of the cause4 arts & culture fundraising benchmark tool · and culture fundraising benchmark...

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Key Findings oF the

Cause4 arts & Culture Fundraising BenChmarK tool2018 release of 2017 data

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Contents

01. WelCome 4

02. goals oF the Cause4 arts & Culture Fundraising BenChmarK 9

03. deFinitions and Comparisons 10 3.1 Splits between grant, contributed and earned income 11 3.2 Earned income 12 3.3 Local authority and Arts Council England grant based income 12 3.3.1 Capital 12 3.3.2 Income accruing from Arts Council England 12 3.3.3 Non-Arts Council England subsidy (Local Authority and other) 13 3.4 Contributed income 13 3.5 Expenditure 13 3.6 Return on investment on fundraising 13 3.7 Role of volunteering 13

04. Who do you Want to Compare yourselF to? 14 4.1 Regions 14 4.2 Artforms 14 4.3 Arts Council England funding bands & annual turnover levels 14

05. highlights in the 2017 Cause4 Fundraising BenChmarK 15 5.1 National financial highlights 15 5.1.1 National income data 17 5.1.2 National expenditure data 23 5.1.3 National data on funds raised 25 5.1.4 National data on volunteering 27 5.1.5 Summary of national results 28

06. Finding the Best Comparison group For your organisation 29 6.1 Highlights for Arts Council England’s five areas 30 6.2 Artform highlights 33 6.3 Turnover band highlights 38

07. ConClusions 43 7.1 Patterns in the data when we compare the five slices 44 7.2 Looking ahead 45

P A g E

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hoW to use this report

01.think about your strategy

02. identify key areas of your fundraising you want to benchmark

03. use the sPreadsheet to create the best slice of data to comPare yourself to

04. utilise the rePort to look at headlines of the data

05. work with your senior team and board to think about how this benchmark can inform your strategy develoPment

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this second Cause4 arts and Culture Fundraising

Benchmark report is designed to be read alongside the Cause4 arts and Culture Fundraising dashboard. these resources are designed to help both organisations in the arts council england (ace) national Portfolio and in the wider non-profit cultural sector compare and contrast their individual business models, their achievements in income diversification and to set targets for the future.

these two tools look first at the national picture but then dig into the detail about how the average changes when you start looking at individual artforms, regions and turnover bands.

ultimately the goal is to enable you, the trustees and leaders who run arts organisations to explore the benchmark dashboard yourselves and create your own slices of the data so that you can look not just at your peers today but perhaps also at a data slice which represents your own organisation’s aspirations for growth and change.

both dashboard and report make use of the public release of the 2017 aCe annual data set. there are some notable differences in the way that the data has been aggregated in this benchmark by comparison to the ace report on the annual dataset. ace reports on the portfolio as a whole and focusses on the percentage of total income to the portfolio that accrues from say trusts and foundations.

by contrast, our approach is focussed on enabling comparisons at the level of individual organisations to a series of clusters or slices ranging from the national overview to regional, artform and turnover slices. this means that instead of reporting as a percentage of the total in the portfolio’s income that accrues from trusts and foundations, the cause4 arts and culture fundraising benchmark reports the percentage of income from trusts per organisation and then shows it as an average in a cluster or slice. this means that the balance of income types in the slices of results we’re reporting should be a closer match to the day to day experience and business models of an individual organisation.

01. WelCome to the seCond Cause4 arts and Culture Fundraising BenChmarK Findings

key findings of the cause4 arts and culture fundraising benchmark/introduCtion

This resource looks first at the national picture but then digs into the detail about how the average changes when you start looking at individual artforms, regions and turnover bands.

the benchmark dashboard can be found at www.artsfundraising.org.uk

http://www.artsfundraising.org.uk

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this means that the results of the organisations with lower levels of turnover are not being masked by the business models of the very largest organisations in the portfolio. of course, the results will be an even closer match if you are looking at say your artform or turnover band than if you are only looking at the national averages. there is definitely value in slicing the data by more than a single factor, in particular we would suggest that users of the benchmark set up a slice that looks at a single artform in combination with either a single region or a single turnover band. this level of granularity is likely to produce a set of results which are much more recognisable as being ‘like us’ when this sits alongside your individual organisational results.

when we look at the income summary data on a national level we see that the two largest sources of income for most organisations in the portfolio are arts council england (ace) funding and earned income, with each being responsible for around 35%–40% of the turnover of a n individual organisation. at a national level, ace income is, as an average percentage of an organisation’s income, responsible for a higher percentage of total income than earned income.

however, once we start slicing the data by region, artform or turnover band we can look at how this headline splits out to show up clear patterns by region, artform and turnover band. the pattern in the turnover band slice is perhaps the clearest as there is a direct relationship between turnover and the ability to achieve higher levels of earned income.

similarly, when we look at the average percentage of income that organisations see from trusts and foundations, we can look both at the average nationally (around 10%–11% of turnover) and compare and contrast this to the patterns by region, artform and turnover band. however, when we split this national average into regional averages we see that the picture for london (around 14% of turnover for organisations in this region) is very different to that for the midlands (around 8%–9%) or the south west (around 6%–8%). when we look at the same data on income from trusts and foundations by artform we see that literature does well (on average 18%–22%) with museums at the opposite end of the spectrum (around 2%–4%). as this is now the second report, what we can now add to this picture is that these levels are approximately consistent as patterns across the first two reports and thus three years of data.


The pattern in the turnover band slice is perhaps the clearest as there is a direct relationship between turnover and the ability to achieve higher levels of Earned Income.

01.

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01.

the national average percentage of income from each of the income types that ace collects data on is a useful reference point. however, we can quickly see that the real value comes from working out what slices of the data help an individual organisation compare themselves to their own peer group. with this in mind, the dashboard has been constructed so that not only can you shape your own comparison group (columns f & g) but you can also look at your individual organisation’s results alongside it (columns h & i).

for the first time we are looking not just at income but also at expenditure, fundraising return on investment (roi) and the role of volunteering in your business models.

at a national level, spend on artistic or main activity is unsurprisingly the largest single line of expenditure at an average of approximately 50% of turnover. overheads are the second area with a national average of 22% and education comes in third at around 11%. this latter figure is interesting when compared to the income accruing from education (nationally this is just under 7%) as it shows that on the whole organisations spend more on providing

education activities than they earn from them in income. there will no doubt be various views on this ranging from those who see it as entirely appropriate and part of the role of a non-profit cultural organisation particularly when delivering towards hard to reach audiences, working in areas of high deprivation or increasing access to culture. others might argue that activities such as these should be cost neutral or, depending on the activity or audience should deliver a surplus for re-use elsewhere in the organisation. obviously, there is no one size fits all answer here and the role that the data can play is one of stimulating debate in your organisation as to what is appropriate in your context.

with fundraising we have focussed on setting a baseline for the return on investment (roi). nationally the roi is approximately four to five to one (4–5:1). so, for every £1 you spend on fundraising (and on average nationally it’s about 8% of turnover) you will, in addition to getting your £1 back, achieve another £4–5 in income. you will also see that we’ve looked at the differences in levels of spend on fundraising to ask questions about whether those that spend more on this area achieve a higher roi or not?


For the first time we are looking not just at Income but also at Expenditure, Fundraising Return on Investment (ROI) and the role of volunteering in your business models.

