Jumper

Diane Ragsdale on what the arts do and why

Change in the arts sector. Can we speed it up or must we wait it out?

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EvolveFish

 

Devon Smith has written a smart, provocative post on a debate she engaged in at the recent Americans for the Arts Conference in Nashville. It’s called We Should Allow Failing Arts Organizations to Die and it has lit up the arts blogosphere, Twitter, and Facebook the past few days. So much so that she has added a second post responding to the internet comments. This topic is close to my heart. In 2009 I was on a panel at the Grantmakers in the Arts Conference alled Graceful Exits,What Can Funders Do When It’s Time to Pull the Plug. In 2011 I was interviewing Rocco when he made his now infamous supply and demand comment. And over the past few years I’ve written four Jumper posts on the subject.***

While one could argue that I’ve had more than my say on the topic, Devon’s terrific post, along with a recent academic article recommended by one of my PhD advisors, has inspired me out of an extended hiatus from Jumper (during which I’ve been working on my dissertation). I thought I would reflect on the following issues related to ossified organizations that fail to change or die: (1) why organizations arise in the first place; (2) why inertia sets in; and (3) how organizational change happens.

The academic article that I’m referencing is called Structural Inertia and Organizational Change and it is by Mike T. Hannan and John Freeman (who work in a realm of the social sciences known as organizational ecology).

Why organizations arise in the first place:

One of the many provocative points that Devon makes is that a lot of what counts as culture, captures our interest and imagination, and gives meaning to our lives does not, necessarily require an arts organization to be created or delivered. She writes:

I don’t have the stats to support this, but for every hour of “traditional” nonprofit arts that a consumer experiences this year, they’ll spend 20 or 30 times times that experiencing “nontraditional” arts and culture. Those experiences that reveal or question our humanity. That enable us to see the world and each other in a new light. Those experiences that delight our mind and our senses. That teach us about other cultures and expand our capacity for imagination. Because for me, those “nontraditional” experiences include going to a folk music concert, funding a poetry book on Kickstarter, appreciating the aesthetic design of an especially beautiful video game, the art of a pulling a great shot of espresso, and the craft of a great pair of raw denim jeans. All things that I’ve done these past 3 days in Nashville. And none of those experience required an arts organization to support them.

Many of them did, however, require organizations (video game companies, coffee houses, fashion houses and manufacturers, etc.). This raises a couple interesting questions. Why do organizations arise, generally? And why do we see a sector made up of arts organizations more so than a sector made up of artist collectives that are not permanently structured into organizational form?

If I asked a room of arts conference attendees this question they would probably answer that you can only get grants if you are formed as an organization and this may, indeed, be a significant part of the story. At the heart of it, organizations are means by which a collective of individuals can pursue common goals and also aggregate resources. While economists tend to explain the emergence of organizations in terms of efficiency organizational ecologists looks at it differently. They argue that organizations are favored over loose collectives because they are reliable (i.e., they can reproduce a given product at a certain level of quality) and they are accountable (i.e., they are able to rationalize their decisions and account for their actions to customers, investors, governments, et cetera).

The nonprofit organizational form, in particular, was not heavily utilized in the US until the mid-twentieth century when it became authorized (the IRS began to approve its use among arts organizations), legitimate (donors and others had begun to recognize arts organizations as having a valid educational or charitable social purpose, worthy of contributions), and materially beneficial (there were actually sources of funding that opened up that made the nonprofit form preferable to the LLC or other forms).

Why inertia sets in:

In the article mentioned above, Hannan and Freeman make the case that structural inertia (meaning a failure to change, or change fast enough, in response to changes in the environment) is an outcome of a system that tends to select organizations (over unincorporated collectives) and certain kinds of organizations (those perceived as reliable and accountable) over others.

In the arts sector, with the emergence of grants from government agencies and funders came the emergence of eligibility requirements: the presence of managerial staff, minimum number of years in existence, minimum number of weeks of programming per year, track record of producing good works as demonstrated by positive reviews, a minimum level of annual operating budget, stable operations (lack of turnover), a persuasive mission statement, clear organizational goals, and a long-range plan. These are basically signs of reliability and accountability.

And it stands to reason that within a given field it is often the oldest organizations that are perceived to be most reliable and accountable. So funding tends to gravitate toward them–funding which enables them in many cases to build buildings or hire staff, which further contribute to their structural inertia.

Not only does structural inertia increase with age and size but transformation is a gamble for organizations as it may jeopardize their perceived reliability and accountability. Big change seems to have paid off pretty well for Diane Paulus at American Repertory Theatre, but not so well at New York City Opera, where attempts to reinvent in the final years (when the organization was already in a weakened state financially) resulted in a loss of confidence among stakeholders.

For this reason, large, old under-performing organizations often resist transformation. This is the idea at the heart of the book, Permanently Failing Organizations, in which the authors essentially ask why low-performing organizations persist. They answer that it’s largely due to the fact that those who rely upon the organization for a livelihood and also have the power to make decisions (i.e., managers) keep organizations alive (so they can continue to earn a living) but fail to make necessary changes that might lead to higher performance because doing so is a gamble that could result in outright failure.

Other internal factors that contribute to structural intertia are sunk costs; political alliances; and the tendency for precedents (things that worked once) to become norms (the way things are done around here).

There’s much more I could write as it’s a complex subject but these are the key points that seem relevant for the current conversation.

How organizational change happens:

So if inertia is a consequence of these external and internal factors, and seems almost inevitable, how does change happen?

I’m oversimplifying things, but there are basically three major points of view on this: individual organizations can make conscious decisions to adapt to their environments (rational adaptation); individual organizations do change but often such change is random, rather than in rational response to goals or the external environment (random transformation); and that change tends to happen at the population level, rather than at the individual organization level. Meaning, change happens with the death of some organizations and their replacement by those with different traits (more suitable or favored in the current environment).

The last perspective is that of population ecology and the one advanced by Hannan and Freeman.

While these are divergent points of view on organizational change it is also fair to say that all three types of change can be observed. Those who advance the idea of population ecology, for instance, also recognize that there are types of organizations, and points in the life cycles of organizations, when organizations can and do change individually. A population ecology perspective would also suggest, however, that this type of change can be challenging and risky (as noted above).

So if I put this all together and reflect on Devon’s post, here’s the picture:

  • Generally speaking, organizations are favored over those entities that are not organized.
  • Selection systems also tend to favor organizations that are older as they are perceived to be both more reliable and accountable.
  • Structural inertia is a consequence of both this selection process (which favors older organizations) but other internal factors.
  • While it is possible for arts organizations to change, generally speaking change (particularly in attributes of an organization that are deeply tied to identity) is likely to be resisted. Why? Because of the expectations of funders, donors, and audiences for reliability and accountability, because of investments in large concrete venues, because managers and musicians want to keep their jobs, because board members want to protect their investments and social standing, and because the general lack of risk capital in the sector makes it less likely that any change that is attempted will be successful (and more likely that the organization will fail).
  • Thus, it is perhaps more likely that change in the arts sector will happen at the population level, with the death of old forms and the birth of new ones.

Can we facilitate or speed up the death of old forms?

The short answer, from what I’ve read, is that permanently failing organizations are hard to kill. Having said that, I do wonder whether there are changes that could be made at the field level that might influence the pace of evolution in the sector.

Here are a few ideas:

(1)    Shift grants away from large organizations to midsized and smaller ones: If you are an avid reader of the annual Grantmakers in the Arts funding reports you will have noticed a couple stagnant trends the past ten years: the “average” arts grant is (and has been for some time now) around $25,000 per year and the majority of contributed income tends to flow to the largest organizations in the sector. When I was still at Mellon I began to wonder whether the arts sector would look different today if (over the past 30 years) arts organizations with budgets over a certain threshold (say $10 million for argument’s sake) had not been eligible for grants from government agencies or foundations.

The rationale for such a norm in the arts sector is that if an arts organization has been able to grow its annual operating budget to $10 million (perhaps larger in some disciplines) it has most likely done so either through increased earned revenues or individual contributions. This leads me to a normative proposition: organizations that have the capacity and stature to attract financially and socially elite board members, large individual contributions, corporate sponsors, or large levels of earned income should cease to be the recipients of grants from government agencies and private foundations. Instead, such funding should be channeled to organizations that do not yet have the stature or size to garner such support from their communities or whose mission prohibits earning large revenues.

If such a threshold (as I’m proposing) were normalized then donors would not interpret the loss of NEA and foundation grants, for instance, as a demerit or loss of legitimacy (which is often the rationale for maintaining tiny NEA grants to big organizations); they would see such as loss as a natural consequence of growth. Funds redistributed to smaller organizations could help to encourage the scaling of artistic innovations and the development of new forms of organization (which often fail to gain traction because they are unable to capture significant grants). And in the long run, perhaps such a rule would also act as a counterweight to the general incentive toward growth that is embedded in the system. How many organizations might cap their growth at the $5-$10 million level if such a norm were to be enacted?

(2)    Taxing the assets of the big and redistributing in the form of income to the small: I’ve just started Pikkety’s Capital in the Twenty-First Century and so am thinking quite a bit about assets versus income, the problem of inequality, and (related to this post) how a small number of organizations in the arts sector accumulate signicant assets while the rest of the sector is living in relative poverty. In the nonprofit arts sector, in many states, 501c3 organizations are freed from the burdens of both property tax and income tax. What if a property tax on arts facilities were instituted, paid to the local authority, and then redistributed in the form of grants to organizations that do not own buildings but do pay rents. As a side benefit such a shift might provide a nice disincentive for continued facility expansion in an already overbuilt arts sector.

