Dept. Of Confusing Data: If You Build It, They Will Come (But Donations Will Drop)

Two of the two hottest trends in the nonprofit arts space are boosting audience engagement and measuring performance. Grantmakers want organizations to reach new demographics and quantifiably track their efforts. They want the most bang for their buck.

New research, however, suggests that if success is determined by more donor dollars, those strategies may not be particularly effective.

A new study of arts and cultural nonprofit organizations from the University of Missouri titled Do Donors Care About Results? analyzed data from the Cultural Data Project (CDP) and was published in Public Performance and Management Review. Researchers found no evidence that donors are influenced by high attendance numbers; in fact, it may be just the opposite, since higher attendance is linked to higher earned revenue.

Now, the title of this post calls the findings "confusing," but if you think it through, the idea that higher attendance leads to reduced donations actually shouldn't come as too much of a surprise. We see this phenomenon play out in our daily lives all the time. Here's an example.

Let's say your next door neighbors—let's call them the Nelsons—invite you over for tuna casserole. You walk into their house and see they have a new flat screen television, a fancy couch, and a host of futuristic Wi-Fi-enabled kitchen appliances. Their daughter Lisa is going to Brown. There's a new BMW in the driveway.

After dinner you return home and immediately say to your spouse, "Boy... looks like the Nelsons are doing very well for themselves. And the casserole was terrible." Of course, the Nelsons may very well be living beyond their means, but if so, they do a good job of hiding it. What matters, here, is perceptions, and according to researchers, this is precisely why donors may keep their checkbooks closed if they see a standing-room-only performance at a nonprofit theater. 

"A plausible explanation for our findings is that better performance—for example, strong attendance—creates an image of success," said Cleopatra Charles, Kim's co-author and an associate professor in the School of Public Affairs and Administration at Rutgers University-Newark. "This can make the organization appear less needy, which may lead to donors being less inclined to support them."

It's also important to parse the semantics here a bit. Sure, donors may be less inclined to cut a check when they see a full house, but it depends who is sitting in those seats. Let's say a donor attends a sold-out performance at the Metropolitan Opera. He looks around and sees the usual well-heeled, deep-pocketed attendees. He instinctively knows the opera probably isn't hurting for cash. They aren't "needy." And so he feels less inclined to donate.

But what if a donor attended, say, an opera performance where the company has made a conscious effort to attract younger, more economically disadvantaged audiences? She may look at the full theater and say, "Wow, this is refreshing. Look at all these new faces." Given the organization's success in reaching new demographics she may very well be inclined to cut that check. In other words—spoiler alert!—every donor is different.

Or while we're at it, let's look at it yet another way. The study found "no evidence" that donors are influenced by high attendance numbers. So conversely speaking, would they be more inclined to write a check if they attended an amateurish performance put on by an poorly-run organization hemorrhaging cash in a sparsely attended auditorium? That's a stretch.

Our point, here, is simply to say that terms like "attendance," "audience," and of course "donors" are fluid and relative. For example, we'd argue that recipients of, say, Bloomberg's Philanthropies' Arts Innovation and Management Program would respectfully disagree with the assessement that donors "don't care" about results. Michael Bloomberg sifts through more metrics before breakfast than most donors do in a week.

But these findings should nonetheless give directors something to chew on. The cult of performance measurement may very well be the philanthropic dog that didn't bark. Not only are these metrics oftentimes more subjective than meets the eye, but at least according to this study, they don't translate into more revenue for the organization:

We found that arts nonprofits that perform better according to philanthropic standards are not necessarily rewarded with more contributions from individual donors.

And so we'd like to call for a performance measurement detente. Let's lay down our spreadsheets, channel our inner Herb Alpert, and live our lives solely based on feel. If only for a day or two.

Is that too much to ask?