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that is to say are there increased gains for those who spend more in this area? the regional data would suggest that increased spend can lead to increased returns, for example, the midlands has the lowest spend on fundraising and the lowest regional average roi at 1.9:1. by contrast the north and south east have higher levels of spend on fundraising and also higher roi ranging from 6.0:1 (north 2017) to 8.5:1 (south east 2016). naturally there are also a variety of other differences regionally, by art form and by turnover band which are also likely to be influencing the roi, but as a baseline we think these calculations provide a sensible starting point.

we have introduced a strand of data on the levels of reserves held by organisations. this data is relevant in reference to work around resilience and in particular the idea a healthy level of liquid reserves (i.e. excluding the value of buildings and collections) is around six months of regular expenditure.

the national average across the portfolio is currently around three months. smaller organisations (<£200k turnover) do better at over four months and larger organisations (those over

£2m turnover) are more likely to be down to two months. this may of course reflect a wider difference in senses of resilience and fragility and differences in prioritisation of this measure versus others.

the last new addition to this report is data on volunteering levels. we recognise that the provision of volunteering opportunities is a vital part of the audience experience and community engagement as well as an often significant contribution to the overall business model of an organisation. our focus going forward will be to explore how this resource which, on one level at least, is a key source of labour, is affecting the business models of organisations in the portfolio. for now, we are simply establishing a baseline year in the reporting.

this report is designed to give arts and cultural organisations a starting point for their own exploration of the data in order to build the baseline data needed to build an effective fundraising strategy. this dashboard and report are the second in an annual series linked to funding from arts Council england as part of the arts Fundraising & philanthropy programme.

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This report is designed to give arts and cultural organisations a starting point for their own exploration of the data in order to build the baseline data needed to build an effective fundraising strategy.

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we’d really like your feedback on whether you have found this report useful so that we can continue to improve it. to chat to us about this or about how you can work with cause4 to develop more bespoke comparisons for your organisation contact michelle wright, ceo, cause4

email: [email protected]

if you have specific questions about the data or the calculations contact sarah thelwall, ceo, mycake on

tel: 07775 562168 email: [email protected]

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02.goals oF the Cause4 arts & Culture Fundraising BenChmarK

key findings of the cause4 arts and culture fundraising benchmark/goals

the purpose of this Benchmark dashboard

and accompanying report are to structure the aCe annual dataset so that it can be used to provide a comparison point at an individual organisational level. this report can be read alongside ace’s own annual report on the data. the difference between the two is that the former is designed to help individual organisations set goals for growth and change that are contextualised by relating the current position of an individual organisation to one or more peer groups. by contrast the latter provides an overview of the progress of the sector as a whole.

given cause4’s focus on fundraising and philanthropy this forms the core of the dashboard and report. nevertheless, we have contextualised this benchmark of the contributed income (private sector fundraising) in a wider narrative about changes in the balance of income types and

factors which influence the expenditure priorities and allocations such as volunteer resources and reserves levels so that we can provide as detailed a picture as the ace data collection allows.

this report is intended to provide trustees and individuals in leadership roles with sufficiently granular data that it can be used to inform strategic decision making.

we would expect these roles and individuals to want to compare their organisation to a peer group of organisations which are similar to them (slices by turnover, sector and geography being the simplest way to do this).

This report is intended to provide Trustees and individuals in leadership roles with sufficiently granular data that it can be used to inform strategic decision making.



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key findings of the cause4 arts and culture fundraising benchmark/deFinitions and Comparisons

03.deFinitions and Comparisons

to make sure we are all on the same page before we launch into the data and analysis here’s a quick recap on the types of income and aCe definitions we’ll be using:

→ aCe annual dataset1 each year, arts organisations and museums that receive annual funding from ace as part of the national portfolio are invited to provide information. this is known as the annual submission. ace release the headline statistics approximately 6 months after releasing their report and release the full data set approximately eighteen months after their report.

→ Benchmarking the process of comparing one’s organisation’s key metrics to industry bests and best practices from other organisations.

→ Cause4 arts & Culture fundraising dashboard the excel file which accompanies this report and which contains all the data (and more) along with the functionality to enable you to look at how your organisation is doing in comparison to groups and clusters of your own choosing.

→ arts Council england income all income which comes from ace including lottery funds.

→ earned income all income earned by your organisation from ticketed activity, education and various supplementary sources including café, shop, parking etc..

→ Contributed income all income accruing from donations, fundraising events, sponsorship and trusts (what we usually refer to as private sector fundraising).

→ Capital income all income accruing to your organisation which is specifically for capital purposes, buildings etc..

→ regional comparison where the national data has been split out into the ace five regions.2

→ artform comparison where the national data has been split out into the ace main artforms.

→ turnover range comparison where the national data has been split out into a set of turnover ranges. by turnover we mean the annual revenue income excluding any capital income.

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03.


to help work out what sort of comparisons would be best to help you track your progress, we have explained them here.

this report is designed to accompany the full Benchmark dashboard. the dashboard contains many more options and possibilities than we can work through in a single report. however both tools are designed to help individuals in senior roles in individual organisations (both in the nPo cohort and outside it) work out what sorts of comparisons would help them better track their own progress in areas that they have identified as important to their future. for some, this will be earned income growth, for others, contributed income is the focus, yet for others, cost management might be a current priority.

with this in mind, we’ve split out both the national data and the more granular slices of data (geographic region, art form, aCe funding band,

turnover bands) into a series of sections of the income data, a summary of the expenditure and a review of what this means in terms of the return on investment (roi) on the spend on fundraising.

organisations that maximise the opportunity of working with volunteers use it to provide an extended workforce for the delivery of the activities of the organisation. for this reason, we have included a review of the data provided on volunteering.

there is also a requirement for non-profit organisations and charities to build and maintain reserves and as this too affects the business model we have provided a summary of the data that ace collects in this area also.


useFul Comparisons

3.1 splits between grant, Contributed and earned incomewe would suggest that the first thing an organisation needs to be clear about is how its business model compares to the average either nationally or by region, artform or scale of operation (ie annual turnover).

if we look at how the income of an organisation is made up before looking at expenditure or fundraising roi, this will provide a baseline or reference point. if we look at the headlines in terms of the relative sizes of the core income types (earned, grant, contributed and other subsidy) then again this provides a useful basic reference point. with this in mind we’d suggest that the national average percentage of total income for each of these main income types is a good place to start. it’s not the most detailed, but it is a good baseline for more detailed comparisons by region, art form or turnover band.


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03.

The structure of the data allows organisations to compare their individual results for each income type against those in the national average and in detailed slices.


3.2 earned incomewith this set of headline percentages in your mind the next question is what are these headlines made up of? the lion’s share for most organisations under the earned income heading will be that accruing from core artistic activities. nevertheless, the relative roles of education and supplementary (this covers retailing, café, parking etc.) offer some interesting perspectives about how similar or different the art forms are and the differences between small and large organisations when it comes to the overall scale of operations (in this finance context we mean turnover rather than audience numbers).

3.3 grant based incomeas this dataset only contains data on organisations which are part of the national Portfolio, all organisations are in receipt of grants to a greater or lesser extent. it is worth noting however, that grants made by private trusts & foundations sit in the contributed income section and those from local authorities and other government sources sit in the other subsidy section.

3.3.1 Capitalwhen we are considering the year to year operational models it matters that we separate out the capital income accruing to some organisations in the cohort in order to ensure that this data doesn’t skew things. for that reason, in the ace element of the grants income we’ve split it out. we can’t do this in the ‘other subsidy’ line as we cannot see whether any of the e.g. local authority funding was for capital purposes.

