The Irvine Foundation has just released a short report that seeks to capture the critical issues facing the arts in California. While the report is specific to the state, the tensions and dynamics it defines might as well be about any state in the Union. Irvine is also interested in gathering comments, and has created a feedback site to encourage it.
While outlining dramatic demographic and economic shifts, the report is particularly bleak about the ability of traditional nonprofit cultural organizations to react and respond. Saying:
Many nonprofit arts organizations, insulated for years from the immediate effects of market shifts, have continued to operate under an outdated understanding of what the general public values. Individual organizations and the sector as a whole have increased fixed costs consistently over the past 40 years by building new facilities and adding programs, even while attendance and earned and contributed revenues remain stagnant or fall. There is now a serious imbalance: the current level of public participation and financial support is not sufficient for what the nonprofit arts sector needs to survive.
The report goes so far as to suggest that the cultural nonprofit as we know it is a species that has had its day:
…it appears that the era of the nonprofit arts organization’s preeminence in the American cultural landscape is coming to a close.
While I’m not quite ready to begin a eulogy for the 501c3, I do agree that the particular corporate structure as we have interpreted and enacted it doesn’t have a great future. As George Thorn and Nello McDaniel suggested over a decade ago, it’s the myths of the nonprofit structure, rather than the realities, that get us into trouble.
Still and all, the Irvine report offers a thoughtful map of the choppy waters ahead. It’s well worth a read.
A fascinating topic, as always, Andrew. I don’t think the arts, as a whole, are overgrown with regard to the orchestral sector. Locations such as Nashville have demonstrated that you can grow a successful organization during the most difficult financial climate in decades – even out of an atmosphere of bankruptcy.
At the same time, the Nashville Symphony has expanded revenues (contributed and earned) exponentially along with building a $123.5 million symphony center while also doubling musician wages and benefits in the space of a decade.
I would submit that the organization has been able to fuel this growth – and will continue to sustain these levels of expenditures – due to inspired, capable leadership and an understanding of their operating environment. They’ve designed their new symphony center to be self-sustaining through a combination of earned income and creating an appropriate operating endowment in the capital fundraising stages.
I can’t speak to the rest of the performing arts world, but for orchestras, there’s never been a better time to be in this business – the only thing currently lacking are necessary numbers of capable managers and board leaders.
A secondary study that compares and contrasts the current study with the decline of “Arts” programs within the school systems could enlighten the root cause. Assuming this decline leads to apapthy concerning the arts it is not surprising children turned adults lack the appreciation to support art(s). Over focus on the three “R”s may significally hinder the traditional broad based education or classical education that drove art appreciation.
Assuming this to be true. Thriving programs like the one noted by Drew are even more amazing and should praised and held as examples.
There are so many statements interlaced in that report that proceed from negatively-charged value judgments. I wonder if the consultants were working from a set of pre-ordained strategic objectives already decided by the Irvine folks: ding dong the non-profit is dead. But that never happens when a wealthy foundation commissions a report to guide its future, does it?
I am being facetious, but somebody please kill the buzz of would-be gloom and doom prophets who preach the Last Days of the non-profit institution.
But first, less facetiously, consider this snippet from the report:
“Meanwhile, many emerging artists and cultural entrepreneurs are eschewing the 501(c)3 nonprofit model in favor of other organizing structures such as S corporations, artists’ collectives, sole proprietorships, and unincorporated forms that better fit their needs and the current economic climate.”
Who are these foolish knaves?
If your mission is community good and not profit, why would you eschew the 501 in favour of these other business models? There are too many unique benefits to exploit adn embrace under 501(c)3. There are potentail unearned income sources to consdier, fees-for-services and UBI and govenrment resources to tap, individual givers and creative sponsorships…plenty of room for external partnerships with any form of business, social, educational, or cultural activity.
If your ‘needs’ involve mostly personal gain, profit generation and distribution (and little regard for community contribution or impact), then by all means become a sole operator (or a highly-paid consultant perhaps, or a lawyer). Maybe write a convincing business plan, get some friends to put in money, and make an S Corp (to share your future profit and loss). Good luck with that.
And if you don’t want to be bothered with any structure at all, remain a loose, unincorporated, collective, casual, anarchic effort. Many of these try to do great and interesting things, and often they do. But it soon becomes like watching sausage being made, and the overall life-span is shorter than a dragonfly.
Who are these people who are suposedly eschewing the non-profit model, and can we get some more exact case studies? Why do they want to go and do that…is my question?
Ding, dong, ding.