Connecting Data to Strengthen Arts Organizations’ Financial Insights

Arts and culture organizations may rely on numerous systems to sell tickets, manage donors, track memberships and grants, run programs, and maintain financial records.

Each system can serve an important purpose, but when the information in those systems isn’t connected, it can be difficult to see how the pieces fit together. For example:

• A patron may appear as a ticket buyer in one system, a member in another, and a donor in a third
• Grant information may be maintained by development, artistic, program, and finance teams
• Revenue and expenses associated with a production could be spread across ticketing, fundraising, concessions, parking, and accounting systems

Connecting information can give you a more complete picture of financial performance and help you make more informed decisions. Explore strategies to better connect your nonprofit’s data.

How disconnected data obscures nonprofits’ full financial picture

Arts and culture organizations often need specialized systems because no single platform handles every operational and financial function. This might include separate systems for ticketing, donor management, grants, retail activity, payroll, budgeting, and accounting.

Development focuses on pledges and expected contributions. Marketing tracks ticket sales, subscriptions, and audience engagement. Artistic and program leaders evaluate attendance and mission impact. Finance considers how revenue and expenses are recorded in the general ledger.

The challenge is bringing those perspectives together. For example, a production with modest ticket sales might appear to have underperformed. But what if it also received significant grant funding or donor support? What about concessions, parking, or other revenue associated with the production?

Without the ability to consider those revenue sources alongside related expenses, you might make programming and resource decisions based on only part of the financial picture.

Connecting your nonprofit’s operational and financial data

Connecting information doesn’t necessarily mean replacing specialized platforms with one system. And not every connection must be completely automated.

What’s important is creating a reliable way for relevant operational information to reach the financial system.

Identify which systems contain important data and determine the source of truth for key information. Consider establishing consistent identifiers and coding for programs, productions, venues, departments, funds, grants, and restrictions.

Key questions include:

• Where does each piece of information originate?
• Who’s responsible for maintaining it?
• How often should data move between systems?
• How will discrepancies be identified and reconciled?
• Where’s information being entered more than once?

Answering these questions before implementing technology can help avoid automating inconsistent processes.

A financial management system such as Sage Intacct can serve as the financial system of record within this structure. Dimensions can help organizations track activities by program, production, venue, department, fund, grant, and restriction.

Linking grants management to your arts organization’s financial reporting

Grants management can present a particular challenge because responsibility often spans multiple departments:

• Development manages the funder relationship
• Artistic programming, education, or outreach oversees activities supported by the grant
• Finance tracks expenses, billing, revenue recognition, and financial reporting

Requirements can also differ significantly from one grant to another. Some awards have relatively limited reporting requirements, while reimbursable grants may require detailed documentation of expenses and employee time before an organization can invoice the funder.

Strategies to improve nonprofit grant reporting

Consider how awards are recorded in both development and finance systems, how frequently information is reconciled between those systems, and how the departments communicate. Financial management systems can also be designed to separately track grants, programs, and restrictions and provide budget-to-actual reporting.

For reimbursable grants, connecting data is particularly important. You may need to associate employee time and expenses with an individual grant to identify reimbursable costs and bill the funder.

Case study: How a theater turned connected data into better decisions

The experience of Alley Theatre shows how better financial visibility can affect real-world decisions.

Alley Theatre’s previous financial system provided basic information like ticket revenue and direct costs but lacked the detail needed to analyze additional revenue streams — including fees, concessions, and other indirect income. With CLA’s help, the theater moved to Sage Intacct and developed a financial structure designed to provide a more complete picture of each production’s economic impact.

The enhanced visibility changed an actual programming decision: Alley Theatre reinstated a canceled show after its new analytics revealed economic value that had been obscured by the limited data in its previous system. The theater also implemented Sage Intacct Planning to develop more detailed budgets and strengthen its budgeting process.

Where should your arts organization start with connecting data?

Before investing in another technology, take inventory of the systems and processes you already use.

Ask:

• Which systems contain ticket, donor, membership, grant, program, budget, and accounting information?
• Where’s information entered more than once?
• How does operational information reach the general ledger?
• How frequently is information reconciled?
• Which reports require significant manual spreadsheet work?
• Can revenue and expenses align with the appropriate program, production, grant, or fund?
• Who’s responsible for resolving discrepancies?

The answers can help determine whether your organization needs stronger system integration, clearer processes and coding, better-defined data ownership, or a combination of those improvements.