Speaker

Sarah Lutman amplified

Defining R & D in the cultural sector: why we need innovation in grantmaking strategy

As part of the research project I’m working on with the Philadelphia-based Wyncote Foundation (see previous posts), I recently had the opportunity to attend the Annual Forum for Nesta‘s Digital R & D Fund for the Arts in London. To give you the lay of the land in case you don’t already know anything about it, Nesta calls itself “an innovation charity with a mission to help people and organizations bring great ideas to life.” R D Annual ForumNesta works in partnership with other businesses, nonprofits, government agencies, and funders to increase social impact and to innovate around ways to test new ideas, new financing methods, and new ways to gather and analyze results. Through research, piloting, convening, and publishing, Nesta spreads knowledge and improves practice around innovation, approaching its work across sectors and disciplines. If you’re interested in these topics you really should scour the website and follow Nesta and its principals on social media. They’re a font of useful information about emerging practice in many different fields.

The Digital R & D Fund for the Arts is a multi-year collaboration among Nesta, the Arts Council England, and the Arts and Humanities Research Council. The Fund was established to help “accelerate effective innovation and experiment, bringing together researchers, technology businesses and arts organizations.” The Fund’s £7 million budget (about $11.7 million in US dollars) has been distributed via 3 two-year grant cycles with maximum awards of £125,000 ($210,000). It was created in response to the one-two punch of challenging economic conditions and the onslaught of digital technologies that together have required arts organizations “to sharpen up their thinking about how to relate to audiences, and how to develop business models that can bring more revenue.” (Check out the first year report here.)

It would be great to have something like this in the U.S. The Fund is supporting really interesting projects. (Examples: the Imperial War Museum partnering with HistoryPin to invite the public to help curate the content in its First World War paintings collection, Dance Digital‘s development of an animated learning tool to help children create dances, and Cambridge Junction‘s effort to interest youth in digital music production through the development of a customizable and codable musical instrument.) But what interests me even more is the methodology. The underlying questions being asked at the grantmaking table are not about which projects are “the best” but rather which projects ask the best questions and are best designed to deliver answers that will result in field-wide learning. Nesta is taking a crack at defining the nature of R & D as it applies to the cultural sector, using the Fund’s architecture to innovate in processes that result in learning andfailbetter632 progress. The Fund’s goals are to generate knowledge, to share knowledge efficiently, and to speed up the rate of learning not just in the individual organizations that receive support but among the broader field of practice.

Field-wide sharing and learning was the topic of the Annual Forum, held in Vinopolis, a sprawling wine emporium and conference center at Borough Market in Southwark, conveniently adjacent to one of my favorite coffee shops. About 250 people from across the U.K. gathered for the day, many with job titles like Digital Producer, Digital Communications Officer, Developer, Creative Director, Senior Innovation Consultant, or my favorite, Imagination Catalyst (@KnowNOW_KnowHow). We heard a strong panel on “What is R & D in the Arts?” along with panel presentations from funded projects, keynotes delivered from a business’ (Patrick Bradley) and then a cultural organization’s (Nick Starr) perspective, and an interesting panel on the role of data as it applies to creativity and learning. Program highlights are viewable online and Nesta promises more coverage in future editions of its on-line publication, Native.

Nesta gave me a copy of the application form for the Fund (it’s not available online because applications are closed). The Fund’s specific interests are in expanding audience reach and engagement, and in the exploration of new business models (or a combination of these two). Each applicant must collaborate with a researcher and a technology provider, and is asked to propose “investigations from which the wider arts sector might learn.” Applicants incorporate a plan for the action research methods — created with the third-party research collaborator — that can capture lessons from their proposed experiments. This supports the Fund’s overarching goal to “extract lessons and transferable insights to contribute to a growing body of evidence and data on digital innovation in the arts.” The quality of the team — organization, researchers, technologists — and the clarity and importance of the question being asked, are determining factors in funding.

Nesta’s R & D orientation is different from the logic model-driven funding approach so pervasive among U.S. funders. The differences are more than semantic. Logic models detail intended inputs, outputs, and impacts, and are oriented toward planning, delivery, and evaluation. Logic models ask us to demonstrate the causal relationships between what we do (inputs) and what will happen (outputs and impacts). Logic models say, “If we do x, then y will happen.”

