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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.

 

 

 

 

 

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.

Sarah Lutman

I am a Twin Cities-based independent consultant and writer working with cultural, philanthropic and public media organizations across the United States. You can read my entire bio on LinkedIn or read about current clients and projects on the Lutman & Associates web site.

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