Letting go of the lifestyle to which some arts groups have become accustomed

Syracuse Symphony, Detroit Symphony, and the New York City Opera have all been in the news this past week. To some degree these three organizations share a common circumstance: the conditions under which they were created and grew over time have changed and, in recent years, they have begun to experience difficulty sustaining their operations at the level to which they (and their stakeholders) have become accustomed. These organizations are not alone in their struggles.

Syracuse announced that it is filing for Chapter 7 bankruptcy because it is unable to pay off its debts; Detroit’s musicians have recently voted to end a six-month strike, accepting pay cuts necessitated by a deteriorating financial situation; and NYCO’s chairman has announced that it is struggling to pay off a $5 million deficit and will not announce its next season until it has a balanced 2011-2012 budget. 

There should be no shame for organizations that are coming down the mountain, so to speak—just as there should be no shame in having one’s net worth and lifestyle change dramatically through divorce, or from losing one’s assets or high-paying job due to the recession or retirement. However, people (and organizations) sometimes respond to challenging material circumstances either by being in denial about them (and continuing to spend money as if they still have it) or by being bitter towards the world because they no longer have all that they once had.

Thomas Friedman writes in The World is Flat, “when a company is the pioneer, the vanguard, the top dog, the crown jewel, it is hard to look in the mirror and tell itself it is in a not-so-quiet crisis and [that it] better start to make a new history or become history.” It is, indeed, a difficult reality that many arts organizations may not be able to sustain the level of operations (the programming output, the staff size, the employment terms and salary levels, the opulent buildings, the perks, etc.) to which they have become accustomed (in the short term or even in the longer term).

Many arts organizations have closed in the last few years. By-and-large these were not ‘planned sunsets’. Those that even recognized it was necessary to change (and I’m not sure many ever did), evidently did so too late in the game—after debts had mounted beyond the point of being managed, and goodwill had eroded beyond repair. In other words, after years of being unwilling to accept that circumstances had changed.

The sooner organizations can face their changed circumstances and make the necessary changes the more likely they are to have control over their destiny. And please know, ‘make the necessary changes’ is not my euphemism for ‘birth a radical innovation.’ In fact, lately I’m beginning to wonder whether the process of adapting to a changing environment has become harder than it needs to be because funders and others have become so fixated on the idea that future success will come only through ‘radical innovation’.

I’m not saying that innovations should not be enabled or pursued, but I have a hunch we could see some pretty great results through good-old-fashioned, common-sense, it’s-about-time, just-do-the-right-thing, ‘improvements’:

  • Arts organizations avoiding redundancy and, instead, seeking to provide what’s clearly missing in the cultural landscape in order to find a less competitive and more valuable niche;
  • Communities of organizations forming cooperative agreements for the use of space, or investments in shared technology, or other resources;
  • Complementary partnerships and alliances aimed at supporting the development, creation, presentation, and distribution of work, or providing stable sources of support for artists, or providing pathways for people to discover and experience the arts.

To name just a few.

And, oh yeah, all organizations living within their means—even if their means are diminishing—and doing so with grace.

End of the Paved Road image by Tom Grundy licensed from Shutterstock.com.

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Comments

  1. says

    Name one European country that has reduced the pay of one of its top ten orchestras by 23% like in Detroit. I seriously doubt there are many, if even one, in those 30 or so countries. The difference is our unique and isolated system of arts funding by (and for) the wealthy.

    It is telling that our system isn’t working, since we have seen a massive redistribution of wealth toward the top over the last 30 years. The top 20% of society owns 85% of the wealth – a stat more extreme than in any other developed country. It’s obviously not trickling down. We also note that publications (including blogs) about arts administration almost always take a management viewpoint. They tell artists they should accept their plight of less pay with grace even though compensation for management has increased sharply.

    What we need is a chart showing how steeply management salaries have risen, while orchestra musicians are being asked to accept less and less. In NYC, compensation increases of 25 percent to 50 percent from 2003 to 2008 were not unusual for arts managers, and in some cases packages nearly doubled. Which orchestras sharply increased or doubled their salaries for musicians during the same period?

    In NYC, top pay for cultural executives typically runs from $300,000 to $500,000, which can include benefits and allowances. See:

    http://www.nytimes.com/2010/04/26/arts/26comp.html?_r=1&pagewanted=all

    Here are some examples (and considering the extravagant numbers we needn’t heed simplistic whining that these managers might have seen some relatively small reductions in the last couple years):

    * Reynold Levy’s annual compensation to run Lincoln Center tops $1 million.
    * Carnegie Hall pays Clive Gillinson more than $800,000.
    * Glenn D. Lowry, director of the Museum of Modern Art, earned $2.7 million in the year that ended in June 2008, including several one-time bonuses and the cost of his apartment in the tower beside the museum.
    * Occasionally institutions will also pay bonuses tied to performance or longevity, like the $3.25 million given in 2006 to Philippe de Montebello to recognize his 30-year service to the Metropolitan Museum of Art. (His aristocratic name fits well with America’s neo-feudalistic form of arts funding.)

