The Association for Cultural Enterprises, a charity and trade body for the arts, heritage and cultural sector, has announced the publication of its new Benchmarking Report. This highlights the critical importance of commercial income in supporting the cultural sector.
The Benchmarking Report covers the period of April 2023 to March 2024 and is the most extensive examination of commercial activities in the cultural sector to date, combining audience, commercial, and operational information for the first time.
Gordon Morrison, Cultural Enterprises CEO, says: “The data and insights captured in the benchmarking study shine a light on the importance of commercial revenue generation in the cultural sector. At a time of unprecedented cuts to core funding and ever rising costs, our comprehensive study demonstrates that cultural organisations of all shapes and sizes are increasingly focussing on commercial opportunities to provide them with the financial means necessary to deliver on their vital charitable aims.
“It is particularly telling that almost 40% of total income is now generated through commercial means, substantially more than income generated from fundraising activities or the receipt of grants. The Association’s mission to support cultural organisations to maximise their commercial returns through education, training and the sharing of best practice has therefore never been more vital to the sector.
“This important study supports our mission by providing cultural organisations with clear benchmarks for performance measurement as well as guidance and case studies on how to achieve the best possible commercial results.”
Actionable insights
The report aimed to gather insights to help members make commercial, operational, and strategic decisions, and to set benchmarks for the sector.
355 Cultural Enterprises member organisations participated in the research between April and June 2024. The overall response rate of 50% has resulted in a strong dataset.
The report has demonstrated the growing importance of commercial income generation in the cultural sector. 95% of organisations derive revenue from ‘commercial activity’, which accounts for about 40% of their yearly income. This is greater than box office, fundraising, and grants. With core funding decreasing in real terms, commercial income is more critical than ever for financial stability.
However, as the research illustrates, the sector is not static. It is continually innovating and developing new sources of income.
The report also shows how organisations are working to enhance staff retention, which is one of the sector’s most significant concerns.
Ten top tips
The report covers a broad range of topics including visitor numbers and profiles, visitor spending, investments, sources of income, KPIs, and employment.
Based on the results, the Association has compiled a series of case studies illustrating best practices from organisations such as Castle Howard, Titanic Belfast, and The Foundling Museum. It has also identified 10 top ideas for improving commercial outcomes and performance in the cultural sector.
The top 10 cover themes such as:
- Pricing. The study shows that variable pricing is proving successful, and organisations are experimenting with new strategies for ticketing and engaging audiences.
- Increasing donations. Innovative fundraising strategies, like contactless donations, are becoming more common.
- Investment in commercial marketing spend. Increased marketing and communications for income-generating parts of the organisation offer growth opportunities.
- Premium products. These are proven to create significant revenue and should be regarded as a growth area.
- Staff turnover. Retention is one of the largest challenges faced by the sector. The research shares what organisations are doing, and the best practices to improve employee turnover.
The full report is available exclusively to Cultural Enterprises Members. In addition, the sector is invited to a free webinar on Tuesday 22 October 2024. This will share key findings from the report and is open to all. Please click here to book your place.
The Association for Cultural Enterprises recently announced the winner of its new Seeds of Change £10,000 prize fund. Fruitmarket, a contemporary gallery in Edinburgh, Scotland, was selected for its innovative approach and potential for replication in the industry.
Top image: Castle Howard
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