(3)    Term limits in most organizations: What if the following positions were all limited to 7 years: artistic leaders (once the organizational founder has left), managing/executive leaders (once the organizational founder has left), board members, foundation program officers, and government agency program directors? The benefits of term limits are not only the opportunity for a fresh perspective in the organization but also an opportunity for “gates” in the system to open to those not favored under previous regimes. Funders and artistic directors amass considerable power (whether by design or not) and term limits are a way of dealing with that inevitability. This is a sensitive proposition (particularly given that not many people working in arts organizations have pensions); but if we are resistant to it I think it is important to put on the table the reasons why, beyond job security (which is valid, but may not be a sufficient reason for avoiding term limits).

***

So after thinking through these options, and possible reactions to them, it occurred to me that there is another option.

We could wait out the change that is coming.

Population ecology theory tells us not only that change often happens at the population level (rather than at the individual organizational level) but also that it often takes a long time.

So here’s an alternative vision.

There will continue to be the occasional deaths (and I suspect they will increase over the next 15-20 years) and new organizations will continue to be born. And some of those new organizations will have different traits–traits potentially more suitable for the 21st century. There is and will continue to be turnover at foundations and government agencies. There will also be an inter-generational transfer of wealth. New people—with new perspectives and views on the world–will be hired to run organizations, or will serve as grants managers and board members, or will have significant personal resources to invest in the sector. Some (maybe many) will see the merits in new organizations that are cropping up and will choose to redirect money to them. Dynamic leaders running these younger arts organizations will garner attention and legitimacy and either their organizations will grow in stature and size, or they will be hired to bring their values, ideas, principles, and new modes of operating to larger organizations already in existence.

It wouldn’t be entirely smooth and it wouldn’t be fast. There would be failures, tragic deaths, and some zombies would go on stalking the landscape. But change would happen.

So am I suggesting we just wait it out?

While I tend to be in favor of making structural changes to influence both the direction and the pace of change (I’d love to see all three of the ideas above explored and debated) I also recognize how difficult such changes (and those Devon suggests) would be in reality.

Waiting it out may be the only realistic option.

Does this depress me?

Not really–in large part because I have tremendous faith in the younger leaders that I see coming up through the ranks of larger institutions, or leading their own enterprises, or stepping into influential policy and funding positions. Last week I gave a talk on Civic Leadership for the fellows of the renowned Clore Leadership Programme in the UK. I was utterly impressed by the work these fellows are doing, by their deep thinking, and by their energy and courage. I see that young leaders have (in spades) the motivation and desire, networks, and capacity to potentially lead the changes that are needed. Smart boards and organizations are already investing in these young leaders (and young, in my mind, ranges from 25-45) and implementing their ideas.

In the meantime, I think that Devon has given us such great food for thought.

We are all accountable for the shape of our sector. 

Whenever a permanently failing organization is allowed to continue cranking out mediocre programming while capturing precious sector resources it should trouble us. I imagine that many of us recognize these organizations in our midst. Some of us shrug our shoulders and some of us blog about them in the abstract. But perhaps these are cowardly moves. It’s easy to criticize in the abstract and it’s easy to shrug off truly discouraging developments in organizations as inevitable. I’ve been guilty of both.

Calling out the zombies (in the blogosphere, in any event) seems mean and destructive and I’m not sure it would lead to any positive developments.

Perhaps a better route is to ignore them entirely, trust that they will die or change eventually, and (as Devon suggests) turn our attention and channel our resources to the those that are knocking our socks off. I think if foundations, government agencies, corporate sponsors, high profile artists and arts leaders, traditional arts media, bloggers, and influential board members led the way, and shifted their attention and resources, they would have tremendous influence on others.

And such a shift doesn’t have to happen en mass.

One person at a time will work, too.

*** Previous Jumper posts related to this topic: 

 

 

 

 

 

 

On organizations evolving: when short-term coping mechanisms become the new way of doing business

icebergsA couple weeks ago, one of my favorite arts bloggers, Andrew Taylor (a/k/a The Artful Manager) wrote a post whose title conveys a pretty strong thesis: Organizations don’t evolve; they cope.  While I share Andrew’s skepticism of the field’s use of natural world metaphors (ecosystem, ecology, evolve, adapt, sustainability, etc.) it’s not because I think the metaphors don’t apply (within limits); it’s because I think we sometimes misapply them.

Andrew begins his analysis with a comparison between individual organizations and individual organisms, writing:

We’re calling on existing organizations to evolve to the new environment, as living organisms evolve to theirs. Only, individual organisms don’t evolve. They only cope. So, we can tell a nonprofit corporate organization to evolve just as effectively as we can tell a fish to grow opposable thumbs. Its traits and tendencies were inherited at birth. It can adjust its tendencies, it can retrain its reflexes, but it’s still a nonprofit corporate organization, even if it can do new tricks.

He then rightly points out a couple paragraphs later that there are differences between an organization and a fish:

An organization is a bundle of people, things, processes, and traditions, bound by contracts and covenants, and restricted in its operation by laws, codes, and norms. A fish is, well, a fish.

The distinctions that Andrew makes between an organization and a fish are critical; indeed, it is these very distinctions that would seem to make it possible for an organization to evolve and impossible for a fish to do so.

Moreover, I would argue that (legally constraining, in principle, as the form may be) the nonprofit corporation has demonstrated that it can be rather easily manipulated to ends (goals) other than the (educational or charitable) ones which any given 501c3 organization is presumably formed to pursue. In other words, where there’s a will to evolve, there seems to be a way.

***

Organizations are socially-constructed systems with goals, presumed to be shaped by the contexts in which they are established. Typically, variations in organizations have been perceived to come about primarily through the deaths of old forms and the births of new ones. With the birth of new organizations, variations may be introduced, some of which will be retained in the population.

The introduction of the nonprofit form in theater is a nice example. In the first half of the twentieth century it was relatively rare to find a professional, nonprofit theater company in the US. With the emergence of funding from the Ford Foundation, and later the NEA, the nonprofit form became (in the words of Arena Stage founder, Zelda Fichandler) the apava for resident theaters across the US. In a 2011 talk, she remarked:

There’s an expressive word, I believe it’s Sanskrit – and the word is apava – that translates as “the effective means to make a vision concrete” or workable or real. Our apava, strangely enough, turned out to be the nonprofit corporation. Some of us might take that fact for granted, but we shouldn’t. It’s the basic reality of our existence. Before nineteen hundred and fifty something, theatre was excluded from the benefits given to science, universities, charities, the church, opera, and maybe dance – but not theatre, because it made a profit. We knew that without the nonprofit blanket we could not exist, for it allows us to receive gifts and grants and to be free of taxes on tickets.

Beginning in the 1960s there was an exponential growth in the number of nonprofit theaters. Organizational ecologists would suggest this was a reflection of the legitimacy of the form over other forms and that this growth would continue until the population had reached its carrying capacity, and then it would begin to decline. The carrying capacity is the maximum population size that an environment can sustain indefinitely given available resources.

As an example of the growth and decline in a population, as part of HowlRound’s recent weekly series on Black Theater in the US, Sade Lythcott noted in her essay that “in the roughly ten-year span of the Black Arts Movement in New York alone (1965-1975), over two hundred black theaters emerged; today there are less than ten.” The decline in that population (not only in NYC but across the US) has been considered by some in the theater field to represent the struggle of black theaters to attain legitimacy, resources, support, meaning, etc: they were birthed in a certain context and as the environment around them shifted they were unable to compete and survive.

Likewise, it is rare these days to see a young contemporary choreographer form a permanent company in NYC with a large number of dancers on the payroll, or a resident theater company (in any city) formed with a permanent acting company.

And it’s not just certain forms of arts organization that are now harder to sustain; reading the “bracing” conclusion of the executive summary of the 2010 National Arts Index (as reported by Ben Davis), one wonders if we have reached the carrying capacity for the nonprofit form in the arts generally:

Given the profusion of underfunded organizations, the nonprofit model may have to be abandoned in favor of more experimental or market-oriented business models for the arts.

This is frequently how evolution in an organizational population is seen to occur: through the death, birth, and (importantly) growth of some organizations (and not others) in response to a shifting environment.

But as we have seen now and then, and as more recent research has theorized, it’s not only populations that can evolve. Individual organizations themselves can transform (sometimes dramatically, sometimes incrementally) and do. While a fish may not be able to grow a new central nervous system, an organization, in essence, can.

An organization can “unlearn” practices and beliefs and norms and strategies, and learn new ones. It can shift its “dominant logic.” One paper on this topic (Bettis & Prahalad, 1995 – The Dominant Logic: Retrospective and Perspective) asserts that this “unlearning” and “shift in logics” may be more likely to occur out of a period in which an organization experiences a high degree of instability. (Of course, this is not always the case: other possibilities arising from instability are that the organization will survive and revert back to the status quo, or simply fail entirely).

It’s not hard to identify arts organizations that have been transformed out of periods of duress. The Louisiana Philharmonic Orchestras is a musician-owned and –led orchestra that formed after the demise of the New Orleans Symphony. The fact that the name has changed is less important than the fact that many of the same people re-organized and re-formed with new goals and a different structure and relationship between management and musicians.

Or consider the new strategies introduced in the opera world when Peter Gelb traveled from Sony to the Metropolitan Opera (which was, at the time, struggling with declining audiences and financial challenges). Consider the way the HD broadcast adaptation, specifically, has begun to influence the creation, production, and distribution processes not only at the Met but in other organizations, as well, and has begun to change the relationship of audiences to the art form of opera.

