off-stage right

Monday, May 4, 2009

Interesting articles/blog posts from last week – in case you missed them!

Here is a round-up of what caught my eye over the last week.  Let me know if there is something interesting I should be reading!

Interesting argument - Text Me Later (Or: How Theater Isn't Baseball) http://u.nu/5zz3

Cultural Groups ask what to mount next. The Answer - losses? Washington Post http://u.nu/3zz3

To gala or not gala - Iu2019m Honored. No, Actually, I Canu2019t Afford It. NY TIMES. http://u.nu/6xz3

How Much Does Mayor Bloomberg Want to Cut from the Department of Cultural Affairs? Clyde Fitch Report - http://tinyurl.com/dhcugv

Anonymous Giving Gains in Popularity as the Recession Deepens - Philanthropy.com - http://tinyurl.com/d45sky

More Valuable - The Ticket Buyer Or The Donor? - diacritical - http://tinyurl.com/d8sbrg

Bad Behavior at the Theater: Reviving an Old Tradition « Clyde Fitch Report - http://tinyurl.com/d4vjw4

Celebrities Are Taking All the Jobs - http://tinyurl.com/cm3ur9

Equal Time For Planned Giving http://viigo.im/rFc

Fundraising suffered big drop in 2008 http://viigo.im/rii

99seats: Priorities, Part 1 - http://tinyurl.com/d4sn4v

Let's Get Practical! - Artistic Manager and Resident Companies http://tinyurl.com/cpbdse

Broadway, Off-Broadway, Theater : How to invest in a Broadway show. Part I - http://tinyurl.com/d5cgur

How to invest in a Broadway show. Part 2 http://tinyurl.com/dnzg4t

Reasons to be Pretty to Encourage Texting at the Theater - http://tinyurl.com/c5o864

Union Calls City Opera Strike ‘Likely’ Given Demands - Bloomberg.com - http://tinyurl.com/tra5t

Why Twitter Quitters don't Get It http://tinyurl.com/c4neyh

HarvardBusiness.org: The 24/7 Employee http://tinyurl.com/dcz8mu

The World of Celebrity Giving: http://www.looktothestars.org/

IRS provides a mini-course on the new 990 form for charities - http://tinyurl.com/cuo8wh

There are BO users and AO [Twitter] users: Before Opera/After Oprah' ( http://tinyurl.com/cojbdc )

Parabasis: No One Edits Poets. Pondering new play development and collaboration - read the comments too. http://u.nu/4463

ArtsBeat: Barlow-Hartman, Broadway Publicity Agency, to Close http://viigo.im/q2W

Is Your Social Network Cool Enough To Be A Tree House? http://viigo.im/pS6

Social Net Fundraising - All Hype? The Agitator. (Pretty sound advice) http://viigo.im/pQW

A Nonprofit New York Times? http://tinyurl.com/cskgs3

Theatre vs. Theatre Companies (The Playgoer) http://viigo.im/pln

Wall Street Journal Only Top 25 Newspaper To Report Circulation Increase http://viigo.im/pfw

Diacritical: Do we need institutions to create art? http://u.nu/5dp

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Tuesday, April 28, 2009

Bring it to scale

Bridgespan has released a new report about bringing organizations to scale.   Organization replication and scale is something we tend to forget about when it comes to the arts.   But isn’t the first question we should ask - what is the “right-size” for an organization to accomplish its mission?

The Bridgespan report notes some key challenges for nonprofits in determining and fulfilling scale:

  1. Distinguishing promising programs from proven ones is complicated, costly and essential.  Many social service organizations have little if any evidence of their programs’ efficacy. This doesn’t mean that they aren’t producing results. But it does mean we cannot say for certain that they do.
  2. Scaling requires rethinking traditional patterns of funding. If we want to make a pervasive impact on our nation’s most difficult problems, we are talking about supporting fewer organizations with larger sums of money. Concentrating resources on a few organizations is rarely how money flows today.
  3. Scaling a nonprofit’s programs without investing in its capacity is a recipe for failure. Building organizational and human capacity – putting in place the strategy, systems and, above all else, the right people in the right jobs to convert money into results – is as important a factor in bringing a program successfully to scale as the money itself.
  4. Ongoing research, evaluation and performance measurement are imperative as an organization scales. Put simply, there is no other way to ensure that even a well-funded program with proven outcomes will be expanded and sustained. A good idea absent its execution is in fact not a good idea at all.

Last summer at Harvard Business School’s Strategic Perspectives for Nonprofit Managers, we spent a lot of time talking about scale.  This was the first time I really fully explored the concept in terms of the arts and in particular theatre.  In the post, I pointed out four strategies in terms of scale.

1. Get support for fixed costs (and maybe semi-variable costs), and have variable (and maybe or semi-variable) costs covered by earned income.
2. Franchise.
3. Engage in partnerships (or even possibly mergers).
4. Create a subsidiary of a commercial business.

Shouldn’t successful organizations and programs be replicated? What would bringing it to scale mean for theatre? Can we "franchise?" Aren’t co-productions, touring, or moving a show be a type of franchising in the theatre?  Certainly education programs are replicated – it happens naturally more often than not without a strategic plan, but why not plan to replicate and take certain ideas for programming to scale.  In a way the NEA Big Read program is doing exactly that. 

When talking about funding models and whether theatre’s should be saved, if we can talk replication, we have to take mergers under consideration.  For some reason in the arts, mergers are often interpreted as failures.  But consolidation, restructuring, and resource-sharing can be VERY effective for theatre organizations and individual productions, so why not out-right mergers?  Certainly in terms of scale it may make sense for organizations and the community.

We certainly are seeing a form of mergers in co-productions and new play development.   Adrian Ellis wrote in the Art Newspaper that this would be one of the three ways to compensate for the losses in philanthropic, endowment and visitor incomes for museums, “what museums accept they cannot do alone, they will explore doing together more thoroughly and earnestly than in the past: collection sharing, joint acquisitions, pooling conservation resources, and pooling curatorial appointments.”

Without question determining scale is difficult and requires significant examination, but it seems to be an essential step which we don’t take enough time to address and plan.

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Monday, April 27, 2009

Key Issues facing the nonprofit theatre industry (a top ten list)

Issue One: The business model is broken (if it ever worked).   We need a new definition of fiscal health and sustainability based on individual organizations needs.

Theaters across the US are acknowledging that the traditional nonprofit theatre model is broken (60% earned/40% contributed). For many structural deficits have become the norm rather than the exception.

Other Earned Income resources can be explored but must not pull the theatre off mission.  Enhancement income can be raised from aggressive new play development and active exploration within the industry. Although this is a somewhat unpredictable source of income when done under the right circumstances it can be very helpful in offsetting expenses.  When done for the wrong reasons (read – for the money) it can be devastating.  Co-Productions are another performance related income stream. Similar to enhancement income, the partnership is as important as the income source. Many Education Programs generate significant revenue through participant fees, vendor agreements with academic institutions, or corporate training programs. Real estate acquisition and utilization can be a revenue source for many organizations.

Rising Production costs must be reasonably contained, however, eventually many theatres might have to go through a certain amount of correction on their production expenses if they are “living beyond their means.”  Programming, fund-raising and administrative needs of companies need to be assessed regularly.

Theatres need to address contributed revenue across the board – annual campaigns, specialized campaigns, and reserves/endowment.  Alternatives to traditional endowments will need to be explored.  Working capital must be addressed. 

We must assess our governance structures and make sure there is balance between board, artistic and managing leadership.  Too often healthy discussions become tyrannical demands by one or two of the partners. 

Issue Two: Many of our mission statements have become interchangeable.

Writing missions by committee has watered down many theatres’ missions.  Consensus has become a compromise to mediocrity.  Organizational values are sometimes difficult to identify and in a few cases have been lost to the whim of leadership changes and egos.  We must return to missions that address a need.  Why do we have mission statements in the first place? We need a purpose.  We have to have an identity right? A uniqueness? A reason our community needs us? We have to use our resources and capabilities to fill some social need.  We need goals to measure our impact against!

Issue Three:  We have lost our relevancy within our communities.

The first two issues have created the most challenging and threatening issue of all.  Several organizations have veered away from their original mission and become increasingly irrelevant.  Theatre has become about making the safe choice.  We shy away from artistic risks over concerns for finances – just when we should be taking the greatest risks with our work.  We aren’t spending enough time getting to know our constituencies so aren’t picking work that matters to them. We must live up to the responsibilities we have to our community.

