I have written a great deal about the requirements for a successful turnaround of an arts organization. A successful turnaround requires a leader, a plan, an exciting roster of programs, an aggressive institutional marketing plan and a great deal of discipline.
But there is something else a turnaround requires: speed.
Turnarounds rarely happen over a five year period. Troubled arts organizations virtually always suffer from a reputation for being in trouble.
The press frequently reinforces this image. (When I arrived at the Royal Opera House we were referred to as "the troubled Royal Opera House" in virtually every one of the hundreds of articles written about us.) This makes existing donors hesitant to support us and encourages prospects to stay away.
To create a different financial profile, we need to convince a group of people that we are an important, vibrant organization with strong leadership that simply requires some marginal investment to succeed. If an organization does not make major progress over 12 to 24 months it is unlikely to create the momentum it needs to change donor and press perceptions.
This suggests that arts organizations that wish to change their fortunes must be willing to make major change relatively quickly. They must create a truly exciting programming plan, develop major institutional marketing activities that create the sense of vibrancy and quality and they must pursue vigorous fundraising campaigns.
The artistic leadership must be responsible for the first of these efforts; I have seen tired, frustrated boards perk up quickly when they hear a new, long-term, surprising artistic plan. This can be accomplished in a matter of weeks.
Institutional marketing must be the province of the executive leadership; when an arts organization creates news stories and events that project an image of vitality and fun, people want to join the institutional family. It can take a few months to initiate implementation but the impact can be sudden and substantial.
The fundraising campaign requires a larger group for success and is often the stumbling block in the turnaround. Successful fundraising efforts must bring in far more money that in the past, typically by reaching a large number of new donors for meaningful if not huge gifts. (At Ailey we aimed for 100 donors at $1,000; at a recent client we aimed for 50 donors at $10,000.) Achieving this goal requires many members of board and staff to act with confidence and speed.
Yet many board members will not believe that these new targets are reachable. When I arrived at Ailey my board told me we could never raise more than $1.7 million a year -- our annual take for several years in a row. My board members were hesitant to even try; they wanted us to work with austerity budgets and save our way to health. I argued that this approach had already failed them and they eventually embraced the new plan. In fact, two years later we raised $3.4 million!
Board and staff must develop and accept the turnaround plan and pursue it with vigor, excitement, confidence -- and speed. Or the problems of the organization will simply get worse.
We have witnessed over the last decade the most powerful changes in arts marketing since my career began almost 30 years ago. The advent, and rapid acceptance, of social networking technology have led to new communications approaches that are flexible, potent and inexpensive.
At the same time, we have seen arts organizations using web sites and email blasts with increasing focus and sophistication.
We now have the ability to reach huge numbers of people with little effort or expense. People in our communities can now communicate with us through Facebook and Twitter. And they can influence their friends and associates to participate in our activities through online endorsements.
I have heard more board members than I can count say to me and others: "The key to success in the arts today is to have an active social networking strategy. This is the way to attract younger audiences." I do not disagree at all that every arts organization must rethink its approach to programmatic marketing -- the way we sell our services. We can save money and sell more tickets at the same time, a remarkable win-win opportunity in this era of reduced demand and austerity.
But I fear that the power of social media is being touted by many who are not aware that there are other forms of marketing that are just as essential. In fact social networking activities are not a panacea. They are tools for reaching large numbers of people, inexpensively, but they are not yet the tools that bind people to us enough to make them major donors, board members or volunteers.
But we need other, more personal and engaging activities as well.
We need the one-on-one vehicles that foster true engagement and, ideally, encourage people to take a more active role with our organization than simply being an audience member. Without the personal touch, it is difficult to raise the large sums, attract the volunteers and build the boards we need to support major arts projects.
We also need the institutional marketing activities that impress upon people that we are exciting and fun organizations with which to engage. When we mount exhibitions about our history and accomplishments, present truly special events that are exciting and surprising, announce important new programs or major new grants, form joint ventures with other major organizations (in the arts or out), appear on television and radio, and collaborate with major artists, we give people a reason to want to become more involved with our organizations.
Yes, social media can amplify the impact of any of these activities but a single tweet or Facebook post is not enough to bring wide acclaim. We must include social media as a vital ingredient in a comprehensive institutional marketing program, but not focus exclusively on it.
