As virtually every arts organization tries to improve their fundraising results, the pressure to get help from board members becomes a priority. And yet, try as they might, I find that many arts managers find it difficult, and often impossible, to get board members to assist, actively, in the fundraising effort. In fact, the question most often asked of me is, "How do I get my board members to ask for money from their friends and associates?"
I am completely sympathetic. There is nothing more frustrating than to have a board member who is successful in business, has access to a number of people of means, and connections to important corporate leaders, who is unwilling to use these connections to benefit the organization.
Isn't this the job of our board members? Don't they understand that our ability to create art while maintaining fiscal stability depends on their active involvement in fundraising?
I have found no magic formula for engaging board members in fundraising. There seems to be a gene that some members have--the ones we all know and love who are fearless about soliciting funds--that others are missing entirely.
And while it is true that those arts organizations that consistently produce exciting art and aggressive institutional marketing campaigns have an easier time motivating their board members, there remain those stubborn few, potentially potent members who remain dormant.
So what to do?
The simple answer is: engage these board members in a specific effort, or campaign, over a limited period of time. I find that the board members with the most unrealized potential are also often the busiest people on the board. They have important jobs and many competing time commitments.
If one asks busy executives to help with annual fundraising efforts, they will often ignore the appeal. They will assume others with the 'fundraising gene' will act on behalf of the organization; this allows these executives to focus on another of their activities.
If one asks a busy executive to participate, or even lead, a campaign of limited duration, however, they will often agree to do so. They can be of service, fulfill their commitments to the organization, and know that three or six months later they can focus on other, pressing activities.
When successful executives are given a specific goal and a limited time frame, it is often astonishing how quickly they will act. The short time frame will often galvanize them to act and to call on others on the board and in the extended organizational family to assist them in achieving the campaign goal. Their connections will often respond to their solicitations with gifts far larger than the organization is used to receiving; and when one busy executive asks another for a gift, the response time can be incredibly short. I have seen multi-million dollar campaigns completed in just a few weeks or months.
The busy executives can then focus elsewhere, comfortable that they have fulfilled their obligations well and have had a lasting impact on the organizations they serve.
One of the questions I am asked most often by board members of arts organizations is, "What should we be looking for as we hire a new executive director for our organization." There are numerous skills and qualities an executive director of an arts organization should possess, but my experience over the past 28 years suggests the most important quality is the ability to balance many needs, demands and requirements.
Successful executive directors must balance the needs of:
- The artists who wish to express themselves; this expression forms the core of the mission of the organization and must be respected.
- The audience who wants to be entertained, inspired, educated. While the most successful art typically surprises the audience -- who would probably have named more familiar works as their favorites before the event--the executive director must factor audience taste into programming decisions, or be willing to, or able to, find a new audience.
- The press who set standards and influence taste in the community. While one can point to many popular works of art that do not please most critics, consistent drubbing by the press must hurt the ability of the organization to build a family of audience members and donors.
- The donors who almost always want something back for their contributions. This may be association with something they feel is excellent or important for the community, access to artists, prestige or a social life.
The successful executive director also must balance short term financial needs with long term financial goals. It is easy to look five years ahead and determine what financial profile the organization wishes to enjoy, and even to delineate the level and type of activity the organization must mount to reach these financial targets. What is far more difficult is navigating the short term financial constraints so that we can reach the longer term. Do we reduce our investment in art now so that we can survive? Do we shrink our marketing budget? Reduce staff size or budgets? Cut artist salaries? Does this help us reach this idealized financial profile we aspire to? Or do we go for broke today, hoping to keep creditors satisfied while we build for the future?
And the executive director must balance the needs of the board members, who want financial accountability, artistic success and a modest level of fun or satisfaction that comes from volunteering for an organization one cares about with those of the staff who see the board members as their bosses and who often believe that board members owe a good deal--especially a good deal of money--for the privilege of sitting on the board.
In almost three decades of running arts organizations, I know that I have gotten these balances right at some times, and wrong at others. One is constantly calibrating how to best pursue the organization's mission while maintaining the level of support needed to do so.
It isn't easy.
At a time when financial health has become so precarious for too many arts organizations, it is a cause of concern that a great many arts organizations do not take one important precaution: they do not forecast year end results periodically throughout the fiscal year.
Most organizations do year-to-date results monthly, but too few extrapolate to create a projection for fiscal year-end results.
This is dangerous.
