Presentation on theme: "Joanne Scheff Arts Management The Private Sectors Support for the Arts: The U. S. Experience Joanne Scheff Seminario Internacional: Inversion Cultural:"— Presentation transcript:
Joanne Scheff Arts Management The Private Sectors Support for the Arts: The U. S. Experience Joanne Scheff Seminario Internacional: Inversion Cultural: Los Nuevos Escenarios March 2001 Caracas
Joanne Scheff Arts Management History of Support for the Arts in the U. S. Non-profit enterprise developed after the Civil War through efforts of and investment by emerging upper classes. »Museums and symphonies were administered by their founders and supported by wealthy individuals. »Provided source of honor and prestige. »Protected art from government intervention and from the whims of the masses.
Joanne Scheff Arts Management History of Support for the Arts in the U. S. 1930s and 1940s: art became more popularized: »taught in universities »played on radios 1950s: Ford Foundation under W. MacNeil Lowry provided millions of dollars of capital financing to support infrastructure of arts organizations.
Joanne Scheff Arts Management History of Support for the Arts in the U. S. Other foundations followed Ford model. 1965: National Endowment for the Arts created: cultural emphasis by the government given official life. Followed by creation of state and local arts agencies. Contributions from corporations and foundations: »1955: $15 million 1990: $500 million
Joanne Scheff Arts Management History of Support for the Arts in the U. S. 1960s - mid-1980s: promotion boom in the arts: »Increased accessibility of arts to greater numbers of people »Expanding attendance levels »Growth of new and larger performing arts organizations
Joanne Scheff Arts Management Growth in the Arts Orchestras 581,000 Opera Dance Theaters12 400
Joanne Scheff Arts Management Income Sources for Arts Organizations 50% earned (ticket sales, etc.) for performing arts; less for museums 50% contributed »Individuals: 70% - 75% »Foundations: 10% - 15% »Corporations: 10% - 15% »Government: 3% - 5% (Federal, state, and local)
Joanne Scheff Arts Management Philanthropy from Individuals Major source of charitable contributions: 83% of giving overall In 1996: totaled $150.7 billion overall from 75% of Americans Another 14% said they would have given but were not asked! $10.9 billion for arts, culture, and humanities
Joanne Scheff Arts Management Philanthropy from Individuals, contd On average, people give between 1 and 2 percent of their income to charities. 50% of arts contributors report annual incomes of $50,000 or more. Cultural donors are older (50% over age 50) than donors to other charitable organizations (23% over age 50). Cultural donors are more likely to be married and less likely to have children at home.
Joanne Scheff Arts Management Motives for Giving Altruism masks the complex motives that underlie giving behavior. What people want most is simply to be sought. Every individual needs to feel that he is a worthwhile member of a worthwhile group. Harold Seymour
Joanne Scheff Arts Management Motives for Giving, contd Builds self-esteem and self-image Builds social status or prestige: public recognition for good deeds Pride in association with an organization, its programs and personnel Belief in value of the arts and in responsibility to support them Some people give because they are asked by someone they like and respect.
Joanne Scheff Arts Management Motives for Giving, contd Required to give at work -- pressured by superiors Family tradition of being philanthropic Financial planning considerations: tax deductions Primary inducement for giving: belief in an organizations goals and offerings.
Joanne Scheff Arts Management Major Gifts vs. Small Gifts 80% of gifts come from 20% of givers. Problematic to rely on a few major donors: loss can be destabilizing. Necessary to expend effort to obtain many small gifts. Small gifts ($1 to $1,000) tend to be made regularly -- usually annually. Major gifts are often a one-time stretch gift (for endowment drive or capital campaign). Moderate gifts given annually by major givers.
Joanne Scheff Arts Management Major Gifts vs. Small Gifts Small gift givers are customers of the organization. Small gifts focus on the organizations annual and shorter-term needs. Major gift givers are stakeholders in the organization. Major gifts focus on donors agenda.
Joanne Scheff Arts Management Types of Gifts Annual Fund Capital Fund Endowment Drive Special Events Planned Giving
Joanne Scheff Arts Management Corporate Support for the Arts : grew to $698 million per year. Driven by benevolent self-interest; derived from philanthropy budgets. Late 1980s - early 1990s: dropped to $518 million. (Recession, reduced tax benefits under Reagan). By 1994: up to $875 million.(Economic upturn, tax benefits reinstated, growth of sponsorship from marketing budgets).
