more evening and weekend hours to woo donors—again, including board members—before and during theater performances. He also notes that fundraisers must pay more attention than ever to generational differences among individual donors.

Finally, these approaches are likely to bear more fruit for larger theater companies that can afford to invest more in fundraising; they may be unnecessary for the smaller companies, which already know most of their individual donors quite well; and the better they work for the larger companies, the more they may disadvantage midsized companies, which may not be able to invest in additional staff or bells and whistles like predictive modeling.

Still, as Voss says, “Theatres have been able to continually make investments in fundraising that generate additional contributed revenue, which is not the case for many of the other [arts] sectors.” That alone ought to merit a hearty round of applause.—Eileen Cunniffe