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August 11, 2004

GETTY: Nonprofit and for-profit

Much of the discussion at the June Getty Leadership Institute/National Arts Strategies convening (introduced in my last post) was focused on the 'gulf' between nonprofit and commercial/for-profit creative endeavor. Thankfully, we (mostly) moved beyond the usual assumptions that sandbag most such conversations:

• Nonprofits make art / For-profits make entertainment
• Nonprofits serve vision and mission / For-profits serve the mass taste
• Nonprofits are noble / For-profits are venal
• Nonprofits are poorly managed / For-profits are wonderfully managed
• Nonprofits are poor / For-profits are rich

While all of these are occassionally true as stated, the reverse is also true (some for-profits make art, while some nonprofits make entertainment...however you choose to define the difference; many for-profits are poor, and poorly managed, and noble, and vision-driven).

As I've said before, the idea that the corporate structure is the cause of such differences -- even when they exist -- is flawed and backwards anyway.

More interesting than judgment is analysis, which came in spades at the Getty event. According to one participant, all managers of creative endeavor -- nonprofit or commercial -- have the same three concerns:

1. Artistic vision (what to create, how to create it, and why)
2. Access to resources (how to pay for it and sustain it)
3. Legal/regulatory environment (what rules and barriers will define the two elements above)

The stresses on for-profit and nonprofit creative endeavor are certainly different in type and scale (for-profits are more prone to merger and acquisition, for example, and to shifts in Intellectual Property protection and associated revenue streams / nonprofits are challenged by a much more limited set of financial tools and options than their for-profit counterparts). But the outcome of these different stresses, the group suggested, has begun to look quite similar:

• Organizations that focus on financial outcomes first (nonprofit or for-profit)
• Organizations that promote defensive decision-making (aversion to risk)
• Cultural systems that breed imitation and repetition, rather than innovation

More broad strokes, to be sure, but with some interesting caves and crannies to explore. One of particular interest, and the focus of my next post, is the concept of fungibility (I'll define it, don't worry), and how it drives behavior and dysfunction on the nonprofit side.