Year-to-date results do not always present an accurate picture of financial performance. They can be grossly affected by the timing of large income or expense items. If a big grant comes in early, the year-to-date results can look far better than budgeted. If an invoice is paid early year-to-date results get skewed and can give a false picture of overspending. Only those with a very detailed knowledge of income and expenses can derive a true picture of financial performance from year-to-date results.
In my first year running the Alvin Ailey organization, for example, we received a good number of gala ticket checks very early. This led many board and staff members to believe that we were doing far better than we truly were; we believed we had turned a financial corner when we really were still very far behind our true turnaround plan.
What is needed -- at least quarterly, though I prefer monthly -- is to project what the remainder of the year is likely to look like. This erases the timing problem and gives a picture of the complete fiscal year.
All staff should be asked to provide detailed expectations of income and expenses for the remainder of the year. These can be aggregated with year-to-date figures to provide a projection of what the entire fiscal year will produce. As the year progresses, this forecast should become more and more accurate.
We are now early in the new season. Most arts organizations are just completing the first quarter of the new fiscal year. This is a perfect time to review all projected income and expenses and to develop a view of the entire year.
If you are not happy with what you see, you still have many months to affect income and expenses; you can make selective budget cuts and implement aggressive and short-term fundraising campaigns. Do you need to push your annual gala especially hard this year? Can one use a projected gap to motivate board members to help with fundraising? Are there some expenses one can delay to a future year? These actions give the organization a far better chance of ending the year in the black.
The full year projection also provides a far more solid basis for developing next year's budget. It is dangerous to base next year's budget on this year's budget. One must base future projections on a solid analysis of what this year is actually going to look like when it is completed not a plan for this year.
So do not rely solely on year-to-date statements; they can lead to over-optimism or panic. Neither is healthy.
I have noticed an increasing number of arts organizations planning capital campaigns. This may simply be one result of a recovering economy -- few arts organizations felt capable of raising large sums in the years immediately following the stock market crash of 2008. Now that the market is back at record levels, more boards, and staffs, feel confident that their donors will be generous.
But I fear that with this increase in capital fundraising will come a concomitant increase in disappointed arts organizations. Too many institutions are planning capital campaigns that far exceed their abilities.
These organizations have not built a family of donors sufficient in size and potency to earn the number of large contributions required to complete successfully a capital campaign.
I have watched as arts organizations set campaign targets that are ten, twenty and even thirty times the amounts they raise annually. These ventures almost always end in failure; and the repercussions can be severe. Not only will the building go uncompleted or the endowment fund be undernourished, but also the sense of failure can pervade the board room, the staff offices and the minds of the donors. This cannot help the organization present the image of accomplishment that is required to grow an institution. And, of course, annual operating fundraising typically suffers during a capital campaign, often retarding the amount or level of work attempted just as the organization needs to present a picture of vitality to justify capital gifts.
Why do so many organizations fall into this trap?
I think they confuse prospects who are able to give with those who are likely to give.
Anyone can create a list of prospects that are able to give large sums to a capital campaign -- there is no shortage of incredibly wealthy people in every state of the union.
But will these prospects be interested in your campaign?
Have they ever demonstrated any significant interest in your organization?
The fact that people once came to a gala, made a modest contribution or attended a performance -- and happen to have a great deal of discretionary funds -- does not make them strong prospects for a capital campaign.
It does make them strong prospects for cultivation; we must invest the time and energy to build a large core of potent, engaged donors before we can attempt any capital campaign that stretches the institution.
This requires organizational focus and commitment: we must be willing to select a group of prospects and then commit to working diligently over an extended period of time to engage them with our work.
Only when we can easily identify enough prospects who have demonstrated their excitement in our work and who can collectively (and easily) contribute at least 75 percent of our campaign goal, are we in position to mount the campaign.
Unfortunately, just having a good idea for a new building, new project or expanded endowment fund is not enough for success.
We must have that group of likely donors - ready, willing and able to help us achieve our target.
I have written often about the problems that emerge when silos develop within arts organizations; when artists, marketers and fundraisers stay in their own corners and do not collaborate with each other, the power of the cycle is lost.
When artists do not communicate their plans to marketers and fundraisers, the opportunity to develop major marketing efforts, and cultivate the press and donors is lost. When marketers and fundraisers do not collaborate, it is impossible to coordinate the timing of special fundraising campaigns with major marketing initiatives.
But why do silos develop in the first place?
One obvious reason is a natural mistrust for other departments, especially when resources are tight.