Issue Four: We aren’t investing enough in new kinds of theatre – the evolution of the form.

Theatre has a bad tendency of being behind the times, we must explore how we use new technologies, environmental theatre and challenge the definition of the theatre or new forms will evolve without us.

Issue Five: We should partner more often with other arts organizations or social service organizations.

We must identify mutually beneficial partnerships and eliminate those that drain resources.  Natural partnerships have formed with other theatres and some arts organizations, but we must actively pursue new bonds and relationships that allow us to share resources and fund our expenses.

Issue Six: We don’t do enough for families.

As members of a community, we must do more for families.  In a world where group experiences are becoming more and more virtual we must provide programming that  brings families together under our roof to experience live storytelling.  We must make theatre-goers.  If you haven’t experienced something you will never miss it.  We need to provide flexible services and scheduling to parents as well as provide the tools with which to explore theatre together with their children.  We need to have programming that reaches audiences of all ages focusing on the major transition periods.

Issue Seven: We need to make theater more accessible.

Programs that lower ticket prices must be created so that more people can see shows.  We have marginalized much of the theatre-going experience to the affluent.  Of course not all programming will be accessible to everyone (that is unfortunately inherent in the arts structure).  But we have reached a point of imbalance.  A correction is essential to remain relevant, to serve most missions, and to keep theatre alive.

Issue Eight: We need to build theater’s Audience Base.

We must create participatory experiences beyond productions.  Education programs, outreach programs, audience development programs – whatever you want to call them, must be at the center of the organization along with productions.  We cannot afford for them to remain or become satellites to production.  When all of the information in the world is available in a few keystrokes in a google search, we must feed the desire for deeper, more qualitative, more educational experiences. We have to listen to our audiences, create a dialogue, and create forums for ideas to be expressed.  We have to work as diligently on the relationship with the audience as we work on producing the work.  We must speak their language and use their communication tools.

Issue Nine: We need to build theater’s Donor Base.

We must work with the entire nonprofit community to stop complete marginalization of the arts.  We must finally create a multi-layer argument regarding the value of the arts.  We must stop the competition and aggression towards other arts organizations.  Again, we must listen to our donors and create loyalty and generosity that is based on something more than a rewards system for patrons.

Issues Ten: We must empower and invest in our staffs.

Without committed and seasoned staffs we will not achieve any of our goals. We need the staffs of organizations to drive programming and ALL activities of the of the organization in partnership with the board to achieve appropriate growth, long-term strategic goals and the necessary fund-raising to sustain the organization.  We need to invest in continuing education for our staffs.  We must break the cycle of short-term employment and increase staff retention.

As with any list about an entire industry, of course there are folks working on these issues.   Please share what you are doing!  Learning from one another and working together is the only way to address these issues industry-wide!

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Thursday, April 9, 2009

12 things to learn about each donor or audience member

As a follow-up to my post about box office and front of house staff, I got several emails about what kind of information should staff try to learn about their customers beyond how they heard about the show they are seeing. Any information is good information, but below are the top 12 things I try to learn about donors, audience members, and anyone I work with (agents, artists, etc). The information is only useful if it recorded somewhere, don't forget that! For example, I copy the answers to these questions from our donor/ticketing software into the notes field of my outlook contacts. For agents I add their client list to the notes, and for artists I add every show I have worked with them on and all of their representation. Some of the information comes from phone calls, some from a little research, and some from conversations, but I track it all and ask that my staff does too.

1. What is their spouse's name (and track whether they stay married)? The reason is pretty obvious – whether it is for ticket pick-ups, events or phone calls – best to know who is married to whom

2. Do they have children? Names? Ages? Again, obvious reasons for tracking this – programming options, the occasional question about how they are doing. It is good to get what schools they go to (for educational program discussions) and speaking of schools…

3. Where do they work and what do they do? Another obvious one – you can learn a lot about what people might like by what they do for a living.

4. What colleges did they go to? Often they are active in alumni groups (hello group sales), they may be on the board (hello connections), or they may just follow that sports team (always an safe conversation topic).

5. Do they have pets? I have five dogs and a cat – no kids, enough said.

6. Where were they born? This is a great one to figure out through research and toss into a conversation – always impresses and makes a very personal connection.

7. Who are their friends? Or as I like to think of it – who are they going to bring to me as potential audience and donors! It is about networks and always has been, we are just more aware of this in the era of social networking (plug for fun site – muckety.com - It is a great way to find out a lot of info it actually tracks their former business associations and boards that they serve on and creates a cool graphic of it, in addition to Google and Wikipedia searches of course.)

8. What are their other causes? This is a great way to find future partner for programming or to identify programming that folks may be interested in. Perhaps you offer another organization they support free tickets for their employees or constituencies, it can really strengthen relationships and make you feel good about helping another organization.

9. What is their religion? Touchy subject, but it is more embarrassing to invite someone to an event scheduled on – say – Yom Kippur and completely insult them. Also religious organizations can be good programming partners (as in number 8).

10. What are their special needs or even just likes? Do they really prefer an aisle is as important as if they require it. Are they injured and need special assistance? Do they love the mezzanine (or hate it). Do they like to arrive early to socialize or get in and get out quickly. You can't also meet their desires, but acknowledging you couldn't sometimes is just as good as not meeting them.

11. What are their other interests? Knowing they are a baseball fan is not enough – Mets, Yankees or Sox? Guess the wrong one and you could be in trouble. Do they love gardening? Play tennis every morning? Write a blog? If you know you are going to see them – use a personal hobby as a conversation piece.

12. Are they talkers? This is a tough one, but you have to be careful. Some people don't want to chat or make small talk with you – it isn't anything about you, perhaps your organization is really their spouses passion and they are really just supporting their spouse, so they really don't want to hear about the great new programs you have. Some people are just very uncomfortable with small talk especially in a crowded lobby or group, but one on one are happier. Believe it or not I often learn this from a box office person. I will be curious about someone who never really wanted to talk before a show and the box office will tell me how odd it is because they are Chatty Cathy on the phone when getting their tickets, so I follow up with a one on one call, and make stronger connection to that person in the manner in which he or she prefers.

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Tuesday, April 7, 2009

Better box office and front of house service keeps your customers coming back – almost as much as your programming

Several months ago, I wrote a post on market research for theatre – who to talk to, where audiences might come from, and initial methodology that I have been meaning to revisit for ages. My Harvard Business Publishing update reminded me of it but brought up some really important ideas that I wanted to address as well. Of course, since many don't have access to HBR website I pasted the post below.

Peter Merholz makes some really important points about staff right up front. I have had many conversations with other leaders about our box office staffs. They are usually the youngest and worst paid staff members. We work diligently to keep them up-to-date on programming, updated information, and institutional information, but many if not most are part-time and more often than not our work to keep them informed is subpar. And let's not face it customers are not always nice, so when you are young, underpaid, and unprepared, it is pretty easy to be short or even rude to customers. And for a large part of our constituencies this is not on the first contact that they have with our organizations but the majority of our audiences probably only meet or talk to the front of house staff. Many of our subscribers only ever interact with the front of house staff. This is more than our "front line." So how do we improve customer care?

Perhaps we should do some analysis on what we pay for part-time employees, telemarketing and other interactions and really explore the idea that the box office staff and house management staff should be experienced, middle managers who are capable of handling difficult decisions.

Also, by nature, most box offices are separate from administrative offices. I really recommend to any one building a theatre, think of connecting the two. Satellite offices naturally receive information at a different rate and are by placement alone separate from the day to day conversations and camaraderie of the general office staff. The box office should be closed for full staff meetings and all box office staff should be in attendance at these meetings.

Of course staff structure is different at each theatre, but there must be a strong connection between marketing and development functions, as well as a system for staff education that makes sure that these front of house staff members are in the loop as decisions are made. These key intermediaries between the audience and the organization MUST have interaction with the artistic department and artists – and not just booking their tickets, showing them to their seats or letting them know about house sizes. It must be healthy, quality interaction about the work happening on stage.

As for the information that these staff members collect about customers from conversations and sales interactions, it has to be recorded somewhere. I don't care how busy the phone lines are – we have to learn more about our customers and what better way than through the person talking to them.

If we are going to connect with people, the connection should be as intimate as theatre itself with as many of our patrons as possible and at all levels of the organization. People can get cold, canned, impersonal experience from the majority of businesses they interact with throughout the day. If they don't want a human experience they will buy on-line. But most people who come to the theatre are coming for the human connection whether social, emotional or intellectual, they want a connection. We have to give them a positive, well-informed one.



