Changing direction is hard enough. Changing while continuing to not change is ridiculous.
The book is now available everywhere, even as an eBook. And if it’s not, please let me know.
My new book, Scene Change: Why Today’s Nonprofit Arts Organizations Have to Stop Producing Art and Start Producing Impact is now on the shelves, be they internet shelves or real ones, in the UK and the US. If your bookstore isn’t carrying it (yet), please let them know that you want a copy and that they should stock up for the thousands more behind you. Okay, hundreds. Okay, dozens. Just give them this ISBN: 978–1–80 341–446–1.
If you teach an arts management program, work at an arts school, or want to buy a bulk purchase (25 or more) for your board of directors and staff, contact me at alan@501c3.guru for a nice discount.
Did you get to see the interview for The Sound on Stage? Here it is:
And now, this week’s column.
For-profit businesses can lose money for years and still (ultimately) succeed if they find a way to adapt. Why? Because they have access to funding that nonprofits don’t have: venture capital.
Nonprofits don’t get venture capital – especially nonprofit arts organizations.
Why not? Tradition. Bad press. Overly restrictive “best” practices.
The public has been taught (incorrectly) that nonprofits and their employees must scrape by, no matter what. They’re pilloried if they want to run a deficit budget in order to invest in anything. Nonprofits, especially arts organizations are only allowed to raise enough money every year to do the work they do in that particular year.
Sometimes, there are multi-year pledge/gifts. But even so, they are usually not designed for making the nonprofit arts organization more impactful to their communities. Too often, they’re for multi-year projects.
The only way in which your nonprofit is allowed to get venture capital, when you ask around, is through a throat-strangling endowment fund that rolls off a whopping 3-5% of its value to your nonprofit’s budget each year. As a Ford Foundation executive once told me, “If you’re not rolling off 20% of your annual budget from your endowment, you shouldn’t really have an endowment.”
As a result, when nonprofit arts leaders do long-range planning of any kind, they think in terms of survival instead of thriving. They have no financial incentive to change course when necessary. And when they do change course, they have to expend a great deal of personal capital and psychic energy to gather buy-in from all the other stakeholders. Meanwhile, they have to run the current version of the arts organization, even when they know that their future is doomed.
As the photo at the top of the article suggests, they are forced to fix the plane while flying it. Even if the plane is breaking down. Even if it’s going in the wrong direction.
Even if it would be more successful if it were a Vespa.
Stop. If you run an arts organization that is flailing because it refuses to act as a charity, and has become an obsolete, elitist vestige of some sort of golden time 50 years ago (that likely never occurred), you have to find a way to stop. It’s not the best way to go, but if you can’t raise venture capital to cover the initial losses of the new, impactful version of your arts organization, that’s the last arrow in your quiver.
Stop. You handicap yourself by trying to continue an old, unworkable model of “art for art’s sake” and tweaking it to gain popularity as your sole goal.
Stop. Especially when you already know that change is not only necessary, it’s the only path to sustainability.
Stop. Land. Let the current passengers deplane. Look at the plane and marvel at the fact that no one died while riding in it.
Start the conversations with your community leaders about what they feel are the most important needs, how you can help solve or mitigate them with your arts organization, and why your company is best-placed to do those kind of indispensable activities.
Now, the hard part. Get some venture capital. Find the financing to run a big ol’ deficit budget for a year if you have to (there’s no law that says that you have to present a break-even budget every year). That’s the kind of investment instrument that keeps entrepreneurial companies going.
Change the dynamic of donations not as play sponsorships, but as task sponsorships that span the lifetime of the organization (and not for the engagement of a play, exhibit, or other artistic venture). After all, why is it unthinkable for a nonprofit, regardless of its ability (or lack thereof) to bring charitable impact to its community, to lose money, but a for-profit, which has access to billions (trillions?) of dollars in long-term venture capital to lose billions of dollars when it does nothing but care about money?
The wage gap, wealth gap, and trust gap is increasing, even though we’re more aware that inequity exists than ever before. Is this why so many young people are eschewing their dreams of a better world through the arts? Is this why there’s a nonprofit skills gap even though thousands graduate from arts management programs each year, taking with them the kind of debt load that wages from a nonprofit arts organization cannot currently help pay off? And is that why those same students, people who have a passion for the arts, are leaving their chosen field to go work for whatever tech company will pay them the most?
Yes.
Does your leadership have the courage to stop the current inessential nonprofit arts organization model? Are they willing to create a new, viable path for the organization’s success? How can they do that while still producing “art for art’s sake” or some other ignoble cop-out?
Hard questions. Harder answers. So hard, in fact, that it makes sense to stop what you’re doing and start fresh. Maybe, without the extraneous noise, the core of your leadership can figure out a way to become the essential business most nonprofit organizations claim to be (but aren’t). Or maybe, if they can’t (or rather, won’t), maybe it’s time to create the kind of vacuum that nature abhors. If you don’t choose to be indispensable to your community’s stated needs, maybe another visionary arts organization already does, and they deserve all the support in the world.
At which point, give them the permission to soar, along with the spirits of all the underserved people of your community.
I get a kick out of your writing, Alan, – especially your Rube Goldberg analogies – but what I can’t understand is why you think these folks will change. You’ve been working in the cultural sector for many years. Have you ever encountered an arts organization that was capable of making meaningful change? I certainly haven’t.
Arts organizations don’t change. They can’t. It’s not in their DNA. They were designed by artsy people to do artsy things for other artsy people. Asking them to suddenly become community problem solvers is like asking homeless shelters to suddenly start producing grand opera. Its not what they were designed to do and they’re just not going to do it.
Will they survive? Of course not. They weren’t designed to adapt to changing circumstances.
If there are serious community problems that need to be solved, wouldn’t it make more sense to design new problem-solving organizations rather than ask struggling arts organizations to become something other than what they were designed to be?
If arts organizations become profitable, they become Disneyland. Who needs more of these insufferable places? We already have a boatload of popular “immersive” spaces that dunk their audiences into 3-d copies of artworks. In the age of Covid, instead of art ideas, they spread viruses.
Perhaps arts organizations should downsize until they can live within their means, do a better job at increasing the public’s understanding of art and serve the visitors who will be loyal and supportive. Remember when producers took the pulp out of orange juice and had to put it back in?Yes, arts organizations need to change—involving artists at all levels of programming and administration is one place to begin. Advocate for more arts education in schools to improve the quality of life for everyone.
Right on, Julie! Art is the inspiration and the fuel for cultural/societal change.