Artists are naturally afraid of the executive departments; they fear that their pursuit of the mission of the organization will be compromised by the need to sell tickets or raise funds. This fear is not unjustified. In too many organizations, artistic ambitions are blunted by those trying to make "art that sells."
Marketers often mistrust artists because they fear artists are too idealistic and naïve about the interests of the audience. They are also typically not fans of the development people who hold lots of tickets back from public sale in case their donors want them, and who get paid better and dress better than their marketing counterparts.
And development people cannot understand why the artists and the marketers don't appreciate how hard it is to raise money and do not appreciate it when anyone gets in their way of reaching their fundraising targets.
This caricature of an arts organization is certainly not universally true; there are many organizations where departments truly respect one another and work well together to achieve the goals of the institution.
But sometimes even in these congenial organizations, silos can emerge.
When organizations do not plan their art far in advance, everyone is forced work with so little lead time that there is no time for collaboration between departments. Everyone is rushing to do what they need to do to get the show on that they simply have no time to think about ways to engage other departments in their work.
When artists only have a few weeks or months to produce a show, they simply do not have time for discussions with marketers and fundraisers about ways to develop support for their work from audiences and donors.
When marketers are given only a few months notice about the next production, they must develop their campaigns without a thought to the needs of the development staff.
And when fundraising personnel have little advance warning, they cannot cultivate new donors. The fear that existing donors will not give enough to meet the organization's entire needs exacerbates concerns that the department will not make its targets, making fundraising personnel less supportive of their co-workers.
Executive directors and artistic directors must foster communication and cooperation between departments. But they must also create a planning calendar that supports the development of a healthy, productive institution.
I have grown increasingly nervous about the future of diverse arts institutions in the United States. So many have disappeared, others are facing huge cash problems and most are watching as donors shift their priorities to other interests.
But I recently had an amazing week with two of my consulting clients that reinforced my optimism that we will always have a core of important, vital arts organizations of color in the United States.
In St. Paul, Minnesota, Sarah Bellamy was named the next Artistic Director of Penumbra Theatre. I met Sarah a year ago when I began a consultancy with Penumbra. I had worked before with Lou Bellamy, the remarkable founder of Penumbra and Chris Widdess, its Managing Director, for over a decade.
Together they have created an amazing theater organization that is true to its mission and able to find resources needed to produce excellent theater.
When I began to work to write a strategic plan for Penumbra, it was coming off of a major salvage period that I have written about before. After a shortfall was recognized in the fall of 2012, Chris and Lou went on a fundraising binge and raised over $500,000 to save Penumbra.
Shortly after the crisis, it was decided that Sarah would be the next Artistic Director, to begin in 2017. I cannot imagine a better choice. Sarah grew up at Penumbra, it is in her blood. But she does not simply carry on her father's legacy. She is committed to maintaining the best of the past but also adding a stronger education focus and integration of special programs and main stage productions. She is articulate, passionate and sensible.
And the plan we developed is now being implemented; the results are impressive and bode well for the future: art is now planned two seasons out, a marketing manager has been hired, and multi-year grants, that totaled $330,000 in June, now total $1.5 million!
I think Penumbra's best days are ahead.
A few days later I was in Kansas City, Missouri, where I started my arts management career, to conclude a planning consultancy with the Kansas City Friends of Alvin Ailey. KCFAA is a remarkable organization, now celebrating its 30th anniversary, that presents the Ailey company, created AileyCamp (now in 10 cities), and educates over 30,000 children each year. The organization has a steadfast, deep and perpetual commitment to uniting people of differing backgrounds. Any not-for-profit organization that has a true interest in embracing diversity should study the Kansas City Friends of Alvin Ailey.
The plan we announced this week includes an expanded annual programming calendar, enhanced marketing efforts and a more aggressive fundraising campaign. We also announced a substantial challenge grant, $375,000 from the Muriel McBrien Kauffman Foundation, which should help the organization create a far stronger donor base. Several other donors have already made substantial pledges to meet this match.
Both Penumbra and KCFAA were willing to address their strengths and weaknesses objectively, to create a viable plan and, most important, to work diligently to implement that plan.
In both cases this hard work is already showing results.
It was heartening to read about the progress made by the Cincinnati Symphony that recently celebrated a new music director, Louis Langree. The elements of this story are a textbook case for the way an orchestra -- and any other arts organization -- can survive, even thrive, in the current environment.
