The American Fundraising Model — How Did We Get Here?

This post is a part of a larger forthcoming article on the traditional American fundraising paradigm, examining why it is outdated for our current era, and what structures, vehicles, practices, and narratives we need to create in order to appeal to the next generation of philanthropists, audiences, and advocates.

A generational shift 

While the crises of 2020 are further impacting the already troubling flow of capital into the arts, there is another crisis that was already affecting the lack of generational diversity. 

The established generation of philanthropists in the United States came of philanthropic age during the time of post-war American prestige and dominance, especially as it relates to arts and culture. Almost halfway through the last century, the center of the western art world shifted from Paris to New York, mainly due to two events: the Armory Show of 1913, and the Second World War (particularly the invasion of France). Then, the post-war Abstract-Expressionism movement, centered in New York in the 1940s, put the spotlight on the city as the leader of the western art world. The organizations built since, those that define the arts landscape of New York and other major cities in America, have been examples of civic pride, as well as preservationists of American culture. And the accompanying traditional system of fundraising has consisted of cultivating civic and society leaders – pre-Instagram influencers, if you will – for major gifts. For these contributions, they have been thanked with their names embossed on walls and featured prominently in programs, at events and on websites. Lavish annual galas have typically brought in the majority of the unearned revenue. And there has been a focus of continuing to engage the wealthiest members of society using these methods. 

However, many of these philanthropists – whose contributions, dedication and passion built and sustained some of the most esteemed institutions in American society – have given their final gifts during their lifetime. Many participated in and supported the phenomenon that swept the cultural sector across the world at the end of the last century and beginning of the present – The Bilbao Effect. This method of transformational capital construction and cultural investment projects, in the form of cutting-edge architecture by world-famous architects, was a trend that yielded economic resurgence in cities and increased visitorship at museums and performing arts centers. “If you build it, they will come” was true, if the “you” was Frank Gehry (whose Guggenheim Bilbao is the namesake of this term), or architects like Renzo Piano or Zaha Hadid. Those substantial donations supported this trend and created many beloved cultural hubs across America. And they were expensive to build. Civic pride was measured in part by a strong architectural presence in the urban realm, and we have the traditional philanthropic class to thank for some of our greatest national treasures. 

But now we find ourselves with outdated models of fundraising, systems that are at odds with two important factors: the values and giving preferences of rising generation high-net-worth individuals, and the significant decline of cultural education, fluency and relevance in recent decades. 

To be continued…