The following is a conversation I have had far too many times in the past three years:
Nervous board member (of an arts organization that has recently incurred a deficit): Is our organization sustainable? Can we take in enough revenue to sustain the budget size we have or should we be cutting the size of our organization since it is harder to attract earned and contributed income?
Me: I am afraid that there is no simple answer to your question.
Yes, your organization can sustain its budget, and even grow, if you develop a strong artistic and educational program, embrace your community, create aggressive and targeted programmatic and institutional marketing programs, build a strong, supportive board of directors, welcome new supporters openly, mount smart, focused fundraising campaigns and invest only in mission-driven projects.
No, your organization cannot sustain its budget, and will likely get smaller, if you continue to produce the same works year after year, stay aloof from your community, waste money on programmatic marketing and forget to pursue an institutional marketing effort, maintain a weak, unsupportive board, make it difficult for newcomers to join the institutional family, continue to solicit the same 20 donors without targeting new prospects and devoting scarce resources to building campaigns rather than art.
Nervous board member: But you are asking us to invest in programming and marketing when we have no money to risk. How do I know that we will earn enough to pay for it? Isn't it safer to spend less since we know we can raise the funds to cover a smaller program?
Me: I cannot promise you will earn enough to pay for the programming, but in my experience arts organizations that do the most interesting work earn and raise the most money. And those that make themselves visible and exciting have an easier time attracting new donors.
I also know that those organizations that reduce programming for financial reasons almost always experience further loss of ticket sales and contributed revenue. We are living in a very competitive world -- there are so many forms of entertainment available. If we are not interesting to our group of friends and supporters, they have many other places where they can give their money. Arts organizations that do not get more interesting and ambitious are going to fall farther and farther behind. In other words, you cannot save your way to health.
Nervous board member: What you say makes sense and I want to believe that you are correct but I am not sure our organization has the capabilities to implement what you are suggesting. How can I be sure?
Me: You cannot be sure. But if the board and staff work together as a team, develop an exciting plan, and work hard to implement it, I am confident you will see substantial progress. Focus on a strong product, aggressive marketing and consistent development of the board. And remember, it takes the entire organization to commit.
Nervous board member: Hmmmm.
I was honored to be asked to present an award to Joan Myers Brown at a recent Dance USA conference at the Kimmel Center in Philadelphia. Joan is the founder of Philadanco, a great African American modern dance company. She is also a great friend; we have worked together for over 20 years. It was not a surprise to be asked to speak on Joan's behalf - she is honored frequently and I am her 'go to' presenter.
The two other honorees that evening were also great women of dance: Barbara Weisberger and Sharon Luckman. Barbara was the Founder of the Pennsylvania Ballet (celebrating its 50th anniversary this year) and the Carlisle Project, and Sharon just retired as Executive Director of Alvin Ailey after a remarkable tenure there.
All three women were most deserving of every plaudit they received.
What made the evening so special for me was that all of the Honorees - and their presenters - were dear friends of mine.
I met Barbara 20 years ago. She was considering me as a consultant for the Carlisle Project. She decided I was not the right person for the job but we both came to respect each other immensely. Her award was presented by Roy Kaiser (no relation) the current Artistic Director of the Pennsylvania Ballet. I am currently serving as a consultant to Pennsylvania Ballet and meet weekly with Roy; together we are developing a truly exciting plan for the Ballet.
Barbara joked that we were finally working together after all of these years.
Sharon followed me as Executive Director at Ailey; in fact I hired her as Development Director when I was there. We have been colleagues, collaborators and friends for two decades. Her award was presented by Uri Sands and Toni Pierce Sands, two former Ailey dancers who have started their own dance company and school in St. Paul, Minnesota. Toni rejoined the Ailey company in 1992, during my tenure there. I will always remember her wonderful, balletic grace in works like Night Creature.
The confluence of people who I have known, worked with and respected for so long brought home the compact nature of the dance world. In the course of a career one gets to know just about everyone and, more importantly, work with everyone. We can share stories about choreographers, dancers and performances, remember great successes and dramatic failures, and appreciate the many people we have in common. In fact we share lives. (Not surprisingly, there were other 'relationships' among awardees and presenters: Uri Sands started as a Philadanco dancer for Joan; Meg Booth, then the Chair of Dance USA runs my ballet program at the Kennedy Center; Meg, Sharon and Linda Shelton, the Executive Director of the Joyce Theater, all worked for Twyla Tharp at some point in their careers, and on and on.)
