I’m on a lot of lists. Aren’t we all these days? Every opt-in, registration, purchase, donation, search, website visit, YouTube watched, etc. translates into data points for marketers and fundraisers eager to know our buying patterns, giving histories, preferences, and desires. Arts and culture organizations are very much part of this world, as illustrated, in part, by end-of-year appeals for donations.
These appeals make sense. It IS the season of giving, and many people are moved by stories of young people learning to play instruments, memories of a local Nutcracker or Messiah performances, or family visits to a museum to make donations to their favorite arts and culture organizations. These donors give for “intrinsic” motives—personal meaning, social purposes, a warm glow.
But another kind of season will soon be upon us - TAX season. Donations to non-profit organizations, including those in the arts and culture, are, by federal law, tax-deductible. ‘Tis the season for individuals to limit their upcoming tax burdens. Arts and culture non-profits are more than happy to help individuals to do so by accepting their year-end donations. These donors tend to give for “extrinsic” reasons, which also include public recognition, preferred seating, and other tangible benefits beyond the warm glow.
Whether donors are intrinsic or extrinsic in their motivations, arts and culture institutions want them to keep on giving and for others to join them. Individual giving is the second largest source of revenue for the nonprofit arts (24%) after earned income (such ticket and merchandise sales) at 60%. Both these sources dwarf revenues from government (9%) and from foundations and corporations (7%). Note: Pittsburgh has higher foundation and government funding percentages than most other cities nationwide. But it has lower-than-average individual giving rates, too.
Still, in recognition of the importance of individual giving, many larger arts and culture organizations in Pittsburgh (and nationwide) have sophisticated operations to court individual donations, large and smaller. Their “best practices” include donor prospect research, mixes of intrinsic and extrinsic messaging, targeted cases for support, frequent communications with donors, and demonstrations of the positive impacts of individual gifts.
This point reminds me that we’re also in a season to remember those with less privilege. The majority of arts and culture organizations in the area, including many ALAANA organizations (African-American, Latino, Asian, Arab, and Native American), are small. They have budgets under $500,000 and relatively few staff (with heavy reliance on volunteers). The fewer staff means less capacity to systematically court individual donors. When combined with a relative lack of accumulated wealth in communities they’re serving, ALAANA arts organizations tend to rank lower on tabulations of individual giving at the end of the year and during special giving events throughout the year. Why not help to reverse this trend and reach out this year to an additional organization who could genuinely benefit from your individual gift?
Now, the issue of who you choose to give to touches on another season. Following a transition from the election season, we’re now in the political season. Already there is buzzing in the halls of D.C. power to alter the charitable deduction laws and to make deductions less generous for donors, all in an effort to help pay for anticipated tax cuts. Some scenarios envision across-the-board cuts in deductions, while others might reserve cuts for sectors deemed as less connected to social needs, which still, for some, includes the arts.
To help ensure that the arts sector will continue to garner tax-deductible donations that provide essential revenues to pay for the fabulous variety of cultural activities we can access here, it may well be that more of us will need to be active participants in this new political season. The Greater Pittsburgh Arts Council will be in touch about how you can be a pro-active arts advocate, and until then, consider a year-end gift to one of your favorite arts and culture nonprofits.
David Pankratz is the Research & Policy Director at the Greater Pittsburgh Arts Council.