Art by Numbers: how data can support fundraising

Data can be used to develop audiences and sell tickets – but it’s also an invaluable tool when it comes to fundraising. Michael Nabarro explains how to tap into the wealth in your audience database

In previous columns, I’ve mainly looked at how to use data for marketing, in order to grow and develop audiences. But given the funding challenges facing arts organisations in the UK and around the world, I thought it would be useful to spend some time looking at how data can also improve fundraising outcomes.

A 2012 report by Arts Quarter analysed the databases of 126 British arts organisations and discovered that on average 3.4 per cent of individuals in the databases had a personal wealth over GBP1m (excluding the value of their homes). As might have been expected, this was highest in London (5.4 per cent) but even in the region with the lowest number (North East & Yorkshire), it was 1.3 per cent. Imagine a database of 50,000 customer records – 1.3 per cent still represents 650 individuals. Were you to solicit annual donations of GBP1,000 from just 10 per cent of these, you’d be able to secure GBP65,000 each year.

Those numbers are incredibly compelling, but surely it’s not that simple? Surely there is still the challenge as to how you would you go about identifying these individuals within your database? This can’t be an easy task.

Fortunately, data of this sort is naturally in high demand so the work has already been done. Fundraising consultancy Prospecting for Gold has built up a UK-wide database of over 280,000 millionaires and are able to screen your database for free and tell you how many of these individuals it contains. There is then a cost to purchase the data, but if budget is an issue, you could purchase the data for a subset of your database, focussing on the data for the most viable segments.

I’d recommend sending your data grouped into the following segments:

• Regulars (Visited 3+ times in the last year)
• Irregulars (Visited 1-2 times in the last year)
• At least once (Visited at least once in the last 3 years)
• Never (Not visited in the last 3 years)

Using this segmentation, when you receive the results of your audit you could perhaps choose just to purchase the data for your Regulars, rather than for all segments. And you could of course purchase the other segments at a later date. When you do get the data back, you’ll likely need some assistance from your system supplier as you’ll want to write the data back into your database.

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

Read: Highlights of the 2014 Arts Marketing Association Conference

While it’s no doubt harder to make the case for raising money in the arts than it is for addressing extreme poverty in Africa, or fighting cancer, we do have advantages over other charities. We have knowledge of individuals with a proven interest in our organisation, by virtue of having attended an event or production. Additionally, we know about individuals that are usually local to us. In both cases, we know we can make an appeal based on personal relevance.

This is also why it’s crucial that once we’ve identified these potential major donors, we continue to take a personal approach. Key to this is using the data we have about them. For example if you have a group of potential donors who regularly come to your family shows, you might consider a cultivation event around this.

The overall strategy of putting your data to work in this way is relatively straightforward – and it has proven success. I spoke with Caroline McCormick, director at fundraising consultancy, Achates Philanthropy, who pointed to the success of the Natural History Museum’s campaign to raise GBP65m to build the new Darwin Centre: ‘At the Natural History Museum, we were able to deliver the campaign target in the context of a very limited annual revenue income base at that time because the database had been carefully invested in, over a number of years, by diligent team members. This meant that even though we often had to rapidly grow donors through first gifts, before approaching them for major gifts, we did have the knowledge asset base to work from to do so.’

Although the museum is a major national institution, McCormick says ‘the principles of knowing and understanding your audiences, their interests and priorities, are relevant to all of us whatever our location and scale’.

Knowing the theory is, of course, just the start. But it is a major first step to recognise that there is undoubtedly significant hidden wealth amongst the individuals in your database and that uncovering it is relatively straightforward and inexpensive. Once uncovered, you have data at your fingertips that can help you develop personal approaches to these individuals to start them along a path towards becoming a major donor.

Michael Nabarro is co-founder and managing director of Spektrix