FULL TRANSCRIPT OF THE PODCAST

Bob Swaney: Let's turn the mirror outward and think about current trends and challenges in the arts and culture industry.

As we said before, no one came out of COVID unchanged. That doesn't necessarily mean anything bad, it just means things changed. We're far enough away from it now that we're starting to see some trends, and not just number trends, but behavioral trends, programmatic trends, and approach trends.

Let's spend a couple minutes just talking about that. Here we are top of 2024. What do you see as based on what you've experienced and what we've been working on as a firm? What are some of the trends and challenges and fundraising for arts and culture as we hit the top of this year?

Catherine Heitz New: There's certainly been shifts in Individual giving, which for most performing arts and cultural organizations drives their contributed revenue. Fewer donors are giving which is impacting the broad-base donor base. Those who are giving continue to give strong, and then major donors are continuing to give strong as well.

What it means is that retention and stewardship matters more than ever. And so from a practical standpoint, I'll share that what we're seeing is that those organizations that are stewarding consistently, communicating with their donors, sharing news, successes, future plans, and thanking them regularly, they're seeing the greatest returns.

Bob Swaney: We have previously talked about how the dollar is how we measure our success, but that's probably in reality a little shallow because it doesn't encompass all these different moves needed with donors. So let's dig down a little bit deeper on this relationship development because I think it's important to talk not just about what it is, but why, why it is and how you do it.

If relationship development is the key to unlocking all the doors of fundraising including planned giving, endowment campaigns, gap funding, and the annual fund, what are some of the practical things that an organization, no matter what its budget size, can do?

Catherine Heitz New: We often see eyebrows raise and hearts race when we mention that with our major donors, we should have a meaningful touch point every six weeks.

But what we want to emphasize is that we don't have to over-manufacture those touch points. In the arts, we benefit from having built-in touch points with our concerts and our event openings. So it's about taking those moments and being intentional and making a plan about who is in touch with who? Who's reaching out to who? And what do we want to accomplish in that conversation?

The other piece is that beyond our concerts, openings, and events, you can continue to use what you have. When I talk about sharing news, often clients think they need to spend hours creating elaborate, messages to individual donors. But instead this can be as simple as forwarding something that the organization has already created, like a newsletter or even a social media post. Maybe your music director posted something interesting and you send a simple little note saying “I knew that you would find this interesting” or “I knew that you would share in our excitement about this news.” So keep it simple, but keep it consistent. Every six weeks. That's a good benchmark.

Bob Swaney: We’ll get a little bit more into relationship building here in a few minutes. But before we go there, let's take a few more moments to discuss additional trends and challenges. We hear from clients a lot about staff resources. We're helping those organizations work through staffing, but let's define what the challenges are because it's a huge pain point for almost everybody at this point.

Catherine Heitz New: I just mentioned retention matters more than ever with our donors, and that's equally applicable to our staff. When we think about our fundraising team, let's not just silo it with our staff. It's really our staff and our volunteers, and both need retention strategies.

Often people think that this again needs to be over-manufactured or that it's a really important set of HR policies, but in truth, it's not. It's about checking in with your staff, making sure they have the tools they need to be successful. Things we discuss in conversations about how to retain donors are the basics of human communication and apply to our teams as well.

Ask engaging questions. Listen earnestly and then respond authentically. It's the same principle in retaining key staff. So first and foremost when it comes to staffing, if you have good folks, keep them. And keep them through good communication.

When it comes to recruiting new staff, take account of the resources you already have. We talk often that a team member is either a program manager or they're a major gift officer, right? They can design a program, keep the trains running on time, deploy all the resources; or there's someone who can go out, make major gifts, close those gifts, and bring home those dollars. Very rarely do we find a unicorn that can do both, so you have to be realistic.

It is very rare, especially in the competitive hiring market that we have today, to find someone who's going to check all the boxes, so make sure you're really clear about what are the top two or three boxes are that your organization needs checked, and then find the person who does that, and then invest in them.

If this is someone who checks two of those boxes, but not three, then think about how you can invest in growing their experience and skillset so that over time you're developing them for the organization and for their own career, which is quite fulfilling and builds a great deal of trust.

Bob Swaney: Part of this is age old, that question of do you set up the structure the way that you want the department to look like, and then try to find the people who can fill those slots? Or do you instead look at what you have on the team and try to build the jobs around it?

I don't think there's a single right answer because different organizations behave differently and they have different cultures. The old consultant answer is it depends on your organization.

My other concern about staffing is that post COVID we saw a lot of people run for the door. Fundraisers who just basically got through COVID, kept their organizations going, and then collapsed.