    * On top of his $940,000 salary, Michael Kaiser of the Kennedy Center earned a $150,000 bonus, as well as other benefits, for 2009.

    * Zarin Mehta’s most recent compensation, for fiscal year 2010, is $807,500. In the fiscal year ending in August 2008 he earned 2.67 million. This reflected his salary in addition to eight years of accumulated deferred compensation.
    * Timothy Rub, the director of the Philadelphia Museum of Art earns $450,00.
    * George Steel, the general manager and artistic director of New York City Opera receives $360,000 – and from an opera house that just shut down its next season due to a lack of funds.
    So we musicians are to look at numbers like these and the redistribution of wealth in our society and then gracefully accept getting screwed? No, I think it is time for us to start fighting back.

    • Stephanie says

      Mr. Osborne, you’re forgetting that the European orchestras are heavily subsidized by their governments through a tax system that some Americans would call “socialist/communist.” Personal income tax brackets can be 60% or more. But they also have universal health care and cultural institutions that are less reliant on private donations. You get what you pay for! The global recession has forced many European governments to significantly reduce arts funding, which has left arts orgs scrambling because they have virtually no fundraising infrastructure. Until/unless the US (citizens and gov’t) decides it wants to support the arts to the extent that orgs receive 80-90% of their funding from the gov’t (and then you’ll run into issues of what art the gov’t should be funding, like the ongoing conservative argument against the NEA), arts orgs will be reliant on gifts from those with discretionary income.

      That said, I agree that some arts administrators salaries and bonuses are out of line. However, the snapshot you’ve given us is very small and limited to some of the country’s largest arts orgs. In my experience, those are the exception, not the rule. Have you researched arts exec compensation in mid-sized markets like Cincinnati, Nashville, and Kansas City? Does the pattern hold up?

      Diane, I couldn’t agree more with your thoughts. As arts ed has declined over the decades, coinciding with the increase of entertainment options, the status quo, which was built on lifestyle and education models of 50-75 yrs ago, is not sustainable. We can light a candle or curse the darkness – and cursing the darkness won’t slow the rate of change anyway.

      I heard an excellent interview of an economist on the radio yesterday. He talked about how the US federal budget was built in the 60’s and 70’s on the assumption that the economy would continue to grow exponentially forever so we enacted lots of new programs for lots of good things that now we can’t pay for. A quote that can be applied to the arts world: “Now we are the unfortunate heirs of that legacy, but we’re still laboring, it seems to me, under the illusion that we can afford everything.”

  2. says

    I have tremendous respect for numerous organizations that present groundbreaking art or choose to remake themselves through radical innovation. There is also a lot to be said for organizations finding methods to focus on their core programs and to connect in more meaningful ways with their communities and partners. Success is not solely defined by innovation. It is equally reflected in the work of organizations who continue to present work of high integrity, serve a community of artists and participants, and continue to serve the mission for which they exist. As a not for profit theater, we are gratified to have maintained the support of institutional and individual funders who recognize that radical innovation is not necessarily the only means to a successful future.

  3. David H. Graham says

    Brava Diane! You are spot on. Thank you for your thoughtful, level-headed, unemotional observations on this potentially volatile subject. Gee, what a thought to live within your means. This is a societal issue as you so deftly point out and it demonstrates the importance for all of us to understand Economics 101. Well done.

  4. says

    Great post, a very wise collection of advice. And along the journey to a “new new” lets not forget a couple of little organizational development theories. First, establish a clear set of institutional priorities – and we’re talking about a top 3 – 5, not a grocery list’s full. Not all priorities can be NUMBER ONE, either. This provides clear direction and criteria for the staff and the brand, it’s highly empowering and it connects the organization laterally, affirming a stronger and relevant brand in the eyes of the consumer. Second, in my experience, part of what organizations continue to go through post-recession is this “be all things to all people” perspective, an antiquated and often dangerous pursuit as it dilutes focus and pushes organizations past their core competencies in a quest to expand its offerings, very often solely for intended financial gains. Don’t jump into new programming before doing a competitive landscape scan, and consider creative partnerships in an effort to grow your offerings before you use your valuable (and probably scarce) resources to move into a new pursuit. In the end it means more work, for the same team, with no sustainable way of managing it.

  5. says

    Normally I hate comments like the one I’m about to leave, because they don’t add to the discussion. But I must say, Diane, you are quickly becoming one of the best arts business bloggers I know. Very few write on this issues with your level of forthright candor, accessibility, and rationality.

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