What Nesta has designed is a process based on “trying and learning.” It is iterative, modeling a creative process. Their model requires the development and clarification of an important question, one worth asking, and one for which the answer or answers are not known. In their model, the planning rigor is around the quality of the question and in how it will be investigated.  Their inquiry asks, “If we do x, what will happen?” The outcome is not planned, it is sought.

Perhaps I’m out of touch and if that’s the case, please, pile on the examples! But I don’t remember ever being asked by a funder, “What idea are you testing?” and “What data, evidence, and research findings can your project deliver?” and “How is this learning beneficial to the wider arts sector?” Einstein quote

Shouldn’t this methodology be added to the ideas and instruments grantmakers deploy in their program architecture? Certainly, we need operating support grants, capitalization grants, and support for major projects and initiatives, all funding mechanisms represented in contemporary grantmaking. But what would it look like if we also had specific support for R & D in separate programs whose purpose lies in the testing, documenting, learning, sharing, and iterating of new ideas?In thinking about anything at all comparable in U.S. private sector arts grantmaking, what comes to mind are the reports and publications about what the grantmakers are learning, not so much about what the grantees are learning.

In an environment in which the purpose of a grant is to learn, organizations have full permission to innovate, to fail, and to iterate. When the knowledge gained is shared, other organizations have access to data and results, and they’re encouraged to adopt and use tools and practices that work. Some of the Digital R & D Fund projects have been major flops, with audiences, or technically, or otherwise. And some are delivering very promising results. All learning is welcomed.

At a time when it seems especially important for cultural organizations to be able to try new things and iterate, Nesta’s approach is both sophisticated and refreshing. I’d love to see R & D approaches modeled locally, regionally, or nationally. What is stopping U.S. grantmakers from building similar efforts in our country?

Announcing Hothouse: Exploring new ideas in co-working with the Minneapolis Institute of Arts

Something new is launching in Minneapolis next week! I’m excited to announce Hothouse, a 12-week pilot co-working project I’ve created as MIA Entrepreneur in Residence. In collaboration with Hunter Palmer Wright, Venture Innovation Director of the Minneapolis Institute of Arts, Hothouse will explore whether and how the museum can foster a creative co-working space that is inspired by the museum’s collections, capabilities, and setting but operates independently as a lively incubator and convener. The pilot will demonstrate newHOUTHOUSE-02 ways the museum can use its assets, including its facilities, collection, and staff, for imaginative new civic purposes, and will encourage civic connectors and animators to draw on the museum’s resources to power their individual and collective work and impact.

The project will allow exploration of a co-working strategy that is new to the Minneapolis-St Paul region. The vision for Hothouse is to create a space not only for co-working, but also for fostering public discourse and civic engagement, reflecting and amplifying ideas and projects from the co-working community, and inviting the public in as participants and co-developers. Participants interested in this public programming orientation have been intentionally recruited for the Hothouse pilot. The group includes artists, journalists, non-profit organizations, small businesses, and independent producers and consultants.

(Who will be there? Here’s a list, some with links  — the list is still growing. Lutman & Associates, Ben Hertz, Coffee House Press, Collective Eye Productions, Copilot Web Services, Danger Boat Productions LLC, The Drawing Project, e-democracy/Open Twin Cities, Northern Lights, Pollen, Kate Nordstrum Projects, Chris Farrell (MPR))

The co-working group will share the MIA’s Villa Rosa Room, a large sunny meeting and event room on the top floor of the MIA, as well as using other museum spaces for programming. Co-workers will be encouraged to draw on the museum’s collection for inspiration and metaphor, collaborate with museum staff, and help identify opportunities and obstacles that can inform the feasibility of an ongoing co-working and alternative programming space. We’ll share our learning in a final report.HOUTHOUSE-02

During the 12-week pilot we plan to:

  • Explore the benefits of a co-working space connected to a museum
  • Identify new civic purposes for MIA’s less-used and rental spaces
  • Introduce new people to MIA
  • Discover ways the co-working community can draw on the MIA’s assets across their varied occupations and disciplines
  • Identify obstacles to public participation as co-workers create programs independently and “beyond the museum”
  • ​Foster new connections between co-workers and MIA
  • Encourage collaborations among the co-working participants that are new and actionable
  • Inform MIA future choices and directions

The Hothouse co-working pilot project has resonances for any cultural nonprofit that owns and operates its own buildings. What are the highest and best purposes for these structures and how can new creative uses be explored? How can we share infrastructure and ideas in new ways? And how can our increasingly independent workforce find ways to connect with each other and to cultural institutions in ways that amplify and extend the work? We will be working to discover the answers to these questions over the next twelve weeks. To track our progress, follow #Hothouse on Twitter.

