Transcript The Art of Leadership in Philanthropy

Philanthropy in the Arts
Symphony Services International
Orchestras Summit
November 2011
“Apart from the ballot box, philanthropy presents
the one opportunity the individual has to express [a]
meaningful choice over the direction in which our
society will progress.”
George Kirstein
Philanthropy in Context
Growth in individual giving
There has been a huge rise in philanthropic donations over the past 2 decades.
In 2008-9 growth was checked by the global financial crisis. “For the first time in well over
a decade the number of taxpayers claiming tax-deductible donations increased, but the
amount of these donations decreased.”
Total gifts claimed
Average gift
% taxpayers claiming gift
deductions
1992-3
2001-2
2007-8
2008-9
$439m
$868m
$2.35bn
$2.09bn
$140
$239
$523.10
$450.05
33.70%
35%
35.47%
Source: Giving Australia, 2005 and Current Issues Information Sheet 2011/12, Australian Centre of
Philanthropy and Nonprofit Studies, QUT
Giving to the Arts in Australia
Giving Australia recorded an increase in giving to the arts and culture between 1997 and
2004 although it represented the smallest percentage of total giving for that period.
Sector
Arts or cultural associations
Community or welfare services
Education
Environmental or animal welfare groups
Health (inc medical research)
Sporting & recreational groups
Religious institutions
International aid
Other
Total
Total value
% of total value
1997
2004
0.7
2.3
15.8
12.8
15.1
6.6
2.2
4.8
11.9
14.2
8.1
3.7
34.1
36.1
10.3
13.3
1.8
6.2
100
100
$3 billion
$5.7 billion
Source: Giving Australia, 2005
However as the Major Performing Arts companies have invested in building relationships
and fundraising over the past decade, they have begun to reap the rewards.
Source: AMPAG Tracking changes in corporate sponsorship and private donations 2011
Today private giving contributes almost as much as corporate sponsorship to MPAB
companies. In some cases, it has already overtaken corporate support.
This is no coincidence.
Major performing arts companies sources of revenue 2010
Events (net) $2.6m / 5%
Private giving $25.2m / 46%
Sponsorships $26.8m / 49%
Source: AMPAG Tracking changes in corporate sponsorship and private donations 2011
The rise of the Private Ancillary Fund
Introduced by Commonwealth Government in 2001 as Prescribed Private Funds (redefined as Private Ancillary Funds in 2009), these tax vehicles have proved attractive to
high net worth individuals.
By 31 October 2009 there were 769 PPFs in total. 170 were approved in 2007 alone.
Number of Approved PAFs
900
800
Accumulated PAFs
New PAFs
700
600
500
400
300
200
100
0
2001
2002
2003
2004
2005
:
2006
2007
2008
Source: J B Were Philanthropic Services, Australian Tax Office
The arts fares particularly well from this group with a total of $63.2m distributed to
Cultural Organisations between 2002-2008 (second only to Welfare).
In 2007-8 Cultural Organisations represented the highest percentage of total distributions.
2007-2008 PAF Distributions
Health 5%
Education 7%
Other 17%
Research 1%
Welfare 26%
Cultural Organisations 33%
Environment 6%
International Affairs 5%
Source: J B Were Philanthropic Services, Australian Tax Office
What conclusions can we draw?
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There has been huge growth in giving by individuals to all causes over
the last two decades
•
Individuals give substantially more than corporates
•
There is a relationship between income / wealth and giving
•
The arts and culture are popular among potential major donor groups
•
Investment in building relationships works!
What’s next?
1.
We need to think harder about ourselves as a cause
2.
We must make development a whole-of-organisation commitment
3.
We must work at both ends of the pyramid:
•
At the base to build the pipeline
•
At the top to generate major gifts
4.
We absolutely must be better at major donor solicitation
5.