3.3.2 income accruing from arts Council englandthe majority of income from arts council england sources accrues to an organisation through a variety of grant programmes. there is a degree of activity where the monies are made available through the contracting of services. however, this distinction is not made in the ace data gathered in the annual dataset. for those who are interested in this separation, reference to sets of annual accounts is likely to be necessary, as this is where organisations tend to report grant income separately from contracts to deliver services.

for the purposes of this benchmark and report we will assume that all monies accruing from ace are grants. the data does separate out monies from lottery sources managed by ace. there is also a separation out of the data for development activities.

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3.3.3 non-aCe subsidy (local authority and other)the granularity of the data here is very limited. it is nonetheless very useful as an indicator of the role of forms of income from public sources other than that from ace. again the data doesn’t allow us to separate out grants from contracts but the non-local authority data is a useful indicator of the extent to which organisations or clusters are achieving their goals for diversification of income and reduction of dependence on ace or other more traditional sources of grant income such as trusts & foundations.

3.4 Contributed incomeas with all of the data in the benchmark, this section looks at the average percentage of turnover accruing from each type of income. the structure of the data allows organisations to compare their individual results for each income type against those in the national average and in detailed slices. the additional detail here is that the data enables comparison between regular versus one-off donations versus fundraising events. all three of these are types of private individual philanthropy. the data also separates out corporate sponsorship versus grants from private trusts.

3.5 expenditurein order to maintain consistency of reporting and ease of understanding, the results continue to report the expenditure results as a percentage of income. this time however, we are using this approach to look at spend by the organisation not just revenue accruing to it.

3.6 roi on Fundraisingwe look at all the funds raised for the organisations in the data set. this means the non-earned income sources i.e. public and private sector grant making and individual and corporate giving.

3.7 role of Volunteeringvolunteers often play a crucial role within arts organisations. for the first time we are looking at the importance of volunteers within an organisation.

For the first time we are looking at the importance of volunteers within an organisation.

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4.1 regionsthere are some important differences in the business models when viewed from the position of the five ace regions. in particular, some regions do better than others when it comes to the different types of income. this slice is therefore a useful reference point if you want to understand the factors that are influencing your business model and income potential based on the region in which you are based.

4.2 artformsequally, there are some important differences in the business models when the data is viewed on an artform basis. this is important when setting goals for development, growth and change as the national averages alone do not show these important sectoral variations which, as with region, are usually fixed factors in your business model. the general rule that we would apply here is that if there is a factor which is fundamentally affecting your business model and which is unchangeable then, at a minimum you need to fully understand both the limitations and opportunities that go with it. this also means that, where appropriate, you should expect to communicate these differences to funders and other stakeholders – especially if you expect these stakeholders to be making comparisons between your organisation and others who may not be working from the same baseline of opportunity as yours.

4.3 aCe funding bands & annual turnover levelswe’ve pulled out two perspectives which relate directly to turnover levels. the first of these is a slice based on the ace funding bands. the second draws on the total turnover of the organisations in the dataset. the former is useful if you want to review the competition at your level of funding or are considering applying to a different funding band in the next round and want to understand how your business model might need to change if you are to compete in this class. the latter is useful if you want to understand how your annual turnover level is influencing your potential to grow the various components of your business model and how life might be different if you were either bigger or smaller in total turnover terms. if we assume that on the whole, organisations may grow or shrink by one band either way over the course of a 10–15 year period, then this slice is useful when considering the likely impacts of e.g. loss of nPo status or the potential for economies of scale or increases in the ability to fund a greater number of staff and the concomitant increase in capacity to buy in specialists rather than to hire generalists.

key findings of the cause4 arts and culture fundraising benchmark/Who do you Want to Compare yourselF to?

04.Who do you Want to Compare yourselF to?

you might have a preference as to the angle on the data that you would find most useful. With this in mind, we’ve also selected four main slices of the data (geographic region, art form, aCe funding band and turnover band) so that you can pick out the one(s) that you think provide greatest insight into your own organisation’s position and potential.

regions artforms turnover

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05.highlights in the 2017 Cause4 Fundraising BenChmarK

key findings of the cause4 arts and culture fundraising benchmark/highlights

5.1 national financial highlights

in this section we’re going to establish a reference point for later more detailed comparisons. think of this as the foundation layer.

we’re looking for broad trends as well as data points that don’t fit with the trend and might suggest that there is something unusual or interesting to learn from (either best practice or challenging circumstances!). findings at this level are only going to be high level and are intended to give a general steer as to the overall picture and direction of travel.

the 2018 release of the annual data set collected by arts council england contains information on some 670 members of the national Portfolio and covers the two years of 2016–17 and 2015–16. the average turnover of organisations included is some £2.7m per annum. the total turnover in 2017 was £1.9bn.it’s worth pointing out that not all organisations achieve income in all of the lines below. it’s also worth noting that this report is designed to accompany a detailed dashboard which allows for individual comparison of every organisation in the set of 670.

throughout this report, where possible, we refer to the 2015 data if we can see a clear three year trend. whilst the list of organisations whose data was included in the 2015 dataset is slightly different to that in the 2016 and 2017 dataset, in this report we suggest that the variations are not so substantial as to prevent some comparisons being made.

if you are reading thissection alongside theBenchmark dashboardthen the columns tolook at are d & e – thenational average forthe two years of 201516 and 2016–17. the Benchmarkdashboard canbe found at www.artsfundraising.org.uk


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05.nationaldata &analysis

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5.1.1 national income data

05.

key findings of the cause4 arts and culture fundraising benchmark/highlights/national inCome data

→ funding from arts council england is the largest single source of funding nationally and is very close to the previous year (39.9% in 2017 versus 39.7% in 2016 and 39.8% in 2015).

→ looking at this summary level the figures for 2017 and 2016 are all very similar to those from 2015.

→ earned income is a close second and is again largely static at 35.6% (2017) versus 35.4% (2016). this figure is broadly steady, with a minor increase 0.2% year on year since 2015.

→ with these two major income streams proving broadly steady it is no surprise that contributed income and other subsidy are also largely steady at around 15% of turnover each, although other subsidy figures have been eroded slightly from 16.4% (2015) to 14.8% (2017).

→ these revenue turnover figures are calculated to exclude ace capital income. for this reason, the total revenue income should (and does) show as 100% throughout. this calculation acts as a double check that the rest are working, as well as a point of comparison for the role of ace capital funding in the overall mix.

→ ace capital funding is, on average, worth a couple of percentage points across the set of 670 organisations. however, for those organisations that receive it, it is worth over a quarter of turnover in the year in which it is received.

→ there were fewer recipients of ace capital funding in 2017 than in 2016 or 2015 and they receive a greater proportion of their income.

2015 – 2016 average % of income

2016–2017 average % of income

analysis

income summaryFigure 1

earned income arts council contributed other subsidy revenue income excl. ace capital

ace capital income incl. ace capital

100

80

60

40

0

20

35.4 35.639.7 39.9

14.6 15.5 14.8

100 102.5 102.1

19.3

26.3

100

14.6

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key findings of the cause4 arts and culture fundraising benchmark/highlights/aCe Capital Funding

analysis

→ one can take the view that ace capital is more concentrated in 2017 than in 2015 (or 2016).

→ the other subsidy figure doesn’t indicate whether the funds are revenue or capital so we cannot determine whether there are other capital funds being received by the 670 organisations.

aCe Capital Funding

average % of income 26.3%

7.9%average % of reciPients

19.3%

12.8%

2015–16

10.9%

19.4%

2014–15 2016–17

Figure 2

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→ core earned income is the largest of the sources of income within the earned income set. whilst mainly steady, this has shown a marginal decline from 26.2% (2015) to 25.7% (2017).