Or look at how Diane Paulus has radically re-interpreted the mission of the American Repertory Theatre. She has changed the goals, relationships, identity, structure, and strategies of the organization in response to not only a changed “world” (i.e. larger societal context) but also changed expectations from ART’s “host,” Harvard University.

Of course, organizational evolution is rarely this dramatic. More often, it happens so slowly we don’t recognize it. Paulus did in one season what other theaters took two decades to enact.

We tend to talk about the arts and culture sector these days as though it is “stuck” – unable or unwilling to change – but it might also be useful to consider how the present state is a function of small adaptations (in structure, people, processes, culture) in response to a shifting environment and the persistence of some of those changes over time (i.e., those that were perceived to increase the chances of survival).

Evolution occurs both through adaptation and through the perpetuation of whatever is working well. In The Resilient Sector, Lester Salamon has suggested that we have been witnessing a long creep towards commercialism in the nonprofit sector in the US generally (not only in the arts), because this is, essentially, what the slings and arrows of the US system encourages.

With the lack of subsidies and increased competition for funding, what options exist for staying alive? Do an enhancement deal and produce a new musical; reduce production expenses and beef up the development and marketing staff; find a corporate sponsor and produce a sensational exhibition of some kind; hire a celebrity and charge $300 for tickets; avoid producing works that require a large number of actors or musicians or dancers and more than the standard amount of rehearsal time; replace an unknown work by an emerging playwright with last year’s Tony Award-winning work; or better yet, a revival of a well-known title by a household name.

These strike me as coping mechanisms. Tactics to enable short-term survival.

In this sense, I agree with Andrew. Organizations often adopt coping mechanisms in response to changes in the environment and uncertainty. However, sometimes a coping mechanism, perhaps because it’s working in the short-term, becomes a longer-term strategy. It gets re-framed as a process innovation and becomes a new way of doing business — a model for existing organizations, or new ones being formed, to replicate. Eventually, one adaptation can begin to have repercussions on the audience, the art, and the identity of not just one organization, but on an entire organizational field.

Some of these changes may strengthen nonprofits and their ability to realize their missions and goals. Some may not.

Therefore, from my perspective, the question is not whether or not organizations can (and thus should be expected to) evolve; they do evolve. The question is how, and in response to what?

***

BTW, closely related to this blog, I’ve endeavored to tackle the concept of sustainability in the arts in a recent talk that I’ve given in Minneapolis, Lyon, Salzburg, and Belfast. It’s called, “Holding Up the Arts. Can We Sustain What We’ve Created? Should We?” There is a permanent link in the sidebar “Stuff I’ve written”.

Nonprofit Arts Orgs and the Boards That Love Them

Last week I read an article by Pablo Eisenberg in the Chronicle of Philanthropy in which he argues that greater oversight of nonprofits is needed because nonprofit boards can no longer be trusted to make sure the institutions they govern are serving the public interest, which they are legally obliged to serve. Eisenberg mentions hospitals and universities in particular, citing the recent debacles at University of Virginia and Penn State as evidence for why we can no longer put our faith in boards. However, I think it’s fair to say that the arts sector is not immune to “poor performance, corruption, and a lack of public accountability.”

Let me ask you: Do these seem to be reasonable questions to be asked of a nonprofit arts organization?

Why was the board unaware that the organization had been, for years, overspending? Who made the decision to spend funds that were restricted and on what were they spent? What is motivating what appears to be a radical shift in the programmatic strategy for the theater? How do you reconcile your mandate to be accessible with the fact that you are charging over $100 per ticket for this show? Why did you cancel the new play scheduled for this season and replace  it with a revival? Can you explain why, over the past five years, administrative salaries and costs have grown at a faster rate than artistic salaries and costs? Do you think audiences may be declining because the quality of the programming has declined? Why did the board approve significant raises for the executive and artistic director even though the last three seasons have ended with deficits? Why are no female writers, or writers of color, featured in the upcoming season? Is it true that the work of a political artist was censored by your chief curator?

I think these are reasonable questions–difficult and complex to answer as they may be.

And yet, nonprofits often seem unable or unwilling to answer such questions directly, or they bristle at the idea that someone (a funder, a journalist, a new board member) would ask them in the first place. But one could argue that nonprofits shouldn’t need to be asked such questions at all–that they should be more transparent in the first place about the decisions they take, presumably in the public interest.

Which raises more questions: How seriously do nonprofit arts groups take their ‘public interest’ mandate? Do board members actually see themselves as representatives of the community’s interests (which they are)? Or rather do they consider themselves to be primarily advocates for the needs and goals of the institution?

Here’s Eisenberg on why boards cannot be trusted to look out for the public interest:

The reasons we can’t trust boards are most obvious at colleges and hospitals, which account for a large share of the assets of nonprofit institutions.

Most trustees at public universities and nonprofit hospitals are essentially political appointees, named by governors and state officials because of their political connections, as financial supporters, party members, or close allies to universities and the medical profession. The large majority are not experts in either health or education. Nor are they a cross section of their communities. They are among the wealthiest people in America, and they largely serve as lobbyists to attract more government aid to their institutions.

And at most colleges, public or private, it’s rare for boards to include students, professors, or members of the public in their boards, although some hospital boards include patients, nurses, and people who represent the community.

Also missing from the boards of most national and regional, and even community, groups are the blue-collar workers, teachers, small-business owners or grass-roots community leaders. It may be a cliché to say that we have become much more of a class society, but increasingly the nonprofit boards reflect that truth, and with it the problems of democratic representation and public accountability.

Instead, most trustees of large nonprofits mirror corporate America.

With the exception of the phrase about “political appointees” much of the same could be said of the boards of the largest arts organizations in the US.

Reflecting on Eisenberg’s article, I wonder:

  • Is  this failure of nonprofits to look out for the public interest a new phenomenon? Or is it possible that boards and executives have always used nonprofits to achieve institutional rather than public aims? Put another way, is the problem with the nonprofit form itself (and the fact that it lends itself to manipulation) or with board members who have become, perhaps, more likely (for whatever reason) to use it to misguided ends? Or both, perhaps?
  • If a nonprofit fails to act in the public interest, what can the public reasonably do in response? If a community decided that a nonprofit was not well run what would its options be? A leveraged buy-out would clearly not be possible but is there an equivalent for nonprofits? And if not, why not, and do we need such a process?

Eisenberg’s suggestions for improving nonprofit oversight include: requiring all nonprofits with budgets over $5 million to appoint an inspector general or hire an ethics or compliance officer; appoint an independent ombudsman to investigate complaints by whistle-blowers; or appoint an oversight committee of citizens to communicate with boards about possible infractions.

The arc of the first five comments (each made by a different person) posted by readers in response to Eisenberg’s article made me chuckle:

“I’d like to be one of those new Ethics Officers. I would imagine that to be a $2m/year job, with the primary role being to not object to the Board’s or my own salaries.”

“No more regulators or regulations or layers of accountability.”

“Regulation on top of regulation is useless. As soon as one of Eisenberg’s ethics officers cheats or steals, we’ll need ethics officer overseers. Yes, some boards will be inept — so are some professors, and writers, and editors. Over-regulation solves nothing.”

“Sure…let’s pile bureaucracy on top of regulation on top of oversight on top of more bureaucracy. And while we’re at it, make sure we never, ever trust the private sector to govern itself. Typical academic clap-trap! I guess Eisenberg proves that when your only tool is a hammer (bureaucracy), then every problem looks like a nail. We already have more-than-sufficient regulation. Let’s start by simply enforcing the existing rules. The last thing we need is more government inserting itself into the situation.”

“I can’t help but think that the previous comments are not coming from people who provide the funds for the charities.”

Reading through the comments posted in response to his article, I noted that many people were skeptical of Eisenberg’s suggestions. Nonprofits are often offended or annoyed by the suggestion that greater oversight is needed, and assert that they are capable of self monitoring. But Eisenberg asserts that boards have proven over and over again that they are not.

In last week’s post I shared the Marshall W. Meyer and Lynne G. Zucker theory of permanently failing organizations: organizations that persist despite the fact that they are not achieving their goals. Arguably, permanently failing nonprofit organizations do not serve the public interest. But as the responses to Rocco Landesman’s 2011 supply/demand salvo showed, arts organizations seem to find it unacceptable that the NEA or the IRS or state arts agencies or any outside entity, really, would weigh in and mandate the closure of some organizations.

Thus, it seems that if permanently failing organizations are going to be encouraged to either take the necessary risks to become high performing, or acknowledge defeat and close their doors, board members are the ones that need to make that demand–on behalf of the public interest. Board members are in the driver’s seat when it comes to approving organizational plans, budgets, and (often) finding resources that allow an organization to persist.

Of course, if you were appointed to a board exclusively because of your ability to give or get money, or if you mistakenly believe your job is to keep the institution alive rather than on mission, or if you are reluctant to admit defeat “on your watch” … well, it’s easy to see why nonprofit board members may be prone to tolerate a permanently failing existence.

I’m not sure how to address the failure of nonprofit boards to, at times, do their jobs (and for the record I do not think all boards are failing in their responsibilities to the public); but it would seem that if the public is, indeed, losing trust in the ability of boards to act in their interest then we might very well expect increased calls for greater oversight to be imposed–for the ultimate good of the nonprofit and the public it serves.

Nonprofits and those who love them, eh?

