The Rise of the Individual Introduction How individual donors are driving the Greater Philadelphia cultural sector and beyond

Most of the data you’re going to learn about today comes from a research report released last fall called the 2011 Portfolio. It’s the third publication of its type, similar reports released in 2008 and 2010 Based on data from the Pennsylvania Cultural Data Project, Portfolio has broken new ground in measuring the size and health of the cultural sector. The PA Cultural Data Project, a joint effort of foundations and arts service groups across the state to create a reliable, ongoing, repository of data about the nonprofit cultural sector.

The Nonprofit Arts & Cultural Sector in Greater Philadelphia Revenue: just over $1 billion Total Employment Positions: more than 24,000 Total Attendance: almost 17 million visits Total Revenue: just over $1 billion Total Employment Positions: more than 24,000 Total Attendance: almost 17 million visits Just over $1 billion in total revenue More than 24,000 employment positions 17 million visits to arts and cultural organizations each year

Attend 3 performances an hour Take 27 public classes per day Visit 98 exhibitions each week Watch 138 films each month To take advantage of all that our sector has to offer: Attend 3 performance an hour Take 27 public classes per day Visit 98 exhibitions each week Watch 138 films each month

Sector Is Operating in the Red Operating Margin: Unrestricted Revenue vs. Expenses, Excluding Investments 2007 And yet, with all of the arts and culture opportunities Philadelphia has to offer, the sector is operating in the red. There is no getting around the fact that the recession had a serious financial impact on the cultural sector. In the 2006 and 2008 issues of Portfolio, we found that cultural organizations were operating on thin margins. Well now those margins have gone from thin to negative.   As you can see from this chart, in 2007, before the recession, the overall operating margin for cultural organizations was +2%. After the recession hit, in 2009, it was -9% Break Even +2%

Sector Is Operating in the Red Operating Margin: Unrestricted Revenue vs. Expenses, Excluding Investments 2007 2009 Break Even +2% -9%

-19% Contributed Income The problem was on the revenue side. Both contributed and earned income fell sharply. What we found is that contributed income fell 19% Contributed Income

Contributed Income 2009 (Revenues) And it happened due to reductions across-the-board in ……corporate……foundation, and…….. government giving…….. Break Even -$12.1M -$10.1M -$40.1M

Contributed Income 2009 (Revenues) Individual giving was the exception. Break Even -$12.1M -$10.1M -$40.1M

5% What stands out about this year’s Portfolio findings is the extent to which organizations adapted to tough times, and the way Philadelphia’s residents responded. In the teeth of a recession, with discretionary income shrinking, people actually attended cultural events more frequently. We saw a 5% increase in attendance between 2007 and 2009. Attendance

As I mentioned earlier there were 17 million cultural visits last year.

5% 5% Bucking the Trend Attendance And it’s not just attendance; we sold almost ¾ million memberships and subscriptions an increase during the middle of the recession of 8%. That works out to one membership or subscription for every three households in the region. 5% Attendance

Membership & Subscriptions Bucking the Trend 8% Membership & Subscriptions 5% Attendance 8% 5%

Membership & Subscriptions Bucking the Trend 20% Individual Giving 8% Membership & Subscriptions 5% Attendance And individuals also stepped up to donate to their favorite organizations. When we reached out to our patrons and board members, they answered the call. Between 2007 and 2009, personal giving to arts and culture expanded a staggering 20%.

Categories of Revenue from Individuals Increased $47million Total $339.1m Overall, between single admissions……subscriptions……. and contributions individuals are responsible for an increase of $47 million to our sector. If you need any evidence that arts and culture matters to the citizens of this region, you’ve got it. Admissions, Tickets, & Tuitions

Categories of Revenue from Individuals Increased $47million Total $339.1m Memberships & Subscriptions Admissions, Tickets, & Tuitions

Categories of Revenue from Individuals Increased $47 million Total $386.0m Total $339.1m Overall, between single admissions……subscriptions……. and contributions individuals are responsible for an increase of $47 million to our sector. If you need any evidence that arts and culture matters to the citizens of this region, you’ve got it. Individual Contributions Memberships & Subscriptions Admissions, Tickets, & Tuitions

So how do we capitalize on this new philanthropic trend So how do we capitalize on this new philanthropic trend? What are some creative ways to engage individual donors further? In the last few years, arts organizations across the country have adopted online giving platforms similar to Kickstarter, where individuals can search for, connect with, and donate to projects that spark their interest. In late 2010, the Arts & Science Council of Charlotte-Mecklenburg’s launched power2give.org, which allows community members in Charlotte, Miami, Kentucky and South Indiana to browse nonprofit arts, science and history projects in need of funding. And to engage new donors, power2give.org offers gift cards which active users can send to friends or loved ones to give them an opportunity to find and fund a project of their choice.

3,800 individual contributions $1,408,704 in individual donations Another model is the Pittsburgh Foundation’s Pittsburgh is Art Day of Giving, which gave individuals the opportunity to contribute to 147 different arts and culture organizations over a single 24-hour period. Beyond just engaging individual donors, this model also used individuals to lead the way and set a bar for foundational giving—which, as we discussed, has declined in recent years, along with corporate giving. More than 3,800 individual contributions were received, totaling $1,408,704, and organizations like The Heinz Endowments and The Buhl Foundation then contributed matching funds of $475,000, for a grand total of approximately $1,883,704. 3,800 individual contributions $1,408,704 in individual donations $475,000 in matching funds Grand total: $1,883,704

As we’ve seen in the Greater Philadelphia cultural sector, many individuals are stepping up and answering the call for donation on their own, but incentivizing individual donors certainly can help. As they build their donor base, organizations like Oklahoma’s Allied Arts also build an engaged arts and cultural community by offering donor benefits like performance discounts and invitations to hands-on arts experiences.