From Harvard Business Publishing Blogs:

It's Not Who Your Customers Are, It's How They Behave by Peter Merholz

9:28 AM Wednesday February 11, 2009

Businesses cannot exist without customers, so it's sadly ironic that many, if not most, businesses, actually understand so little about them. As a company grows, a smaller and smaller percentage of the staff interacts with the customers. In fact, those folks on the "front line" (think call centers, service counters, retail stores) are typically among the lowest-paid and have the least authority.

Meanwhile, back at headquarters fundamental decisions are made with extremely limited information about customers. There, understanding the customer is often considered someone else's responsibility, because, "we have a department for that." No department has a complete view of the customer, however, and so in place of true understanding are models and frameworks that attempt to describe the customer. Many companies don't go beyond demographics and market segmentation. While it's helpful to know how they break down by age, sex, income, region, and other easily measurable characteristics, there's actually very little you can actually do with that information. In order to become customer experience-driven, you need to go beyond who your customers are, and understand what they do.

When companies think of how their customers behave, it's typically in one of these four ways. See if any of these resonate with you:

1. "A gullet whose only purpose in life is to gulp products and crap cash"

That quote comes from The Cluetrain Manifesto, still one of the best books on how companies should embrace a new way of communicating with their customers. Very few companies would admit it, but you know that some still see their audience this way (I'm looking at you, broadcast media.)

2. Sheep

This view holds that with the right "messaging", you can guide people to behave in certain ways, because they're docile and gullible and respond only to emotional tugs. And while this might be fine in the world of packaged consumer goods, where there's not a lot of complexity in using (i.e., literally consuming) the product, it breaks down when your offering is more complex. During the first Web boom, I remember companies spending tens of millions of dollars on advertising, and a tenth (or even a hundredth) of that on the site experience. You can no longer simply hound people into buying your product.

3. Homo Economicus

If Sheep are one side of the behavioral coin, this is the other. This view argues that customers are highly rational beings who want to maximize the utility of their purchases. This leads to an assumption that what matters most is "bang for the buck," which in turn gives us products with bloated feature lists, because who wouldn't want to buy the item with 14 bullet points on the packaging over the item with just 10? Sadly, there's research that suggests that many customers do make just this purchase decision; however, there's also research that up to 50% of product returns are for items in perfectly good working order -- they're just too confounding to use.

4. Type A Personality

Perhaps the most sophisticated common view of customer behavior is the one that understands customers are completing tasks in the process of accomplishing a larger goal. This view comes out of the world of software and Web design, where the functionality can get quite complex. This perspective becomes problematic when taken to the extreme -- that people are some kind of flesh robot seeking to maximize productivity. This leads to offerings that work, but can be joyless and dull. Perhaps you've used some of Microsoft's products?

Now, these perspectives aren't wholly wrong (well, maybe the gullet), but clearly they're not quite right. In order for a company to deliver truly outstanding products and services, it must embrace the messy complexity of human life, and endeavor to understand its customers as people. In other words, understand your customer as you understand yourself.

This means going deeper than tasks and goals to appreciate behaviors and motivations. A few years ago, I worked with a large national bank to help them better understand how customers decide to purchase the bank's products and services. The bank had a sophisticated demographic model, but didn't understand what cinched the deal.

Our initial efforts focused on the "goal" of buying a product, and we were able to outline the steps that people took to achieve that goal. They researched banks online, then compared products within banks as well as across banks. They visited nearby branches, and spoke with representatives in person or on the phone. And once they amassed enough information, they committed.

In our analysis, we realized this was only part of the story. We asked the research participants to retrace their steps, focusing on the Web site, to walk us through their experience. And in doing so, we saw that while there was a set of discrete tasks that lead to achieving a larger goal. More importantly there was an underlying motivational layer of emotion that actually guided their decisions. Buying financial products is challenging, because unlike physical goods, it's hard to define what you want ahead of time. At Best Buy, you can point to a 52″ television and say, "something like that." You can't do that with a loan or a line of credit.

So what happened was that while people appeared to engage in the appropriate steps to make a purchase decision, because they couldn't articulate an end state, they were simply going through the motions and would never commit. We realized that customers must satisfy three sets of requirements -- functional (does the product meet my basic needs); intellectual (through comparison, am I confident I'm getting the best deal); and, crucially, emotional (could I have a relationship with this bank?). The bank wanted to drive all applications for new products online, but the customer research analysis made clear the importance of maintaining a quality cross-channel experience. Potential customers often wanted to meet representatives, either in person or on the phone, before committing to an application, even if they've done all their research online.

Peter Merholz is a founding partner and president of Adaptive Path, an experience strategy and design firm. He has worked with a wide variety of clients from large multi-national companies to smaller, avant-garde firms and start-ups. Past clients include Hallmark, Socialtext, Intuit, United Airlines, and The Vanguard Group. Peter is an internationally recognized thought leader on user experience. He co-authored Subject To Change: Creating Great Products and Services for an Uncertain World, published by O'Reilly. Peter's thought leadership is perhaps most dubiously demonstrated in his coining of the term "blog" in 1999 when it was a nascent genre.

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Saturday, April 4, 2009

Recession and post-recession Marketing

With all the talk about discounting, buying patterns, and subscriptions, I started to think about the trends we are setting (yes, I said WE are setting).

As the old saying goes, it takes two to tango and we have been a terrific dancing partner in the avalanche of discounting, last minute ticket purchasing, and the demise of the subscription model.

We didn't have much choice and hindsight is 20/20, so rather than looking at what got us to this point (there are many great posts on that on other blogs and even a few in my past posts), I am thinking about the impact we are right now during these exceedingly tough times.

The cultural shifts in ticket purchaser's patterns will likely stick after the recession. We are shaping a lot of consumer's ideas about attendance during this time, and we are actually instilling future habits.

Can the last-minute buying trend be reversed?

Why don't we reward early-adopters like say software companies products? Free betas of software are common – try it out for us and help us find the bugs and in exchange it is free. Isn't that sort of the exact same concept for previews? Lots of folks make these preview prices earlier, but what if we took it further. Web-site start-ups often let the initial "customer" have free or low cost membership forever. Why aren't we rewarding those who buy early?

Without question buying early and loyalty of repeat customers should be rewarded. However with all the last minute discounts, subscribers or members tend to pay on the higher end of the price scale. We justify this by saying to ourselves that when a show is a hit, they are guaranteed their seats or through so-called benefits (exchanges, extra events). But let's be honest, the traditional pick your seats in the advance program really only works for one thing – a subscriber who wants to sit in a specific seat, in other words, the traditional much older subscriber.

What would happen if the subscribers were guaranteed a steep discount? I think it is really important to do some number crunching and see if lowering subscription prices significantly can increase your number of subscriptions and make up for the lost income with number of butts in seats. After all it is about having the cash in the bank AND the advance ticket sale.

However this can only work if last minute buyers aren't rewarded more for their "bad" behavior than subscribers.

Frankly, we are treating theatre subscribers like the gadget industry treats its customers. To get the cool new thing (or the possible hit show) you actually have to buy in at the higher price than those who wait. Is the Kindle or Ipod model really what most theatres want to be? A few privileged few who can afford it get it first? After all two months after the first Iphone release Apple had to drop the price $100 to increase sales, isn't that the same thing we do with single ticket discounts?

Lot of folks talk about the airline model being applied to theatre – where the earliest and the last customers are rewarded with the best price, this does fill seats that would go empty. It certainly is work exploring.

Other folks are experimenting with scaling of prices based on demand. This resulted in the last minute premium ticket prices that some find insanely over done, but perhaps it teaches a bit better behavior. Perhaps scaling should be extended to daily performances. If Saturday night is the hardest ticket to get shouldn't it be the most expensive?

Let's use some simple numbers – what if ever subscriber paid $1 per show, single ticket buyers who bought during the first 10 days tickets were on sale paid $1.50 and those who bought in the few weeks prior to the show paid $2-3, and a few rush tickets were sold at $1 a show. Would the capacity shifts actually increase overall income?

Whatever route a theatre decides to take, this is the time to experiment with ticket prices and to create good habits that help theatres with advance sales.

