sector transformation, unlikely to be kind or gentle

In 2008, Paul Light (professor of public service at NYU and author of numerous books) wrote an article for the Nonprofit Quarterly in which he speculated on Four Futures for the nonprofit sector arising out of the recession: (1) Rescue Fantasy: nonprofits saved by significant increases in contributions; (2) Withering Winterland: organizations starve themselves into a weakened organizational state; (3) Arbitrary Winnowing: survival of the largest, oldest, and best connected; and (4) Transformation: a redesign of the sector that leaves it stronger, more vibrant, more sustainable, and more impactful. Light wrote:

“The nonprofit sector can always let the future take its course … but in doing so, it would almost surely experience either the withering of organizations that comes from inaction or a random winnowing based on influence and ready cash, not performance. It can reap the benefits of transformation only by deliberate choice.”

Dr. Light’s prediction appears to be panning out; across the nonprofit arts sector we have by-and-large witnessed a winnowing and a withering the past couple years. For all the jabbering about transformation, we don’t (yet) appear to be manifesting it.

I’ve been reading essays by the economist Joseph Schumpeter who identified innovation as a critical dimension of economic change and emphasized the importance of the ‘new firm’ and the ‘new entrepreneur’ as the vehicles for innovation. He also popularized the term ‘creative destruction’ in economics – a term derived from Marxist economic theory, which Schumpeter used to represent the destroying of old economic structures in order to create new ones.

In the arts and culture sector we seem to want to reap the benefits of transformation without the process of creative destruction. We say we want transformation but we refuse to let underperforming organizations die, or shy away from de-funding what has always been funded in order to fund that which has never been funded, or desperately try to maintain an overbuilt infrastructure. Such reactionary impulses to preserve the status quo will not result in a kinder and gentler transformation. To the contrary, they may result in stagnation of the arts and culture sector. As Light says, we can let the future take its course. I fear, however, that if we do so we may regret what we have become in years to come.

In 1968, the sociologist Robert K. Merton coined the term the Matthew Effect (in sociology) to describe the propensity for those who already possess power or capital to leverage those resources to gain more power or capital; the term comes from the bible passage Matthew 25:29: “For to all those who have, more will be given, and they will have an abundance; but from those who have nothing, even what they have will be taken away.”  (NRS version)

Is arbitrary winnowing the future we want? With more being given to those who already have the most? Survival of (only) the oldest, largest, and best connected, and not necessarily the best performing? 

If not, if we are sincere about wanting transformation, then the gain of progress is unlikely to be accomplished without the pain of losing or challenging some longstanding industry structures, beliefs, practices, jobs, conventions, and hierarchies.

No pain no gain image by Andy Dean Photography licensed on

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  1. says

    This is a great article! On face value, I totally agree with your premise, “We say we want transformation but we refuse to let underperforming organizations die, or shy away from de-funding what has always been funded in order to fund that which has never been funded, or desperately try to maintain an overbuilt infrastructure.” – very astute observation.

    But how, specifically, does transformation take place? What does it look like? If it is different in every instance, what are examples of organizations which have taken the lead in this initiative?

    Thanks as always for your wonderful insight.

    • David H. Graham says

      Well done. It’s time, actually past time to “walk the talk.” The same folks are talking….and talking… and talking. You might appreciate this quote by Theodore Roosevelt: ” It is not the critic who counts, not the man who points out how the strong man stumbled, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena; whose face is marred by dust and sweat and blood; who strives valiantly; who errs and comes short again and again; who knows the great enthusiasms, the great devotions, and spends himself in a worthy cause; who, at the best, knows in the end the triumph of high achievement; and who; at worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who know neither victory nor defeat.”

  2. says

    If Transformation is the caterpillar into a butterfly I think that in this discussion many people or organizations might mistake this with the chameleon, mere adaptation to a new environment. I hope that in the discussion people are distinguishing the two and people are on the same page.

    In the Audiovisual Industry it is the Analogue Industry against the Digital Industry and the same is true in Renewables where Governments and the Conventional Industry are doing what is in their power to stay in power.

    I believe, and I hope, that in both sectors an increasing decentralization of power will occur, one in which consumers and audiences gain control. An economic system that no longer allows for an exploitation of demand (Economy of Demand), but a system based on consumer and audience appreciation (Economy of Appreciation).

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