 

 

Is Opera a Sustainable Art Form? Excerpts from a new keynote …

I’ve been on hiatus in order to concentrate my time on the weekends to learning Dutch (state exam coming up). My last post was before Mike Daisey unhinged Ira Glass and Ira Glass exposed Mike Daisey and the whole world wrote about it. I’m not going to write about Mike Daisey. Instead, because I’m still concerned about the state of the arts and culture sector in the US (despite its “turnaround” according to Americans for the Arts), and because I’m still studying Dutch and neck-deep in my research at the moment, I’m going to share an excerpt from a new talk that I gave in February at the Opera Europa Conference. The conference asked me to do a keynote on the topic, Is Opera a Sustainable Art Form?  This is just one section (from an hour-long keynote), in which I discuss the paradoxes of sustainability. I’ll be back next week.

Is Opera A Sustainable Art Form? (Excerpt)

I recently came across a paper, Paradoxes of Sustainability, by a scholar named Alexey A. Voinov from the Institute for Ecological Economics. Here are four key points from Voinov’s paper:

  1.  After examining the definitions of sustainability of many scholars, Voinov determined that all of the definitions had one thing in common: an assumption about “keeping something at a certain level” – that is, a resource, system, condition, or relationship. In other words, a goal of “avoiding decline.”
  2. Voinov says, however, (and here’s where the first paradox comes in), that this kind of behavior—the sustaining of something at a certain level or state—seems to belie the fact that living systems tend to go through life cycles: growth, followed by conservation (or inertia), followed by release (obscurity or death), followed by renewal and new growth. This life cycle is what contributes to evolution in response to a changing environment.
  3. Sustainability is, thus, an unnatural attempt to break this cycle and extend a certain stage of the life cycle and avoid decline. Whereas renewal is about development; sustainability is about preservation. The term sustainable development, thus, contains a paradox.
  4. Furthermore, there is a hierarchy of systems; and here’s where the second paradox comes in. Sustainability of a certain level of the hierarchy may impede sustainability of systems at a higher level that are potentially more important. For any ‘supersystem’ to evolve and renew its sub-systems or components must be set free to recombine.

So, what is Voinov talking about? Forest fires naturally occur and burn down portions of ecosystems so that the forest ecosystem as a whole can persist. If we begin to prevent forest fires we damage the forest ecosystem.

And so what, specifically, could this mean for the opera world and the question at hand? Well, if we agree with Voinov and think his ideas could apply to organizational systems and not just natural ones, it means that we should ask ourselves where we may be seeking the “unnatural perpetuation of what might otherwise die”? It means that we need to think very carefully about which level of our ecosystem we are seeking to sustain. So I want to return to the question at hand, which I find compelling, in large part because of the way it is phrased. Is opera a sustainable art form? It begs a question: What shall we permit to be a legitimate and sufficient form for the passing on of the opera genus?

  •  Does vinyl count? A CD? A digital download?
  • What about a diehard opera lover who has an extensive collection of recordings, listens to opera broadcasts on the radio throughout the day, and even sings it in the shower every morning?
  • What if this diehard opera fan never purchases a ticket to see a production at his local professional grand opera house?
  • What about an amateur opera company that performs in, say, churches, community centers, or senior centers?
  • How about a children’s chorus? Or 5th graders composing and performing puppet operas?
  • What about independent artist collectives creating avant-garde and experimental works?
  • Or smaller chamber companies?
  • What about the Philadelphia Opera Company’s Hallelujah Chorus Flash Mob performed at the department store Macy’s, which has been downloaded more than 7.75 million times on YouTube?

Are these what we mean by sustaining opera as an art form? Or when we talk about wanting to achieve sustainability, are we really, pretty much exclusively talking about … well, your opera house? Or even better, all of your opera houses?

So then how do we feel about San Francisco Opera’s broadcasts at the baseball park, one of which, evidently drew 32,000 people to see Aida (see picture above)? Or The Metropolitan Opera broadcasts in movie theaters which continue to expand in reach and numbers (and as I understand it, earning higher revenues and profits) year after year?

On the one hand, we need the San Francisco Opera and the Metropolitan Opera to create those broadcasts. But, over time, one could also imagine that some people would start to go to the movie theater exclusively, and not to their local opera house. Perhaps there have even been moments when we have wondered at two in the morning, sweating in our pajamas, whether the Metropolitan Opera broadcasts in a movie theater might, in fact, eventually displace some opera companies somewhere?

Is opera a sustainable art form? It’s a different question from ‘Is opera a sustainable industry?’ Or ‘Are nonprofit opera houses sustainable?’ Or even ‘Is my opera company sustainable’?

When we say we need to try to find a way to make things “more sustainable,” what are we talking about? Sustaining the reputations, salaries, and vacation packages for directors and other professional arts administrators that have them? Sustaining all historically leading institutions? Sustaining our buildings? Sustaining a canon of great works through the recording or ongoing performance of certain works? Sustaining very specific productions, or performance practices? Sustaining the capacity for artistic risk-taking? Sustaining a pool of talented artists who, perhaps, even have the resources to self-produce their works, independent of major institutions? Sustaining broad and deep community engagement with the opera? The “what” is really important.

One of the things that is most interesting to me about the conversations in the arts sector about sustainability is that the implicit goal seems to be preservation of the oldest and largest companies, and often their venues. While we seem to recognize that some deaths are inevitable, history and good sense tell us that the renewal in the sector should happen in the ongoing churn of small organizations.

That’s natural.

As opposed to the collapse or 180-degree transformation of established, historically leading institutions, which we would find not only unnatural but probably truly alarming. Hence, one concludes, the strategy of the Dutch government and others. Sustain the large institutions and let the rest of the sector churn, which we presume leads to innovation, and not to the loss of innovation from the sector.

There is an assumption that the ‘supersystem’ we are trying to sustain and grow is the infrastructure of existing large, leading professional opera houses. But what if the ‘supersystem’ is the relevance of opera as an art form as demonstrated by its ongoing practice and enjoyment? That could mean that everything else (large, historically leading companies, smaller amateur companies, training programs, the recording industry, and on and on) is part of a sub-system and may need to evolve in order for opera as an art form to be sustained.

Voinov, A. (1998). “Paradoxes of Sustainability” in Journal of General Biology, 59:1, pp. 209-218.

On my Soapbox: Digitization of Live Performance

The Wooster Group

Clay Lord has written a provocative and rather erudite post, The Work of Presentational Art in the Age of On-Demand Technological Empowerment, in which he cautions that as arts organizations embrace or respond to pressure to record and disseminate their live work that they not lose their identity and the core of what live performance (and theater in particular, perhaps) is all about.

Clay mentions my post from last week in which I wrote: “If our goal for the next century is to hold onto our marginalized position and maintain our minuscule reach—rather than being part of the cultural zeitgeist, actively addressing the social inequities in our country, and reaching exponentially greater numbers of people— then our goal is not only too small, I would suggest that it may not merit the vast amounts of time, money, or enthusiasm we would require from talented staffers and artists, governments, foundations, corporations, and private individuals to achieve it.” In response, Clay comments, “I’m not sure I can simply agree, much as I might want to. This, more than anything, reminds me of Veruca Salt, forever simply wanting more without pausing to ask whether that was going to truly get her someplace she wanted to be at the end.”

My encouragement towards reaching greater numbers of people through other channels (generally and in the post quoted) is not meant to be a rejection of the importance and distinctive joy of an intimate, high quality, live arts experience. Those opportunities exist in great numbers in many cities in the US, for those interested and able to attend. But perhaps a personal anecdote will help to illustrate my excitement over the possibilities of recording and streaming live performances.

Despite being a ‘theater person’ I did not encounter the Wooster Group until I was in my 30s when I was working at On the Boards. Why? Because the Wooster Group didn’t travel to Kansas City when I was in graduate school. Or Idaho, when I moved there in my 20s to work in theater and run a music festival.The Woosters have never traveled to more than a select number of cities in the US (for perhaps obvious reasons). I had read about the Woosters in my edition of Brockett back in the late 80s/early 90s (a few paragraphs, as I recall) but never experienced ‘that kind of theater’. When I finally saw the Woosters, live, in my 30s, it was a seminal experience.

The same with Anne Bogart, Miranda July, Felix Ruckert, John Moran, Deja Donne, Richard Maxwell and many other artists that I was fortunate to encounter only because I had the good fortune to live in Seattle and work at On the Boards and, in particular, with Lane Czaplinski. Eventually, I moved to NY and saw 150 performances per year and it was a pretty heady period of my life. And now I’m living in a small village in the Netherlands and for many reasons (financial limitations because I’m a student, transportation issues, family obligations, etc.) it is quite difficult for me to see even the great work that is happening here in the Netherlands, much less venture to various festivals around Europe. No more Wooster Group for me.

Thus, I am (now more than ever) incredibly enthused that (for example) the the Metropolitan Opera broadcasts and OtB TV now exist. I wish to God OtB TV existed in 1990 when I was trying to find a place for myself in the arts world and develop an aesthetic. If I were running an arts aministration or MFA program of any kind I would make such broadcasts/channels mandatory viewing. When I was in graduate school one of my professors screened a film of Laurie Anderson’s UNITED STATES LIVE. I had not yet seen Laurie Anderson live. It prompted me to buy a ticket to her next concert, in Lawrence, Kansas. That, too, was a seminal experience for me.

