As Individual Giving Drops, Performing Arts Leaders Weigh in on the State of Fundraising

Over the summer, Inside Philanthropy surveyed performing arts professionals about COVID-19’s impact on the sector’s fundraising fortunes. Their pessimistic outlook reminded me of an old quote by Stephen King: “There’s no harm in hoping for the best as long as you’re prepared for the worst.”

I realize it’s pretty macabre to cite the “master of horror” when talking about the state of performing arts fundraising, but these aren’t normal times, and if recent research from TRG Arts and arts data specialists at Purple Seven is any indication, respondents’ worst fears are now coming to pass.

The report found that in the first nine months of 2020, the number of gifts received by performing arts organizations in North America increased by 15%, but the average value of those gifts fell by 24% from the previous year. And while gifts from “super-active patrons”—defined as those who had donated to the organization and/or attended performances at least 10 times—were up 47%, total revenue and average gift size were down 38% and 8% for the nine-month period.

The report is all the more unsettling given the broader economic context. TRG Arts/Purple Seven found that aggregate gift revenue from June to September was down 29% compared to 2019. Yet that tried-and-true barometer of philanthropic giving, the S&P 500 Index, was up 8.4% from June to September 2020, and up 12.9% from September 2019 to September 2020.

“If donors don’t support arts organizations now, when stocks are doing well, they may not be around in the future when the market is uncertain,” said Suzanne Appel, managing director of New York’s Vineyard Theater.

With performing arts nonprofits facing what Julie Wake, executive director of the Arts Foundation of Cape Cod, calls a “long and dark winter,” the TRG Arts/Purple Seven report highlights two questions that will make fundraisers feel as if they just read “The Shining” in a darkened room: Why are donors dialing back giving when the market is enjoying a historic run, and what can they do to ensure their organizations can hang on for another 12 to 18 months?

Alarming Trend Lines

Theories as to why donors are tightening the purse strings range from the intuitive (donors are prioritizing giving to public health organizations) to the pragmatic (donors, fearing a downturn in 2021, are hedging their bets) and the Darwinian (donors have concluded some organizations can’t be saved).

In mid-September, Inside Philanthropy’s survey of performing arts professionals confirmed the first theory—donors were irrefutably dialing back giving in favor of more urgent needs.

Sixty-seven percent of respondents said that giving from “smaller individual donors through events (including virtual events)” were either decreasing (34%) or staying “about the same” (33%). Fifty-seven percent of respondents said that giving from “large individual donors” were either decreasing (19%) or staying “about the same” (38%).

All told, 45% of respondents said they’ve noticed reduced funder interest and resources as a result of the current shifting of funds for COVID and racial justice.

One fundraiser summed up the situation best: “The arts and culture sector was greatly impacted by COVID shutdowns and mandates for reduced capacity, but local philanthropic resources have been very focused on basic needs (food, shelter, social services), leaving arts and culture organizations to fend for themselves.”

Two months later, the TRG Arts/Purple Seven report suggests that donors’ attention remains firmly fixed on organizations focused on critical public health issues.

Surviving the Summer

Donors’ preference for organizations focused on “basic needs” doesn’t entirely explain their tepid support for performing arts organizations. Eight months into what Appel calls an “18-month intense stress test,” some may have concluded that they’re throwing good money at bad. “I think a lot of individual donors are rightly asking, ‘Which of these organizations are going to survive?’” Appel said.

Fundraisers worried about this prospect in the early days of the pandemic. In retrospect, the worst case didn’t come to pass on a vast and disruptive scale. Donors’ first priority was simply getting money out the door as fast as possible—a course of action no doubt facilitated by the knowledge that Uncle Sam and national arts foundations were stepping up in a big way.

As of mid-July, the Paycheck Protection Program doled out $1.8 billion to nonprofit arts organizations. Around the same time, the New York Community Trust’s NYC COVID-19 Response & Impact Fund, flush with donations from Bloomberg Philanthropies, the Ford Foundation and the Andrew W. Mellon Foundation, announced that it had raised more than $110 million for emergency grants and zero-interest loans to 768 New York City-based organizations. The trust, Appel told me, “gave us a lifeline. They asked us what we needed, we told them, and they fully funded our request. That early support was critical.”

Appel went on to oversee the Vineyard Theatre’s Campaign for Right Now, which raised over $140,000, plus $100,000 in matching funds by the end of May. Three months later, Theatre of the Oppressed NYC created a COVID-19 relief fund for its actors using emergency grants and converted program funds. “The only reason this relief fund became possible was because there were enough funders that provided us with general operating support,” Executive Director Meggan Gomez told me.