A few years back, the orchestra had a substantial deficit and its smart President, Trey Devey, cut expenses modestly (15 percent across the board) rather than seeking draconian cuts from musicians alone. This allowed the organization to stop raiding its own endowment and to establish a measure of stability.
His intelligent moves encouraged a major donor to make a huge gift, $85 million, that created an endowment that allows the local opera and ballet companies to engage the orchestra, providing weeks of work for the musicians.
For his inaugural program, Maestro Langree asked the great poet Maya Angelou to narrated "The Lincoln Portrait." The program also included a chamber concerto by Jennifer Higdon and Beethoven's Fifth Symphony.
And while it still faces challenges attracting audiences, the orchestra has seen attendance rise, albeit not enough to fill the huge hall it occupies. In fact the orchestra attracted 35,000 people to two outdoor concerts this summer! (Classical music is not dead -- it is simply too expensive.)
Yet renovating the hall is not currently on the agenda for the Cincinnati Symphony. Its new maestro is more concerned with adding musicians to its roster, improving the quality of the music rather than the decor of its hall.
To my mind, this organization is doing everything right:
- It recognized the need to cut costs but did so in a fair and judicious manner
- It recognizes the value of celebrity -- both its maestro and its guest speaker are of note
- It is focusing on improving its art before it tackles a renovated or new hall. It is art, after all, not architecture that draws people to its performances
- It has formed meaningful joint ventures with its ballet and opera counterparts. The opera and ballet companies benefit from excellent orchestral playing while the symphony benefits from guaranteed annual engagements.
- It is not afraid of new work (several premieres are on the calendar for this season) but recognizes the value of the classics as well.
- It is welcoming the entire community to enjoy and support its endeavors.
Yes, some will say, the Symphony was 'lucky' to attract a major endowment gift. And luck is always part of the equation. But I prefer to view this as an instance where an organization does so many things correctly that donors are willing, indeed happy, to support its work.
In other words, in the arts world, we make our own luck by creating a family of loyal, engaged donors, audience members and volunteers.
Imagine if some of our most troubled arts organizations had proceeded in this thoughtful, mature manner to solve their problems?
I have to believe that they would be in far better shape today.
Thank goodness the Minnesota Orchestra lockout is over.
As many commentators have pointed out, now the hard work begins. After 15 months, the orchestra musicians now have to get back to their real business of making music. Staff has to confirm soloists and conductors, sell tickets, raise money, etc. But a great deal of healing must also take place; one knows there must be many hurt feelings on both sides and probably will be for months and even years to come. A serious effort must be made to woo back the board members and major donors who stood firm in their conviction that the orchestra needed to reduce musicians' salaries by $5 million and did not see this result achieved. And management must rebuild relationships with musicians who face a substantial cut to their wages after 15 months of only freelance employment. We can all be happy the lockout is over but only a few will truly be celebrating.
But the hard work also belongs to any of us who care about the future of American orchestras and all American arts institutions. The board of the Minnesota Orchestra is not the first, and will not be the last, to attempt to cut costs dramatically by cutting artists' salaries. There have already been attempts in a number of cities and I expect there to be many more in the next decade or two.
We need to learn from the mess of these past 15 months and determine what to do and what not to do in the future. A few preliminary thoughts:
• While economizing is essential in the arts, one can rarely save ones way to health. One can only cut so much before an institution becomes irrelevant. Although a portion of a sustained deficit can be addressed with cost cutting, it is more important to address revenue growth in a realistic, focused manner.
• It is not helpful to demonize the other side when management and labor have a serious disagreement. The crucial healing process is made so much more difficult when board and management disparage the musicians and the musicians attack the motives of the board and management. How does one go back to fundraising for musicians one just attacked and how does one ask for money from board members one just deemed villains?
• Don't assume that union artists will cave easily. They won't. They have many, many friends who provide opportunities to survive during a lockout or strike. And while the problems of an arts organization may concern board members deeply, they rarely matter to them as much as they do to the artists for whom the institution is a livelihood and a way of life.
• Communicate with your musicians all the time, not just during negotiations. There should be an on-going, open and honest discussion among management, board and artists about the state of the organization and the industry. It should not be a surprise when a budget has to be re-shaped.
I sat in a meeting with a respected businessman the other day who was skeptical about the ability of a specific arts organization to turn around its financial health. "Everywhere you look," he said, "arts organizations are going bankrupt. They all are struggling now."
This was news to me.