→ supplementary income has seen an increase for the second year in a row. from 8.2% (2015) to 8.7% (2016) to 9.1% (2017), with the same number of organisations 76% of organisations reporting supplementary income.

→ whilst education income has been steady at 6.9% (2017) vs 6.8% (2016) we can see that there has been a decline in education income from children and young People from 5.6%. (2016) to 5.4% (2017) (note 6.3% (2015)). in this time, the number of organisations deriving education income from children and young People has increased from approximately 43% (2016) to 48% (2017).

earned income

05.

analysis

key findings of the cause4 arts and culture fundraising benchmark/highlights/earned inCome

Figure 3

5.3

8.7

core3 education4 of which children and young People

supplementary5 total earned income

30

25

20

15

10

0

5

35

international6 inward international7

total

%

26.025.7

6.8 6.95.6 5.4

9.1 7.5

7.1

3.9

35.4 35.6



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05.

key findings of the cause4 arts and culture fundraising benchmark/highlights/aCe Funding

aCe Funding – excl. Capital

→ within the various sources of ace funding national Portfolio organisation(nPo)/major Partner museum’s (mPm) funding is the single largest source at an average of 34.7% of turnover in 2017 (35.3% in 2016) from a total of 39.9% (39.8% in 2016). all organisations received money from this source in 2017.

→ for those that received ace capital funding, this is the second largest source of ace funds at an average of 26.3% of turnover in 2017, up from 19.1% in 2016.

→ capital funding aside, the second largest source of revenue monies received from ace is lottery Project funding at 11.2% in 2017. this is higher than the 2016 level of 9.3% but lower than the 2015 level of 13.1%.

→ 23% of organisations received lottery Project funding in 2017, this is the same proportion as in 2016.

→ other non-lottery funding is the third largest source with an average of 8.7% in 2017 (vs 2016 figure of 8.3%).

→ the average lottery development funding has almost doubled from 3.7% (2016) to 7.2% (2017), although the proportion of organisations receiving lottery development funding has dropped from nearly 20% in 2016 to around 13% of organisations in 2017.

→ approximately 18% of organisations received other non-lottery funding in 2016.

analysis

Figure 4

3.7

lottery development6 lottery Project9 lottery other revenue10

other non-lottery11

national Portfolio organisation/major Partner

museum (nPo/mPm)12

total ace fundingexcl. capital11

30

25

20

15

10

0

5

35

40

ace capital funding13

total

%

7.2

9.3

11.2

5.9 6.47.7

8.7

35.334.7

39.8 39.9

19.1

26.3

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key findings of the cause4 arts and culture fundraising benchmark/highlights/ContriButed inCome

→ income from trusts, foundations and legacy bequests is the single largest source of income for most organisations in the dataset, as it has been in 2015 and 2016. it is worth an average of some 10%–11% of income and is seen in 76% of the organisations in the dataset, the number of organisations receiving this type of income has increased from 70% in 2016.

→ one-off donations, regular donations and fundraising events are each worth an average of some 2%–3% of turnover.

→ two thirds of organisations achieve income from one-off donations (monies received from the general public or friends for which no benefit is received).

→ approximately 47% achieve income from regular donations such as friend and member schemes.

→ income from sponsorship is achieved by about 44% of all the organisations in the dataset.

→ fundraising events are the least common source of contributed income with just under 20% of organisations accruing income from this source in 2017.

→ there has been a slight increase in the proportion of organisations generating contributed income from 93.0% (2016) to 94.5% (2017), although the average contributed income is steady at 14.6% across the two years.

analysis

Contributed incomeFigure 5

one-off donations14 regular donations15 fundraising events16

sponsorship17 trusts18 total ace funding excluding capital

12

10

8

6

4

0

2

14

16

total

%

3.1 2.9 2.9 3.02.5 2.6

3.74.0

11.0 10.7

14.6 14.6



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key findings of the cause4 arts and culture fundraising benchmark/highlights/other suBsidy

other subsidy

analysis

→ local authority grants continue to decline from 11.9% (2015) to 10.4% (2017).

→ other Public grants has remained steady at 10.6%, however, the proportion of organisations receiving this type of grant has declined slightly from around 46% (2016) to just under 44% (2017).

→ overall, both the amount of other subsidy and the proportion of organisations receiving total other subsidy has declined from 2016 to 2017. the amount has declined from 15.6% in 2016 to 14.8% in 2017 (16.4% in 2015) and the proportion of organisations that received subsidies from local authority grants or other Public grants has declined from 74.4% in 2016 to 73.0% in 2017 (73.8% in 2015).

Figure 6

local authority grants19

other Public grants20

total other subsidy

12

10

8

6

4

0

2

14

16

total

%

11.1

10.4 10.5 10.6

15.6 14.8



Page. 23

in order to maintain consistency of reporting and ease of understanding, we are continuing to report the expenditure results as a percentage of income. this time however we are using this approach to look at spend by the organisation, not revenue accruing to it.

the data collected in these two years is structured so that the staff salary spend is recorded under the most appropriate activity heading so that marketing staff form part of the marketing spend whereas the artistic staff costs sit within the artistic/main activity spend.

the value in looking at these national average figures is that they provide a useful baseline for comparisons of the averages seen in the art form, region and turnover band slices.

05.

key findings of the cause4 arts and culture fundraising benchmark/highlights/national expenditure data

5.1.2 national expenditure data

expenditure

→ artistic/main activity is the area with the single greatest level of spend in the national average. we expect to see this hold true across all art forms, geographic regions and turnover band slices. this national average of approximately 50% of turnover being spent on the main activity of the organisation forms a useful comparison point for other slices of data.

→ overheads form the second largest area of spend at around 22% of turnover in each of the two years. we expect this figure to vary according to whether an organisation runs a publicly accessible building or not. variations based on whether a building is owned as freehold or leased from a landlord are also expected.

analysis

Figure 7

22.6

collections – acquisitions 21

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funds

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7.9 9.55.5 5.0

7.9 7.711.5 12.4

22.5

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5.1 5.110.5 10.8

2.6 2.5

98.3 99.0

Page. 24

of course, we cannot research these topics based on the nPo dataset and exploration of these questions would require separate data collecting.

→ spend on education activities sits at around 10%–11% in each of the two years. it is interesting to note that this means that, on average, the spend on education is higher than in the income from education (which is around 7% of turnover on average nationally).

→ as a national average, the cost of generating funds is sitting at around 8% of turnover in both years.

→ we wonder if, after further research, whether a correlation will be visible between the spend on fundraising and the spend on marketing.

→ we are also looking to see what the relationship between the spend on fundraising and the impact on both contributed and earned income will be.

→ on average, the spend on marketing is approximately 5% of turnover as a national average.

→ the average annual spend on collections is of course mostly limited to the museums in the data set and is, on average, approximately 5% of turnover.

→ governance costs are also stable at around 2.5% of turnover.

→ on a national basis, the organisations in the portfolio are spending less than they are earning by around 1%–2% as the total expenditure is sitting at around 98%–99% of turnover. as we will see from some of the slices of data this is not true for all organisations in the cohort.

05.

key findings of the cause4 arts and culture fundraising benchmark/highlights/national expenditure data

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this section looks at all the funds raised for the organisations in the data set. this means the non-earned income sources i.e. public and private sector grant making and individual and corporate giving.

5.1.3 national data on Funds raised

05.

key findings of the cause4 arts and culture fundraising benchmark/highlights/national data on Funds raised

→ as we will see when we look at the individual slices of data by artform, region and turnover band the actual levels of funds raised vary considerably across the slices. with this in mind we’d suggest that the most useful reference point in this set of results is the fundraising roi ratio rather than any of the cash figures shown above.