I am including in this post excerpts from a proposal I wrote (with a great Institutional Grants Manager) for TCG's Think It! Do It! Grant. It is about deconstructing the traditional subscription model – we didn't get the funding and I am not at that particular theatre to implement it (nor are they), but I think it has some good thoughts on how seasonal planning can also play into pricing and advance tickets sales. I certainly wouldn't advise it for every theatre – but if you read this blog often you know that I don't prescribe anything for all theatres except individuality, uniqueness, and self-examination.


May 15, 2008 proposal for TCG's Think It! Do It! Program (in partnership with Met Life). This was submitted under the Do It! Guidelines.

How do we increase ticket sales, increase working capital and broaden our audience base? This is a question familiar to any performing arts organization. As reported in Theatre Facts 2006 and based on the TCG Fiscal Survey of 105 Trend Theatres between 2002 and 2006, the percentage of seats filled by subscribers is on a steady decline and there is a decrease in overall subscription packages sold.

Many theatres have struggled to maintain a subscription audience and have found that a significant amount of staff time is dedicated to the exchange of tickets and updating subscribers with changes in programming and other information. Industry-wide, the last five years have marked a steady change in buying patterns with an increase in single ticket purchases, especially for a specific date or performance in the distant future. Pricing models are in flux; theatres are trying different types of subscription packages, single ticket initiatives, flexible purchasing options, and audience initiatives focused on filling seats and reaching a varied demographic. Perhaps most pressing is the struggle to maintain working capital. Theatre Facts 2006 reported that of the 190 Profiled Theatres that participated in the survey, 64% experienced negative working capital. Theatres consistently struggle with the challenge of maintaining a steady income while producing first rate art and decreasing our dependence on a once a year season announcement, an annual gala and an annual appeal.

What if a theatre were to throw out the traditional season-based subscription model and transition to an advance, multiple ticket sales model by introducing productions on a rolling basis. Perhaps, three times a year, the theatre rolls out the next eight months of programming, offering the opportunity to purchase multiple tickets to be used in any number at any of the listed events. While the theatre may still offer the traditional keep your seat/pick your day subscription model, it will no longer be the primary sales focus. The intention is to shift the focus from seasonal programming to ongoing programming, giving the theatre multiple marketing opportunities and creating a more consistent cash flow. This model may provide audiences more choices and flexibility with how and when they choose to use their tickets. The theatre would have greater flexibility in terms of ticket pricing and artistic programming.

I was inspired by the 2007 TCG Fall Forum to think about making radical changes to our business model – which is where this grant idea was formed. At the forum, business leaders proposed that innovation and the need for major change were necessary in order for theatres to survive in a shifting consumer market. People were working on this.

Some theatres attempted to address these issues by introducing a "Flex Pass" to the subscription model, allowing patrons to choose from any number of shows in our season with a variety of pricing options. Other theatres have offered flat rate performances, student rush passes and vouchers redeemable for any production within a given season. Talk back's, pre and post show social gatherings, and other social events have been introduced to enhance programming and to draw more patrons to our nation's theatres. I believe that these tactics were acting as "band aids" to the larger problem of an antiquated system, and began to strategize a whole new way of looking at sales and programming.

This could yield an exciting opportunity for Artistic Directors by not being limited to the traditional season model. Being released from the confines of securing an entire season at one time, the artistic staff will be given more options, planning can be multi-dimensional – a programming arc of four months can than become larger affecting the next four months, and then the next, rippling out to present a more powerful and fluid vision. An Artistic Director could find freedom to focus not only on our mainstage productions, but also on our ancillary programming that enhance the themes of the theatre's productions. In addition, the artistic staff will be able to capitalize on last minute changes that occur in programmatic and talent availability, as well as having the opportunity to adjust programming to address changes in our larger social landscape; remaining current and vital.

Marketing will be key in communicating the new model to patrons. Finance will face some adjustment to our accounting practices, including changes in pricing models, marketing budget and economic projections.

The desired outcome is to increase the sale of multiple advance tickets. By being in constant dialogue with its audience, a theatre will change the audience's expectations and inspire them and give them more opportunities to purchase multiple tickets in advance. A new ticketing model could give a theatre more flexibility with pricing models, and more fluid artistic programming.

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Thursday, April 2, 2009

Working together even if you are direct competition - technically...

In a posting last month I talked about the restructuring or the possiblilties of resource sharing. Here is a great example taking a co-production a bit further than the norm with two great nonprofits teaming up!


Playwrights Horizons, Vineyard team 'Burnt Part Boys' opens spring 2010
By DAVID ROONEY

Off Broadway stalwarts Playwrights Horizons and the Vineyard Theater will team for the first time to co-produce the musical "The Burnt Part Boys," scheduled to bow in spring 2010 following two developmental productions.Written by Mariana Elder with music by Chris Miller and lyrics by Nathan Tysen, the show is set in West Virginia in 1962. Coming-of-age story traces the odyssey of a group of teenagers whose fathers were killed years earlier in a tragic coal-mining accident. Erica Schmidt ("Humor Abuse") will direct.

The tuner has been the subject of Gotham transfer rumors since it was first seen in summer 2006 as part of the Barrington Stage Musical Theater Lab. The Vineyard will further workshop "Burnt Part" in a developmental staging running May 26-June 6, followed by a summer presentation as part of New York Stage and Film on the Vassar College campus. The official premiere will take place in 2010 at Playwrights.

Both Playwrights and the Vineyard have a history of shepherding unconventional musicals, the former with shows such as "Grey Gardens" and "Sunday in the Park with George" and the latter with "Avenue Q" and "[title of show]," among others.

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Sunday, March 29, 2009

Who should get funding in times like these?

Controversy in the funding community...see Wall Street Journal article below

We all know that the arts are facing some serious challenges. Unfortunately, it is a reality that now more than ever we are competing for dollars against social service initiatives.

Let's be honest - feed a homeless child or help a theatre put on show? I have to admit - I would probably give my dollar to the homeless child. In times like these most people will. Of course there is the argument that Arts feed the soul. But who are we kidding, as with September 11 and Katrina, we need to adjust our funding requests and justifications.

I am not suggesting we all go out and start a bunch of new programs directed to the increasing "poor." Quite the opposite. I think we all need to think about our missions. Are truly serving our communities as we want to or are we only serving the upper echelon of our society? We have to ask ourselves honestly does our organization only want our programming (except maybe education programs) to serve the upper echelon of society.

Unfortunately the majority of the professional theatre in this country is produced and presented for wealthy. It is an assumption I am making - before everyone comments asking for proof - based on price of tickets alone (let alone the cost of baby-sitters, dinner out, and transportation). Of course discount and outreach programs open the doors to a few others, but as a whole you have to have a healthy weekly pay check to catch a performance. What are we as theatre managers to do to open up our houses to those who can't afford $35-65 tickets? And do we really want to? And if we can't or don't - how can we or should we compete with all of the social service and education initiatives out there, especially when most of our donors have a lot less to give?

Just the beginning of the conversation.


Need a Real Sponsor here

MARCH 23, 2009, 8:18 P.M. ET

Foundations Oppose Call to Target Grants

A prominent philanthropy watchdog has riled some foundations by releasing a report suggesting they should devote half their grants to minorities, the poor and other disadvantaged groups.

The report, released this month by the National Committee for Responsive Philanthropy, argued that foundations should meet a handful of benchmarks to practice "philanthropy at its best," including making half their annual grants to "lower-income communities, communities of color and other marginalized groups, broadly defined."

Several foundation leaders have called that benchmark overly prescriptive and argued it could exclude philanthropies that pursue missions such as the arts, medical research and education -- areas that might not always directly affect the groups identified by the committee. In addition, the committee lobbies Capitol Hill, so some fear the report could spur stricter regulation of foundations' activities.

Criticism of the report has intensified in recent days, with a well-known foundation president blasting the report's findings on an Internet blog and another large foundation canceling its membership with the committee. The committee in turn circulated a memo attempting to shoot down criticisms.

Aaron Dorfman, the committee's executive director, said his group doesn't seek to codify the benchmarks and that he has been "surprised by the amount of venom" the report's suggestions have produced.

"We couldn't have been clearer that this isn't intended to be a set of legislative suggestions or mandates in any way," Mr. Dorfman said. "This is a document to spark discussions among the leaders of our nation's grant makers and to challenge them to be more responsive to marginalized communities."

The debate over the report comes as foundations face increased economic and political pressures. Foundation assets fell about 28% last year amid tumbling world-wide markets, according to the Council on Foundations, a Washington group that lobbies on behalf of more than 2,000 grant makers.

