Cultural institutions have long relied on membership programs as the cornerstone of their fundraising efforts. A recent CCS study of nearly 20 cultural membership programs throughout the Midwest found that, on average, membership programs were generating $1.8M per year. This year’s Giving USA Annual Report revealed an increase of 27.5% in giving to Arts and Cultural organizations in 2021. Now, more than ever, is the right time to ensure that your program is optimized to retain these members, maintain increased giving levels, and maximize your institution’s mission.
Prioritizing, or even establishing, a membership program is dependent on the long-term strategy of your development department—and sometimes the organization at large. A membership program may be great for acquisition purposes and rebounding after disruption to your fundraising goals, but a donor circle or giving society may be more effective in cultivating donors towards renewed and larger commitments to your organization. Through a recent partnership with a leading cultural organization in Chicago, CCS helped to evaluate and develop a potential new membership structure. This process identified three questions for cultural organizations to consider when evaluating membership programs, and donor engagement overall.
Question 1: Do you have the right program for your needs?
The impact of recent national and worldwide events has positioned organizations to explore and assess the effectiveness and sustainability of their donor engagement strategies. CCS’s recent membership study included a cultural institution with over 20,000 members contributing $4 million annually, but with a base that was predominantly focused on their visitation benefits. COVID-19 closures caused a roughly 50% drop in this revenue line in 2020. Organizations can learn from these disruptions to enhance their existing strategies. As you think about the program you have in place, consider running an analysis of your program looking at:
• How has your program grown in total donors?
• How has your program grown in total revenue?
• How has your average gift for this population changed?
• Through what channel are these donors giving?
• Which donors are renewing?
• Which donors are not renewing?
Once you have identified key metrics for improvement, we recommend studying best practices of your peer organizations. CCS often conducts peer benchmarking exercises to help shape our clients’ programs and strategies.
Question 2: Do you have an entry point for these donors?
Both giving societies and membership programs typically offer a compelling reason for investing in the mission through donor benefits. Benefits are a way to engage new members and donors as well as increase giving for current ones—and keep constituents moving through the pipeline. Typical member benefits include free admission and free or discounted parking, while giving societies might offer anything from the tangible (a show poster or tickets to opening night) to more access-oriented benefits (a VIP ticketing concierge or the ability to host a private event). Regardless of what you offer, make sure you are focused on two key points:
- These benefits are engaging donors in your mission
- These benefits are what donors want
We all know that the best donor to solicit is a past donor. While your membership program or giving society may have a few goals (like upgrading annual fund donors into mid-level giving constituents or creating a planned giving prospect pool), retention is key. And to retain, you must engage donors in your mission.
As stated in our national survey, one leading zoo in the Midwest reported that after acquiring members through more transactional benefits, they emphasized learning opportunities for engagement. By hooking the donor with the mission, this organization was able to increase giving and achieve a 70% renewal rate (the average for survey participants).
You can also think outside the box with your mission-oriented benefits…and be more cost-effective! Consider the observation from our recent Perspectives on Philanthropy webinar: it may be time to think of a fourth “T”—Time, Treasure, Talent, and now Testimony. Asking donors to speak up or act on your behalf can be an engaging (and affordable!) benefit. Consider creating a giving circle around signing petitions to advance your cause or empowering donors with the tools to take elements of your mission (like an eco-friendly picnic for a zoo or aquarium giving society) to their friends.
Finally, make sure the benefits that you offer are what your donors want. It may seem obvious, but it’s easy to get stuck in your ways and not realize that what you’ve always offered isn’t cutting it anymore. Consider surveying your donor base, including current, lapsed, and prospective constituents, to get a full picture with the following questions:
- Please rank your benefits in order of importance.
- Followed by list of offerings
- Have you used the following benefits in the past year?
- Consider a conditional “No” follow-up of “Why have you not used this benefit?”
- Of the following potential new benefits to membership, rank the suggestions in order of importance.
- Followed by list of benefits that you may offer in the future
Question 3: How are you managing your donors for your goals?
After your organization has created a membership program that best suits the organization’s needs and an appropriate entry point, the next step is to consider how you are managing your donors for institutional goals. In a conversation with a cultural institution in Chicago, we came across a surprising statistic: long-time members were less likely to upgrade their membership than newer members. The reason for this was clear – members become comfortable and accustomed to their yearly contribution, and without the active engagement and management of your membership, your organization will struggle to “move the needle” when it comes time to increase your request. Considering we saw an average membership of 30,000 across our study, ineffective membership management could result in a potential loss of philanthropic revenue for your organization.
A key element for the successful organizations we surveyed was utilizing their tools and systems effectively. There was an overwhelming consensus that there are more opportunities to leverage data and tools in more effective ways. The most frequently mentioned data analytics strategies included identifying prospects that have the potential to elevate future gifts or move up in membership levels, and conducting more analysis on philanthropic trends, instead of focusing purely on data entry.
While upgrades and renewals are key tenants of any great membership program, testing additional philanthropic messaging to your members can create new pathways to revenue. In particular, including gift planning messaging can lead to unexpected gifts to your organization. This year’s Giving USA data reports that over $46.1 billion was given to top organizations through deferred giving vehicles in 2021. Beyond your major gift program, long-time members are your best gift planning prospects. These donors who may not think they have high net worth can realize especially impactful giving to an organization they have a great affinity for through this vehicle. Even more important when considering that, according to the Boston College Center on Wealth and Philanthropy in their 2009 study, between $45 to $150 trillion is set to be bequeathed over the next five decades, resulting in at least $21 trillion in new charitable gifts.
According to Giving USA, when accounting for bequests and family foundations, individuals represented 88% of all philanthropic revenue in the US in 2021. An internal audit, guided by the questions above, can support your institution in securing new members, retaining and upgrading current members, and creating new pathways of revenue to elevate the mission of your organization.
Interested in evaluating your membership program?
Our firm would be thrilled to partner with your organization.
Here’s my perspective on fundraising during recessions and times of economic uncertainty after 40 years in the field.
CCS’s annual Philanthropy Pulse reports provide nonprofits with helpful data to navigate the ever-evolving philanthropic space. The survey that will inform our 2023 report closed on November 17, 2022.