By Tina

Following on from Jon’s and Dawn’s posts, I have been thinking about growth for smaller arts organisations and the expectation of raising more income from different sources in the next three years, particularly in regards to private investment from businesses, individuals and trusts and foundations.

In theory, encouraging diversifying income sources is a good thing… but in reality smaller arts organisations have three years to achieve some rather difficult targets. Raising £10k or even £5k in a year without any previous experience in, or current budget for, fundraising is not easy to do.

Fundraising takes time and investment, particularly as it requires research, an overarching strategy and plenty of patience, time and perseverance. Results do not happen overnight and relationships have to be cultivated in a sensible and sensitive way. Freelance/ consultant fundraisers can help, but they need to become really involved with the organisation in order to represent it with the conviction and passion required to make the right asks and to the right people.

And boards can and should also help, but how hands on can they be, particularly if their own resources (time, money and networks) are limited? And what about organisations’ audiences? A small touring company, for example, might have numerous loyal fans but not necessarily their contact details, as they come through the venues where they are booked. In which case how will they build a strong database which they can start using for fundraising? And what kind of support can they ask for if these audiences are often the very same underprivileged people they are trying to reach out to and empower through their work? And how will they reach the big sponsors and major philanthropists instead? In most cases, organisations will therefore start by applying to trusts and foundations, which must by now be inundated with applications and which therefore make this a very competitive “market”.

These are amongst the serious challenges which smaller organisations are faced with and which encouragingly the Arts Council seems to recognise. It will therefore in turn, try to address some of these issues by promoting fundraising capacity building through the Catalyst fund. However, I’m not sure how far it will go in equipping organisations in need of support with the appropriate knowledge, skills and expertise to start successfully fundraising from a variety of sources and in a very challenging economic climate.

To begin with, more than half of the money available through the £100m fund (£55m) is ear-marked for large organisations seeking to start or build an endowment. With a maximum of £5m allocated to an individual applicant, there could be a minimum of 11 (large and already successful at fundraising) organisations benefiting from this tier of the fund.

The £30m that will be directed towards fundraising capacity building and matched funding, again is targeted at the more experienced and successful organisations (in terms of fundraising). And though matched funding has proved a useful mechanism to incentivise giving in the past and for other sectors such as education, smaller NPOs with little or no fundraising successes to date (and in many ways those that most urgently need support), will have no access to it. They will only be able to apply for a grant between £15k-£25k in April 2012, and it is not clear if this will be a one-off for one year or if it will be repeated across the three years. I am assuming this would come from a total of £15m (the remainder of the original Catalyst pot), though this is not clear either and therefore it’s hard to estimate how many arts organisations might be able to benefit from this. In the meantime, targets for this financial year need to be met and without any resources or some strategic guidance, this will be hard to do.

Not to mention the fact that, as Dawn pointed out, the economy is likely to continue to have ongoing spill-over effects on sponsorship budgets, endowment yields and disposable income (and ultimately on philanthropy). So how successful will a fundraising gala be?