A favorite moment in my arts conference trek this summer was an Americans for the Arts panel on new business models in the arts. Clara Miller of the Nonprofit Finance Fund cut through the clutter with this little phrase:
”There is one business model: reliable revenue that meets or exceeds expenses. Any questions?”
This after I had been spending months exploring various business entities — B Corporations, Low-Profit Limited Liability Companies (L3C), co-operatives, holding companies, fiscal sponsors, hybrids — along with their various strengths and weaknesses for aggregating capital, shielding liability, coordinating complex activity, and advancing mission.
It was a helpful reminder that business models are means, not ends. And, in fact, artistic endeavors can reach similar ends by many means. The essential first step in any enterprise is NOT to select a method, but to define the principles. Which suggests that most of our conversations in the arts about new business models have the question exactly upside-down. Says Ralph Waldo Emerson (forgive his gender bias):
”As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.”
A reliable stream of revenue that exceeds expenses is completely dependent on value being reliably delivered that meets or exceeds the needs/interests/expectations of those who pay.
And, ‘reliable revenue that meets or exceeds expenses’ and ‘value being reliably delivered that meets or exceeds the needs/interests/expectations of those who pay’ are completely dependent on understanding three things:
1) ‘those who pay’ – are we too dependent on patrons who don’t actually deeply care about our work or our message? What about finding a model where our income comes directly from those who love our work?
2) their needs, interests, expectations, and perceptions of value – if we’re not getting paid well for our work, is it because ‘people don’t appreciate the arts’, or because we don’t understand the people well enough?
3) what the heck is our real product and message anyway? Here’s a parallel from another struggling industry: are we worried more about preserving the newspaper as a product and a business model than on finding better and more valuable ways to deliver the news?
If we cannot find anybody who values our work enough to pay what it’s worth, and we cannot understand their needs well enough to consistently exceed them, then we will not prosper.
It is not enough to worry about how individuals, organizations, businesses, and governments ‘should value and support the arts’. Maybe we should be more worried about how the arts might not be understanding the needs of the people whose support we desire?
If we treated the arts like any other business, and we had only a very limited amount of funds and time before we run out of money, what would we do? Seeking more investors can help, but in some cases it only delays the real issue: delivering a product/service at a profit.
We need to go out and find the people and groups who care in some way about the message behind our works, and find ways to deliver what they value and get paid accordingly.