→ as a national average £1 spent on fundraising returned both the £1 risked and an additional £4.30 in 2017. this is down from 2016 where the average return was £5.10.

→ so as a baseline for comparisons the national average fundraising return on investment (roi) is a ratio of around 4–5:1.

analysis

Funds raised 2015 – 2016 average % of income


Figure 8

ace incl. capital £626 £613

contributed income £326 £334

other subsidy £278 £266

total funds raised £1,230 £1,217

cost of funds raised £201 £228

net raised £1,029 £989

fundraising roi (net raised/cost of fundraising as a ratio) 5.1 : 1 4.3

Page. 26

05.

key findings of the cause4 arts and culture fundraising benchmark/highlights/FinanCial resilienCe

Financial resilience

→ the purpose for looking at this metric is that it is one method of looking at the financial resilience of an organisation.

→ in an ideal world, non-profit and charitable organisations would carry liquid reserves equivalent to around six months of spend29. the data above suggests that the norm nationally is currently around 3 months.

→ we can see a slight decrease in the amount of unrestricted, undesignated funds as expressed as weeks of expenditure.

analysis

13weeks

2015–2016unrestriCted, undesignated Funds as WeeKs oF expenditure

12weeks

2016–2017

Figure 9

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05.

key findings of the cause4 arts and culture fundraising benchmark/highlights/national data Volunteering

this section looks at volunteering within the organisations in the data set. this means the number of unpaid individuals that work for an organisation, expressed as full time equivalents (fte).

5.1.4 national data on Volunteering

→ as the volunteer fte’s per £1m of expenditure is 128, we can see that more smaller organisations use volunteers versus larger organisations.

→ 60% of organisations have reported the use of unpaid volunteers within their organisation and on average they have the full-time equivalent of 90 staff.

→ as this is the first time we have reported this data, the sole purpose at this stage is to set a baseline. we suspect that volunteers are a very important part of both the audience experience and the business model for those organisations that provide volunteering opportunities. whilst we have not (yet) planned to look at how business models vary between high and low volunteering organisations it would in theory be possible to do so if the sector felt it would be useful.

Volunteer Fte’s per £1m of expenditure 2017

numBer oF orgs With Volunteer data

401

aVerage Volunteer Fte’s

90.3

Volunteer Fte’s per £1m oF expenditure

128.7

analysis

Figure 10

Page. 28

on a national level we can see that for the majority of organisations 2017 was very similar to 2016, and in many cases similar to 2015. so whilst the national portfolio has decreased from 676 members to 670, the average turnover is the same at £2.7m per annum. the ace funding remains the largest source of funding, with earned income and contributed income also remaining static and in second and third place respectively.

there are, however, some changes apparent at a national level, the greatest of which is ace capital spending. fewer organisations have received ace capital funding in 2017 than in 2016 or 2015 and they receive a greater proportion of their income from this means, with 7.9% of organisations receiving on average 26.3% of their annual income. lottery development funding has also seen a drop in the proportion of organisations receiving it, from 20% in 2016 to around 13% of organisations in 2017, with the average amount received doubling from 3.7% (2016) to 7.2% (2017).

other income streams have also changed between the 2017 release and the 2018 release of data. there is a slight decrease in other subsidy from 15.6% to 14.8% which comes from the decline in local authority spend which has fallen from 11.9% in 2015 to 10.4% in 2017, with slightly fewer organisations reporting local authority support , down from 73.8% of organisations in 2015 to 73.0% in 2017.

we can also see a decline in education income from children and young People, from 6.3% (2015) to 5.4% (2017) which accompanies a rise in the proportion of organisations generating education income from children and young People which has risen from 43% (2016) to 48% of organisations (2017).

we are reporting on expenditure, and financial resiliency for the first time, and we see that the artistic/main activity is the key area of spend for organisations at approximately 50% with overheads claiming 22% of income and education spend is roughly 10%–11%. we can see from the volunteer data that many thousands of volunteers play a key role in the life of cultural organisations with an average of 128.7 volunteers per £1m of expenditure. we can also see that in 2017 organisations held an average of 12 weeks expenditure as unrestricted, undesignated funds, which is down from 13 weeks in 2016.

05.

key findings of the cause4 arts and culture fundraising benchmark/highlights/summary oF national results

5.1.5 summary of national results

We are reporting on Expenditure, and financial resiliency for the first time, and we see that the Artistic/Main activity is the key area of spend for organisations.

Page. 29

the purpose of all these slices is to help organisations identify one or more peer groups that they could usefully compare themselves to. there are of course many more ways to create more nuanced benchmark comparisons but to make the most of these you really need to be using the full dashboard where you have the option to look up your individual organisation’s results, as well as to create bespoke benchmark comparison groups using several of the filters at once.

in the excel-based full dashboard you have the option to look up your individual organisation’s results and create bespoke benchmark comparison groups. the comparison groups are created using filters to slice the data and a number of filters can be applied to create a specific and relevant comparison group. the dashboard shown includes the north region and dance artform.

slicing by region, art form and ace funding band are only four of the nine options for creating a bespoke comparison group. the others are to:

→ slice by a bespoke turnover range

→ select organisations that record volunteer hours

→ select organisations that are local authority run

→ choose between comparing your organisation to those which are or are not charities

→ choose to compare to organisations that claim gift aid

you can of course apply more than one filter criteria at once, however, for brevity of reporting we will focus on four single slices here.

06.Finding the Best Comparison group For your organisation

key findings of the cause4 arts and culture fundraising benchmark/Comparison groups

now that we have a clear view of the national picture and the headline results we will look at each of four slices of data – by region, art form, aCe funding band and annual turnover range.


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Page. 30

there are some important differences in the business models when viewed from the position of the five ace regions. in particular, some regions do better than others when it comes to the different types of income. this slice is therefore a useful reference point if you want to understand the factors that are influencing your business model and income potential based on the region in which you are based.

of course, very few organisations choose to change the region in which they are based (clearly impossible for building-based organisations!) but if, for example, you are based in a region which typically achieves less income from trusts or sponsorship then you might want to consider amending your strategy accordingly, or working with a specialist who has networks based outside of your region.

6.1 highlights for the aCe five regions

06.

key findings of the cause4 arts and culture fundraising benchmark/comParison grouPs/regions

Figure 11average turnover per organisation by aCe region

northno. of orgs: 189turnover: £1.74m

midlandsno. of orgs: 87turnover: £5.48m

londonno. of orgs: 241turnover: £3.08m

south Westno. of orgs: 82turnover: £1.57m

south eastno. of orgs: 71turnover: £2.77m

→ there is significant variation between the volume of nPos in each of the five ace regions. the south east (71), south west (82) and midlands (87) regions have notably lower volumes of nPo’s than the north (189) or london (241) regions.

→ there is also a significant difference between the average turnover levels of the organisations when sliced by region. the midlands region has the highest average turnover at £5.48m followed by london at £3.1m. the south west has an average turnover less than half this figure at £1.57m.

analysis

Page. 31

there are eleven key points in the income summary of the five areas, the top three are:

→ the average level of arts council income (excl. capital) is higher than the average for earned income in both years for london, north and south east regions

→ in the south west earned income was higher than arts council income (excl. capital) in both years, and in the midlands they are almost equal in both years.

→ there are significant differences between regions and years within the average ace capital investment figures, between the midlands 1.5% in 2017 and 54.7% in the north 2017. only london shows consistency between the two years between 15%–16%. this variation is likely caused by the numbers of ace capital grants made in each region.

