Melbourne Theatre Company on managing revenue streams
MTC has reduced the cost of their fundraising efforts, increasing their net fundraising outcome in 2014 by an impressive 80% on the previous year.
We spoke with Melbourne Theatre Company Development Director Tiffany Lucas about the theatre’s strategy to manage its revenue streams more efficiently.
What is the focus of your role?
As Development Director at MTC, I have a fantastic job! Every day I get the opportunity to articulate the value of theatre and the arts in our society and to inspire donors and corporate sponsors to support this important part of our culture! At MTC, the Development Department comprises philanthropy (including individual giving and giving through trusts and foundations), corporate partnerships and our membership programs. My time is split fairly evenly between these three areas, with a slightly greater emphasis on philanthropy.
What led MTC to make this decision?
I come from a legal and business background (having practiced corporate and commercial law for 8 years prior to moving into development). In the corporate world, the goal is always to increase the bottom line – focusing on increasing profit, not simply increasing revenue. In my experience, many fundraising organisations focus solely on increasing dollars raised and never consider how they might decrease costs (i.e. be more efficient in their fundraising efforts) – thereby putting themselves in a more ‘profitable’ position.
When I commenced at MTC, we had a hard look at our costs of fundraising as well as our corporate sponsorship margins and honestly, both were too high. We made some difficult decisions in order to ensure we were being as efficient as possible in our fundraising and sponsorship efforts, including changing the structure of our membership program, ensuring that our donor events break even and even walking away from some partnerships that simply weren’t profitable enough to warrant the staff costs it took to service them. Making these changes has now started to pay off financially. Of course, we are still highly focussed on increasing revenue, while at the same time investing in our donor and sponsor relations!
How will you measure your success in this area over the next 3 to 5 years?
To me, we will be successful if we continue to inspire more and more donors and corporate partners to support the arts (and theatre in particular) and we do so while ensuring we are being as efficient as possible in our fundraising efforts. The less we spend fundraising, the more donated dollars can go directly to supporting the great work MTC is doing on and off the stage!
Do you allocate a certain amount of time or resources towards corporate partnerships or do you work in a more opportunistic way?
In general, we work on a bespoke partnerships model – ensuring that we approach partners that align with our values and that we tailor our partnerships to suit our mutual needs, leveraging our synergies as much as possible. We always strive to use our networks – whether it’s through personal contacts from the Development Team, our Executive Team, the MTC Board, our Foundation Board or otherwise, we prefer to target companies where we have a personal connection and a shared value system.
Competition is fierce – have you noticed a marked decrease is the number and scale of ‘cash’ sponsorship?
Currently MTC has more cash sponsors than in the recent past – so I would say no, I don’t see a decrease in cash sponsorships. In fact, in 2014, we increased our number of Corporate Partnerships by 14% above 2013 and increased the average sponsorship amount of cash partnerships by over 44% above 2013. We did this primarily by introducing bespoke Corporate Partnerships, delivering unique and targeted marketing benefits and offering exclusive behind-the-scenes opportunities to our Partners. It also helps greatly that we have an excellent, dynamic Corporate Partnerships Manager – Dean Hampel – who helped lead this charge!
Traditional industries are being challenged through disruption (e.g. Uber for taxis and Airbnb for hotels). Do you think there are similar challenges and opportunities for the performing arts?
In my opinion market disrupters are great – they lead innovation. Having said that, there are certainly some challenges from technology-based creative disruptions facing the performing arts in relation to fundraising.
Outside of the Arts, there is a clear trend towards digital funding platforms – broadly highlighted in the rise of crowd funding, text donations, Facebook and other social media funding campaigns and web-based donation platforms. In my opinion, these digital mediums are being utilised better by other types of not-for-profits, rather than large arts organisations. For example, medical research and disaster relief organisations seem to have strong success in social media campaigns and text/digital funding platforms whilst crowd funding is incredibly prevalent amongst artists themselves, rather than arts organisations.
Although these alternative fundraising channels may currently present a challenge to Arts organisations, I think they also present an opportunity. Obviously, you can be much more efficient in fundraising when you can employ digital mediums. This opportunity may be slightly different for an arts organisation as opposed to a disaster relief project, mainly due to the nature of our audience – and that’s OK. Rather than shying away from these trends or simply copying what’s going on in other not-for-profit sectors, we need to ask what’s appropriate for our audiences (and what will be appropriate for our audiences of the future) and how do we best cater for this. Any organisation that isn’t looking toward the future of fundraising utilising technology will certainly be left behind!
MTC is considered a leader in so many ways – what is exciting you about MTC’s future?
MTC has gone through so many exciting changes in the past few years – with our Artistic Director, Brett Sheehy, and our Executive Director, Virginia Lovett both coming on board within the past three years. Brett and Virginia have instituted so many new, fantastic initiatives including launching the NEON Festival of Independent Theatre, putting MTC on the touring map (including touring to Washington DC in 2014 and touring our education productions regionally to Victoria and Tasmania) and creating a series of family productions to ensure MTC is a theatre company for all ages.
Coming up, I am particularly excited about our continued work in regional Victoria through our Education program and our Sharing The Light Initiative, a partnership with Crown Resorts Foundation, which is allowing us to ensure that disadvantaged students are given the opportunity to experience live theatre and drama enrichment programs. These programs can make such a difference in the lives of students – providing them with career pathways they never before considered. This is exciting stuff and I’m so lucky to be part of it!