HomeMONEY MATTERS: Financial Development Like the Pros

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When I ventured into the field of Arts Administration, I had very specific interests. When it came to raising money, I thought “ew.” I didn’t want the boring job of accounting or payroll. So when the topic of development came up (and for this article, I am referring to financial development), I immediately answered that I wasn’t interested.

Looking back, I realize that I had a horrid misunderstanding of what development in an arts organization actually is. Filing forms and taxes with the government, handling bills and payroll – that is the job of a finance specialist. Now to backtrack a bit and defend the area of finance, I now know that it’s not necessarily boring, I just don’t have a background or education in finance (and furthermore, I suggest every organization have an individual that specializes in finance).

But for now, we’re talking about development. I will not venture into the areas of finance or budgeting, as those are so dependent on the organization itself.  We’re just talking strictly about bringing money into your organization. The key areas we will focus on are: individual contributions, corporate sponsorships, grants, special events, and fundraising. There is, of course, always the area of ticket income, but I will elaborate on that in a future article surrounding audience development.

Before I start, I will say this: I find that typical forms of development found within organizations such as opera companies and symphony orchestras are uncommon in contemporary a cappella. I have a few guesses as to why – it’s a fairly recent art form with a younger group of participants, and many of us got our start in high school or college groups, where (what I call) “Girl Scout” fundraisers are common and accepted. As I am going through these suggestions, you may think “but we’re not a 70-person orchestra.” But if you are an established performing arts organization providing artistic performances and/or educational outreach to your community, then you need funds that you will not receive through typical fundraisers. Furthermore, there are people and organizations that want to give you money if you’re creating an impact on the community or if they simply identify with your mission and/or art form. With the following suggestions, it is important that you analyze what is available in your community, what your ensemble does for the community, and exactly what you need. These are all long processes that must be planned and executed carefully with frequent evaluation and adaptation.

INDIVIDUAL CONTRIBUTIONS

I cannot stress enough how important it is that arts organizations begin to make individual contributions the greatest focus in their development initiatives.  Grant resources have become scarce and fundraisers just don’t raise enough money. Arts organizations that do their research are consistently finding that individual contributions (donations) are the way to go. For this article, I will be discussing the recruitment of donors for an organization’s annual fund – if you want more information on planned giving and/or endowment campaigns, you can contact me directly.

So whom do you target and where do you start? Later, I will write another article about audience development in which I will discuss transitioning single-ticket buyers into subscribers. These subscribers, especially the active ones, will make up your pool of potential donors. From there, it is up to you to craft relationships.

Even multi-million dollar performing arts organizations understand the careful crafting of donor relationships. As you review your subscribers, consider those that commonly ask how they can help the organization and/or administrative staff, those that come frequently, those that often bring a group of people along with them. It doesn’t necessarily have to be only the wealthiest of your patrons, either.

With this list drafted, I suggest you consider which member of your administration (whether it be an outside administration or administration within the group) would mesh well with the personality of a potential donor. As such, divide up the donors among the administration in a fitting way. Never should you approach these people and directly ask for money on the first meeting. The way I’ll approach a potential donor is by first making contact at some of the performances I see the person at. After a couple, I’ll ask the person to something informal – not dinner, but often coffee or lunch. During these meetings – and there will always be several of them for each potential donor – I’ll actually get to know the individual and allow him/her to know me better. Eventually, I will begin to talk up the organization and everything it has to offer the community. When I feel the time is right and the “ask” is natural, I won’t beat around the bush at that point – I’ll come out and say “Listen, you’ve been such a great patron for (this organization) for a while and we’d love for you to get more involved – is there any chance you’d be willing to contribute financially to our annual fund?” This approach builds an honest relationship (as you should – because even if the person doesn’t donate, he/she is still a loyal subscriber) and approaches the matter in a personable way.

At any time you should be able to speak to what that individual’s donation would go toward, and what the donor could receive as perks – invitation to special events, recognition in the program book, tangible rewards, private performances, etc. Often, donors donate because they want to, not for recognition; however, some do want the recognition, so find out what those individuals want and, if it’s reasonable, provide it. After that person has donated, continue to build that relationship – send gifts or cards on birthdays and anniversaries, check in with the family, and ultimately ensure that this new donor stays a donor.

This is a hit-the-ground-running basic on cultivating donor relationships – it’s difficult to write a lesson because every donor and organization and situation is completely different. But use this information as a starting point and cater it to your needs.

CORPORATE SPONSORSHIPS

Corporate sponsorships are cultivated in a way similar to recruiting donors. You must focus on the wants and needs of the community, discover what your organization can give to businesses, and research how businesses can help your a cappella ensemble.

First, to form a pool of potential corporate sponsors, make a list of companies in your area that are known for giving back to the arts and/or supporting education (or some other field your group is active within). At the top of the list should be any companies with which you already have a connection. Great targets are medical offices, law firms, hotels, car companies, and chain franchises. They do not always necessarily need to be companies with representation at your performances.