Enough with the nostalgia … Yes, hold onto the core. But, to be honest, I think the ‘core’ of theater is far more threatened by the preponderance of rather deadly small-scale teledramas that pass as ‘dynamic live theater’ in many of the regional theaters in the US than by, for instance, a broadcast of the fabulous Young Jean Lee’s SHIPMENT on OtB TV.

If the ‘live’ experience is still mattering to people I believe it will compel people to go to the theater, buy a ticket (or stand in line for free tickets) and attend in person. But I would implore you not to dismiss these mediated experiences by assuming that they still generally ‘look like shit’ (as Clay suggests in his post and as they mostly did in the 20th century). Have you seen one of the Met HD Broadcasts? Personally, I think they are amazing and, as a ‘theater person’, I prefer them to the live experience as I can see the faces of the performers. Furthermore, having seen the broadcasts I now find the live experience all the richer. Not only is the technology improving but so are our skills at capturing the ‘liveness’ in a digital medium. And OtB TV is showing us that it can be done well without the price tag of the Metropolitan Opera broadcasts.

The major institutions in this country are now quite large and hungry beasts, demanding incredible resources to be sustained. It is quite hard for me to imagine how we can continue to justify such expenditures in the face of the declining live audience trend (that seems to have begun in the 80s according to the various studies). But if we could begin to talk about a rising ‘online’ or ‘cinema’ or ‘DVD’ audience (which the Metropolitan Opera and others have been able to do) then I begin to see the logic of ongoing large investments in these institutions. And these recordings are not just about reaching audiences that can’t access the live work. Arguably, they could play a crucial role in helping artists (more easily or quickly) build a larger global audience, be ‘in dialogue with’ other artists, and have greater impact.

We can also avoid that path, preserve the current experience, and hunker down with the goal of serving the people that (again) have the interest and ability to join us at our venues. But if that’s the case then we probably need to be prepared to downsize our infrastructure over time if the audience for what we do continues to diminish over time.

I would argue that if organizations with the potential for wider reach (that is, they are producing work for which there is demand beyond their local community) can do it well, and affordably, and strategically, and ethically (paying artists their fare share), then they should embrace the possibility of mediated experiences, trusting that they can live side-by-side with the live performance (and decades of recordings by musicians that primarily make their money doing live concerts should give us some hope here). Or even better, that new, exciting art forms may emerge (think Dance on Film) geared especially to the medium.

While the recording may be a substitute for some, I also believe it will be a complementary good for others. Do I think that if mediated experiences grow in number and reach that we will necessarily maintain our current (some would say ‘overbuilt’) infrastructure in the US? I don’t. But like others, I think that some of that infrastructure needed to be dismantled anyway – long before the Met broadcasts disrupted our sector.

If I had seen a recording of the Wooster Group in my 20s I would have beaten a path to NYC or the next nearest city where they were performing to see them live. But I couldn’t conceive of what that experience would be before seeing it. (I was trying to place the Woosters within my rather limited LORT theater experiences.) That is, after all, why we call them experience goods. Giving more people an experience (even if it is a mediated experience) is better in my mind than having them sit outside the venues wondering what goes on inside or, even worse, being pretty sure they know and that they wouldn’t find it interesting.

POST SCRIPT: Coincidentally, I just came across an email about an opportunity to experience the Wooster Group on film and video. Anthology Film Archives are hosting a 7-day series that ends on the 23rd. Info here.

If you’re still awake at the end of this post (sorry for the length) grab a cup of coffee and make the time to read Clay’s thoughtful post as well as truly smart comments by Polly Carl and Linda Essig.

A planned ending for Merce Cunningham Dance Co.

Merce Cunningham

In last week’s post on direct subsidies to artists, I expanded upon a premise from artist/economist Hans Abbing–that direct subsidies to artists may provide incentives to more people to become artists, thereby increasing competition, and making it more difficult for any to make a living–and suggested that the same may be true of arts organizations. I wrote, “We have incentivized the exponential growth of the arts and culture sector in the US and, despite significant resources (government and private) flowing into the sector on an annual basis, we now find that both artists and the large majority of organizations are poor. There’s a lesson there.”

What the lesson may be I’m not entirely sure, but the past couple of weeks I’ve been thinking about the problem of chronic undercapitalization and its effects on the sector in the context of the final performances of the Merce Cunningham Dance Company on New Year’s Eve. The planned closure (aka Living Legacy Plan) of this renowned company has been both refreshing and disconcerting to a field that has become accustomed to dance companies struggling to sustain themselves and preserve the legacies of their founders after death. Merce had witnessed the disappointing trajectories of more than a few companies; he understood what could happen to his own company over time if it tried to persevere without the infusion of new works and his presence.

In planning for its closure, Cunningham Dance Foundation raised funds to help support (among other things) a world tour, transitions for members of its company and staff, and filming/digitial recording of Merce and the company in rehearsal and performances. This past year we were badgered with claims that there are too many arts organizations and calls for the sector to ‘make it OK’ for arts organizations to close responsibly and with dignity. The Cunningham Dance Foundation’s decision and successful implementation of that decision could be seen as a model for how to realize a ‘successful’ closure. But the very planning of the closure seemed to be what was most disconcerting for some. Despite the emotional and financial toll they take on artists, administrators, and community members it seems we prefer our endings to be either a long and exhausting battle to the bitter end or a blindside collision we never saw coming.

To plan for them seems to be an acknowledgement that we recognize and accept that it’s the end of an era.

I adore the Merce Cunningham Dance Company. I truly regretted being unable to attend the Park Avenue Armory performances on New Year’s Eve and it makes me genuinely sad that there is no possibility of a performance by the company in my future. I am quite grateful that I lived in NYC at a time when Merce Cunningham was still alive and I saw his company perform many times; I will not soon forget those experiences. But if anything, the closing has made my experiences of him and the company all the more valuable. Of course, the effects of the closure are somewhat mitigated by the existence of an incredible archive (which many organizations do not have, btw, for many reasons). The MCDC archive is also all the more valuable (and may become all the more ‘alive’) now that the company is not performing.

In the end, it seems that Merce Cunningham made a decision that was both principled and pragmatic.

And perhaps that is one of the lessons in our miserably impoverished and wonderfully abundant sector. Perhaps now is the time for both principled action and clear-eyed pragmatism.

Does it seem likely that we can continue to generate interest and support for what we do, how we work, who we are? If not, can we adapt our organizational practices, structures, and purposes to ‘the times’ without crossing a moral line or violating core values (see Phills 2005, pp. 27-28)? If not, is it better to linger on and become a shadow of our former institutions, or is it better to plan for closure, document and celebrate accomplishments, and make room for something new to emerge ahead of us?

It’s a new era.

PS: You can now ‘subscribe’ to Jumper and receive an email alert when a new post has been published. To do so, enter your email address in the form on the right hand side of this page. Thanks for reading!

J. A. Phills, Jr. (2005). Integrating Mission and Strategy for Nonprofit Organizations.

Photo by Floor [CC-BY-SA-2.0], via Wiki­me­dia Commons

What are we incubating and to what end?

A couple weeks back Thomas Cott published an issue of “You’ve Cott Mail” centered loosely on the theme of innovation and business incubators in the arts world, in which he linked to a post by one of my favorite bloggers/researchers/thinkers, Devon Smith. Devon contrasted the concept of ‘incubator’ in the tech world and the arts world. After reading her post I was curious to read up on technology and business incubators and ask myself what, exactly, arts incubators are incubating and to what end?

Devon makes the point that in the tech world it is ‘demo or die’ and that, in contrast, many arts incubators tend to be about process without the expectation of a deliverable on a certain time frame. Devon characterizes it as ‘we’re here to support you in however much you get accomplished for however long you are here’. Beyond the expectation to ‘demo or die’, however, there’s something else I learned in my reading: business incubators, philosophically and practically speaking, perceive themselves to be incubating the entire enterprise. At the end of 33 months (the average amount of time spent in a business incubator) it is expected that the startup can leave the nest with a viable business model and product and fly on its own.

How do these business incubators develop the whole enterprise? Devon talks about this in her post, as well, but I found a couple things particularly interesting. First, while they don’t necessarily provide venture capital, business incubators often serve as brokers and introduce entrepreneurs to venture capitalists, other successful entrepreneurs, or people that have knowledge and skills needed by the startup. Second, a successful tech incubator will provide access to high-end technology, as well as high-level marketing support, comprehensive adminstrative support, and hands-on business planning.

After reading about business incubators it struck me that it seems important to distinguish the purpose of an ‘incubator’ from (1) a one-to-three week ‘workshop’ or ‘residency’, which is meant to give an artist time to further develop a particular project and (2) ‘access to affordable office space, basic equipment, and business classes’ — which seem to be common types of support offered to artists and arts companies. These are not without value; but I would suggest that (particularly when provided by separate hosts) they do not an incubator make, if ‘incubation’ suggests a range of support and services aimed at making a venture viable and launching it into the world with a greater chance at success.

Devon suggests that art incubators seem to be reluctant to hold the groups they are incuabting accountable for success beyond a ‘good process’ and hypothesizes that perhaps arts incubators are ‘too nice, too forgiving’. I wonder whether the laissez faire nature of many arts incubators is a symptom of two things. (1) The rejection for the past 100 plus years of the notion that great art works can be born of a ‘shared vision’ between patron/investor and artist. (2) The widespread belief in the ‘fine arts world’ that ‘being truly artistic, excellent and innovative’ and ‘keeping an eye to the market with the goal of eventually selling the work to a mainstream audience’ are mutually exclusive endeavors.