Joanne Scheff Arts Management Corporate Support for the Arts 47% of U.S. companies support the arts. 73% of contributions come from small and mid-sized companies ($1 million to $50 million in revenues). Median contribution of $2,000 93% of gifts allocated to arts projects at local level
Joanne Scheff Arts Management Types of Corporate Support for the Arts Corporate Philanthropy Sponsorships Collaborations
Joanne Scheff Arts Management Why Corporations Give 74%: to demonstrate good corporate citizenship 66%: to enhance the quality of life in their community 46%: to enhance their image and reputation 22%: to strengthen employee relations
Joanne Scheff Arts Management Why Corporations Give 21%: to increase business networking opportunities 19%: to increase sales 18%: to reach important constituencies 17%: to promote products and services 13%: to enhance employee creativity 9%: to increase media coverage
Joanne Scheff Arts Management Corporate Philanthropy Most corporate philanthropy is given for health and human services, education, civic and community affairs. Corporations donate 0.8% of pre-tax profits. Tax deduction of up to 10% of adjusted net income allowed by U.S. government. Corporate foundations can donate up to 5% of gross income without tax liability.
Joanne Scheff Arts Management Nature of Corporate Support of the Arts Philanthropy for the arts is declining: »12% in 1992 »9.5% in 1995 Primarily program and project support as opposed to general operating support. Avoid supporting controversial or unpopular programs that do not provide desired type of visibility. Require extensive public relations benefits.
Joanne Scheff Arts Management Approaching Businesses for Donations Accountability is key. Donors do not reward good intentions; they reward good results. Want to support programs of value; not help an organization limp along to survive. 82% of decisions about philanthropy made by the chairman or owner. Decisions increasingly made by employee committees. Understand funders guidelines and interests.
Joanne Scheff Arts Management Types of Support Cash Goods Expertise Services Space
Joanne Scheff Arts Management Corporate Sponsorships Cash or in-kind fee paid to a property in return for access to the exploitable commercial potential associated with that property. Undertaken with expectation of commercial return. Goal is promotion; altruism is implied.
Joanne Scheff Arts Management Advantages of Sponsorship Heightens visibility and enhances profile by linking up with arts organizations image, appeal, and customer base. Provides lifestyle association. Responds to consumer demands that companies give back to their communities. Helps companies communicate or enhance their commitment to a particular market segment.
Joanne Scheff Arts Management Advantages of Sponsorship Provides benefits other media do not: »Live audiences »Loyal members »Client entertainment opportunities »Category exclusivity »More visibility than TV ads »Matches lifestyle, rather than intruding »Access to databases and volunteers
Joanne Scheff Arts Management Advantages of Sponsorship Merchandising opportunities and sales incentives. Call attention to, shape, or reinforce publics perception of a products benefits. Add human element to corporate image »Helps attract and retain quality personnel »Promotes goodwill among customers, clients, and employees
Joanne Scheff Arts Management Growth of Sponsorship: Museum sponsorships increased 41% (to $65 million in 1997). Sports sponsorships increased 35%. Corporate media spending increased 21%.
Joanne Scheff Arts Management Sponsorship/Media Growth Sponsorship has outpaced the growth of advertising and sales promotion every year since In 1996, growth of expenditures for: »Advertising:7.6% »Sales promotion:4.6% »Sponsorships:15%
Joanne Scheff Arts Management Collaborations Strategic in nature as opposed to sponsorships which are tactical. More durable commitment - not event oriented. Common mission. Authority determined by new collaborative structure. Resources and reputation pooled.
Joanne Scheff Arts Management Collaborations Comprehensive planning Well-defined communication channels Risk greater than in more informal and short-term relationship.
Joanne Scheff Arts Management Uses for Collaborations Expand customer base (both the businesses and the arts organizations) Improve internal functioning by developing new and better management skills. Cut costs.
Joanne Scheff Arts Management Examples of Collaborations Share expertise:EDS and Detroit Symphony Combine office expenses and management: American Symphony Orchestra and Concordia Orchestra Tie-in Promotions: San Jose Arts Card