This may be a job better suited for the executive director of an ensemble, as opposed to matching up personality types. A luncheon or coffee meeting should be set up in advance. Before meeting with the potential corporate sponsor, you should make sure you know your way around any speaking point – upcoming repertoire, educational outreach activities, social activities, development plans, and especially, economic impact. Many companies want to know that they’re giving to an organization that does financial good for the community and, potentially, for them. Additionally, they may want to know what the income levels of your audience are, so they know that investing in your organization is an investment right back into themselves. It may behoove you to do an economic impact study to better understand the financial demographics of your audience and the tourism and income your organization brings to your county. For more information on economic impact studies, please feel free to contact me.

You should compile information on the following in a presentation booklet for the meeting: mission and vision, long range plan, marketing initiatives, development initiatives, education initiatives, community engagement initiatives, audience development initiatives, economic impact, and any other necessary information. Additionally, you should include a nice perk package for corporate sponsors – especially since many of them may not be that interested in the concerts themselves. Just some of these can include: free advertisement space in your program, invitations to special events, series subscriptions with reserved seats and/or parking spaces, and so on.

With these meetings, you only have one opportunity. You must be prepared on all your speaking points, do not be afraid to ask the potential sponsor what aspect of your ensemble his/her company is interested in getting involved with, and have a well-prepared presentation booklet. You also must not be shy to simply ask if they would be willing to jump on board as a corporate sponsor.

Finally, to clarify, corporate sponsors do not simply donate to your annual fund. They typically sponsor a specific project. For instance, I’ve seen corporations sponsor concerts, guest artists, educational outreach activities, annual recognition dinners for donors, and so on. As such, you easily get the finances you need for a certain activity donated by a corporate sponsor in exchange for some easy perks.

GRANTS

I’m not going to say much on this area, as each grant application is different. Mostly, I simply suggest that your ensemble researches a good variety of grant resources in the community, and/or corporate grants that sponsor arts initiatives. Your local and state arts councils are a great place to start. Look at foundations in your area that support the arts or some of your initiatives. Also look for corporate grants. For instance, Verizon and Target provide arts-related grants.

Also, I reiterate that you should conduct an economic impact study. Most grant applications will be more related to your education initiatives, and some related to your audience development initiatives; some, however, will want to know how you improve your local economy.

SPECIAL EVENTS

This is a huge area that consists of “ask” events (in which you ask potential donors for money), recognition events for donors, silent auctions, and so on. If you have a specific event in mind that you want suggestions for, please contact me. I, however, would like to teach you all a method of recruiting multi-year pledge donors. This method I learned through the book and DVD by Terry Axelrod called Raising More Money. It’s a fantastic source of information and can be found at www.benevon.com.

This method is used to recruit people that will promise to donate a certain amount every year for 5 years (or perhaps individuals that will donate one big amount to your endowment). It must be planned carefully, and it will be close to a full year before you can hold an event in which you actually ask people for money.

First, you want to let patrons that are active in the organization - including donors – come to see your inner workings. You should do this with a Point-of-Entry (POE) Event. These POE events are not at all to request money, but to educate others on your organization. You can provide facts, or Facts 101 (basic, easy to understand, positive facts) about the group, and then provide some sort of emotional hook. For instance, if you provide education activities for students at a low-income school, you may want to talk that up. This is because donors want to donate based on their emotions and need facts to justify. For an a cappella ensemble, you may want to invite them to a dress rehearsal, then join together nearby for appetizers, drinks, and discussion. This discussion is when you should drop the Facts 101 and emotional hook – ideally, by a member of the board or an active donor, not a member of the administration. Also, you’ll want to gain names by intravenous permission – begin to build a relationship with each attendee and, when the time is right, ask for their contact information. Do not trick them with the “business card in the bowl” tactic – they know what you’re up to.

Next, the executive director should follow up with each attendee that provided contact information. Five bases should be covered in these phone calls. First, thank the individual for attending. Second, ask what he/she thought of it – what was good or could be improved. Third, just be quiet and listen to the responses. Fourth, ask if there is anyway he/she could see himself/herself getting involved with the organization (do not ask if he/she can donate, just listen). Finally, ask if there is anyone else he/she thinks would be interested in attending your next POE event.

This series of following up becomes the “Cultivation Highway.” Meet with people in person if need be, get them involved in future POE events, and get attendees to come again and bring friends. As your group holds more of these POE events, keep an eye out for those that seem very interested and involved. Over the course of the year, ask them if they’d like to be a “table captain” at your ask event (obviously, have a name for it, don’t call it an ask event). These captains will be responsible for recruiting other people potentially interested in the organization to join them for a breakfast or lunch (not dinner – keep it somewhat informal). After that, captains will only need to hand out a form to their table-mates at the event.