Not every arts organization is struggling.
Ask the Los Angeles Philharmonic, Penumbra Theatre (of St. Paul, Minnesota), Alvin Ailey American Dance Theater, and numerous other thriving arts organizations around the United States. The Detroit Symphony just announced record fundraising results and the Kennedy Center has had 14 years in a row of an operating surplus. And there are so many other examples I could cite.
We hear so much about a few, high profile arts bankruptcies that the conventional wisdom has it that every arts organization is in trouble. This has repercussions for all of us who manage, or care about, arts organizations.
When the general belief -- of audience members, donors, board members and politicians -- is that "all arts organizations are struggling now" there is a built in skepticism about expansive planning, adventuresome work and new ventures. How can we condone big projects when the money doesn't exist to pay for them? Isn't this the time to think small, to pull in our horns a bit?
But the money does exist -- there are important artistic projects happening in Miami and Grand Rapids and Seattle and Santa Fe. Great artists are working with well-managed arts organizations in every corner of the nation.
And when the conventional wisdom suggests that "every arts organization is in trouble," there is also an implied excuse for not giving generously to a special campaign ("Why should I give a lot when the entire field is doomed to failure anyway.") and not even attempting a turnaround of a troubled organization ("It is going to fail anyway.")
Contributions, in fact, are largely dependent on the mood of the donor base. That is one key reason why strong artistic planning and aggressive institutional marketing are so important. When an organization seems to be growing and thriving, more people feel compelled to contribute. And success breeds success in the arts and in all not-for-profit sectors.
Conversely, when donors are pessimistic and skeptical, they are not as generous.
Unfortunately, at this time we are not just facing one or several arts organizations that are doing poorly, we are encountering a commonly held 'wisdom' that all arts organizations are in trouble.
And that belief is inhibiting new donors from supporting our field and even motivating some of our most loyal donors to back away.
So what to do?
We need to celebrate our success stories as much as we mourn those organizations in trouble.
While there is a natural inclination to pin blame on those associated with failures, we must also openly give praise to those who are doing it well.
There is, in fact, a great deal to celebrate in the arts world today.
And we would all benefit from doing so.
Mayor Bloomberg has just ended his twelve year tenure as mayor; he governed over a remarkably turbulent span in American economic history: from post 9/11 gloom through the 2008 stock market crash. What is astonishing is how well New York arts organizations fared over the course of these past twelve years. It certainly has not been easy but there is arts vitality in every borough and in every sector of the arts from Pregones Theater in the Bronx to Snug Harbor on Staten Island.
Yes, there have been casualties, most notably the New York City Opera, but considering the economic turmoil, New York City has done very well; the vast majority of New York City arts organizations are producing a very rich and diverse quilt of arts offerings.
I give much of the credit for this to the mayor and to his personal philanthropy. (For the record, the DeVos Institute of Arts Management at the Kennedy Center, an Institute I started in 2001, has been the beneficiary of Bloomberg Philanthropies funding. Specifically, we were engaged to train the board and staff leaders of 250 arts organizations in New York City.)
But we must also credit Kate Levin, the remarkable Commissioner of Cultural Affairs, who worked tirelessly and diligently on behalf of the entire New York arts ecology for these past twelve years. The New York City Department of Cultural Affairs is the largest arts funder in the nation and its Commissioner plays a central role in the health of the city.
Kate is tough. She is not fooled by empty promises or plans without substance. She does not believe in funding arts organizations that are not prepared to manage themselves well. She is hard on board members who, she believes, are not being responsible stewards of their organizations and harder still on staff leaders who are not prepared, focused and rational.
But she is also a passionate and hard-working advocate for any arts group that is prepared to work hard to create a strong institution. She is as committed to, and spends as much time with, the small dance organization as she is with the giant presenting organization.
Her role in rescuing too many arts organizations to count will probably never be adequately reported. She planned strategies, she engaged outside consultants, she found board members, she cajoled donors; in short, she took steps, to ensure that New York had a vibrant arts sector. And, crucially, she was never risk-averse when it came to supporting those in need.
Anyone who cares about the health of the arts sector in New York City must be grateful to Mayor Bloomberg for selecting such a grand champion and empowering her for all of these years.
I only wish she were moving on to head the National Endowment for the Arts. Imagine if Kate Levin's intelligence, knowledge and commitment to the arts were brought to bear on the nation's arts challenges. I cannot think of anyone who would be a better advocate, leader and champion.