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Among the many lessons reinforced over the past few years is the critical role our cultural institutions – from our museums and parks to science centers and the performing arts – play in American life. Together, these institutions help shape our collective identity and foster a more creative and compassionate society by preserving, interpreting, and exhibiting our diverse histories and experiences.

Cultural institutions also play a vital role in our economy. In March 2024, new data from National Endowment for the Arts (NEA) and the Bureau of Economic Analysis (BEA) revealed the arts and culture sector reached an all-time high in economic value in 2022, contributing an impressive 4.3% of U.S. GDP.

However, with arts, culture, and humanities giving comprising just 5% of total philanthropy in the U.S. and with giving from individual donors falling to its lowest share of overall giving in the past 40 years, arts and cultural organizations are forced to survive in a highly competitive and ever-evolving funding landscape. Major shifts like the rise of new technologies, increased focus on inclusion and accessibility, and the shrinking number of donors are driving arts and cultural organizations to rethink the way they engage their supporters.

Here are four key trends and insights for arts and culture nonprofits to consider in 2024:

1. Embracing Digital Transformation. As the digital landscape continues to advance and evolve, artists and arts organizations are harnessing technology to reach new audiences and transform the visitor experience for all ages and backgrounds. Some of the sector’s leading grantmakers like Bloomberg Philanthropies, the Knight Foundation, the Doris Duke Foundation, and others are directing their funding to organizations that integrate technology into their arts programming and audience engagement. These initiatives, and others, can take many forms, such as immersive exhibits, online educational resources, livestreamed performances, interactive mobile applications, and much more.On the development side, new technologies are also changing the way nonprofits think about their donors and their level of engagement.  For development leaders, early modes of AI are providing powerful new ways to analyze donor and member data. More and more nonprofits are using AI to measure characteristics that go beyond traditional wealth and philanthropic indicators such as the level of affinity a constituent – which may be a donor or member – has to an organization. These new data points provide actionable fundraising intelligence that can help shape an individual donor approach or a nonprofit’s larger fundraising strategy.

 Bottom Line: Strategically investing in new technologies is critical for organizations seeking to expand their audience reach, offer greater accessibility, and identify and attract new funders. 

2. Reimagining Accessibility and Inclusion. In recent years, the art world has been responding to increasing demand for equal access to artistic expressions and greater inclusivity in the sector. This is evident among both arts organizations and their supporters. New museums like the National Museum of the American Latino or exhibitions at the MET and the Museum of Contemporary Art Detroit are examples of organizations representing the contributions of communities that have been historically overlooked. Major grantmakers like the Ford Foundation, Mellon Foundation, Bank of America, and others are fueling this shift. Last November, The Mellon Foundation doubled its commitment to $500 million toward the Monuments Project – a national initiative that is funding new memorials to overlooked histories – which emerged amid the wave of social justice protests in 2020.Regional foundations like the Denver-based Bonfils-Stanton Foundation have also made tremendous strides to shift their grantmaking strategy to emphasize racial equity by prioritizing capital support for smaller groups serving BIPOC and other historically marginalized communities.

Bottom Line: Diversity, equity, and inclusion are essential for a thriving arts organization and remain a top priority among major funders. To better connect with both audiences and donors, arts organizations need to authentically incorporate diversity, inclusion, equity, and accessibility across their organization.

3. Prioritizing Donor Retention. While studies consistently show that retaining existing donors is far more cost-effective than acquiring new ones, donor retention remains a significant challenge for arts and cultural organizations. Research suggests that inconsistent communication, often stemming from internal data mismanagement, is the leading cause of donor attrition. By prioritizing data management, arts organizations can gain valuable insights into their donor base, enabling them to segment their audience, promptly and thoughtfully acknowledge their supporters, and develop more targeted communication strategies. Moreover, arts organizations are finding success in retaining patrons through loyalty programs like subscription and membership options, return discounts, event invitations, and other important entryways that enable organizations to capture and track new donors.

 Bottom Line: Focus on building lasting relationships with your existing donors by ensuring your CRM is up to date; thoughtfully personalizing your communications to different audience segments; and implementing loyalty programs that reward repeat engagement and cultivate a sense of community.

4. Underscoring Your Value. As we noted at the beginning of this article, the arts are not just a cultural asset, but a powerful economic force. Forward-thinking organizations are quantifying their economic impact through data and research, highlighting metrics like job creation, tourism revenue, and boosts to the creative economy. By effectively communicating this value proposition, arts and cultural organizations can attract support from private and public sector partners.

 Bottom Line: Don’t shy away from communicating your organization’s economic value to the community. Work with your finance staff, board, or external consultants to quantify the economic impact of your organization and incorporate it into your case for support.

Arts and cultural organizations continue to play an invaluable role in our society, but adaptation and innovation are critical to meaningfully engaging new donors and audiences. By embracing technology, prioritizing accessibility and inclusion, nurturing donor relationships, and effectively communicating their value proposition, these essential institutions can ensure they continue to enrich our lives and our communities for future generations.

Author

Nicholas Walsh,
Senior Managing Director