So looking at that, and then seeing the next generation of fundraisers, we see staff members routinely who have jumped over two or three management learning positions to take the chief development officer position, and they're not ready. They don't know what they don't know, they're not equipped, and they don't want to ask questions because they believe that is a sign that they don't know what they're doing.

The bottom line is, it puts them and the organization in a really precarious position for the 12-18 months. When somebody is put in that position, what can they do? What can they do to increase their success chances and the chances of success for their organization?

Catherine Heitz New: First let's actually address something that I'm hearing quite often, and it's to your point about the necessity of allowing people who may not have all the experience that we would expect to step into that role.

I have a good friend who is the provost of a major university and he specializes in generations, and he always reminds me that this is a volume situation we're dealing with. What he means is that when we take a look at the volume in each one of the current generations, when we look at baby boomers, Gen Xers, and millennials, that baby boomers and millennials, they are neck and neck.

They're huge groups. But when we look at Gen X, which is the group that most would be looking at to step into those leadership roles, they're half the size of either one of the generations on either side of them. Often I hear organizations say this is specific to their community or their organization. But the reality is it's a culture of the times right now. We have to deal with this intentionally, because there's not much we can control about the pool of candidates. Instead we are required to invest in people who may not have that same length of track record.

When we think about investing in those people, it is about giving them the tools they need to be successful, right? It's giving them some guardrails. It's a strong onboarding process, which is often overlooked.

And it's defining what success looks like. Of course, at the end of the fiscal year we need to hit the bottom line goal, but along the way, what do we want to accomplish to continue to grow and advance the fundraising program? Set those benchmarks, tell them what success looks like. And then if they have concerns about, have the right resources available to help them succeed.

Bob Swaney: I would add that if this is the reality, we have to live within it. The first thing the board has to do is let the new hire know that it's okay to invest in some resources and to learn some things they may not know to get up to speed more quickly and efficiently.

And those new leaders should look for a partner, like RSC Associates or others like us, who will coach and work with them to really bolster their chance of success. There are plenty of other resources, including educational resources, they can tap into.

They should not feel like an island. It does not work to say now that you've got the job, we expect you to do the job and interpreting that as you should know everything, be everywhere, and don't screw up. That's the biggest trip that I see over and over and over again – executives and boards who say that because you took the job, now you should be perfect. Not excellent, but perfect. That is not a realistic expectation.

We're always learning things. So somebody coming in new to a job certainly has things to learn. I get excited about that permission to not know everything and not have to know everything.

If there's something I could change instantly in the industry, it would be that.

Catherine Heitz New: That's right. Fear is often the greatest hindrance to successful fundraising. So if you've created an environment of fear for your fundraising team, that's going to hinder you greatly. That permission to make asks and get rejections is critical.

We often talk about the fact that you have to have three prospects to close one gift, and that's because we know we have to be able to be wrong two out of three times to be right that one time. It's just a matter of giving them the confidence and the environment where they can move forward.

Bob Swaney: We're sort of on relationships now, but let's talk about relationship building and how important it is at every level. We coach clients a certain way, with the idea that we want them to mimic our approach with their donors and their prospects.

And that's through the whole cycle of identifying and cultivating and soliciting and stewarding. So let's spend a minute or two on how you coach clients on their approach to building and maintaining quality relationships.

Catherine Heitz New: Yeah, so I think this is a moment where some practical examples are really helpful. I'll share a recent one, where we were working with a client who we had conducted a feasibility study to explore the possibility of an endowment campaign. We interviewed during that process someone who I'll call the community's big philanthropic fish.

Every single person who engaged with us through the study process knew that he had the capacity. But when we interviewed him, though he loved the organization, he communicated that he felt he'd really already done his part and was likely not going to be the lead donor that many thought he would be.

And so, through a process of about a year of coaching them in asking engaging questions, really listening to his responses, and responding thoughtfully, he was sold. He ultimately made a $5 million gift to the campaign and he challenged the community to match him in his support. It’s a great example of the potential success of the simple process of asking, listening and responding.

That is cultivation. That is stewardship. We do it very naturally in our day to day lives. We do it naturally in our conversations. Think about how you start up a conversation with any friend or family member. It's asking, listening, and responding. And so, do that authentically with your donors. Do it consistently with your donors.

And you are going to see results.

Bob Swaney: That’s a great story of success and a great result for that organization. Thanks for sharing it.

Our conversation will continue in a few weeks on more trends and challenges in fundraising. Check back here soon for more.