The committee's philanthropy benchmark report found that most foundations steer about a third of their grants toward "marginalized groups," defined to include the poor, minorities, women, people with AIDS, the disabled, the elderly, immigrants and refugees, and crime and abuse victims, among others.

The committee advocated 10 benchmarks. It said foundations should distribute 6% of their assets annually, up from the current legally required 5%. The report also advocated better transparency and more-diverse boards at foundations.

But the benchmark on grant allocations drew the most fire. Paul Brest, president of the William and Flora Hewlett Foundation, called that proposal "breathtakingly arrogant" in a blog entry on the Huffington Post Web site.

"I don't agree with it at all," Mr. Brest said in an interview. "Whether you call it arrogant or inappropriate -- you could imagine 10 different organizations deciding the most important issue is cancer" instead of marginalized communities, he said.

The California Wellness Foundation canceled its membership with the committee and asked for money to be returned after reviewing the report. The report "sounds like an attempt to endorse a one-size-fits-all approach for all foundations," said Gary Yates, the foundation's president. He said the foundation canceled its membership because it didn't want to be viewed as "tacitly endorsing positions" the committee takes.

Many foundations, charities and nonprofit leaders endorsed the report. Among the most prominent was the Atlantic Philanthropies. Many critics are "misreading" the report, said Lori Bezahler, president of the Edward W. Hazen Foundation, another endorser.

"This is a set of ways we can look at our work," Ms. Bezahler said, adding that many other groups have explored best philanthropic practices.

In a follow-up report addressing criticisms from foundation leaders, the committee said "flexibility is important" for foundations and that their leaders should decide whether to meet or exceed its proposed benchmarks.

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Thursday, March 26, 2009

Board retention in good and bad times

One thing I have been thinking about a lot in the recent weeks and keep meaning to write about is board member retention during these difficult economic times.  The Wall Street Journal article below was a kick in the stomach reminder that we need to be focusing some significant attention on our boards.  In times this dire, it is essential to keep key stakeholders engaged.  With the pressing economic concerns for both the organizations and the individual board members, a delicate balance must be maintained between being honest about situations and being overly negative or pessimistic. 

It is a necessity to remember to celebrate successes no matter how small.  Even in good times this is something many nonprofits forget to do.  By nature we are problem solvers and excellent at crisis management, once something has been achieved we often make the mistake of moving onto the next task before congratulating ourselves on our accomplishments. 

Our boards need to know that they are important to us in every way possible - as a workforce, as information resources, as access to networks and as funding sources.   There are plenty of reasons for board members to be concerned - if we are conscious of this during our interactions we will find a proper balance.  But the MOST important thing is to keep them engaged!

Believe it or not most board members join a board for some reason other than to write a check - a deep connection to the mission/cause, a desire to make a difference in his or her community, social-standing/prestige, or a slew of others reasons.  Hopefully during the recruitment process and the individual's time on the board the reasons that drew the person to the board are clear.  Our job as staff leadership is to make sure that we take time to address these reasons with positive reinforcement during these times (and all others). 

In times like these we have to fight the impulse to hunker down and have a small group make the tough decisions.  A healthy process must be maintained.  We need to work with our board leadership to ensure that each board member has a chance to be heard and be part of key decisions -- especially organizations that are truly at risk or on the brink.  After all very few people join a board if they don't want to take responsibility for the organization's well-being. 

Healthy board management is going to be very important the in the months ahead.


From the WALL STREET JOURNAL

GETTING PERSONAL: Charity Board Members Insure Against Risk

NEW YORK (Dow Jones)--Even at charities, boards of directors are watching their backs.

In an environment ripe for investment- and employment-related lawsuits, a number of nonprofits are increasing their directors and officers coverage - or D&O - while insurance companies say they have seen an uptick in the number and severity of claims.

"Individual directors are now more concerned about making sure insurance is in place to protect them and their organization," says Michael Schraer, a vice president and not-for-profit product manager at Chubb Group of Insurance Cos.

Several prominent charities have been caught up in recent investment frauds, including the alleged $50 billion Ponzi scheme run by Bernard Madoff, and most are struggling with shrinking endowments because of the market decline.

Charity board members can be held personally liable for mismanagement of investments or employment mishaps, among other things. An individual's umbrella insurance policy won't necessarily cover these claims.

"If a board member is sued, it means their house, their retirement savings, their investments that could ultimately come into play," says Scott Simmonds, an independent insurance consultant who advises nonprofits on D&O insurance.

This kind of insurance "pays for poor decisions," he adds.

Coverage, which can start at around $1,200 a year for organizations with fewer than 25 employees, varies by plan and carrier but D&O policies typically cover claims over misused funds or mismanaged assets.

Policies also address employment issues such as wrongful termination, discrimination and harassment - important at a time when many hard-pressed charities are being forced to trim jobs and other costs. More than 90% of claims against boards of directors involve some type of employment dispute, according to the Alliance of Nonprofits for Insurance Risk Retention Group.

Know the Rules

Most states have volunteer immunity laws that protect board members from personal liability when acting in good faith. However, coverage is limited and these laws may not protect against federal civil rights and anti-discrimination laws. What's more, volunteers will likely have to pay fees to defend themselves.

Nonprofits usually say they will indemnify board members, or pay for legal costs. However, nonprofits may not be permitted to indemnify board members against all types of actions and may require the board member to pay legal fees first and then get a reimbursement.

And if the nonprofit doesn't have enough money to cover the claims or has gone out of business, the individual could be held accountable.

"Foundations that go out of business because they had all their assets invested in Madoff will not likely be able to pay for defense costs," says A.Q "Skip" Orza, a vice president at RLI Corp., an insurance company in Peoria, Ill.

D&O insurance policies can serve as additional coverage - typically at least $1 million of coverage per year - or pay claims on behalf of the nonprofit so the organization doesn't have to dip into its funds.

Sizing up your policy

D&O insurance can differ from other types of liability insurance and policies should be reviewed annually.

It typically covers lawsuits filed while the policy is in force, regardless of when the wrongful act occurred. And limits are aggregate, not per occurrence: Unlike an automobile policy that pays up to a certain amount each time you get into an accident, D&O insurance will only pay up to a set limit for all of your claims that year.

Since contracts can span 30-60 pages, board members should carefully read the terms and conditions to determine what is deemed a wrongful act and what is excluded from coverage - such as bodily injury or sexual abuse.

Board members should also keep tabs on the financial strength of insurance providers using ratings issued by companies such as A.M. Best Co.; Moody's Investors Service, a unit of Moody's Corp.; and Standard & Poors, a unit of McGraw-Hill Cos.


MARCH 10, 2009, 3:31 P.M. ET

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Sunday, March 22, 2009

Hartford's Cultural Institutions Take Steps To Weather Economic Storm -- Courant.com

Hartford's Cultural Institutions Take Steps To Weather Economic Storm -- Courant.com

This article gives a great overview of one city's cultural institutions.  Nice to see some smart thinking happening here in Connecticut.


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Thursday, March 19, 2009

Other bloggers thoughts on the business model issue

Read these!

Beth's Blog: how nonprofits can use social media: The Crumbling of Nonprofit Arts Organizations (includes great map)

A. Fine Blog: Greatest loss of 2009: Social Capital

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diacritical

Douglas McLennan of Arts Journal has started blogging - I know I thought all along surely he was, but alas... His first full post is a nice companion to many of my posts last week.

Is the NEA bad for the Arts?

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Tuesday, March 17, 2009

Recent Articles

Some recent articles that I missed until today - maybe you did too.


Seattle Post Intellegencer goes digital only - no more print. March 16

Bloomberg Musical has cure for Broadway Blahs - in seat drinks service? on Broadway? March 17.

Guardian
Arts World braces for a hurricane - a look at UK arts organizations' issues during the global financial crisis. March 14

Chronicle of Philanthropy 52% of donors plan no decrease - new survey results by Cygnus Applied Research

Nonprofit Fundraising Trends - Retriever Development Counsel survey results

Crains Experts give nonprofits tips in weather tough economic times

NY Times The Problem with Nonprofits - mini review of the book UNCHARITABLE. March 9

NY Times Charities say Government is ignoring them in Crisis - deals with implications from Obama charitable tax deduction changes. March 4

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Restricted Gifts and the Arts in difficult times

In what certainly will become one of the largest examples of trying to "re-purpose" restricted gifts, Brandeis University announced a few weeks ago that it was going to close the Rose Museum to the public and sell off it's art collection to help make up for endowment losses and budget problems. Yesterday the Rose family publicly denounced the plans (see Boston Globe pay special attention to the comments).

