Performing Arts and Cultural Centers: Planning for the Future
It is no secret that performing arts organizations and cultural institutions are experiencing significant hardship and instability as the COVID-19 pandemic continues to restrict their operations. Due to their nature, these in-person entertainment and education organizations are fully compromised by the pandemic. Despite this, some groups have found creative ways to continue to engage with their communities virtually via video content or live video events. We’re really enjoying the Jazz St. Louis series Season of Stream. Engagement ought not be their only priority; nonprofits in the performing arts sector must pursue financial planning for stability in the long term. These organizations face difficult decisions and an uphill battle in order to welcome crowds of visitors once again.
Because of the nature of pandemic precautions, avoiding gatherings and limiting in-person work to essential services, performing arts and cultural organizations have suffered greatly. Not only are audiences stuck at home but performers and crews cannot come together to create and share. This has left many organizations at full stop over the spring and summer of 2020. Across the United States, in addition to halted operations, 36% of cultural organizations are expecting serious fundraising challenges in both the near and mid-length future. Similarly, 56% of performing arts organizations expect the same challenges. These dismal predictions are a result of the damage caused by the COVID-19 pandemic and the subsequent economic fallout. As the pandemic continues to affect the United States and the world, making a fundraising plan is important, but also continuing to raise funds for an endowment is important too.
As these organizations gain their bearings and begin to plan, it is important to consider two related but separate goals: short and long term stabilization. While pursuing crisis donors to mitigate losses in revenue over the last several months is clearly important, some organizations have tapped into their endowment while simultaneously placing its fundraising on the back burner as they focus on the crisis at hand. It is essential that nonprofits remain vigilant and consistently build out their endowment in order to have a stable recovery from the COVID-19 crisis over the next several years. While this may seem outlandish to some given the current situation, it provides several benefits: supports the ability to draw small amounts (in relation to the fund total) from the fund annually to offset expenses when necessary, supports exploring future ventures that include risk during stable times, protects from future crises as another could compound unhealed damage from the COVID-19 crisis, and finally, it demonstrates an organization’s commitment to sustainable practices and stability. These are all factors that can contribute to growth and recovery in the near future.
Fundraising for two different accounts may seem daunting, even impossible given the crisis the world is experiencing, but there are several steps organizations can take to get started. The first step in the process involves looking inward at the nonprofit itself. This includes examining donor data and reviewing fundraising structures and policies. When reexamining donor data, look for donors who annually give large gifts, choose a benchmark gift amount, and when inviting those donors to give, invite them to consider an extra amount for the endowment. When reviewing fundraising structures and policies, consider a change that diverts some funds to the endowment. For example, divert all bequests to the endowment. Additionally, promoting this restructured giving program across all personnel, from board members to performers, is essential to support it. Honesty and communication are key first steps to fundraising.
The COVID-19 pandemic has damaged beloved community institutions, and many need to make sure they get back on their feet lest a community lose a beloved establishment. Organizations must remain positive and vigilant in order to make decisions with a focus on return on investment and an eye toward the future. With some restructuring and awareness around funding, performing arts and cultural organizations can communicate to donors their desire and ability to recover and continue educating and entertaining audiences and visitors for many years to come.
Looking for help guiding your nonprofit organization through challenging circumstances? Reach out to info@nmblstrategies.com today to see what the NMBL team’s extensive nonprofit executive experience can do for your organization.