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March 09, 2005

The Nonprofit Dilemma

Ben's response to my assertion that creativity and experimentation is being squeezed out of non-profit arts world encourages me to expand on those thoughts a bit (See, don't answer back, it'll only encourage him!).

I agree with Ben that there is creativity and risk taking in the theater, and, I guess, we could review the content of twenty or thirty subscription seasons presented by companies with varying budgets in order to make some judgement about the degree of experimentation that exists across the board. But, then our opinions would be burdened with fact and the conversation would be less fun.

I'd rather point out the three converging tendencies that, to me, make it very difficult for nonprofits to use creative freedom as a compass with which to steer programming. First, as I mentioned the other day, the entire non-profit cultural sector has probably grown to a point at which we're competing tooth-and-nail for every penny that gatekeepers are willing to assign to "culture;" popular programming becomes an essential survival strategy. I'm a card-carrying arts populist, so I don't think that's necessarily a bad thing, but we need to acknowledge the fact that in many museums and performing arts organizations programming decisions are driven by the need to feel confident about audience or donor support. And, because nonprofits are perpetually undercapitalized, they have much less ability to tolerate failure than, say, a for-profit record company that operates knowing that only one in eleven CD releases will make money. No modern nonprofit could tolerate the failure rates accepted in movies, TV, or record business.

Midori's very strong point about the tyranny of "results" also highlights part of the problem. The entire field of cultural funding has become more outcome oriented in the past decade: corporate sponsors want exhibitions to actually sell products; foundations expect community transformation or youth development; everybody wants big audiences. As Midori indicates, the multitude of donor demands and expectations forces arts nonprofits to take their eyes off the creative ball. As we take money for projects targeting economic development projects or at-risk youth, we force ourselves away from core artistic values. Of course, we can walk away from promising big audiences, transformed communities, or smart, well-behaved kids, but we would do so knowing that our sector would instantly get shrink, because the pot of philanthropic and public money available for a "pure" artistic agenda is a lot smaller than what's out there for social transformation.

(Of course, this is just a version of the "art versus commerce" argument that cuts across the entire cultural system, not just the nonprofit world. Here in Nashville, songwriters, record producers, and recording artists complain bitterly that the demands of radio progammers (who have very specific needs around songs that prevent audiences from "tuning out"), hold too much sway in the entire creative process. The record industry can, of course, walk away from the demands of radio (and some boutique companies do avoid radio), but the post-radio record business would be a lot smaller than it is with broadcasting as a marketing arm. The same holds true for a film director who resents the presence of a studio "watchdog" executive on the set. So, these issues of balancing artistic vision against the demands of those who are paying the bills for their own reasons cut across the for-profit and non-profit sectors. However, because nonprofits lack the financial reserves necessary to encourage risk, and because we often have a hand-to-mouth relationship with funders, I would argue that right now our very large non-profit sector is more inclined to compromise art for commerce than for-profit arts companies. We could choose to be more creative, but I think we'd be choosing to get smaller at the same time.)

Was there a third point...? Oh, I remember: one challenge unique to nonprofits is the fact that organizational mission is always bigger than available resources. That means, of course, that if we have good years we always use excess earnings to grow programming, not to create reserves that would free us to invest in future experimental work. Oh, I'm certain there are exceptions, but I know I'm right on the rule. From time to time the NEA and other entities have funded the creation of cash reserves, and we all quickly learned that, after a couple of years, the reserves somehow migrated into operations. I believe this is a perpetual management issue that is an inevitable result of the accurate perception that a cultural nonprofit can always be doing "more." This is, of course, a noble aspect of non-profit character, but one that keeps us in a fiscal backwater that forces too much emphasis on attracting big numbers and pleasing donors.

Some of these problems are the result of the way we are forced to "make the case" in a scramble for limited resources. Employ instrumental arguments, and your organization starts to serve somebody elses agenda; fall back on "intrinsic value," and your company might end up performing for quarters on the stairway leading down to the Flatbush Avenue Express.

Posted by bivey at March 9, 2005 06:54 AM


The simple statement "No modern nonprofit could tolerate the failure rates accepted in movies, TV, or record business" is startling. Of course this does not mean that the corporate arts world is full of bold risk takers, but it should give pause to those of us who feel the not-for-profit world is the place to nurture risk taking. And it reiterates the need to build endowments, which may be the single dullest thing a not-for-profit director can say, but it is true.

More importantly, we need to be creative about searching for totally new economic models to finance our enterprises. The record companies didn't get it when Napster, etc., arrived. I sense that we (museums, my field) could be in a similar position to the recording industry five or ten years ago, content that our economic model is intact. I suspect we would be better served anticipating seismic change before it becomes cataclysmic. Our reliance on a particular set of donors, membership as it now stands, gala fundraisers, etc, are all somewhat bizarre and quaint mechanisms upon which to base an institution.

Posted by: Harry Philbrick at March 10, 2005 05:10 PM

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