1. Governance and strategy in cultural firms and institutions Chiara Berera - 1346170 Malys Dalle-Mourey - 1631498 Lavinia Enea - 1334077 Irina Gurova - 1237833 Paola Miatello - 1385137 June, 5th, 2012 Reduction of public funding & new challenges for fundraising 2. Agenda Our topic: the drastic reduction of public funding to creative productions/cultural institutions and the need to find new ways to nurture creative effort and to select it Part I Fundraising Part II Italian funding Part III US case: Washington National Opera 3. Part I - Fundraising 4. Players involved In order to manage efficient fundraising activities, there is a list of various players to which we must pay attention to for doing the campaign: various arms of government local communities and civic groups private corporations private individuals. IMPORTANT GOAL: CREATE STRONG RELATIONSHIP Classification of techniques according to the types of potential contributors: Sources Techniques Individuals (major gifts) Personal solicitation Individuals (small gifts) Direct mail Individuals (bequests) Phonathons Foundations Proposals Corporations Joint ventures Civic groups Raffles Special events (specify options) Source: The Nonprofit Handbook fund raising, by James M. Greenfield, ed. The AFP/Wiley, Fund Development Series, third edition, 2001, p. 440 5. Reasons for people to give People who give to charity are motivated by many different reasons other than simply pure altruism. Certainly motivations for giving tend to be universal: giving to meet a need, make a difference, bring about change. E. T. Hall developed four categories of cultural variables that are related to the fundraising campaign: Relationship Communication Time Space Ethical practice and stewardship are vital for NPOs success in gaining the confidence of donors of all types. Philanthropy 6. The practice of stewardship The careful and responsible management of something entrusted to ones care by the others (Dan Conway - 2003) Stewardship Efficient management Embodied trust Sustainability 7. Applied example: the case of the National Opera of Paris (2009) The story illustrates the concepts of fundraising. Opra National de Paris (ONP) : four galas a year Gala hosted on the 16th Dec. 2009, in Palais Garnier under the haut patronage of the French President Nicolas Sarkozy Included a lavish dinner & performances from the ballets of the ONP and Bolsho The French Garde Rpublicaine expected to stay in the grand staircase Donors at the heart of the event: invited to rehearsals with the dancers, to a reception at the Russian ambassador's residence in Paris & to go on tour with the company to Moscow Grand Donateurs: invited to meet with singers, dancers and directors + opportunity to attend dress rehearsals + their names engraved in the Palais Garnier's rotonde des abonns Intention: collecting funds: k10 for the night for 10 tickets which benefit the ONP ballet's 2011 tour to Novosibirsk and Moscow Organization of the event: Prestige of the evening: in accordance with the types of contributors; segmentation of contributors & differentiated approach, more efficient Contributes to the prestige & corresponds to the standing image Conveys a traditional while quite elitist story through its brand Financial approach: benefits from the location and the building of the Palais Garnier & takes the opportunity of these evenings to promote its own story and its own talents Stewardship: reward as a thank you, given to major donors, according to their contributions 8. Part II Italian funding 9. The FUS (Fundo Unico per lo spettacolo) Italian General Fund for Art Before 1945: culture has been supported by the States ruling class After 1945: No more patronage system; increase of ticket sales and private donation Very fragmented and ever changing legislation (cinema) Hindered creative growth and long-term sustainability of the institutions Since1985: FUS as a stable pool of direct State funding (according to the national GDP) Monitoring Department for Arts and Culture Criteria of funds distribution Conflict between Rome-based institutions and the rest The examples of the Cinecitt, La Scala and Northeastern theatres Focus on the importance of the Italian culture: role of the State as a patron of culture 10. PUBLIC FUNDS 2007 2011 DIFFERENCE % FUS 2.020.000,00 1.802.605,00 - 10,76 City of Turin 9.250.000,00 5.500.000,00 - 40,54 Region of Piemonte 750.000,00 800,000 + 6,67 Provincial administration of Turin 100.000,00 269.000,00 + 169,00 City of Moncalieri 250.000,00 230.000,00 - 8,00 TOTAL 12.370.000,00 8.601.605,00 - 30,47 In 2012 the FUS gives 1.900.000 Public fundraising After Piccolo Theatre in Milan, the Teatro Stabile is the second one most sustained institution by the FUS. 11. OWNED REVENUES 2007 2011 DIFFERENCE % Gross revenues of business 1.870.350,00 2.937.812,69 + 57,07 Other revenues and sponsors 540.171,00 1.388.523,09 + 157,05 % Owned revenues on balance sheet 13,60 % 28,25 % + 107,72 Bank foundations Sponsorships O only temporary seasonal projects Private fundraising 12. Part III International case: Washington National Opera 13. Washington National Opera U.S. Case The American system of funding performing arts differs from those of other nations: U.S. art institutions relied almost only on private donations to support their annual operating budget. American arts organizations benefit from certain tax benefits. July 2011: WNO became an affiliate of the John F. Kennedy Center for the Performing Arts. WNO is totally dependent on private funds: Contributions come from: The Opera Ball is the largest fundraiser Individuals (philanthropy) Local corporations Foundations WNO does not receive any federal funding for its productions or operations. 14. Conclusions Changes in the environments: legal shocks, global financial crisis, decreasing State funding External shocks to be taken into account in the fundraising strategies Importance of local specificities Need to find innovative ways to attract funds through fundraising 2 main issues to consider while developing fundraising strategies: 1. Context: local environment is crucial 2. At the core of value creation: ex-ante & ex-post analysis of donors structure 15. Thank you for your attention! Q&A 16. Appendixes 17. Adapt the tools to the different targets Sources Techniques Individuals (major gifts) Personal solicitation Individuals (small gifts) Direct mail Individuals (bequests) Phonathons Foundations Proposals Corporations Joint ventures Civic groups Raffles Special events (specify options) Source: The Nonprofit Handbook fund raising, by James M. Greenfield, ed. The AFP/Wiley, Fund Development Series, third edition, 2001, p. 440 18. Different types of campaigns ANNUAL CAMPAIGNS CAPITAL CAMPAIGNS Designed to provide funds for basic program operations and normal growth Address relatively short-term needs (a year or less) Focus on individual giving, corporations, foundations, and civic groups Typically thousands of dollars raised in annual giving campaigns Undertaken to achieve a major organizational goal Concern extraordinary investments Often in millions of dollars Source: The Nonprofit Handbook fund raising, by James M. Greenfield, ed. The AFP/Wiley, Fund Development Series, third edition, 2001, p. 438 19. The fundraising plan 1. Evaluate past activities, in terms of tapped sources, income obtained, evolution of the obtained sources, costs (direct & indirect) linked to fundraising. 2. Determine what support is needed, if possible, in order to have a more efficient fundraising program. 3. Identify potential fund-raising markets. 4. Establish a goal, amount-wise. 5. Create a calendar and put someone in charge of each project. 6. Give recognition. Source: The Nonprofit Handbook fund raising, by James M. Greenfield, ed. The AFP/Wiley, Fund Development Series, third edition, 2001, p. 439 20. Focus on special events Before organizing a special event Choosing between types of events 1. What is the event primary purpose? 2. Is there an existing event to which a fund-raising component could be added to? 3. Who will lead the event? 4. Is the event compatible with other projects or will it exclude other profitable activities? Many different forms for these events: gala dinner, auctions, golf or tennis tournaments Depends on the institution Opera houses Take into account the nature of the institution, and in particular its history, its strategy and its mission Events may be more closely related to the arts performed inside the institution or to the place of the institution In the case of quite old institutions, the story-telling around the image of the institution takes part to the value of branding One of the priorities: to consider the current image and the potential image impacts of the event 21. The practice of stewardship (2) 4 strategies: Reciprocity Responsibility Reporting Relationship maturing Practical guidelines for communicating data can be summarized as following: a clear mission statement along with a description of programs, services, goals, and objectives Organizational charts showing the governance structure of the organization (board) and the management team (staff) A strategic plan, including evaluation measures Overviews of the organizations finances, including sources of income and a case of philanthropic support. Source: Waters (2009), in Achieving excellence in fundraising, the practice if stewardship by William G. Enright and Timothy L. Seiler, ed. Eugene R. Tempel, Thimothy L. Seiler & Eva E. Aldrich, third edition, 2010, p.269 22. WNO Balance Sheet