Yes, it’s important to distinguish between the processes that best support the making or preservation of culture and those that best support its exploitation. But distinguishing between these two processes does not suggest that the two cannot coexist or that we should necessarily reject the latter as a goal if we care about the former.

What is the goal of a successful arts incubator? What should it be? Is it wrong to think that it should be not only about improving the quality of the work but also about discovering avenues by which to exploit it (i.e. derive full value from it) in the marketplace?

 

 

 

 

How to avoid a strip-mall future for the arts sector: Lessons from the boutique label, Pi

This past week I came across a New York Times article featured on ArtsJournal examining the remarkable success of the indie Jazz label, Pi. The article demonstrates that Pi is bucking trends in the music industry. It is managing to not just keep its head above water at a time when many music labels are struggling, but it is having tremendous impact despite being a relatively small Jazz label focused on the leading edge of its artform.

Here are a few keys to Pi’s success (which I gleaned from the article):

(1)   Unlike many labels that flood the market with product (often as a hedge against the uncertainty of not knowing which will succeed or not), Pi releases a handful of albums per year and is highly selective in choosing which artists to get behind. Virtually everything it releases meets with critical acclaim. Because it has earned a reputation for consistently putting out great albums and has a very clear niche, it has a devoted (and growing) fan base.

(2)   Given its limited release schedule, and the limited revenue potential of each of its releases (these are not mainstream artists), Pi keeps its overhead low. Its owners are pragmatic and disciplined. By staying small they have been able to maintain artistic integrity.

(3)   Pi has a long courtship with an artist before it makes a commitment. Once in, however, Pi invests deeply in the development of its artists and ensures that each receives sufficient resources, attention, and support from the label. This is a critical factor in the label’s remarkable track record and reputation.

Pi’s strategies are serving both its artists and its customers.

Given an overabundance of product and seats to fill on any given night in many communities (relative to current ‘demand’) and (sorry to say) the not-quite-ready-for-primetime-quality of much the so-called ‘professional’ work that is produced and presented in the US, it’s worth considering the lessons of Pi (which are not new, of course).

It seems that more than a few overleveraged and underperforming professional nonprofit arts organizations need to both better differentiate themselves and hold themselves to higher artistic standards; to right-size their institutions and reduce fixed costs given the amount of income they can reasonably expect for the forseeable future; and to provide more time, attention, and resources to artists and to the development, production, and thoughtful promotion of artistic works.

I’d much rather live in a community with a sustainable number of boutique arts organizations than one with a deluxe mall featuring four high-end department-stores (the ‘flagship’ orchestra, theater, opera, and ballet companies) that suck up the majority of the resources and a bunch of strip malls made up of undercapitalized retail chains and mom-and-pop shops that either saw their best days in 1985 and haven’t been able to make improvements since, or were formed in recent years and (while perhaps promising) are struggling for attention, customers and capital.

I seriously fear that the strip mall nonprofit arts sector is our future. There are arts boutiques out there, but in many cities they are few and far between and seem endangered.

How and why so many arts organizations in the US have grown to unsustainable levels in recent decades is a topic that requires more reflection than I can give in a blog post. However, I will say this: it often seems that capacity building in the arts sector is (1) aimed primarily at securing the administrative futures of arts organizations and (2) resulting in an erosion of quality and distinction in artistic processes and experiences, today. I by no means wish to suggest that the answer to an overbuilt sector is to starve it into a more sustainable state; but it is reasonable to think that we need to seriously rethink how existing resources are distributed (within and among institutions).

We tend to think of a ‘sustainable state’ for the arts and culture sector as being one in which existing arts organizations have achieved equilibrium and can crank along in perpetuity. This is wrongheaded: even if we could achieve a state in which all existing organizations could secure adequate resources to keep running year-after-year, the lack of creative destruction in the sector would eventually lead to its stultification (oh wait, we may be there now). This is one of the consequences of letting some institutions get ‘too big to fail’ (and too big is relative to the size of city you are in and the other arts organizations in your market): the majority of arts sector resources get sucked into the incumbents and rather than creative destruction (reinvention of those firms or their replacement by younger, more innovative ones) we end up with plain old destruction (losing the boutiques and watching the big organizations calcify).

Pi may or may not last for another 50 years (much less beyond the lives of its owners/founders). But while it exists it is having positive cultural and social impact. That’s more than we can say about many professional nonprofit arts organizations in the US.

Generic strip-mall image by Mark Winfrey, licensed at Shutterstock.com.

 

The crucial gap once filled by Florida Stage

Last week, it was announced in the Miami Herald that Florida Stage would be filing for Chapter 7 bankruptcy protection and closing its doors for good. I am haunted by the thought that the American Theater has just lost an organization without fully grasping the critical role that it played. It appears that the move to a new space was a key factor in financial troubles that eventually left the company with a $1.5 million debt (significant for a theater of its size). This closing has left me feeling sad and disappointed in the trajectory of the American Theater.

Do funders and others understand what is at risk if we cannot sustain the midsized theaters in the US that often take great risks and do great work (think Woolly Mammoth) and often at a fraction of the overhead expense incurred by much larger theaters? As has been noted in the press, Florida Stage was one of the midsized gems in the regional theater in the US. It had a national reputation for producing new work and was a founding and leading member of the National New Play Network (a consortium of midsized theaters that work together to co-commission and produce new plays). However, it seems that this award-winning theater was not sufficiently valued by national and regional funders, donors, and audiences to sustain a $4.1 (or even $3 million) budget. Are we headed for a future in which no theater in the US can commit to a ‘season of new works’ as Florida Stage did for years?

As regards the challenges faced as a result of the move to the new space–well, I wish I could say that this was a surprising result. Unfortunately, over the past few decades we have seen way too many examples of successful theaters (and other arts organizations) seeking, or being encouraged, to trade-up to niftier digs and then falling into financial turmoil as a result. We all know this story: the first couple years generally go OK as there is often great enthusiasm for the new space and people like to put their names on buildings; 3-5 years later organizations are often panicked when they realize that that ticket sales are coming in lower than projected, the electric bill is higher than projected, and the donors that were so enthused to put their names on a brick or a wall are not quite as enthused to provide additional operating funds to support the mission and pay the running costs. Behind the eight ball, these organizations do not generally close; instead, they often ‘evolve’ their missions to suit their new buildings (i.e., begin taking fewer artistic risks).

The case of Florida Stage appears to be somewhat extreme: it seems that audiences in its new venue were significantly lower than they had been in the year prior to the move. Because they closed so quickly, we’ll never know if they might have been able to sustain a larger budget and still maintain a longstanding commitment to new works.

Last week, I penned a post for Arts Queensland’s blog: Are arts groups creating too much of a good thing, or not enough? Can we answer the question? (It’s essentially on the supply demand issue and evaluation.) In it, I wrote:

Rather than using evaluations to help funders assess and rank organizations based on one public value criterion (e.g. excellence) rather than another (e.g. innovation), perhaps they should be used to help organizations and funders alike better comprehend the arts ecosystem (how it works, where it’s healthy, and where it’s ill) and their role in it; to understand where they are playing an important role; to understand where they may be duplicating efforts or missions with other organizations; and to understand where gaps in the system exist that need to be addressed.

Not all, but certainly many small and midsized theaters are highly valued by playwrights, actors, designers, directors, and others because they will work with artists before they have established themselves (or ’emerged’ as we sometimes say) and, thereby, help to advace their careers (at which point the larger regional theaters will often pick them up). In other words, many small and midsized theaters appear to be doing critical ‘artist and repertoire development’.

It’s a sad reality that, generally speaking, it’s difficult for even the best midsized theaters to compete against the regional behemoths (with their much larger development departments) to secure high profile board members, high net worth donors, and significant grants (the exception, perhaps, being capital funds to build new buildings). Like salt to the wound, not only are midsized theaters often overlooked by donors and funders, but they often end up reading about much larger theaters being awarded grants that will enable them to commission, develop, or produce one or two new works, or put on a festival of new plays, amidst a season of otherwise safe, if not downright commercial, fare.

I’m not sure why Florida Stage could not attract larger audiences in its new space and there is, no doubt, more to the story than I could glean from the papers. Candidly, I wish the board might have been willing to form a strategic alliance with another organization, or move out of the Kravis Center and relocate back to Manalapan, before closing the doors of the theater ‘for good’. Or, at the very least, I wish that the financial troubles had been made public long before the theater reached the point of no return–allowing for the possibility of a consortium of funders and donors to come together and help the organization dig out of its debt and develop a new business plan.

Perhaps these (and other) options were considered but were not feasible? If so, I’m sorry that Florida Stage was left with no option except to close.

While $1.5 million is a significant amount of money to raise, I hope and trust that in making the decision to close the board members of  Florida Stage weighed its debt not simply against the annual operating budget of the theater and the pockets of those board members potentially saddled with the financial burden, but against the critical role and great value provided by Florida Stage in the local, regional, and national artistic landscape. Years from now, I’m betting that artists and funders will be talking with regret about the ‘crucial gap’ that was once filled by Florida Stage and has yet to be replaced by another theater.

Gold cubes image by F. ENOT, licensed at Shutterstock.com.

Nonprofits redistributing ‘surpluses’ to patrons?