Hothouse houseIf you think about it, there are all kinds of civic buildings — wherever you may live — that can be adapted to new uses and can become part of the sharing economy. If you know of other tests or projects going on that resonate with our ideas, please be in touch. And we’ll let you know how things go.

 

 

 

 

 

Practicing extreme transparency: Why does your “About Us” section have to be so boring?

Entrance to Walnut Creek's maintenance yard

Entrance to Walnut Creek’s maintenance yard

As part of a major project I’m working on with the Philadelphia-based Wyncote Foundation, I’ve been spending a lot of time on the websites of cultural organizations; looking at their apps, social media projects, and other digital channels; visiting them to see projects first-hand; and talking with them about the capabilities and resources needed to do the work.

In the course of this research I’m engaging with interesting people and seeing a lot of terrific work and so I’ve decided to start blogging about it, in part to engage all of you in the journey. (Besides, maybe you can help.)

First up is an example of extreme transparency on the business side of a cultural enterprise – at least by the standards of U.S. cultural nonprofits. It’s easily discoverable on the website of the Tate in England. An early and persistent leader in all-things-digital (more on that another time) the Tate’s leaders also are modeling their explicit strategy of creating “a digital dimension to everything we do” by doing something other organizations could do, but most don’t. The Tate has created a transparent and content-rich “About” section of their website. It even looks good.

I won’t recount all the things that are there, just a few highlights to entice you to look around for yourself.

Try these for appetizers:

Organizations of every size have all kinds of enterprise information they’ve never catalogued for sharing with the public. In fact a lot of website sections called “About Us” are a sort of corporation yard that is both disorganized and ugly. I speak from experience, having combed dozens of these sections over the years for a variety of purposes.

Interactivity depends on openness and transparency – on offering ideas, processes, and information substantive enough to make interaction worth it for the participant. If you’re a leader reading this, what’s stopping you from pursuing radical transparency and reaping the benefits of deeper engagement and interaction with the public, and with policymakers, researchers, and funders?

I asked John Stack, Head of Digital at the Tate, about this. “In terms of advancing our digital strategy across the Tate, we thought we should model the needed behaviors.” Bravo.

Know of other interesting examples? Would love to hear about them.

 

 

 

Don’t hope

Hope graffiti, photo by Rupert Ganzer

About a month ago there was a NY Times interview with Ben Lerer, co-founder and chief executive at Thrillist Media Group. He says, “One thing we preach at work all day long is ‘don’t hope.’ What that means is don’t wait for somebody to do something for you. Don’t do something 90 percent well and hope that it’ll slide through. Don’t rely on luck.” Lerer went on, “It is important to know that you’re giving as close as you can to 100 percent, dedicated effort, and you’re being thoughtful about it.

Definitions of hope: “The feeling that something that is wanted can be had or that events will turn out for the best” (Dictionary.com) or “To desire with the expectation of obtainment” (Merriam Webster).

I’ve been thinking about Lerer’s interview (you should read the whole thing) and how it relates to our nonprofit cultural sector. We live in a world of hope. Like what? Here are some things that we have been known to hope for:

– That a long-shot source of funding will come through to fill our budget gap;

– That our grant request is an exception to guidelines but that we are so special an exception will be made;

– That our expense budgets can increase much faster than the rate of overall economic growth;

– That we can leave a gap in budgeted revenue and it will be filled ‘somehow’;

and many other things.

In fact the nonprofit sector is built on hope — hope for community vitality, hope for educational opportunity, hope for jobs, hope for civic engagement. Many of us are drawn to the sector because we are optimistic people, people who hope because we think that “what we hope for can be had.”

So what would it look like to preach “don’t hope,” and would that change how we operate?  I think it would. I think that “don’t hope” is a particularly useful post-recession state of mind. The recession is showing us just how unstable a house built on hope can be.

