Necessary changes on Fundraising Logics and its Goals Metrics for Artistic Performing Enterprises

Money should not be the unique dimension to evaluate Fundraising Success

Fundraising goals metrics must embrace the full complexities of philanthropy and non-profit activities to enrich societies and detach itself from plutocracy antiquate models of governance. A fundamental change to secure non-profits social and economic sustainability in the current world.

As a server of philanthropy, fundraising is one of the channels where people can contribute with money to a broader good. In essence, it contrasts with other ways of philanthropic actions, such as volunteerism or in-kind donations, because fundraising is focused primarily on money (or at least based on the currently available literature). However, despite its principal goals and analysis criteria are based on monetary aspects and how to get them (as the term etymology of the word states Fundraising: raising of funds), fundraising procedures are much more complex than simple money-focused strategies. They require a full understanding of the philanthropy complexities and how they play a role in the non-profit sector.

Some of those complexities are placed in the “right to ask” thinking[1]. As Tempel, Seiler, and Burlingame say, successful fundraising efforts require a series of actions that could be summarized on the organization building the “right to ask”[2]. In fundraising, specifically for non-profits, this “right to ask” is gained by multiple factors[3]. Mission, vision, organization objectives, stakeholders, beneficiaries, current budget, etc[4]. All of them are important because they allow a potential donor (small or big) to evaluate if he/she/they wants to give money to support the non-profit mission. However, donors create (or the organization will influence the donor as explained later) different relations with these “right to ask” factors[5]. And here is where we start to find fundraising approaches summarized as “transactional vs. relational fundraising” that require some adjustments in their logics.

Transactional fundraising is, by default, the general way of donor/organization interaction in terms of fundraising. The donor gives money, and the organization, in return, gives something to the donor. A donor gives some dollars and can have his name in the hand program of a concert, if gives more money can access better seats; if give more money could put his name in a building, wall, or create a sponsored position in the organization with his name; or if it gives more money could be part of the board and take decisions about the future of the organization. No matter the amount of support, there is always a transactional element in all types of donations[6]. This kind of framework to understand fundraising is simplistic, seeing the donor/organization relationship only in the monetary dimension. It only requires understanding how much the organization needs to give to the donor to receive money.

In contrast, relational fundraising analyzes the full relationship between the donor and the organization. It allows a better understanding of how the organization can encourage the donor to develop a more meaningful donation to the organization by a carefully planned research about him/her/they and strategic communication with him/her/they[7]. According to fundraising literature, relational fundraising is better for major gifts[8]. Their logic says that the stronger relation a donor has, the more potential to give more money[9]. Therefore, the full “relational fundraising” becomes only a series of procedures to influence the donor to go from a single donation for a name on the hand program to a significant donation and be on the board leading the organization[10].

However, here is where the fundraising scholarly is still weak and fundraising professionals must to start changing the rotten logics of current procedures. The problem is that this kind of fundraising mindset still put the monetary dimension as the leading framework to understand the relation, up until a point that it denies the other complexities around the donor/organization relationships. In summary, this fundraising logic leaves other components of philanthropy (volunteers and in kind-donations) out of the equation, creating wrong assumptions about the strength of donors/organizations relationships, and also creating long-term sustainability problems for the organizations.

There are multiple lines where this money focused approach is damaging the long-term sustainability of the organizations (for more information please review Opera Sustainability Research) One example is the weak understanding of the single donor financial characteristic. It is only one example of how multiple complex dimensions are being left behind because the current logic of fundraising metrics focused only on the monetary goal. According to current fundraising thinking, a person that gives more money has a stronger relationship with the organization. The constituency model with major donors at the center[11] is the perfect example as well as the donor pyramid with personal connection only left for the bigger donors[12].

Under current literature, a donor who gives $1M has stronger relationships with the organization than a person who only gives $1,000. And more dangerous is that both are treated differently. With the $1M getting personal attention and the other probably a thank you automatic email[13]. However, this thinking does not consider the possibility that the $1M donor could have more than $100M in assets and the other donor could have only $10k. Under this example, the first one was giving only a 1% of his/her/their wealth, and the second a 10% of his/her/their. Who has invested more in the organization from a relational perspective? Who should be treated as a major donor and should have the opportunity to lead the organization?

Strength of donor/organization relationship analysis based only in amount of donation is wrong. Only using previous example, this premise does not consider that each donor has different wealth; therefore, its support to the organization has a different percentage of importance for him/her/they. That creates sustainability risk for the organization[14]. Because instead of supporting and building strong relations with the people that are actually investing their time and value to the organization, the organization is focusing in people that are not at the same level of commitment.

These simplistic only monetary logics, are putting organizations in a dangerous position losing the opportunity to build a stronger base of really committed supporters. People that at the end of the day are going to be there for the organization no matter what.

Of course, the $1M donation is still very valuable for the organization, and of course, the organization should also thank, support, and develop a relationship with this donor. In addition, is clear that a $1M donation creates, from a monetary perspective, stronger contribution than a $1K. However, the organization also needs to acknowledge the ones that, despite their lower monetary contribution, are giving to the non-profit a very significant contribution. That is why there is an urgent necessity for more comprehensive fundraising metric logics that incorporate the full complexities of the philanthropy and non-profit realities.

Fundraising is way much more complex than only money focused, and it should not have the dollar amount as its unique goal metric because, as explained before, it is misleading and creates a dangerous threats to the organization's sustainability. And to do that still many questions still need to be solved:

1. How we are going to measure the commitment of a person donating their time (volunteers) given the fact each person is different and brings different expertises to the enterprises therefore its time requires to be valued differently?

2. How we are going to measure the non-monetary resources contributions (in kind donations)?

3. How we are going to measure the subjective value that each contribution, commitment and person has in the full picture enterprises based on the real time, money, assets, knowledge?

4. Which is going to be the common language between all of these contributions? ***Transform apples to apples and oranges with oranges***

5. Are the current accounting models and legislation ready to tackled down these complexities?

6. Which are the required steps to change the internal and external systems to be able to create these transformations?

7. Is the non-profit model able to address all of these complexities?

The framing of Opera and Artistic Enterprises as Cultural Commons is allowing us to review and tackle down these questions taking into account their full complexities. For more information about it Click Here!

What do you think are the responses for those questions? Are you interested in collaborate to solved them? For more information on the full research umbrella and how to contribute and be part of it, please review Opera Sustainability Research Here!

Footnotes:

[1] Achieving Excellence in Fundraising, 4th edition. Editors Eugene R. Tempel, Timothy L. Seiler, and Dwight Burlingame. Page 29 [2] Ibid. Page 29 [3] Ibid. Page 40 [4] Ibid. Page 117 [5] Ibid. Page 74 [6] The unique exceptions could be anonymous donations that don’t reclaim tax benefits or any kind of special treatment; however, as research shows, that is very uncommon. [7] Achieving Excellence in Fundraising, 4th edition. Editors Eugene R. Tempel, Timothy L. Seiler, and Dwight Burlingame. Page 77 - 79 [8] Ibid. Page 220 [9] Ibid. Page 227 [10] Ibid. Page 227 [11] Ibid. Page 51 [12] Ibid. Page 220 [13] Ibid. Page 220 [14] Barbosa-Vasquez, Diego. “Ostrom Workshop Research Series: Opera Sustainability: Through Multilevel- Apprenticeship Programs at Opera Companies.” Video. Ostrom Workshop. Mar, 2021. https://www.youtube.com/watch?v=PfdemPODRlM