Then we can think about endowment
It takes a village to raise…
a major gift
Symphony Services International
Orchestras Summit
November 2011
Gift types
Gift type
When
Relative size
Fundraising
methods
Regular
Calendar
1X
Special
Needs of
organisation
Ultimate
Life
circumstances
of donor
Ref: Pearl Veenema
Emphasis:
Preparing vs
Asking
Fundraising
program type
Orientation
Speculative
(focus on asking
for gifts by $)
Annual appeal
(DM/telethon)
Project
5X to 10X
Project/Campaign
(requires prior
involvement)
Major gift or
capital
campaign
Project
1,000X to
10,000X
Nurturing
(requires
willingness to
commit/invest)
Ongoing Major
Gift Program
Prospect
Questions a major donor asks himself
•
•
•
•
•
Do I have a compelling, driving belief that this organisation
is singularly important?
Is it well run or will they squander my money?
Who’s involved that I know and/or respect?
What, precisely, do they want money for?
What difference will my gift make?
Critical Success Factors
Vision and case for
support
A concise, compelling vision and case for support which will enthuse and
excite potential donors
A convincing organisational strategy
Strong internal
leadership
Strong internal leadership capable of inspiring, responding to and
managing change, and of interacting credibly with both internal and
external constituencies
Committed external
leadership
Strong external leadership – volunteers and ambassadors who provide
external credibility and access to new networks
Prospects & programs
Ability to identify a pool or network or potential sponsors/donors who
share the organisation’s aims and vision and have a capacity to give
Mechanisms to engage and involve them in the life of the organisation and
to reward them for their support and involvement
Skills & resources
Professional fundraising expertise and adequate resources focused on
maximum return on investment
A cogent and accessible set of data on current and prospective donor
communities
Effective performance measures
Group 1
Do I have a compelling, driving belief that this
organisation is singularly important?
•
How can we demonstrate to this donor that we matter and
we have a unique contribution to make?
•
What role can the following roles and functions play?
•
•
•
•
•
Board
CEO
Marketing/Communications
Artists
Other donors
Group 2
Is it well run or will they squander my money?
•
How can we demonstrate to this donor that we will
spend their money wisely and achieve our (and their)
objectives?
•
What role can the following roles and functions play?
•
•
•
•
•
Board
CEO
Marketing/Communications
Artists
Other donors
Group 3
Who’s involved that I know and/or respect?
•
How can we create or capitalise on a peer group network
that will convince this donor?
•
What role can the following roles and functions play?
•
•
•
•
•
Board
CEO
Marketing/Communications
Artists
Other donors
Group 4
What, precisely, do they want money for?
•
How do we go about developing and articulating the
case for support?
•
What role can the following roles and functions play?
•
•
•
•
•
Board
CEO
Marketing/Communications
Artists
Other donors
Group 5
What impact will my gift make?
•
How do we go about developing the right ask for this
prospect? What should they expect in return?
•
What role can the following roles and functions play?
•
•
•
•
•
Board
CEO
Marketing/Communications
Artists
Other donors
It takes a village to raise…
a major gift
Symphony Services International
Orchestras Summit
November 2011
Leadership Roles &
Responsibilities
The CEO, Executives and other organisational
leaders should commit the necessary time, energy
and resources to create an environment where
philanthropy can flourish.
Leadership Roles & Responsibilities
Executive
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Secure the active support
of all departments
Set targets, projects and
resources
Engage the Board
Engage the involvement of
external senior ‘volunteers’
Board
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Set the tone and articulate
the vision
Raise donors’ sights and
encourage ‘stretch’ giving
Enlist senior volunteers
and donors by example
Guarantee effective
stewardship of donations
CEO/General Manager
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Public face of philanthropy
Understand and articulate the impact of philanthropy
Inspire the Board, volunteers and staff
Ensure unity among staff
Make the ask
Close negotiations
Artistic Director
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Drive the vision and case for support
Make time available to spend with prospects and
donors
Inspire volunteers and donors
Feed back prospect information to Development
team
Philanthropy Director
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Devise, articulate and implement strategy
Manage the organisation and performance of
development/fundraising process
Educate Executive and Board
Manage volunteers
Ask
Negotiate