One would think this would be national news considering the precedent it seems to set. And in different times it might be. However considering the economic news coverage and the recent, growing debates about money going to the arts or sports sponsorships from corporations, I think we are lucky this story isn't gaining too much national momentum.

Let me state first, foremost and unequivocally, restricted gifts are restricted gifts. It is up to a donor and institution to negotiate the restrictions or adapting the restrictions, but it is a partnership in which the donor's wishes will always over-rule the recipients. As the saying goes you can't have your cake and eat it too, that is just the way it is and it should stay that way. If this were to change, every time there was a shift in leadership - staff or board - the use would be open to adjustment based on an individuals whims and desires, long term strategies would be difficult to implement and the organization would likely be subject to significant mission creep based on said individuals whims and desires - even with the restrictions some individuals try to circumvent the restrictions with personal agendas.

Without question, one of the most difficult decisions an organization is faced with is when a donor want to make a restricted gift that does not fit the mission of the organization. For years, programs specific grants created many instances of ineffective results or "next new thing" programs. However, lets imagine all grants were general operating grants. Does anyone really believe we would have many of the amazing education programs that arts organizations have? Does anyone really believe that as much new work would be created? Imagine how destructive the tension between artistic staff, management staff, and the board would become.

Let's face it, we need restricted gifts.

At organizations I have worked at, I have had "passionate discussions" with an Artistic Director or Board members about restrictions on certain funds, and almost every time I have been grateful to the donor for said restrictions. If a project was clearly mission based and close to the core - it was usually easy to make the restrictions work or to renegotiate them, if not, well the restrictions certainly made the decision easier.

Are the arts a luxury or necessity?

As for the second and more important issue at the forefront of the Brandeis situation - at what point in the economic crisis do the arts become a luxury that must be eliminated or sold off? Literature and life are filled with the tales of families caught in horrible economics that must sell off their personal belonging to rebuild their lives or survive. Of course, organizations can reach a point where they are required to do the same.

In a similar situation, the Metropolitan Opera just mortgaged it's most famous art work to raise cash. I consider the Met's decision to be creative - the mission is about Opera and leveraging the artwork in these difficult times seems like a reasonable risk.

In the case of Brandeis, I have to ask if this is a "quick/easy/obvious" decision - if it were just about closing off the museum to the public perhaps a mission argument could be made, but the proposal as a whole seems pretty drastic. Is Brandeis really at that famous Scarlett O'Hara moment - do they need to make a dress from the curtains already? I hope not, we are still pretty early in this financial crisis, and you would hope the university was better managed than to have already reached that point.

But back to the bigger more global question that looms - is there a point where the arts are just a luxury that should be eliminated? We are back to that relevancy issue and making an argument for the arts. A lot of my recent posts have circled around a major point that I want to reiterate - the key is to get past the idea that all of the arts arts elitist and making the arts more accessible if in cost alone. We have to embrace that the definition of art has evolved and needs to evolve. We have to broaden the donor and audience base. We must be relevant to our communities, or we will become a luxury not a necessity.

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Monday, March 16, 2009

Andy Horwitz proposal for the Arts: Should create a lot of discussion...

Andy Horwitz proposal for the Arts from Culturebot.



A MODEST PROPOSAL FOR THE ARTS IN AMERICA

1. Consolidate, Innovate and Reposition

The first thing we need to do is reposition the role of arts + culture in society. For many reasons the arts have moved to the fringes of cultural conversation. We need to reintroduce the idea of the arts as a place of civic discourse. Artists and curators need to work much more closely with non-arts partners - economists, sociologists, scientists, computer programmers, city planners, demographers, etc. - to identify the pressing conceptual issues of the day. Art - no matter the form- is about creating an object or event that focuses attention on a specific idea; it is a tool for enabling human beings to collectively and simultaneously focus their thought processes - thus the arts need to collaborate directly with non-arts disciplines and start leading the conversations America will be having as we move into a global future.

Part of repositioning is innovating the modes of public engagement. Taking its cue from Harold Skramstad’s seminal 1999 article “An Agenda for American Museums In the Twenty-First Century,” the contemporary museum world has already made great strides in redefining the way the public interacts with art. In a multimedia, multidisciplinary, hybrid, networked, on-demand world we can no longer privilege one form over another. We should be looking at the members of the Contemporary Art Centers networks (The Walker, the Wexner, Yerba Buena, etc.) for scalable, multidisciplinary presenting models that will allow us to consolidate resources, streamline curatorial processes and cultural production as well as promote multidisciplinary ideas-based investigations. Certainly as the economy falters and the visual arts lose their economic engine the value of other art forms will rise - we need to leverage this for the benefit of all.

Part of this innovation is to consolidate bricks and mortar. Contemporary arts and culture spaces must be multidisciplinary with adequate, adaptable theatrical space for all different kinds of performances integrated with visual art space, screening rooms and multimedia/virtual spaces. They should be smaller. As we become more and more accustomed to mediated space and networked environments, where mass entertainment happens in sports arenas and stadiums, the unique experience of intimate live performance and/or interaction with art objects and other human beings becomes ever more valuable. Keep it small and keep it flexible. If you are presenting an artist who can draw 10,000 people, then do ten shows for 1,000 people each. It’ll be a better experience for everyone involved.

In this day and age, where one person’s iPod may well contain a dozen different kinds of music next to each other, discipline-specific delineations are less relevant than ever. While some may prefer dance and some theater, some classical and some world music, all of these disciplines can - and should - cohabitate. If we view art and culture as an essential part of civic dialogue then the public should be exposed to all forms, frequently in juxtaposition. The public must be educated to experience culture regardless of discipline and become as savvy in the parsing of cultural product as they are savvy with entertainment, movies, popular music and video games.

The hardest part of Consolidating, Innovating and Repositioning is making room for the new by LETTING THINGS DIE. It is absurd to have a regional theater, a symphony, a ballet company, an opera, and other cultural enterprises all with their own buildings, all with their own administrative infrastructures, all in competition for the same funds. Let the regional theater system die. It is antiquated, expensive and largely irrelevant. Consolidate, share resources and place art in juxtaposition. Let’s focus on the notion of a cultural “civic center” run by trained, qualified administrators and housing a variety of different arts organizations - of varying sizes, disciplines, aesthetics and ambitions.

2. Develop Sustainable Cultural Infrastructures

There are many different components to creating a sustainable cultural infrastructure. In America today it is more likely that an arts institution will embark on a capital campaign to build a new building then it will engage in an endowment campaign targeted at increasing its general operating budget to provide living wages and better quality of life to its employees. This is a HUGE MISTAKE. The arts - more than any other industry - requires sustained institutional knowledge management, innovative and nimble administrators and the ability to retain the most qualified and effective workers. However, wages in the arts + culture sector are phenomenally low, there are almost no incentives or rewards for success, opportunities for professional development are few and far between and human capital is widely seen as expendable. I could go on a foul-mouthed furious tirade about this -and have - but for decency’s sake, I’ll leave it there and move on to the key issue that is: if you want to have sustainable arts ecologies then you need to invest in people. Here are a few ways in which arts + culture could improve the lives of its workers and make it a more attractive profession:

  • Pay a living wage with health benefits, retirement, etc. Arts administrators should at least be on a level with teachers, the two professions are deeply related and require similar skill sets.
  • No more M.F.A.s! There is nothing more useless than a Master’s degree in arts administration or an arts administrator who possesses one. Not only does the “book learning” rarely have anything to do with the real world, it creates a peculiar breed of person who feels entitled to respect (and a senior position) without possessing any prior actual experience. Cultural institutions don’t need more MBA-style administrators who are constantly looking for the next best opportunity. Cultural institutions need administrators who are hands-on and capable. More importantly, because of the extraordinarily ephemeral nature of arts + culture, the institutions need the knowledge management which comes from long-term employee retention.
  • Bring back apprenticeship! A young arts administrator should come into an organization and be able to stay for 5-10 years, learning the trade and gradually moving up. Cultural institutions are not corporations, they are organic and complicated, they are about knowledge, creativity, education and imagination. As such, without a tangible product or revenue stream, the “collective memory” of the institution must be sustained and moved forward through the cultivation of its human assets.
  • Reward success. Provide opportunities for professional development, provide clear pathways to promotion and advancement, implement institutional mentoring programs, subsidies for continuing education and skills acquisition. Treat Arts Workers like Valuable Human Beings!!