06.


analysis

Figure 122016–2017 average % of income

2015–2016 average % of incomeincome summary by aCe region

london midlands north south east south West

earned income total 35.2 34.1 37.9 38.0 33.2 33.9 34.8 37.1 38.8 39.7

arts council total (excl. capital) 39.9 40.4 37.7 38.3 41.6 41.4 40.2 40.5 36.5 36.5

contributed income total 20.6 21.3 11.1 10.3 11.2 11.3 13.7 11.8 9.3 9.9

other subsidy total 11.0 10.9 17.1 17.6 17.5 16.8 15.1 13.1 17.8 15.9

total income (excl. ace capital) 100 100 100 100 100 100 100 100 100 100

ace capital 15.8 16.4 10.8 1.5 22.3 54.7 33.0 7.6 18.2 32.6

total income incl. ace capital 101.8 101.2 101.7 100.1 102.5 104.3 105.6 100.9 102.4 102.8

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06.


Contributed income by aCe region Figure 132015 – 2016 average % of income


london midlands north south east south West

one-off donations 3.9 4.3 2.9 1.5 2.0 2.2 3.8 3.3 2.4 1.8

regular donations 4.2 4.6 2.0 2.1 2.3 2.2 2.2 1.8 1.6 1.7

fundraising events 4.0 4.3 2.3 0.4 0.9 0.8 1.1 1.2 1.3 2.6

sponsorship 5.9 6.7 1.9 1.9 3.4 3.3 1.8 2.2 3.1 3.1

trusts 14.5 13.7 8.4 8.6 9.2 9.7 10.9 8.0 6.6 7.8

total contributed income 20.6 21.3 11.1 10.3 11.2 11.3 13.7 11.8 9.3 9.9

there are a number of key points across the five areas’ contributed income figures, the top three are:

→ one-off donations, regular donations and fundraising events are each worth an average of some 2%–4% of turnover in all regions.

→ as highlighted in the income summary london does two to three times better (with averages of 20.6% and 21.3% of turnover respectively) than all other regions when it comes to achieving income from contributed income sources. what this table allows us to look at is what is driving this across the various income types.

→ one key difference is in income from trusts. for london based organisations this is an average of around 14% of turnover. this is in stark contrast to the south east and the south west where the average hasn’t exceeded 8% in either year. this begs the question about what support and development is needed at a regional level to change this position?

as in the 2016 report there is great variety in the number of nPo’s in each of the five regions from 72 organisations in the south east and 82 organisations in the south west to 242 in london.

the average turnover for the regions has also retained its disparity between regions. the smallest average is in the south west which is under half the size of the average in the midlands which has retained the top spot with the largest average.

whilst all the regions see the greatest proportion of their contributed income accruing from trusts, london region’s contributed income remains double that of other regions. this is offset by london receiving two thirds of the other subsidy figures received outside the capital.

this reliance on trusts is exacerbated by the fact that outside of london the percentage of income accruing from any other source only exceeds 2% for sponsorship in the north and south west. have organisations in these regions chosen to focus on sponsorship specifically? are organisations elsewhere spreading their focus so that they do a little of each? it might be useful to research this further to understand the activities which are leading to these differences.

analysis

Page. 33

there are some important differences in the business models when the data is viewed on an artform basis. this is important when setting goals for development, growth and change as the national averages alone do not show these important sectoral variations which, as with region, are usually fixed factors in your business model!

the general rule that we would apply here is that if there is a factor which is fundamentally affecting your business model and which is unchangeable then, as a minimum you need to fully understand both the limitations and opportunities that go with it.

this also means that, where appropriate, you should expect to communicate these differences to funders and other stakeholders – especially if you expect these stakeholders to be making comparisons between your organisation and others that may not be working from the same baseline of opportunity or challenge as yours.

it is worth bearing in mind that this nPo round is the first to include museums so it may be difficult to compare this artform cluster to those which have been part of the nPo set for longer.

6.1 artform highlights

06.

key findings of the cause4 arts and culture fundraising benchmark/comParison grouPs/artForms

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average turnover by artform in 2017

ComBined arts167 organisations

£2.7m

Visual arts121 organisations

£1.17m

museums21 organisations

£7.9m

theatre162 organisations

£3.25m

danCe57 organisations

£2.2m

musiC91 organisations

£5.06m

literature21 organisations

£7.9m

non artForm speCiFiC4 organisations

£1.33m

Figure 14

analysis

→ the museums sector stands out by virtue of showing the largest average turnover as a sector in 2017. it is worth noting that the addition of museums to the ace national portfolio is relatively recent and the profile of these organisations is not wildly similar to the profile of the organisations in other sectors on the basis that they are mostly large museums as measured by turnover and staffing levels.

→ the music and theatre sectors both have an average organisational turnover of over £3m per annum. given that the theatre sector is the second largest in terms of the number of

organisations in the cluster, this renders them the largest art form sector in the whole portfolio.

→ whilst the not art form specific cluster is the smallest in terms of number of organisations, it is the literature sector that has the smallest average organisational turnover at £696k in 2017.

→ combined arts is the largest art form sector in terms of numbers of organisations in the cluster (167) and third largest in terms of revenue.

06.


Page. 35

Combined arts dance literature museums music

earned income 36.3 35.6 33.1 34.0 30.7 30.5 32.5 34.6 37.9 38.1

arts council (excl. capital) 36.3 37.5 50.0 47.8 45.5 45.7 26.5 26.6 35.7 35.5

contributed income 11.8 11.1 9.7 11.2 22.9 21.2 5.7 6.9 20.6 20.2

other subsidy 19.6 19.3 12.1 11.8 9.0 7.2 35.3 33.8 12.6 12.0

income (excl. ace capital) 100 100 100 100 100 100 100 100 100 100

non-specific theatre Visual arts

earned income 6.9 13.1 41.8 42.2 27.9 28.1

arts council (excl. capital) 57.6 53.1 38.9 39.7 43.2 42.8

contributed income 18.1 10.5 13.1 12.9 17.0 18.0

other subsidy 29.2 23.3 9.2 8.0 16.9 16.2

income (excl. ace capital) 100 100 100 100 100 100

06.


there are eleven key points on the artform slice for income summary, the top four are:

→ the music and theatre sectors stand out from the crowd in terms of the average organisational levels of earned income (38.1% and 42.2% in both years respectively) as these organisations achieve, on average, the highest levels of earned income, this has been roughly static since 2015.

→ as sectors, only museums, music and theatre achieve a higher average level of income from earned income than from ace funding.

→ the average percentage of income achieved from ace funding has remained roughly static

(within 1%) from 2015 through to 2017 in the literature, theatre and visual arts sector slices. museums and music have been static in 2016 and 2017 but saw large changes between 2015 and 2016 of 5% up and 12% down respectively.

→ ace funding income has increase by 1.2% on average for the combined arts sector but declined by 2.2% in the dance sector and 4.5% in the not art form specific sector.

→ from the full report, we can see in more detail the variation in support from ace between the different artforms, noting that the smaller sectors such as literature and not artform specific have fewer organisations to compare to.

analysis

income summary by artformFigure 15

Page. 36

06.