In a recent meeting, a colleague said they’d have “to hope for a lucky break” to avoid a deep deficit in the coming fiscal year.  And that reminded me of Ben Lerer. I thought to myself, “Don’t hope.”

Don’t hope also means DO ACT. Act to the best, fullest of your ability. Act with the conviction that it is actions, not hopes, that will make the critical difference.

Inventive capitalization program reaping benefits for theater festival

The Great River Shakespeare Festival (GRSF) in Winona, Minnesota has created an inventive capitalization instrument that will interest the broader field. The Festival’s “Legacy Bond Investment Program,” launched in September, 2011 is a state-approved investment offer for Festival patrons that provides GRSF with significant working capital.  Essentially, GRSF is offering donors the opportunity to support the organization through interest-bearing loans, with the idea being relatively small loans ($5,000) from a relatively large number of investors (100).

I stopped by the GRSF storefront office last week while in Winona to talk to Managing Director Eric Bunge and learn more about the program, which is described fully on the GRSF website.  He explained the program’s development and told me there’s a waiting list for purchasers.

Here’s how it works:

– The Board of Directors of GRSF authorized the sale of 100 Legacy Bonds.

– Investors pay $5,000 to purchase a bond. Multiple bonds can be purchased by a single person.

– GRSF returns $200 in interest annually to the bondholder for an annual return of 4 percent. (The current passbook savings rate is less than 1 percent.)

– Investors sign a legal agreement that was submitted to and approved by Securities Division of Minnesota’s Commerce Department. The agreement explains the program’s risks and returns and details each party’s obligations.

– Bonds may be called after September 30, 2021 (ten years) and GRSF will then have 180 days to repay the bond (plus any accrued interest). GRSF may also repay the bond to the investor after the same date.

– Bonds may be transferred and gifted provided the proper notifications and paperwork are completed.

– GRSF has built a multi-year financial plan that calls for surpluses to pay interest and pay back the bonds over time. Bunge projects the organization to operate with its first surplus this year.

– The expectation is that after 10 years, many investors will choose to roll the bonds over to a new term.

Bunge, who has been in his role for about a year, developed the program as a way raise funds quickly to address the organization’s acute capitalization needs. When he started work, GRSF had debt of nearly $200,000 that was being financed with short-term bank loans at very high rates of interest. Dealing with the debt was expensive, and, as importantly, it was a distraction that occupied the organization as it worked to build creatively on its growth potential.

So far GRSF has sold 39 of the bonds. (GRSF is timing the sale of additional bonds so as not to require an interest payout if the capital is not needed immediately, although you could buy one tomorrow if you want one!) Short term, high-interest bank debt has been paid off, and GRSF has used its new working capital to invest in infrastructure. Most recently GRSF purchased new computer systems and software to support box office and development functions. GRSF had sufficient capital to risk extending its season by a week in 2012, in response to audience demand, and is working to expand its street presence in the beautiful river town of Winona. So far, ticket sales this year have been brisk.

I can imagine a number of instances where a bond program could be extremely useful to an organization paying high interest on debt of any kind, or for an organization that needs working capital to launch new programs or enterprises and can’t wait for the typical 9-12 month grant cycle to seize the opportunity. It seems ideal for artistic investments — for major projects, season expansion or brand new programs and services. With legal and filing fees “under $2,000,” Bunge encourages other people to be in touch to learn more. But maybe wait until the Festival’s summer season is over on August 5th!

New business models? Bring them on

I have been following the modest torrent of discussion in the blogosphere about appropriate business models for the nonprofit cultural sector. A recently published paper was useful to my own thinking about this so I’ll summarize it here and direct you to the link. The paper’s author is Peter Frumkin of the RGK Center for Philanthropy and Community Service at the University of  Texas, Austin. It was distributed to the 100 arts leaders who are part of National Arts Strategies’ CEOs Program, which convened in Austin in May and is now posted on the NAS website.

What Frumkin lays out in the paper, Changing Environment: new forms, actors, and instruments, is that there now exists a spectrum of organizational forms that are more and less appropriate to enterprises with different purposes, financial structures, and  approaches to leadership. The spectrum reaches from “entirely commercial, for-profit and market-driven” and on one end to “entirely charitable, voluntary, donative” on the other. The middle ground is “full of hybrid forms” such as social purpose for-profit enterprises, L3C’s , B Corps, and non-profits reliant mainly on earned income, among others.