“They Want a Safe Bet”

Fast-forward to mid-November. The “mood in the room” has changed. The Paycheck Protection Program is kaput. The next round of federal coronavirus relief is on hold until 2021. Audiences that once embraced virtual performances now have, to quote Appel, “Zoom fatigue.” Organizations are staring down a winter of lockdowns, shuttered doors and mounting financial losses.

Donors see all of this—and they’re getting antsy.

“We’ve been participating in these weekly calls since the pandemic began with TRG Arts, and what we’re finding is that major donors want to know what our financial situation is,” said Appel, who previously served as managing director at Cutting Ball Theater in San Francisco, director of individual giving at Dance Theater Workshop in New York City, and assistant director of the Annual Fund at Wesleyan University.

Appel told me, “It is fair if you are making a major gift to ask about the organization’s financials, but to also ask, ‘Do you have a plan? How are you going to continue to fulfill your mission?’” That said, she has been getting some “requests for detail that is usually reserved for my finance committee or board of directors.”

Heather Hitchens, president and CEO of American Theatre Wing, home of the Jonathan Larson Grants, Andrew Lloyd Webber Initiative and National Theatre Co. Grants, came to a similar conclusion. Donors, she told me, “need resources to get a more sophisticated decision. They want a safe bet.”

Silver Linings

If there’s any good news to be gleaned from the TRG Arts/Purple Seven survey, it’s that organizations can still go back to the well and ask critical “loyal donors” to supplement their previous gifts before the end of the year. “The large decreases in average gift size indicate where marketing efforts need to be focused in these final months of 2020,” said TRG chief executive Jill Robinson.

Vineyard Theatre’s Appel agrees. “We want people who are loyalists to invest in us—that’s our best shot,” she said. “It’s not going to be somebody who’s never heard of us. It’s going to be people who are most familiar with our mission and who believe in us.”

Fundraisers can also pin their hopes on the fact that “end-of-year giving campaigns typically result in large percentages of overall gift revenue for the year,” said TRG’s Robinson. “This year, they can also provide an opportunity to engage donors by sharing the journey arts organizations have been on to stay resilient during COVID-19 and how important donor support is to the success of resiliency strategies.”

And therein lies the challenge. Eight months into the pandemic, every performing arts organization has been on the same perilous journey. Donors already know this. All the while, they’re being deluged by public health organizations making a similarly compelling case for ongoing support and continued resiliency. How can performing arts fundraisers differentiate themselves from the crowd, or at the very least, make the most compelling pitch possible?

What Are People Getting?

To answer this question, fundraisers need to remind themselves that donors tend to approach giving differently than institutional grantmakers. The foundations spearheading the NYC COVID-19 Response & Impact Fund “understand the importance of the longevity of the institution and the messaging of, ‘If you want us to be here in a year, we need your support right now,’” Appel said.

To her point, in May, the Howard Gilman Foundation gave the Vineyard Theatre its annual $75,000 gift earmarked for general operating support. In October, the foundation provided a second $75,000 gift. It was around this time that I spoke with Anna Campbell, senior program officer at the foundation, who told me that the funder’s commitment to general operating support is predicated on the idea that organizations can “round out the edges” by “using the money as needed, particularly in concert with other funders.”

On the other hand, the kinds of donors that asked Appel for the Vineyard Theatre’s granular financial data often make their support contingent on an organization’s plan to ensure its longevity.

Performing arts patrons also approach giving from a more transaction-oriented mindset. Some have a well-documented penchant for putting their names on buildings, performance halls, and yes, water fountains. Others, particularly those in the dance field, want to “come to rehearsal and know the artists,” says Alejandra Duque Cifuentes, executive director of the advocacy group and regrantor Dance/NYC.

This relationship, Duque Cifuentes told me, is “about people in time and in space, it’s about experience and community, and not a product.” The good news is that once converted, these donors tend to stick with dance organizations for the long haul. The bad news is that these relationships were incredibly difficult to cultivate before a global pandemic hit.

In other words, performing arts fundraisers face a heavier lift than their colleagues operating elsewhere. As Appel noted, donors “know what they’re giving to when they support a food bank.” For her, the challenge boils down to two questions: “Where are you giving back and what are people getting?”

Appel told me her development team plans to highlight the theatre’s upcoming projects and an array of COVID-era initiatives, including “watch parties,” readings and interviews with artists, and “Lessons in Survival,” a streaming project that re-enacts verbatim interviews with James Baldwin, Toni Morrison and other Black artists and activists to explore how African-Americans have endured centuries of racism and trauma.

“We’re trying to find ways to connect with people and make sure people know we’re here, what we’re making, we want them to be part of it, and that we need them,” Appel said. The goal, she said, is creating something that donors are unlikely to get while reading “The Shining” in a darkened room—a “warm, fuzzy feeling of giving to something they know is important.”