September 19, 2016 | Read Time: 1 minute
Title: “The NCAR Fundraising Report”
Organization: National Center for Arts Research at Southern Methodist University
Summary: Unrestricted revenue grew at a slightly faster rate than expenses at American arts nonprofits between 2011 and 2014. The study found that unearmarked income grew by 8.5 percent during that period, while expenses increased by 6.9 percent.
The average organization covered nearly 57 percent of its costs with unrestricted contributions in 2014.
The NCAR study is based on 2014 data from more than 4,200 arts organizations; the researchers also examined the performance of a subset of more than 2,700 groups during the period from 2011 to 2014. The report categorized groups as small, medium, or large based on the size of organizations with similar missions. For instance, the study defined a small theater as one with up to $219,116 in annual revenue, but a small art museum as one with no more than $845,228 in annual revenue.
Among the findings:
- Small organizations paid the highest share of their expenses — 67 percent — with unrestricted contributions. Large organizations paid the smallest share of their costs with unearmarked gifts, just over 55 percent.
- The average arts nonprofit collected $9.42 for every dollar it spent on fundraising.
- Fundraising efficiency is increasing. Arts groups saw a 5 percent jump from 2011 to 2014 in their returns on fundraising costs. Contributed revenue jumped just more than 12 percent during that period, slightly higher than the 11 percent increase in spending on fundraisers’ compensation.
- Art museums saw the biggest gains in revenue from 2011 to 2014: 34 percent adjusted for inflation, against an 11 percent increase in their fundraising costs.
- Contributions to dance companies and symphony orchestras grew each year in the period studied. They were the only types of culture groups that saw annual gains.
NCAR recently launched the KIPI Dashboard (Key Intangible Performance Indicator), a free tool to help arts organizations measure their financial and operational performance against that of similar nonprofits.
