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Strategic Planning in the Arts: A Practical Guide
Development Planning The Giving Cycle
Arts organizations must develop careful and coordinated plans for maximizing their contributed revenue from foundations, corporations, government agencies and individuals. To make the transition from small to large, arts organizations need to develop an individual giving program that will support their growth to the next level.
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The impact of marketing techniques on fund-raising results can be remarkable. In fact, environmental analysis suggests that the techniques needed to support fund-raising efforts will become even more sophisticated in the future. With government funds subject to sudden, drastic cuts for economic and political reasons, foundation support limited by investment gains, corporate underwriting moving increasingly to one-time sponsorships, and the newly wealthy looking for increased visibility for their gifts, competition among arts organizations for support, even from the most loyal donors, will grow more intense.
The effect of this transition in giving philosophies by the four major types of donors - government agencies, foundations, corporations, and individuals - on an arts organization depends on its stage of development. The normative model of institutional growth holds important insight for the development plan.
Typically, when an arts organization is founded, it has the financial support of one or several individuals who care about the work of the artistic director. Frequently, artistic directors themselves, or their families, are the principal sponsors. This reliance on individual funders is not required for arts organizations that are founded by an arts superstar or by a high-powered Board. For most young artists, however, corporate, foundation and government funding is not available. In fact, most government agencies require at least three years of activity before an arts organization qualifies for a grant.
A start-up organization will usually rely on the initial circle of individual donors for several years; ideally, these charter patrons will recruit their friends and associates and the base of support will grow. As the organization builds a reputation for good work, foundation grants may begin to materialize, particularly if the individual donors, who typically form the organization's first Board of Directors, have any high-level contacts at appropriate foundations.
Corporate support, in small amounts, may also be received if the organization has access to corporate executives. Greater support may be available if the organization builds a reputation for excellence and addresses the audience that a corporation is interested in reaching. As noted in the preceding chapters, building visibility is a key to fund-raising success throughout the entire life cycle of the organization.
Eventually, government support will be available and when the company is four to ten years old all forms of giving are "kicking in" and the organization enjoys a rapid level of growth. During this period, earned income growth typically matches the expansion of the development effort.
At some point, however, growth invariably begins to slow. Many organizations continue to rely on the same individual and institutional donors who saw them through the growth phase. Frequently these donors, including the Board, begin to feel "tapped out" and frustrated: the growth of the organization frequently outpaces the growth in their giving, making each year's gift count less and less. If the artistic potential of the organization isn't great enough to support a larger organization and the administration is not strong enough to manage in the changing, higher stakes environment, further growth becomes substantially more difficult to achieve. (A very few arts organizations grow on the basis of unusual earned income potential. The Alvin Ailey organization, for example, earns over five million dollars each year, over seventy percent of its total budget. Yet even these organizations must build the level of contributed income to achieve consistent growth.)
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