2016–2017 average % of incomeContributed income by artform

total Combined arts dance literature museums music

one-off donations 2.1 1.6 2.4 2.3 3.7 3.2 3.0 3.0 5.3 6.3

regular donations 2.2 1.9 1.0 1.0 3.0 5.3 1.0 0.8 3.9 4.0

fundraising events 1.8 2.1 1.3 0.9 4.7 5.3 0 0.5 1.8 1.7

sponsorship 4.6 3.8 1.3 1.6 5.9 6.3 0.5 0.8 3.8 4.7

trusts 9.2 9.5 7.8 10.3 22.4 18.0 2.5 3.4 13.9 12.1

total contributed income 11.8 11.1 9.7 11.2 22.9 21.2 5.7 6.9 20.6 20.2

non-specific theatre Visual arts

one-off donations 8.7 3.5 2.2 2.1 4.1 3.6

regular donations 8.7 3.5 2.2 2.1 4.1 3.6

fundraising events 0.9 0.8 7.7 7.8

sponsorship 0.9 1.9 2.2 5.8 6.7

trusts 22.8 18.4 10.8 9.9 10.5 11.1

total contributed income 18.1 10.5 13.1 12.9 17.0 18.0

Figure 16

analysis

there are ten key points to be drawn from the Contributed income, the top three are:

→ as with other slices of the data, income from trusts is the largest single element of contributed income across all art forms.

→ there is a high degree of variation between the art forms in terms of the average percentage of income accruing to organisations from trusts.

→ for most art forms, one-off donations and regular donations are worth an average of 2%–3% of turnover per organisation.

as with the 2016 report there is a wide variety of numbers of organisations within each artform cluster (from 4 –167). there is also wide variation between average turnover in each of the artforms, however, setting the largest forms (music and museums) aside, artforms vary between £700k –£3.25m.

as there has been some movement of organisations to/from the nPo since the previous report, the changes in average turnover may be due to portfolio change rather than environmental factors or efforts within the particular sectors.

Page. 37

we can see that the business models of the different artforms show in the different levels of revenue from different income types, including ace funding. so, we would recommend using artform as the minimum slice of data to compare yourself to. an example is the variation in contributed income, which varies between 6.9%

in the museums sector to 20.2% in literature. see figure 5.

the predominant types of expenditure, examined here for the first time, shows that different artforms have different spending models as well as revenue ones.

06.


Contributed income from 2014–15 to 2016–17 by artform

combined arts

dance literature museums music non-artform specific

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Page. 38

although this slice of data is not one that ace tends to report on in their annual analysis, we have included it because we’ve found it very useful in the culture benchmark. we’ve discovered that business models show themselves to be more homogeneous within a turnover band than when you slice by artform or geographic region. in fact, in our opinion the turnover of an organisation along with whether they run a public building or not are the two single greatest influences on the business model being operated.

the turnover bands below have been developed over the last decade by mycake and are intended to separate out the major differences in growth stages, assets and liabilities and staffing

levels which are the key factors which influence the scale of turnover of an organisation. anecdotal evidence based on many conversations with ceos, consultants, sector organisations and other professionals indicates that these bands are roughly right though in areas of high or multiple deprivation it is worth reducing the turnover bands so that <£200k becomes <£150k, £200k–£750k becomes £150k–£600k and so on. this is currently an inexact science! as the work on third sector business models develops to use a greater volume of ‘big data’ we expect to refine it. in the meantime, we’d recommend the work of Professor John mohan for those who are interested in examining this further.

06.

key findings of the cause4 arts and culture fundraising benchmark/comParison grouPs/turnoVer

6.3 turnover band highlights

→ in terms of the volume of organisations the greatest density is in the £200k–£750k slice where we see 283 organisations out of the total cohort of 670.

→ the £750k–£2m band is the second largest in terms of volume of organisations with 134, an increase of 5 over 2016.

→ the <£200k band has 10 organisations fewer than in 2015, but the average turnover is about the same.

→ in all bands we have a minimum of 30 organisations which aids the statistical reliability of the results.

analysis

average income summary by turnover Band

turnover → band

91organisations

£141kav. turnover

up to £200K

283organisations

£397kav. turnover

£200K– £750K

133organisations

£1.25kav. turnover

£750K– £2m

84organisations

£2.74kav. turnover

£2m – £5m

48organisations

£6.86kav. turnover

£5m– £10m

31organisations

£32.45kav. turnover

£10m plus

Figure 18

Page. 39

up to 200k £200k– £750k £750k– £2m

earned income 24.2 21.9 28.3 27.9 37.6 38.7



other subsidy 16.0 13.8 15.3 14.9 16.6 15.7


ace capital 62.3 0 28.2 26.1 26.2 19.1

income incl. ace capital 100.7 100 101.9 100.6 104.7 102.6

£2m– £5m £5m– £10m £10m plus

earned income 37.6 38.7 50.3 51.9 51.4 53.6



other subsidy 16.6 15.7 13.8 13.4 15.2 14.0


ace capital 26.2 19.1 11.5 49.7 10.8 15.2

income incl. ace capital 104.7 102.6 103.0 108.9 103.4 102.9

06.


average income summary by turnover Band

Fig

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19



there are four key points to be discovered from the income summary across turnover bands, the top three are:

→ there is a correlation between the size of the organisation and the levels of earned income and arts council total income. that is, as the size of the organisation grows so earned income accounts for a greater percentage of turnover – from 24.4% in 2016 in the <£200k band up to a maximum of 59.0% in the >£10m band. this can be best seen in figure 8

→ and there is an opposite correlation with the arts council income, in that the lowest proportion of income from ace (17.7%) is received by the largest organisations (>£10m) and the largest proportion (61.7%) is received by those organisations under £200k.

→ between 2015 and 2017 we can see ace funding slightly tilting further in favour of smaller organisations, with a 3.5% increase at the lower levels, with a commensurate decrease in proportionate funding at the top end of 2.2%, with average ace funding remaining static at the £750k–£2m level.

analysis

Page. 40

06.


Figure 20

earned income versus arts Council income (excl. Capital) as income increases



up to £200k £200k–£750k £750k–£2m £2m–£5m

60

50

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30

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£5m–£10m £10m plus

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Page. 41

Contributed income summary by turnover Band2015 – 2016 average % of income


there are nine key points to be learnt from comparing Contributed income across different turnover bands, the top three are:

→ total contributed income spans a range across all the turnover ranges when considered as an aggregate – from a minimum 9.9% in 2017 for >£10m turnover organisations up to a maximum of 17.2% in 2016 for £750k–£2m organisations see figure 10

→ however, when broken down into its constituent elements we see quite a different picture. for organisations <£5m trusts make

up the lions’ share of contributed income – peaking at an average of 13.7% of turnover in 2017 for organisations in the £200k–£750k range. income from trusts is more than twice the second largest element of contributed income for all these income bands.

→ the role of trusts diminishes in percentage terms as organisations increase in turnover and by the time we look at those of £5m–£10m turnover we see a roughly equal level of income accruing from trusts and sponsorship with each being worth around 4.9%–5.2% of turnover.

up to 200k £200k– £750k £750k– £2m



fundraising events 4.9 3.8 3.3 4.5 3.5 2.6

sponsorship 5.7 5.5 4.0 4.2 5.0 4.7

trusts 12.7 12.5 14.3 13.7 12.1 11.3


£2m– £5m £5m– £10m £10m plus



fundraising events 2.6 1.0 1.3 1.7 1.0 0.4

sponsorship 4.7 1.9 2.4 4.5 5.2 1.4

trusts 11.3 6.0 6.5 4.9 4.9 4.0


analysis

06.


Fig

ure

21

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06.


→ almost half of the organisations in the dataset fall into the £200k–£750k turnover range and there are fewer organisations in the bands from £2m turnover onwards.

