I was part of a fascinating conversation of ‘new business models for the arts’ the other day. The general set-up was that the nonprofit corporate form is showing some wear, and that the downsides of the model (its tendendency toward undercapitalization, organizational isolation, plodding governance structures, cumbersome and demanding funding sources, etc.) are coming to outweigh the benefits.
Our impulse for framing the question is to ask what other business models are available. If the 501(c)3 is not the future of the arts, then what? But, as is often the case, that impulse question may be leading us in unproductive directions.
Imagine that you’re working at a hardware store, and a customer comes in with a basic question: ”Should I use a hammer or a sponge?”
Odds are, since you’re a good hardware store clerk, the first response out of your mouth would be another question: ”What, exactly, do you need to do?” A hammer is quite useful for certain tasks, and quite useless for soaking up water. A sponge is also effective when set to an appropriate use, but not great at pounding in a nail. For some jobs, it would be wise to have both tools, and some others, as well.
The question about the next business model for the non-market-supported arts is quite similar to the hardware customer’s question. What business model should you use? What, exactly, do you want to do?
There are dozens of corporate and organizational forms, and thousands of combinations of those forms: S Corporation, C Corporation, LLC, LLP, sole proprietorship, non-stock corporation, unincorporated group, impromptu gathering, municipal entity, quasi-governmental authority, subsidiary, fiscal sponsor, etc. None of these are particularly new. And all of them can be useful tools for advancing a creative cause. Further, the traditional nonprofit form still is quite handy, as well, and will often play a part in the final mix.
As is common in human endeavor (but particularly common to the nonprofit arts) we seem to have confused the tools we use with the job we had in mind. We are not about the nonprofit structure, we are about the artist, the audience, the art, and the places where they meet. We just use that corporate form to accomplish our goals.
So perhaps when we find ourselves considering the next business model for the arts, we should pause our mad dash toward business models and, instead, describe what we want to accomplish, and the barriers and opportunities that stand in our way. There are plenty of tools available to us, and through policy we can even make more. But first, we need to describe the task.
annette says
I can’t tell you how relevant this is in an Irish context. I am currently managing a national consultation process towards the development of the next strategy for the arts in Ireland and models of governance, organisational structure are constantly being negotiated as if they were the function and reasoning of artists and managers. I’m hoping we can re-imagine some new models as part of this process so it’s heartening to hear that the same issues are emerging elsewhere!
Loni says
I am also involved in two efforts where there is much discussion about how many possible organizational structures should be blended, or layered. The first is my own new multi-tenant community, in which performers, musicians, designers and artisans work and eventually might live with green-minded resource sharing conservers and permaculturalists (The groups are not exclusive). We work in an urban setting right at the interface with our local neighborhood commercial district, a healthy one, by the way. We feel that it is at this juncture that we enrich the lives of the residential and commercial community beyond us by educationg and modeling a life filled with many moments of creativity and living green. So we are looking for a mix of profit and non-profit that allows us to develop income streams for ourselves, yet also might use the npo form for the school and business incubator. Everything is on the table, but we struggle with finding which layer should watch over which, and find that turning to small business development centers and non-profit centers offer us tunnel vision mentalities. Where does one look to learn how to blend the two to achieve our desired goals?
I am also working on a city-wide initiative to bring artists and arts organizations together monthly to encourage collaboration, colocation and sharing of resources. When we mention that they might consider treating their art “as a business” many get defensive and angry. For me, the point is our right to create. It should not be in the hands of grantors, but in the our hands as maker — the artist. At times, thinking like a for-profit, even if you are an NPO, offers new insights and might offer back the power to create at will. Not a bad idea!
Tom Mansbacher says
You are a Trustee, Manager, or Musician with a world-class symphony orchestra. Imagine a hypothetical world where you were given this choice:
Everything you do must be first filtered through the accountants. Money is the overriding concern of your every decision. In other words, this is a business, run for profit, and should be recognized exactly for what it is. Or, on the other hand, the artistry and the quality of the music is your first and foremost consideration. Profitable or not, think of the glorious and magnificent achievements you could create. Now, every vote. Which situation would you choose to be associated with?
Perhaps the question should be: Which side of the compromise of these two opposites, which is closer to the real world, would you rather be on?