Recently I came across an academic paper examining the relationship between performing arts organizations and their patrons that includes a description of a patron loyalty program developed by the Bach Choir of Bethlehem in the early twentieth century (Kushner and King, 1994).* BCB’s model is unlike any current model I have yet encountered (though this may be due to my lack of awareness not to a lack of similar models) and it strikes me as both simple and enlightened. Here’s my summary of the 1994 description of BCB’s model in the paper:

The BCB is a nonprofit organization that has been operating continuously since 1912. Its orchestra members are full-time professionals most of whom live in New York or Philadelphia and its choir is made up of volunteers. It has paid administrative staff. It presents an annual festival over multiple weekends. Its performance facility has just over 1,000 seats and is scaled. Since 1912 BCB has employed a system of “Guarantees” which give patrons the opportunity to book first and to choose seats according to the number of years they have supported BCB with an annual minimum pledge (in 1994 this was $50).  The average (mean) pledge has exceeded the minimum each year and no discounts are offered on ticket prices. The Guarantee pledge is made in advance of the Festival but is not payable until after the Festival. Importantly, Guarantors are not asked to pay the entire amount pledged, but are only “assessed” a percentage, which is based on the actual deficit resulting from the annual Festival operations. Approximately one third of the Guarantors opt to pay the full pledge amount rather than the lower assessment amount. The number of Guarantors who do not honor their commitment is negligible.

According to BCB’s Web site it still offers the Guarantee program and the Gurantor minimum pledge for 2010 is $125, or $50 for those under 35. I like many aspects of this model but the part I find particularly compelling is that by assessing Guarantors at an amount lower than they have pledged, BCB essentially ‘redistributes’ back to them any Guarantee surplus donations at the end of its season (as opposed to taking the opportunity to beef up the annual budget in order to make ‘good’ use of them). It’s clear that demand exceeding capacity (most years) has been a key to the success of this model for BCB.

However, I wonder if there is a way to modify this idea for a nonprofit arts organization facing the opposite problem: a tough-to-sell show. Could patrons that buy early and first be provided with an incentive to try to help fill seats to such shows by offering modest ‘consumer surplus rebates’ if a show that is not expected to sell out does better than anticipated? Imagine the following scenario on a show in which the producers have budgeted ticket revenues conservatively, at 50% capacity:

You reserve a top-tier ticket to a show for which the house is scaled and the prices are listed as $30, $42, $58, $75; your credit card number is taken but your card is not charged at the time of purchase. Instead, you are told that the organization will charge you the day after the performance and that the organization will reward you with a lower price as more tickets are sold to the performance. It also provides you with an easy method for alerting friends that you have bought tickets for a particular night and encouraging them to do the same.

For instance, if the performance reaches 62% capacity, your $75 ticket drops to $71.25; at 75% capacity it drops to $67.50; at 87% capacity it drops to $63.75 and at 100% capacity it drops to $60.  At each level, the ‘new’ ticket price would be extended to all new purchasers of a ticket in the ‘$75’ section.

With tough-to-sell shows those that buy early are often ‘penalized’ as they end up paying a higher price than those that buy later (who are able to find a discounted ticket). But with this BCB-inspired model, the more tickets that are sold the more everyone benefits (including the organization, which earns more than it would if tickets capped out at 50% as projected). The model assumes that those who buy early are the most enthused about the show and thus most willing to pay more initially and most willing to help spread the word to others if given some tools, encouragement, and incentives to do so. 

No doubt some are thinking, “But if the tough-to-sell show gets a positive review and starts to take off at the box office, just at the point when the organization could have been pocketing some significant surpluses (by employing dynamic pricing, for instance, and increasing prices in response to increased demand), it would be lowering prices and leaving money on the table – that makes no sense!” It makes no sense if one’s only motive is to maximize profits. But perhaps it’s not entirely lunatic if one’s primary motive is to create greater social value and develop a loyal, invested, fan base.

There may be many reasons why this particular idea would not work. Nonetheless, I am compelled by the concept of, in essence, ‘redistributing surpluses’ back to those patrons that regularly jump in feet first. It strikes me as a way of conveying to them that they are viewed as genuine partners (and thus worthy of sharing in rewards as well as risks) and not simply reliable sources of cash.

Image of hand with cash by Mikeledray licensed from Shutterstock.com.

* Kushner, Roland and King, Arthur E. (1994) “Performing Arts as a Club Good: Evidence from a Nonprofit Organization”, Journal of Cultural Economics, 18: 15-28.

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 Shutterstock.com.

Arts Ed: An opportunity for arts nonprofits to create shared value?

A new acquaintance recently recommended the Jan-Feb 2011 HBR article, “Creating Shared Value“ by Michael E. Porter and Mark R. Kramer. The authors define the concept of shared value as “policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates.”

The article, which is compelling, gives several examples of policies and practices that create shared value, including: food companies traditionally focused on taste and quantity refocusing on the fundamental need for better nutrition; firms focused on holding down wage levels and reducing benefits refocusing on the positive effects that a living wage, safety, and wellness programs can have on employee productivity; and firms re-conceiving products to serve disadvantaged communities and by doing so developing robust new markets. One of the recurring ideas of Porter and Kramer is that companies need to shift the short-term/zero-sum mindset that investing in ‘doing good’ will harm profits. The authors posit that companies that refocus on creating societal and economic value, in the long term, can generate increased profits.

It strikes me that arts nonprofits may have a similar short-term/zero-sum mindset when it comes to investments in arts education: because such investments don’t pay off in immediate returns at the box office, and may siphon resources away from other areas, many will not invest in arts ed, or will invest only in response to incentives, when dedicated funding is available (and available only for that purpose). Moreover, those arts education departments and programs that are created (even with dedicated funding) often seem to receive insuficient organizational attention and resources.  

On Twitter a few days ago, someone referred to education in arts organizations as the ‘tail wagging the dog.’ I wonder if this idea stems from another issue–the sector having at once too liberal and too narrow a conception of what it means to exist for ‘charitable and educational’ purposes? On the one hand we posit that our educational purposes are fulfilled simply by putting on shows or exhibits and creating program notes; on the other, when we decide to invest in ‘education’ programs, they often end up being limited to two types of activity: kids at craft tables or adults listening to erudite lectures.

One of the definitions of education provided by Wikipedia is ‘the act or process of imparting or acquiring particular knowledge or skills’. There seems to exist a far greater range of knowledge and skills and means of imparting and acquiring them than arts nonprofits are currently embracing. Given the newly published NEA report indicating a significant correlation between taking an arts course and adult participation, increased demand for arts education and participation activities (noted by the National Arts Index), and the dearth of such activities for some members of society, there would seem to be tremendous opportunity for nonprofit arts groups to respond to this societal need.

As I suggested a couple weeks ago, it does not seem unreasonable to think that addressing this societal need could provide new (earned and contributed) revenue streams for arts organizations, and (in the long term) increase interest in performances, exhibitions, etc. In my previous post on the subject I suggested arts/ed hybrids as a possible solution– but by no means do I think this is the only or best path forward. What does seem clear, however, is that arts organizations that want to pursue this path need to take the role seriously and invest accordingly.

If doing so seems to be at odds with a mission ‘to produce excellent shows’ then why not consider a dual mission and add the statement ‘and to help members of our community gain the knowledge and skills necessary to have an expressive life’ (thanks Bill Ivey)?

I often hear organizations protest that arts education is the role of government, not arts nonprofits. Perhaps, but nonprofits were created to fill societal needs that government either cannot fill, or chooses not to fill. Who better than nonprofit arts groups to step in and invest in developing quality resources to meet the societal need—and if Porter and Kramer are right—to potentially strengthen themselves while doing so? The Joffrey Ballet’s investments in dance classes for the public, which yielded significant returns to the organizations strikes me as a great example of this. And there are many more, including Elizabeth Streb’s Trapeze Academy, (which I’ve mentioned before), Chicago Symphony Orchestra’s Beyond the Score programs, and  the Metropolitan Opera’s Live in HD broadcasts and ancillary programs. To my mind, these organizations are creating ‘shared value’.

Image of TMobile Do-Re-Mi Flash Mob at Antwerp Central Station.

What is a mission-failing arts org? Like its opposite, perhaps you know it when you see it.

STREB: The Opposite of Mission Failure

In last week’s post I suggested that the sector might be strengthened if some ‘mission-failing’ organizations were to close. I defined mission-failing organizations as those that were not providing sufficient cultural or social value relative to the investments in them. It’s an awkward phrase and I find it difficult to describe a mission-failing organization with any confidence; however, I can give an example of its opposite–an organization that is providing great cultural and social value–and did so in a talk I gave in 2010 called The Excellence Barrier.

Here’s what I said (additional comments follow the excerpt):

Susan Sontag once wrote, “Existence is no more than the precarious attainment of relevance in an intensely mobile flux of past, present, and future.”  I take particular note of the phrase, “precarious attainment of relevance.”  No organization can be granted relevance in perpetuity based on the size of its endowment, the permanence of the building it occupies, the fact that it was the first or largest of its kind in its region or city, or its historic accomplishments.  The institution exists to matter to people, in a particular community, today.  That is the impact that must be assessed.

What does impact look like if not the metrics we’re currently assessing?  Alan Brown has done terrific work in assessing intrinsic impacts and community engagement, and I couldn’t begin to summarize his research here—but I suggest you take a look at it.   I would, however, describe what I consider to be one of the best examples in the US of an organization that is brokering relationships between people and art.

In 2003, choreographer Elizabeth Streb opened a performance space in the Williamsburg neighborhood of Brooklyn, N.Y. called S.L.A.M. Instead of creating a church-like space that patrons visited once a week for a sacred experience, Streb opened the doors and let people come in anytime to watch rehearsal or use the restroom. She added popcorn and cotton candy machines and let people walk around and eat food during the performances.

