Go Big or Go Home: Museums as the Vanguard of Nonprofit Fundraising

Once we become enamored with a hip catchphrase, it can be hard to let go. Take the "Bilbao effect," for example. It's a term named for the opening of the Guggenheim Museum in Bilbao in northern Spain in 1997, in which an imaginatively designed museum turned the city around.

It seems to be all the rage among large museums nowadays, so much so that it makes us worry somewhat that these large institutions may be biting off more than they can chew. After all, new and innovative museums or renovations cost a lot of money to build and maintain, right?

Except that it seems like everyone but the museums in question are bothered by this. And if recent data on museums' fundraising prowess is any indication, they shouldn't be too worried—at least for the time being.

An annual tally of American nonprofits' fundraising efforts by the Chronicle of Philanthropy showed an uptick for the arts—of the 400 profiled organizations, 15 came from the arts and culture sector, up from 13 in 2014. This may not initially sound like a particularly revelatory finding, but it fits into a larger narrative.

Giving USA recently released its report on 2014 charitable foundations and found a similar trend. While giving to the arts represented a small piece of the overall pie at 4.8 percent of total philanthropic giving, the total amount—at $17.2 billion—was a record high. What's more, donations to arts and culture rose 9.2 percent over the previous year, representing the fastest growing sector (with the environment close behind at 7 percent). 

Which brings us back to the former survey. Of the fifteen arts-related organizations listed in the survey, a dozen were museums and three were performing arts organizations. Collectively, they raised a total of $1.3 billion. Coming in at number 83 on the list was New York's Metropolitan Museum of Art, which raked in $283.1 million. San Francisco's Museum of Modern Art hauled in $238.5 million, coming at number 104.

Arts organizations that eclipsed the $100 million fundraising threshold include:

• Smithsonian Institution—$193.4 million
• The Whitney Museum of American Art—$140.1 million
• New York's Metropolitan Opera—$128.8 million
• New York's Museum of Modern Art—$121.4 million

(In case you were wondering, the nation's biggest charity was United Way Worldwide, at $3.8 billion.)

This brings us back to the "Bilbao Effect." It should come as no surprise that many of these organizations made the list because they're raising money to pay for large capital projects. The most successful fundraiser, the Met, infamously received a $65 million check from David Koch for its David H. Koch Plaza, while the No.2, San Francisco's Museum of Modern Art, is in the midst of a $305 million expansion that kicked off in 2012.

We rarely draw analogies between the for-profit and nonprofit world, but when we consider all of this evidence, we can't help but think of that famous adage, with a slight tweak: "You have to spend money to raise money."