In his excellent blog post blog post on the subject of business models last week, Adam Huttler (who is in the NAS program) offered up some of the alternative organizational forms that artists and cultural entrepreneurs are now using. As a teacher and researcher, Frumkin goes considerably farther, drawing a visual map for how to think about one’s enterprise through a series of three filters and then choosing the organizational form (business model) that best fits. He argues that the nonprofit model should no longer be the default.

Frumkin’s three assessments are the social value proposition (what type and amount of capital is needed and to whom will equity be dispersed), the competitive landscape (analysis of the ways of generating revenue by identifying whether customers can and will pay for the product or service directly or will third parties be needed to pay or help pay for it, which includes understanding how the product/service will be priced), and traits of the leader (how will value, power, and wealth be developed by and distributed among stakeholders). On this latter point Frumkin contrasts a cultural institution that is community- and outwardly-focused (such as one in which an entire community participates in the formation of a shared vision) to one that is individually- and inwardly-focused (such as one that is primarily serving the vision of a single artist or small group of artists).

One of Frumkin’s most interesting observations is that not only are the organizational forms shifting, with new forms emerging, but also the nature of investment in the cultural sector is changing. “New instruments are being used to finance social impact across the nonprofit sector and in the process create new ways to finance organizational growth … The funding scene has shifted over time where the impact investor, not longstanding foundation donors or individual givers, is the key trend setter. These new impact investors … have made strong demands for results and proof of impact, which have challenged charities and arts and culture organizations in particular. .. Nonprofit organizations need to appreciate that there are signs of a shift away from grants to quasi-equity investments, which allow investors in nonprofits to participate in the financial upside—and downside—of programs financed with their funds … There have also been efforts to launch social stock exchanges that permit investments in businesses that have a social purpose, and allow these firms to raise capital more efficiently than would otherwise be possible. And there are many new ideas about debt instruments for the nonprofit sector, some of which would be pertinent to larger arts and culture organizations seeking to mobilize funds for capital and other projects.”

Frumkin urges cultural entrepreneurs to study up on the possibilities that new forms of investment and new organizational forms can offer. These new possibilities are refreshing and energizing to cultural entrepreneurs and we need not view them skeptically or with fear. That’s because there are many more ways to pursue our work than was the case even five years ago. There’s growing acceptance that no one way is right or wrong.  And there are plenty of examples of vibrant organizational practice all along Frumkin’s spectrum.

New business models? Bring them on.

Does your organization need a Chief Experience Officer?

A big part of our choice of favorite products and companies comes from the quality of how they engage us. My favorite coffee shop not only has the best coffee in Saint Paul but also the best playlist going in the shop, the best free Internet access, comfy chairs, an entertaining and useful Facebook page, and multiple ways of interacting with writers, visual artists and local food producers. It’s a sole proprietorship that’s curated by its owner in every sense of the word. Apple tries to do this on a global scale (and in my opinion, fails in many ways, but that’s a different blog post). Today’s successful companies not only develop services and products that are pleasing and useful but also curate our experiences with their people and their products to create (what they hope is) a unique brand.

Our larger performing arts organizations have a tough time curating what I’ll call “the total experience.” There’s no one person who has both the authority and the responsibility to curate the multiple ways an organization interacts with its public and to do so in ways that are interesting and unique; in cultural organizations, different aspects of the audience experience are handled by different departments. Artistic directors have their hands full dealing with what’s on stage. Marketing directors are focused on filling houses. So who is focused on the experience? And by this I do mean the total experience – from advertising to social media to how it feels to be in the house to how I am engaged before, during, and after a performance. I mean how I am greeted and treated, how things look from outside and inside, what food you sell me, and whether the program book is engaging or dull as can be.

As commercial enterprises get really imaginative at this, arts organizations are failing their audiences by not taking this curation as seriously as they do the curation of the work itself. What’s more, in an environment where so much engagement – both live and digital —  is smart and fun, a lot of arts organizations are coming off as boring and stuffy, no matter how great the work is once the show begins.