Streb noticed that her patrons wanted to join in on the action, so she installed a trapeze and began teaching people how to fly. Performances largely feature the professional company, but Streb also features her students in the shows. Not content to simply use the platform of S.L.A.M. to promote her own work, Streb began fostering the development of the next generation of artists, through an Emerging Artists Commissioning Program. 

Streb no longer needs to advertise her performances because she has created a robust social network that drives ticket sales. There is a palpable energy and familiarity in the room—people know each other and interact in the space as they would at a backyard barbecue. People come back to the performances time after time and the “initiated” (kids and adults alike) delight in showing newcomers the ropes, both literally and figuratively. The experience is participatory, not transactional.

Streb’s success is measured not when the ticket gets sold at the box office, but thirty minutes after the show when everyone is still lingering, buzzing, and talking with one another and the artists. Streb is cultivating “true fans”—a diverse group of people who are deeply engaged, enthusiastic, and loyal.  As Kevin Kelly, author of the article, “1,000 True Fans” might say, Streb’s fans “buy the t-shirt, and the mug, and the hat.” Streb does not behave as if achieving artistic virtuosity and being relevant to the community are competing or mutually exclusive goals. She is pursuing excellence and equity. 

By highlighting Elizabeth Streb I am, by no means, suggesting that the sector should institutionalize her particular approaches or practices. The key takeaway is this: You cannot miss Streb’s value when you go to S.L.A.M. And I would suggest that the opposite is also true. You know a walking dead organization when you see one.

An important point: in using the term ‘mission-failing’ I was intentionally avoiding the generic term ‘failing’ as I think it implies financial failure and one cannot assume that the groups that struggle the most financially are those that are providing the least value to society. (Though it is logical to ask how sustainable, and able to maximize mission, such financially failing organizations are and whether consolidation, strategic partnership, or merger with another organization might be necessary. Brian Newman has written a terrific post, Nonprofit Arts Zombies, on this topic.)

Pete Miller asked in his astute comment to last week’s post: “What is the path forward to winnow mission accomplishing organizations from time marking organizations?” Again, there is no easy answer. With very few barriers to entry (the IRS doles out 501c3 status like XTC at an 80s rave) growth of the sector will, no doubt, continue. It will, thus, become all the more imporant that we figure out how to ensure that resources are well utilized.

I do not believe it is the role of the NEA or any other funder in the US to hold ‘death panels’ and determine which organizations are mission-failing and should close. Ultimately, it seems that it is nonprofit boards and staffs that must wrestle with this question and charge themselves to take the decision that is in the best interest of the greater good.

In the meantime, funders need to determine what to do with their limited resources. As a philanthropoid friend wrote to me last week, “You spread the pain or you concentrate it. We all know we should target, but almost everyone just spreads the pain because it’s emotionally easier.” Candidly, we may not be able to (and I know many would argue we should not) reduce the actual number of nonprofit theaters (and other types of arts organizations) that exist; but funders certainly can reduce the number of organizations that receive grants and subsidies. Private and government funders should target their resources, and they should target them to those that are clicking on all cylinders, so to speak–and within that group, might I suggest prioritizing those organizations that cannot as easily cultivate support from individual donors or develop other revenue streams.

There were several posts last week at #supplydemand. I’ve put some of them in my featured texts section. If there are other relevant posts and texts you’d like to see included send them to me.

Two housekeeping matters: (1) Here’s a new essay, Rethinking Cultural Philanthropy, which I wrote for last week’s State of the Arts Conference in London; and (2) you can now follow me on Twitter at DERagsdale.

Image of Elizabeth Streb’s book STREB: How to Become an Extreme Action Hero.

Supply and Demand Redux: Rocco’s Comment and the Elephant in the Room

I’ve been following the responses to Rocco’s ‘decreasing supply‘ comment and his subsequent post on the NEA blog. Some believe that supply/demand is the wrong framework through which to look at the sector; some that there is no such thing as too much art and that we should increase patronage rather than ‘kill’ organizations; some agree with him but believe it was inappropriate for him to make the statement; and a few seem to agree with his points and believe that it was beneficial for him to make them. I’m in the last group.

Rocco has done the arts sector a service with his ‘decreasing supply’ comment as I think it has created an opening for a candid discussion about an elephant in the room: the US lacks a mechanism for identifying and dealing with mission-failing arts organizations and (because competition for resources exists) the nonprofit arts sector might be healthier overall if some mission-failing organizations were to close. Following on my overstocked arts pond post of a few weeks ago, here are some further thoughts on the supply/demand issue.

Competition among arts organizations for earned and contributed income exists. Some markets and organizations experience more competition than others, but it is not uncommon for arts groups located in the same city to be competing to secure patronage and trustees from among the same (narrow) demographic of upper middle class well educated arts-goers and funds from one or two government agencies and a small number of private foundations and corporations.

Many arts people take the stance that we should ‘let 1,000 flowers bloom’. While one might theoretically argue that there is no such thing as ‘too much art in the world’, the same cannot be said of arts organizations: to the degree that resources are not growing at the same rate as organizations (and they are not according to the most recent National Arts Index report), every new firm that enters the sector reduces the chances of every other to secure sufficient resources to operate.

If a commercial firm experiences losses year after year—unless it can successfully develop a new market for its product, or change its product to better serve existing markets, or restructure its business to reduce expenses, or find economies of scale through expansion or merger, or achieve revenues over expenses via other strategies—it will most likely shut down.  Or it might be taken over by others who believe they can do a better job of running it. If an entire industry is in decline and there is insufficient demand for the current suppliers to cover their costs then one would expect to see firms exit the industry until equilibrium is achieved.  There are exceptions– but generally speaking, this is what one would expect because commercial firms exist to make profits.

It’s more complicated for nonprofits because while they must have sufficient cash to operate, they exist (as Andrew Taylor has succinctly put it) to ‘maximize mission’ not profits.  Nonprofit organizations do not (in theory) exist to benefit themselves (i.e., to keep arts administrators gainfully employed); they have an educational and charitable mission and exist to benefit society (e.g., to support the development of artists and people’s relationship to the arts). One cannot assume that an organization that is balancing its budget is achieving its mission and providing cultural and social value to society; nor can one assume the opposite. 

If there are nonprofit arts organizations that are not providing ‘sufficient’ value to society relative to the current investments in them by the government, private foundations, and other donors, and if they do not appear to be able or willing to adapt to fix this situation, then it is logical to assert that other more deserving nonprofit organizations (arts or otherwise) that are currently competing with them for resources would be better off if those ‘mission-failing’ organizations would close (or be re-organized).

However, even if we were able to identify ‘mission-failing’ organizations (sometimes it’s obvious, often it’s not), we do not have a clear method for dealing with the ‘dead weight’ in the sector.  We don’t have a ministry of culture and large government subsidies. If we did, failing organizations could be de-funded and might adapt or close their doors as a result. The plurality of the US nonprofit model is both a strength and a weakness. Government agencies, private foundations, corporations, and major donors give more than just their money: they give endorsements that serve as signals to board members, leaders of organizations, and other donors. Renewed support from the state arts council or one well known family foundation to a failing organization can be all that’s needed to encourage other donors to re-up and for the board and staff to persist on the wrong course for another year (despite good sense telling all of them to do otherwise).

Many organizations were started with the belief that they should exist as permanent institutions and have fought for their survival at all costs. Some of our dead weight is in historically leading ‘tall trees’ that have been preserved for far too long. Those that are the largest or that have already existed the longest are often assumed to be the most valuable. This is why many arts organizations get nervous when the cutting supply conversation happens; they assume (and with good reason) that funders and government agencies will sooner turn off the sprinklers that are misting the grass, the small bushes, and the saplings than shift the hose from one tall tree. (I’d like to see some funders prove them wrong on this.)

We lack a sound mechanism for communities to identify and deal with mission-failing organizations—those that refuse to adapt or close despite a preponderance of evidence that it would be better for society if they were to do so. There is no easy solution to this but there are opportunity costs to ignoring the problem:  again, resources going to failing organizations are resources that cannot be utilized by those providing greater cultural and social value.

The reality is that organizations will close. Some already have, some are closing as I write this, and some will die in the coming months or years. And they will either be the right organizations to close or the wrong organizations to close.  Why is it better to shut our eyes, wring our hands, and hope for the best?

Of course, dealing with  failing organizations is only part of the strategy. We still have the issue of declining participation rates. Many took offense at Rocco’s comment that ‘demand is not going to increase’; but according to a report put out by his own agency, arts participation rates have been trending downward, more or less, for more than two decades.  I don’t perceive Rocco to be a pessimist as much as a realist.

Optimistically, I believe that there is ‘pent up demand’ (read: need) for the arts that is not being realized because of financial, geographic, cultural, educational, social, logistical, programmatic, and other barriers to participation. Pessimistically, I do not see many nonprofit arts organizations radically adapting their institutions to address these barriers. I hope I am proven wrong on this.

To be clear, I’m not suggesting that every organization needs to serve its entire community (it would be unwise for all but the largest flagship institutions to even try to do so); but if a given community has 100 arts organizations, neither should 80 of them be serving the same small segment of society. Perhpas arts organizations should spend less time stewing about the ‘decreasing supply’ comment made by Rocco Landesman and more time pondering why  participation rates have been declining and why the arts and culture sector is securing a declining portion of philanthropic dollars? This may be the other elephant in the room that merits some earnest discussion. And (please) this is not a call for greater investments in marketing and fundraising; it is a call for more relevant institutions.

Elephant image by Alexander A. Sobolev, licensed at Shutterstock.com

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