Philanthropy and the Arts – What are the Odds?
€8,919,000 is the total amount of Private Investment (sponsorship and donations) raised by 177 Clients of the Arts Council Ireland in 2014. That’s according to the 2into3 Private Sector Investment into the Arts Report: 2016, commissioned by the Arts Council. It is, to my knowledge, the latest such report available For clarity, the concept of “Private Investment” in this context is composed of Sponsorship (€3.609 million) and Voluntary Income (€5.31 million) , which in turn is composed of gifts, donations, friends schemes, bequests etc. That’s an average – in the sense of an arithmetic mean – of just over €50,000 per client. Except that – anecdotally – very, very few organisations raised anything close to €50,000 private investment in that year. So, the question is, even with the best fundraising training in the world, what are the factors affecting my chances of raising €50K in 2019? One of the functions of reports is to inform action at an organisational and policy level. For example, if I set a target for my organisation of €50k in Private Investment for 2019 I need some way to calculate the probability of actually raising it. Its not enough to say that I need to hire a fundraiser, or I need to have a fundraising strategy (these things are important), I need to know that even if I do these things what are the chances of making a return on the investment in time and money. If I don’t know the probability I’m simply making a leap of faith, a kind of magical thinking that says because I am fundraising ready I will be able to raise funds. This is a bit like saying I can swim because I’m wearing speedos – it doesn’t matter if there’s any water in the pool. On the other hand, if I’m a policy maker – at arts council, local authority or department level – I need to identify trends and characteristics so that I can take policy and legislative action to correct for potential negative trends and support positive trends. I need to take actions that keep a flow of water into the pool. The 2into3 report is very comprehensive and primarily descriptive. It lays out data but performs no in-depth analysis or inference from that data, and consequently some vital stats are absent. For example, although it tells us the total amount it doesn’t give us a mean or a mode or a median; it doesn’t say what the distribution is like and it doesn’t offer any probabilities. Which is what I need if I’m to make an informed decision. However, we can get a sense of the underlying realities. According to the report, organisations with a turnover of €800,000 or more attracted €5.434 million or 61.% of the total; organisations with a turnover between €300,000 and €800,000 captured €2.225 million or 25% and organisations with a turnover less than €300,000 captured €1.260 million or 14%. The arts council have more clients with turnovers of €300,000 or less than they have clients with turnovers of €800,000 or more. So we can speculate that the small number of clients with the high turnovers are attracting 61% of the private investment, while the large number of clients with turnovers of €300,000 or less are attracting only 14%. Which of course means that in cash terms the large clients are doing far, far better than the smaller clients. Not only are they attracting more money but there are fewer of them sharing it. To put it another way, we could argue that the amount of private investment I have access to is directly related to the current turnover of my organisation, and the number of organisations of similar size. These become the first two variables in my evaluation. There are two other fascinating data presentations in this report: the percentage by artform and by County: It’s clear that there are significant relationships between money raised, geographical location and art form. Just to be a bit of a devils advocate lets imagine that I work for an organisation working in YPCE, with a turnover of less than €300,000 based in Longford; what is the actual size of the money market I am competing in? Total National Private Investment is €8,919,000, Longford gets 0.2% of that or €17,838, YPCE gets 3% so the total available money is probably about €535.14… Given these facts, what is the most effective fundraising strategy if i want to raise €50K in private investment: have a turnover in excess of €800,000, be based ideally in Dublin but if not then in Galway, and work in theatre production or festivals. Any other choice means that you are competing for about 5% of the available funds (depending on art form and location).