A few recent performances I’ve attended have me thinking about this, experiences where the sum total of my experience didn’t equate or align with the qualities of what was on stage. It’s as though the only thing that matters is the work once I’m seated and after I’ve read my program book – not all the experiences I have leading up to the moment the lights are dimmed or after the performance ends.

Some big corporations have an executive position called Chief Experience Officer (CXO). This is a new-ish (past 6-7 years) position for an executive in charge of the way people experience the company. A lot of what you can read about these positions is written in business-speak, but my take-away is that these people work cross-functionally to ensure that employees, customers, and shareholders receive the experiential value the company wants to create.

How could we define a position like this in the cultural sector? I imagine a sort of interactive curator or interactive producer, who applies intelligence and imagination to the total experience of a cultural organization. This person would need to work across artistic, marketing, development, and HR functions to help everyone work together and think about how to make total experiences as lively, creative, and engaging as possible.

Couple of questions for you. Do you think about the total experience when you go to an arts event (or exhibition)? Do your experiences fall short of ideal, or not? Are there organizations you know that do pay attention to the total experience? I’d love to hear from you about this.

Need to get more done? Maybe you need help

The May 2011 issue Harvard Business Review is dedicated to “How to Get More Done,” a topic that consumes a lot of us as we try to do more with less, while simultaneously pedaling uphill during our current recession.  There are a few good articles in the issue but the one that got me thinking is about the role of administrative support (The Case for Executive Assistants by Melba J. Duncan is available here.)  The point of the article is that cutting back on support staff is not a route to productivity for a team, and that, in fact, adding support staff, delegating more to them, and letting them help more with “air traffic control” is the better decision.

One thing that’s changed a lot is the amount of communication we all are doing and the platforms we’re doing it on.  Because individuals are available on multiple channels, it’s become a lot more difficult for support staff to do their jobs.

Example: someone on the support team is trying to set up a meeting with staff and Board members.  A meeting request goes out, and how might we hear back? A couple of weeks ago, this happened at our office.  Several people replied to the Outlook meeting request.  A couple of others texted my mobile phone. One replied via Facebook.  And yet another replied to my personal email account.  Of course a few didn’t reply at all.  Chaos.

There are multiple reasons this can happen.  The first is that there is no single platform (yet?) that is widely used for getting people to the same place at the same time.  Go to meeting, Doodle, Evite, Outlook invitations, Google calendar — everyone is using a different platform. Even if we decided that internally, everyone will use the same platform, externally, there is no single ubiquitous option.  So the live and in-person support person becomes the communications hub, bridging the technology divide and injecting a human (and humane) touch into one of the most frustrating and time-consuming activities of contemporary business life.  The answer to: when can we get together to talk about this? is not a simple one!

The second reason people feel comfortable communicating via whatever channel is convenient: there is an underlying assumption that each of us is an individual productivity unit.  It is assumed that each person handles her own communication and juggles the channels personally.  And this is true!  I do it and I’m pretty sure that all of you do it, too.  Our brains are coordinating our work “channels,” family channels, our friends’ channels, our tweets, our snail mail, and whatever I’ve forgotten to check lately.  We keep track of our electronic task lists and our paper-based grocery lists; we book our own travel; and we synthesize paper, email, and all our other digital communication to construct our daily lives.

The cost of this is, among other things, our serenity.  (When is the last time you saw that word?)  We all know that breakthrough thinking is more likely at moments of detachment — staring out the window, going for a walk, or thinking about nothing in particular.   The cost of commotion is not only physical (stress) but also the way it handicaps the full realization of our work and ourselves. So, if we can’t locate serenity in our lives, breakthrough thinking is unlikely.

So what does this have to do with support staff?  Duncan’s HBR article argues that it has a lot to do with it.  Some of her reasoning won’t resonate because it is so focused on executive life, but she makes an important point that’s relevant to every organization.  She reminds us that support staff add people to the office equation.  People who can get things done by interacting with other people.  People are a kind of “office technology” that can provide what no software solution can:  “troubleshooters, translators, help desk attendants, diplomats, human databases, travel consultants, amateur psychologists, and ambassadors to the inside and outside world.”  We’d all do well to consider whether we are counting enough on people to get our work done, and not hoping for the technological silver bullet.

Duncan’s article is a nice reminder that there’s no substitute for the human touch.

 

 

 

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