In addition to revamping the culture sector’s approach to managing its human resource capital, there are other key factors to developing a sustainable arts ecology/infrastructure. I return to my previous point of consolidation.

Despite what Wall Street would have you believe, running a cultural institution is incredibly hard work. The kind of crap the banking, automotive and real estate industries get away with would never fly in the non-profit sector. For every arts organization, theater, dance company, etc. to have to function as its own 501(c)(3) is just insane.

We need to not only consolidate bricks and mortar but consolidate arts administration. The Public Theatre in NYC has actually made great strides towards housing multiple companies of various size in its building. Here is where urban planners and cultural institutions need to start innovating - how do we devise public cultural spaces that provide both physical resources and administrative infrastructure for multiple arts organizations. If a ballet company, theater company or a musical ensemble didn’t have to have a fundraiser and an executive director and a bookkeeper and all this administrative overhead, they could focus on making art. They could probably make it faster, cheaper and easier. How do we build an infrastructure that alleviates the administrative burdens on arts creators and incentivizes top-notch administrators to stay in the culture sector?

Public cultural spaces should be transparent public/private non-profit partnerships. Administratively they should be managed as public trusts, dedicated to serving the community-at-large through arts, education, humanities and enrichment. The administration of the physical plant, the fiscal dealings of the organization, all of the operational logistics should be completely separate from the creative and curatorial administration. In addition there should be alternative, innovative housing solutions that integrate artists and educators into the daily life of the community they serve.

We must renew the civic commitment to public cultural institutions. Just as those of us in New York are constantly being asked to underwrite the construction of stadiums, ballparks and basketball arenas for the benefit of massive corporations, so too should the public be responsible for funding arts and culture. The arts, at least, provide intellectual development, aesthetic refinement, the cultivation of emotional complexity and moral uplift; considerably more positive benefits than the steroids, arrogance, sexual violence, licentiousness and ignorant conspicuous consumption promoted by so-called professional sports.

This leads back, inevitably, to the notion of repositioning - if we are going to ask the public to participate in sustaining and arts + culture infrastructure we need to reassert arts + culture relevance in civic life. Which leads back to requiring artists and curators to work much more closely with non-arts partners - economists, sociologists, scientists, computer programmers, city planners, demographers, etc. - to identify the pressing conceptual issues of the day and what conversations we need to be having for the future and start having them.

Funding-wise if arts organizations had sustained and reliable general operating expenses this would alleviate the fear and stress engendered by a constant state of financial peril. This would encourage evaluators to assess administrator performance using other criteria - such as relationship building with non-arts institutions, program impact, possibly even revenue generated through the creation of intellectual property.

If arts + culture institutions invested in human capital to make administrator jobs really valuable and hard to get, they would attract better people by introducing a wider field of competition - just like Wall Street! This would also open the field in a way that no longer privileges the privileged. Currently the major qualification for executive arts leadership is often donor cultivation - which is best done by peers. This does not necessarily correspond with managerial prowess, vision, leadership or accountability.

Providing an adequate baseline of funding for a multi-disciplinary shared civic cultural space and increasing arts administrator wages so that it could be a lifelong career would create competition; rewarding experience and talent over privilege.

This would also require the implementation of a more visible and definite line between the administrative and curatorial arms. But an adequate baseline of funding would alleviate the fundraising pressures, strengthening the administrator’s ability to manage in a responsible way. It would also remove the pressure for art to be commercially viable or conventionally successful - concerns best left to the entertainment industry.

3. Decentralize Cultural Production

Think globally, act locally, get connected. Use the internet, new media and all tools available to facilitate conversation and information-sharing and artist exchange. “Regional” rtist shouldn’t have to mean “provincial” artist.

As the cost of cultural production skyrockets in major urban centers, we need to decentralize the process - finding cheaper places to build arts and culture while assuring quality and sophistication that will be competitive in a global arts market. In this day and age there is no reason why cultural civic centers can’t facilitate ongoing global dialogue, artist exchanges, residencies and public programs on the relevant issues of the day.

In addition, we need to cultivate and improve networked performance and real-time trans-geographic interaction. We must identify new ways for artists to collaborate over distances, find ways for audiences to engage regardless of place.

Ultimately this will not only benefit the field of arts and culture but it will bring the arts to life in a new way in each city and/or region. Local art museums should show local artists. Local theaters, symphonies, operas and cultural centers should all actively support the creation of new work in their communities. Projects like the New Museum’s 3M or Museum As Hub initiatives suggest possibilities for collaborative development.

Alternately cultural production could be distributed regionally according to resource availability.

4. Increase Arts Education, Widen the Frame and Democratize Cultural Access

Let’s start by “widening the frame” of what we identify art so that young people find arts and culture are RELEVANT and USEFUL. We must now remedy the 30 years of intentional destruction of the arts education in America and make the arts accessible to all and relevant to the younger generation.

That doesn’t mean forcing them to listen to opera or go see mediocre, didactic plays - it means identifying the new, encouraging innovation and inviting young people into the process of creativity; it means identifying what young people are already doing with technology and encouraging them to contextualize their natural curiosity and creativity as art.

Video games, digital music production, digital video production, web-based interaction - all of these new technologies are not merely utilities they are landscapes for imaginative play. We must encourage young people to move beyond utility and look at technology as fun - a way to make art and play and imagine and dream.

We can’t start arts education with the old, demanding that today’s kids learn about theater, classical music, poetry, etc. on our terms. We must re-frame expression and experience in a way that affirms the aesthetics of our on-demand, “personalized” society and creates new access points to art. Once we re-introduce the idea of imaginative play we can grow young people’s awareness of the history of the arts and culture, point to precedents and empower them to investigate the world around them.

We must be willing to relinquish the dominant narrative and educate young people, give them the tools to express their personal agency in the construction of narrative with intellect, insight and responsibility.

Widening the frame cannot succeed without a commitment to arts education and art appreciation in the schools. It cannot be an afterthought - it must be restored to the core curriculum along with basic science, mathematics, English and social studies.

As culturally-specific museums renegotiate their representations of identity, they are creating literally thousands of new access points to culture for people of all identities, ethnicities, backgrounds and social status.

We need to reintroduce the arts as an educational tool and a tool for empowering young people with the skills of critical thinking, creativity and innovation.

We also need to understand that arts education is not a one-size-fits-all endeavor and consciously tailor artistic educational programs to demographics. Affluent students who come from historically philanthropic backgrounds may well require different educational access points and priorities from those who come from less comfortable backgrounds. The end goal is not unified arts education but providing as many access points as possible and giving young people whatever tools they need. Democratizing access to cultural resources also means scaling those access points strategically. It is not enough just to make things cheap - we need to make things relevant.

Arts Education is not one-sided - arts + education need to be integrated more fully and thoughtfully. We must revise and innovate the integration of educational components into the cultural production process. Every cultural institution should have in-house dramaturges and educational curriculum development professionals. They should keep records of research and process during the creation of new work, developing bibliographies, guides, online documentation and all the paratext surrounding the work. By having educational and dramaturgical professionals on-hand, working on parallel and simultaneous tracks, we can increase the transparency of the artistic process and reinforce the connection between art, ideas, public policy, politics, cultural attitudes, philosophy, economics and entertainment.

To have an informed populace in the information age, they must have the tools to parse the media - and art can create a critical context for developing skills in media analysis. Even though this sounds abstract, the right approach can make it accessible to anyone. Whether it is talking about why video games look the way they do, or why a specific camera angle is chosen, today’s youth need to be educated as much in visual and media literacy as in textual literacy. Arts + Culture is a great tool for that.

In this new world, everything is art if you see it that way. Culture is vast and all-inclusive. We must provide the citizens of tomorrow with the tools to frame cultural experience in an intelligent, empowered way. If America is to remain a dominant global cultural force then we have to be artistically and culturally advanced, conscious of the images we create and messages we disseminate and we must have a population that is literate enough to engage in these conversations.

5. Innovate Funding and Revenue Models For Cultural Production and Distribution

This is the big one - and I’m not giving it away for free. Not yet. But if you’ve read everything I’ve written thus far and think I’m talking big government and socialism, um, you’re wrong.