Eventually, it will come to be time for the ask event. This should be a free, one-hour breakfast or lunch. For a small organization such as an a cappella group, I would aim for maybe 5 table captains and ask them to recruit 6 people each (but this may also depend on your current donor/subscriber base and size of your community). The event should be greatly orchestrated. Your ensemble should be performing as people enter and are seated, and as they eat. Volunteers (perhaps with pins) should be staffing a name tag table and assisting people to their seats, perhaps passing our pins to attendees to thank them for coming. Each placement at the tables should have reading materials such as a pamphlet highlighting the initiatives of your organization – invite attendees to read as they eat. The event should start with some welcomes and thank yous from, again, the board of directors president or a donor prominent in the community – someone attendees can relate to and trust. An approximately 7-minute long video could then be shown to provide an emotional hook. It should aim to bring the audience to tears three times. A visionary leader, such as those mentioned just prior, should give an approximately 7 minute speech about the past of the organization, the present, and the future aims – paint a picture that the organization knows what it is doing but needs help to achieve all it wants to do for the community. Then, someone impacted by the organization – a music teacher that your organization assisted or a student influenced by your group, should give a brief testimonial. Finally, the ask should come from, again, a person with great credibility, enthusiasm, and who is connected to the attendees.  The opportunity to make a multi-year pledge should be presented as an opportunity to become part of an important society (in the video, she discusses a low-income elementary school, and the society was called the “Sponsor-a-Student Society”). At this time, the speaker should ask the table captains to hand out pledge cards. These pledge cards can have options – for an a cappella group, I would suggest options such as: $500/year for 5 years, $2,500/year for 5 years, $5,000/year for 5 years, $10,000 to the endowment (or $2,000/year for 5 years). You can have fill-in-the-blank options as well, such as “$_____ for ______ years” or “please contact me at _________________.” The last two are important because in an economy like this and for arts organizations, even $100 per year for 5 years can come in handy. Your speaker should lead the attendees through this card and encourage them to donate. They can then slip their cards back into the envelope with the table captain, who will later give it to the executive director.

After the ask event, the executive director should again follow up with the attendees with the same five key points as the previous follow up. Continue to cultivate relationships, recruit more table captains, and ask those that were engaged to invite more friends to your POE events.  This process has been known to generate hundreds of thousands of dollars within hours for arts organizations, churches, schools, and so on across the U.S.

FUNDRAISERS

You may have guessed by now that I personally am not super fond of fundraisers. They take significantly more time than recruiting donors and corporate sponsors, but result in far less money. Also, fundraisers depend on all individuals participating – many of your members may have only joined to sing and perform, expecting them to sell things is not appropriate. With a cappella groups, however, there are some exceptions. For one, CDs and digital downloads are necessary more because it promotes the sound of the ensemble, and because we love to explore what sounds the human voice can create and impress the world. Memorabilia such as t-shirts work too because of our culture (a cappella is so unique because it takes the very precise and musical art form of choral singing and pairs it with a popular music culture). Kickstarters work for some, but I rarely see it raise as much money as a simple corporate sponsorship, nor does it build a relationship with organizations or companies in the community. Ultimately, I only suggest that ensembles sell CDs or memorabilia, generally just products that help to promote the organization and its sound. Selling food or jewelry or getting 10% from meals eaten at Moe’s with a certain coupon just doesn’t quite do the trick. Use your own judgment.

Of course, financial development is such an extensive field. As long as I’ve gone on about this, I could go on for hours more. It’s extremely difficult to give a lesson on financial development in one article, so please use this for reference, but do your research before asking people for money or spending your own money on something you may not be fully informed on. And again, please contact me (erin.shults@gmail.com) if you need any assistance in this area.

About the writer:
Erin Shults got her start in contemporary a cappella eight years ago as a member of the award-winning co-ed high school group, BeyondMeasure at Dryden High School in New York.  From there, Erin continued her a cappella participation as a member of Ithaca College's only all-female group, Premium Blend.  While in college, Erin became an avid arranger and presided over Premium Blend in her senior year.  As the group's president, Premium Blend released their third studio album, "Ten," which received a CARA nomination and made its way onto CASA's "Top 10 Female Albums of 2010" list.  She graduated from Ithaca College in 2010 with a Bachelor's degree in Music and a minor in Speech Communication. At SoJam 2010, Erin presented a workshop on all-female group management, served on the first ever "I Am Woman" panel, and was a clinician for a masterclass.  Currently, Erin is finishing up her Master of Arts degree at the Florida State University College of Music, where she studies Arts Administration. She has assisted the Tallahassee Community Chorus and Pensacola Symphony Orchestra in various audience development and community engagement endeavors, and currently serves the Tallahassee Civic Chorale as the Executive Director.