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ArtsProfessional in partnership with Spektrix

There are probably more millionaires in your audience than you think. Libby Penn reveals how to find high-net-worth individuals already in your database.

Photo of Give on keyboard

Everyone knows the arts fundraising landscape has changed dramatically. Arts Council England funding has been slashed, private foundations have raised the bar for accountability, corporate donations are increasingly tied to narrow corporate social responsibility programmes, and individual giving has been squeezed by shrinking disposable income. Charitable fundraising has never been easy, but the challenges faced by today’s arts organisations have changed the game. Fortunately the key to winning may already be at our fingertips.

A 2012 study of 126 arts organisations by Arts Quarter showed that on average 3.4% of the individuals in arts databases had a personal wealth of over £1m (not including the value of their homes). As might have been expected, this was highest in London (5.4%) but even in the region with the lowest number it was 1.3%. If we imagine a database of 50,000 customer records, 1.3% still represents 650 individuals. Soliciting annual donations of £1,000 from just 10% of them would amount to £65,000 each year. Those numbers are incredibly compelling, but surely it’s not that simple?

You have data at your fingertips that can help you develop personal approaches to these individuals to start them along a path towards becoming a major donor

UK lists of high-net-worth individuals already exist and there are consultancies that can audit your database (free of charge) to tell you how many wealthy individuals it contains. There is then a cost to purchase the data, but if budget is an issue you could start with a subset of your database, focussing on the data for the four most viable segments:

  • Regulars – visited three times or more in the last year.
  • Irregulars – visited one or two times in the last year.
  • At least once – visited at least once in the last three years.
  • Never – not visited in the last three years.

Using this segmentation scheme and the results of the audit, you could buy the data for your regulars segment first and purchase the others at a later date. When the data comes back you may need some assistance from your system supplier in order to write the new information back into your database.

There are others ways to spot potential donors too, including some without additional cost. If you offer the option to give a donation at the checkout, identifying individuals that included or increased a donation at this point may provide a good place to start. Alternatively, purchasers of premium seats could be a good indicator of high discretionary income. And their postcode will also provide information about average wealth in the area (though obtaining this data will likely come at a cost).

While it is no doubt harder to make the case for raising money in the arts than it is for addressing extreme poverty in Africa or fighting cancer, we do have advantages over other charitable sectors. We start with the knowledge of individuals who have demonstrated a proven interest in our organisation by virtue of their having attended an event or production. Additionally, we know about individuals who are local to our communities. In both cases, we know we can make an appeal based on personal relevance. This is also why it is crucial that once we have identified potential major donors, we continue to take a personal approach. Key to this is using the data we have about them. For example, if you have a group of potential donors who regularly come to your family shows, you might consider a cultivation event around this.

The overall strategy of putting your data to work in this way is relatively straightforward – and it has been a proven success. I spoke with fundraising consultant Caroline McCormick, who pointed to the Natural History Museum’s campaign for the new Darwin Centre. She said: “We were able to deliver the campaign target in the context of a very limited annual revenue income base at that time, because the database had been carefully invested in over a number of years by diligent team members. This meant that even though we often had to rapidly grow donors through first gifts before approaching them for major gifts, we did have the knowledge asset base to work from.”

Knowing the theory is just the start. Ultimately, the future of arts fundraising lies in better use of data and technology to support the real reason we do what we do: promoting the joy, exhilaration, sense of fulfilment, and the deep and enduring meaning that results from supporting the art you love. The first major step is to recognise that there is significant hidden wealth among the individuals in your database, and that uncovering it is relatively straightforward and inexpensive. Once uncovered, you have data at your fingertips that can help you develop personal approaches to these individuals to start them along a path towards becoming a major donor.

Libby Penn is Managing Director of Spektrix.

This article is part of a series, sponsored and contributed by Spektrix, aiming to provoke new thinking in how we use ticketing and CRM systems to maximise revenue and grow audiences.

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I read Libby's article with interest especially as it cited our own Arts Quarter research from 2012 which I commissioned and authored. I fear that Libby's position continues to put forward a view that the future of HWNI giving to the arts is about the analysis of data. This is wholly untrue and indeed our 2012 research made clear at that time that simply having a core data set is only the start of a long journey of migration from ticket buyer to donor. Our continuing consultancy work with arts organisations on reaching out to HNWIs provides clear evidence that the relationships that HNWIs have with arts organisations are often distant and complex. It must go beyond regarding HNWIs as mere data subjects. We know this because we have sought to speak with many HNWIs identified through wealth screening to plot their perceptions of their relationships with the arts organisations on whose databases they sit. It is vital in this time of so many competing causes for support that arts organisations invest properly in the effective management of their HNWI audience members, developing 1:1 personal relationships, noting personal interests and motivations to engage and seeking to find out where future interests might lie. Making segmentations will always remain valuable but only as an information tool and as part of a complex process of understanding as much as you can about the people behind the funds that you are seeking out. These days, we work with arts organisations where there is no identified HNWI constituency on their databases or where no audience database is held to seek out HNWIs with interest in their work. HNWI fundraising is no longer the sole domain of those arts organisations holding individual data. Equally, alongside those with the financial capacity to give as identified through wealth screening, there will be others on arts databases who fall below a proscribed wealth threshold who will have a desire to give at a level comparable to any HNWI identified through screening. Arts organisations must also have processes for seeking out these individuals. Arts Quarter's approach to seeking out higher level donors has been transformed since 2012 which at that time used simple wealth-screening as its principal driver, to include a much broader range of tools, tailored to the values of each arts organisation and its audience. Much has changed since 2012 and now the road to HNWI success goes far beyond data analysis.

John – thank you for the thoughtful comment. The fear you mention is valid but a key point of the piece is that data is an essential starting point for improved 1-2-1 relationships with donors, not a means to reduce human beings to data sets. Improving customer data in the arts and knowing how to act on it practically is absolutely essential if the complexity in motivations and relationships you talked about is going to be transmuted into better results for fundraisers. Time is an issue as well – arts organisations need to improve results now and the capability exists to make that happen. My argument is that it just needs to be embraced.