*I HAVE WRITTEN LITERALLY HUNDREDS OF PAGES ON THIS and would be able to write a much more cogent and complete assessment if offered a book deal [and editor!) that would enable me to quit my job and devote my energy to writing. I would love to write a lengthy treatise on the economics of cultural production in the U.S. and the systemic function it breeds, but for expediency’s sake I am reducing it to some bullet points and short paragraphs on how to fix the arts + culture infrastructure and reposition the arts in relationship to both the public and private sectors

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Adrian Ellis raises some interesting questions for the museum field but they certainly carry over to all of the arts!

The recession and US museums

How to compensate for the loss of philanthropic, endowment and visitor incomes

“That was then; this is now.” A blunt expression often used in negotiations when one party wants to make clear to the other that previously reasonable expectations are unlikely to be met because of some adverse and unalterable change in circumstances. It is an expression that the cultural sector’s leadership is likely to hear frequently over the next few years as it seeks to navigate a radically changed economic and political map. The global recession that we have entered will not just knock the froth off things; it will permanently reconfigure the cultural landscape. This may happen more slowly and the events may be less flamboyantly newsworthy than the bankruptcy of Iceland, the collapse of the international banking system or the failure of the American mortgage industry, but the underlying forces at work are just as strong—indeed, they are the same forces.

This observation is hardly revelatory. The past five years of the decade-long upswing of the art market—predominantly the contemporary art market—has been largely speculative in nature, and the market correction that we are experiencing has been predicted by most parties who do not have a vested interest in the prolongation of the bubble: a period of declining volumes and prices and a shrinking of the market’s entire infrastructure—galleries, auction houses, art fairs and ancillary publications, and public relations. (In February, Standard & Poor’s gave Sotheby’s a credit rating of BBB, for example.) The scale and duration of the contraction will be directly related to the scale and duration of the wider recession. The art market trails the economy—as a whole reluctantly, but obediently. To give some indication of what’s ahead, the last time the art market experienced a major slump followed the 1987 stock-market crash. The art market fell later but further than the stock market, finally hitting bottom in 1993, with prices falling 56% on average. The market was thinner then, and therefore more volatile, but the current recession is broader and deeper, and likely to last longer; and the fall is from a higher speculative peak.

The impact of world recession on museums will be more subtle, but no less profound. The conspicuous consumption that has fuelled the art market is umbilically linked to the conspicuous philanthropy that has fuelled much of the growth in contemporary art museums throughout the US, the Middle East, South East Asia and Europe. These institutions have been significant beneficiaries of the growing and, to many, morally indefensible disparities of wealth throughout the world. It has left them heavily reliant on, and overly attuned and attentive to, a narrow constituency whose long-term appetite or capacity for support is highly questionable. The sector has come to rely disproportionately on the very wealthy, and on the role that museums can play as mechanisms for the translation of wealth into status, and status into power.

Most fundraisers in the arts freely acknowledge how much the pyramid of giving has narrowed in the past decade, with a greater reliance on an increasingly diminishing number of very wealthy donors. In Russia, India and the Middle East, the pyramid is practically a sheer-faced column—the museum sector is to a large extent the domain of the newly super-wealthy. The almost inevitably speculative nature of rapidly acquired wealth can lead to dramatic reversals of fortune, and thus of largesse. Interestingly, the success of President Obama’s electoral campaign in using web-based social networking to secure smaller donations is the talk of the charitable sector internationally. But art museums are not just short of the technological know-how to widen access to a donor base. They are also short of the arguments to galvanise them, as can be seen in the reaction of the US Congress to the provisions for the cultural sector in the Federal Bailout Bill. Museums have given a great deal of time and attention to stratification and hierarchy for the upper tiers of donors. With conspicuous consumption less in favour, speculative fortunes trimmed and priorities adjusted, the social class that art museums have smooched with most intimately is also the group most likely to sit out the next few dances.

The contraction of anything short of all-weather philanthropic support is, of course, compounded by dramatic drops of 30-50% in endowment income (whether museums’ own or of the trusts and foundations on which they rely). The precipitous drop in Brandeis Uni­versity’s endowment led to its president’s ill thought-out plan to close the Rose Museum and sell its collection. A more wily plan may well have attracted less attention. It is also compounded by cuts in public expenditure as local and national governments enter a prolonged period of austerity, reflecting their reduced tax base and the increased demands for fiscal intervention. UK Culture Secretary Andy Burnham said in January: “All parts of government have to hear that message and live in the real world. Some people may not like it, but the arts has [sic] to live in the real world too. Nobody is immune from what is happening.” In the US, the State of California is sending out IOUs instead of the tax rebates it owes, and most state and city arts departments—far more significant in the US than federal arts funding—have either implemented cuts or warned that they are on their way. Layoffs, furloughs (unpaid leave), pay cuts and shortened public openings are common in smaller museums and galleries in the US.

Museums of art have tended to rely more heavily on spectacle than programme to attract visitors—loud headlines rather than a fine print of involvement in the community. This is despite exhortations by trade associations such as the American Association of Museums in the US and the Museums Association in the UK that their members adopt agendas that increase and parade their social relevance, and myriad programmes of outreach and social engagement.

In the painful process of the prioritisation of public expenditure, the prospect of political underwriting—that is, a sense of obligation to sustain cultural institutions by civic leadership—is greatly diminished both by the realities of public expenditure constraint and by the growing sentiment of politicians that the art world, at least at its current scale of activity, is simply not central to a civic agenda congested with crises in health, housing, employment, education and the environment.

The brunt of the squeeze will be borne disproportionately by operating budgets (exhibition programmes, education programmes, conservation, research and curatorial functions). This is because, short of closure, the fixed costs associated with expanded infrastructure (new buildings, wings etc.) are just that—fixed. It is the need to balance the books from a higher baseline of fixed cost that is causing the pain. The drift is clear: we are entering a period when all but the most privileged and well-connected of art museums are going to come under very real financial constraints and many will be doing so with a weakened safety-net of well-disposed stakeholders. Outside of the restitution of art to Holocaust victims and the occasional censure of miscreants, museums have for the most part shown limited capacity for effective collective action. Industry-wide responses to problems (analogous to those for banks or the automotive industry) would require an appetite for solidarity that does not come naturally, even if the industry found a more willing ear in government.

Much of the reaction to these trying circumstances will therefore be confined to what individual museums, or small coalitions of museums, can do. Museums’ boards and directors are—quite reasonably, given their central mission of stewardship—highly conservative and, perhaps less reasonably, highly motivated by peer approval. Therefore, radical alternatives to genteel but irrevocable decline—such as merger, relocation, restructuring, resource sharing—are only likely to be contemplated as a last resort when an institution is faced with imminent closure. By that time, solutions are significantly more difficult to implement, as the time, money and organisational will required have been exhausted. As Hegel said, “the owl of Minerva flies at dusk”. It is interesting, if not entirely comfortable, to speculate on some of the fault lines that are likely to grow as the pressure caused by the triangulation of the dark forces of speculative expansion, recession and a diminished civic mandate increases.

Here are three possible ideas. First, dramatic and competitive physical expansion and large-scale temporary exhibitions have, in a sense, substituted for an effective agenda of community engagement. These strategies have served as a way of generating buzz and money while interest in the traditional mission of the art museum was waning to the point where it was insufficient to generate the funds required. These strategies are now stalling because of their expense; the contraction of the philanthropic and public sector funds and the cultural tourist market on which they are premised; and the diminishing returns the strategies secure in a crowded, winner-takes-all marketplace. Art museum agendas will have to shift to seek viable alternatives to these warhorses and with them, the skill sets required of museum leadership will also shift.

Second, in the search for resources, the desire to explore ways of capitalising collections will continue to grow. The straightforward fiat that is the current international norm—no deaccessioning unless you spend proceeds on more art—will either be finessed or ignored under the pressure of financial realities.

Third, what museums accept they cannot do alone, they will explore doing together more thoroughly and earnestly than in the past: collection sharing, joint acquisitions, pooling conservation resources, and pooling curatorial appointments. The museum economy is increasingly globalised and these trends will be global in their impact. The alternative to the open-minded exploration of radical alternatives is a sombre one, in which the energies and ingenuities of the sector are devoted increasingly to the support of a dysfunctional pseudo-mission: that of maintaining appearances at any cost, even if the museum becomes a sort of “living dead” organisation, in which any capacity for aesthetic or intellectual endeavour is sacrificed to the goal of keeping the institutional ego protected.

The writer is a regular columnist for The Art Newspaper and a director of AEA Consulting

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