→ there are a number of very distinct patterns

in the data which indicate that there is a direct link between the turnover level and the likely business model and balance of income types. organisations with a smaller annual

turnover are far more likely to accrue a higher percentage of turnover from grants than from earned income for example.

whilst levels of contributed income are relatively stable across the income bands and only fluctuate by a few percentage points, the elements that make up this total contributed income vary considerably across the turnover bands.

analysis

Contributed income Varying by turnover

up tp £200k £200k–750k £750k–£2m £2m–£5m £5m–£10m £10m plus

12

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%

one-off donations

regular donations

fundraisingevents sPonsorshiP trusts

Figure 22

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07.ConClusions

It is clear from all slices, that Earned Income and ACE income jostle for first and second spot in terms of greatest percentage of income at an organisational level.

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the national averages provide a good baseline against which to compare the

various slices – both those covered in this report and those which users of the benchmark can explore for themselves directly. there is definitely value in slicing the data by more than a single factor but that is beyond the remit of this report if only because this is something of a doorstop already! in particular we would suggest that users of the benchmark set up a slice that looks at a single artform in combination with either a single region or a single turnover band. this level of granularity is likely to produce a set of results which are much more recognisable as being ‘like us’ when this sits alongside your individual organisational results.

7.1 patterns in the data when we compare the five slicesnow that we have looked both at the national average and the averages for the slices by region, artform, ace funding band and by turnover band we can review the patterns in the data to see if there are any common themes across the slices or any detail to patterns first seen in the national average slice.

it is clear from all slices, that earned income and ace income jostle for first and second spot in terms of greatest percentage of income at an organisational level. in last year’s report we posed the question whether this jostling revealed any larger trends that might be revealed by examining further years. and we can say that this review of 2017 data shows that despite earned income and ace income remaining the same in 2017 against 2016, those regions that had more ace income than earned income remain the same (london, the north and the south east), the midlands has no clear favourite, and that the south west has more earned income than ace funding.

when looking both at artform and turnover band the story remains the same. museums and theatre are the only artform clusters to generate more earned income than ace funds (music has remained ace positive in 2016 and 2017). all revenue bands below £2m receive more funds from ace than earned income.

not only this, but for all turnover bands and regions (the midlands aside) the difference between ace and earned income has increased, in some cases only slightly, but in others, particularly turnover bands, it has increased by five or six percent.

our tentative advice last year for organisational targets for contributed income, can become more solid with the addition of one more years data. so we can say that if your organisation is in london or in the literature or music sectors you can expect over 20% of your income to reasonably come from contributed sources (donations, sponsorship, fundraising events and trusts). all other organisations can target in excess of 10% of their revenue from contributed income, with the further exception of organisations in the south west and museums.

so this is encouraging for organisations in the midlands, who we suggested last year might not reach 10% of contributed income, but who this year have slipped above the 10% threshold. we also note that dance organisations have been seeing a larger change in circumstances than other dance forms, so they might find it tough to achieve this amount.

similarly, previously, we have noted a difference in contributed income based on turnover band and ace funding band, but we cannot confirm that based on this current release of data.

07.

key findings of the cause4 arts and culture fundraising benchmark/ConClusions

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07.

key findings of the cause4 arts and culture fundraising benchmark/comParison grouPs/ConClusions

looKing ahead

now that we are in our second year of this annual series we are starting to raise questions based on the findings in the data but which need more than data to answer.

these might prove fruitful topics for discussion in the training events associated with this report and dashboard. at this point we can’t tell which of these topics is of greatest interest to the sector and thus would merit further research.

we’d love to hear your feedback.please email: [email protected]

mailto:michelle.wright%40cause4.co.uk?subject=

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1. Quoted from the ACE annual report on the 2017-18 data – ‘Each year, arts organisations and museums that receive annual funding from Arts Council England as part of the national portfolio are invited to provide information on organisation profile, financial statements, number of performances, exhibitions, festivals, film screenings and educational activities, known and estimated attendance figures for these activities and touring activity (where relevant). This is known as an annual submission.’

2. https://www.artscouncil.org.uk/document/ map-our-area-boundaries

3. ACE definition – ‘Please give the figure for income generated by your core activity. This should include box office receipts; engagement and other fees; entrance charges for exhibitions, screenings, readings etc.; sales of books and magazines; and workshop fees etc., where such events form your core activity. All income from sales should be entered excluding VAT. If your organisation’s core activity is education, please complete all income within the educational activity boxes.’

4. ACE definition – ‘Give details of the income generated from educational activity or events in addition to core activity. Educational activity is about learning skills and techniques and gaining knowledge and appreciation of arts, museums and culture. It can also include using arts and culture to develop in other areas such as personal and social skills or history.’

5. This is defined by ACE as “income generated from trading activity, for example catering (excl. VAT) as well as bank interest and any other earned income.”

6. ACE definition ‘Of the total amount of earned income, please state how much of this was earned internationally, for example through international touring and ticket sales.’

7. ACE definition ‘Of the total amount of earned income, please state how much of this came from international investment into your organisation, for example through partnership or collaborative working’.

8. ACE definition - ‘Total income received from Arts Council England for specific development projects or purposes through funding streams such as Catalyst for example.’

9. ACE definition - ‘Enter total grants received through any other Lottery funded programme, e.g. strategic touring.’

10. ACE definition - ‘Give details of any Lottery awards given for general revenue purposes.’

11. ACE definition - ‘Give details of any other non-lottery grants (excluding NPO/MPM regular funding) received through Arts Council England, i.e. one-off project grants.’

12.ACE definition - ‘Give details of the total NPO/MPM funding grant received from Arts Council England for revenue purposes. This field should be pre-populated with the figure taken from our records. If this differs from the figure you have, please contact your Relationship Manager.’

13. ACE definition - ‘Give details of any Lottery awards given for capital purposes.’

14. This is defined by ACE as ‘Include all money received from the general public or friends for which no benefit is received in return.’ 15. ACE definition – ‘Please give details of money received through regular giving. By regular giving we mean friend and member schemes.’

16. ACE definition – ‘Give details of any income generated through specific fundraising events held by your organisation.’

17. ACE definition – ‘Give details of any sponsorship from business organisations as well as income from corporate member schemes.’

18. ACE definition – ‘Please include all money received from trusts, foundations and legacy bequests.’

19. ACE definition – ‘Include any money received from local authorities.’

20. This is defined by ACE as ‘grants from other arts & culture funding bodies, grants from universities or research boards, health trusts, local economic partnerships (LEPs), revenue and/or development funding direct from central and/or European governments.’

21. ACE defines this as ‘the separate costs that are involved in the acquisition of collections.’

22. ACE defines this as ‘the separate costs that are directly involved in the care and conservation of collections’

23. ACE defines this as ‘other costs not included above, including irrecoverable VAT’.

24. ACE defines this as ‘the costs of overheads, such as administration costs (post, telephone, insurance etc and premises costs (rent, heating, lighting etc.)

25. ACE defines this as ‘the total costs of your artistic programme or main activity.’

26. ACE defines this as ‘the total costs of your marketing activity’

27. ACE defines this as ‘the total costs of your education programme, where relevant’

28. ACE defines this as ‘costs involved in governance’ 29. For more detail on this topic see the report ‘What is Resilience Anyway’ by Golant Media Ventures & The Audience Agency and specifically p35

Footnotes

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the Cause4 arts and Culture Fundraising Benchmark is a partnership between myCake and the arts Fundraising & philanthropy programme

report for: cause4 by sarah thelwall & mark elliot october 2018

of the cause4 arts & culture fundraising benchmark tool · and culture fundraising benchmark...

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