It is an honor to be a part of this remarkable fraternity (sorority?) of dance people -- directors, managers, dancers, choreographers -- bound together by a love of dance and shared experiences.
I have spent much of my career working with troubled arts organizations and there is one unfortunate trait that most, if not all, share: board members feel empowered to perform tasks that are typically assigned to staff members.
Board members may try to manage marketing, artistic planning, financial planning or any other operation of the institution they perceive as not functioning properly. Before I became Executive Director, my Royal Opera House board even took to editing press releases during weekly board meetings!
This 'poaching' is almost always well-intentioned; the board members truly believe that the organization would succeed "if only this one thing were done better." They have lost confidence in the staff's ability and are searching for ways to make things better. They believe that their experiences running corporations, or perhaps even serving on boards of other not-for-profit organizations has given them the background required to fix the problem.
Unfortunately, poaching rarely works and often leaves staff members demoralized and any semblance of a strategy in tatters. Staff members no longer know who to obey: their staff boss who is effectively neutered when the board poaches or one of many board members who may feel empowered to direct staff efforts. In fact, I have observed several instances where two board members offer contradictory directions to the same hapless staff members. What are they supposed to do?
Too often board members do not have the knowledge to act effectively. They simply do not know the constraints facing the organization and believe that staff members are being negative when they mention them. When they come to realize, after much wasted effort, that these constraints are real, they often withdraw in frustration.
Other times, their focus waxes and wanes as their "real jobs" take priority. This leaves staff unsure how to proceed when something must be accomplished and the board member is unavailable.
Ironically, if half as much effort that is devoted to trying to fix things was devoted to fundraising, most of the problems facing the organization would disappear. In fact, rarely have I observed a board member trying to take over the fundraising effort!
Instead, many believe they can do a far better job of cost control than staff leadership and begin to make ill-advised cuts that can have deep and lasting repercussions on the organization.
Except for in the smallest organizations, board members are not meant to manage the operations of the institution. They are engaged in planning, budgeting and fundraising and serve as ambassadors to the community.
They are also charged with hiring and firing the staff leadership. If the board does not believe that this leadership can manage effectively, it should replace them. Otherwise, it must provide support, give advice and back off.
It is the responsibility of the board chair to ensure that board members fulfill these responsibilities and respect the limits of their authority. And it is the responsibility of staff leadership to perform competently and communicate freely with their board members so that they do not feel the need to poach.
I am tired of reading that the arts are in trouble because of "the economy." If you have read the financial news lately you will see that the stock market is at an all-time high, corporate profits are strong, housing is rebounding and the unemployment rate is falling.
Yet arts leaders still blame poor ticket sales and fundraising results on "the economy" and board members, the press and the public nod their heads in knowing agreement.
It is true that there remain depressed sectors of the economy and too many people are still out of work. The economy has not rebounded equally for all.
But for the vast majority of arts organizations, most of their audience members and donors are still employed and are enjoying strong returns on their investments. They have rising levels of disposal income and consumer spending is increasing as a result.
What is true is that the world has changed very dramatically: governments are giving less, corporations are far more selective about how they give away their money, there are far more entertainment choices available, our traditional audiences are aging and the younger potential audience members have not received as strong an arts education as their parents did.
Arts organizations must adjust to these changes; we need to change our fundraising strategies to accommodate the reduction in government funding and to compete more strategically for corporate funding by developing strong visibility plans for each corporate prospect. Corporations that are supporting the arts, after all, are now looking for enhanced visibility for their products and services.
We need to examine our programming and determine if it is exciting enough to compete with the new entertainment options; if not, we must work harder to create the transformational projects that astonish our communities. Simply producing the same work year after year is not going to foster earned revenue.
We need to focus, increasingly, on individual donors, providing benefits donors want to become active members of our institutional families.
We need to become far more aggressive marketers, employing old technologies and new ones to entice new audience members and hold on to the old ones. We need to adjust to the buying patterns of younger audience members who purchase their tickets later, do not necessarily get their information from traditional news sources and are often price sensitive.
We need to adjust our budgets to this new reality. It is not acceptable to earn deficits year after year and use the economy as a justification. This is the surest path to bankruptcy.
And we cannot accept the conventional wisdom that "every not-for-profit arts organization is facing deficits" because that is simply not true and is dangerous. I know of hundreds of arts organizations that have done a superb job of navigating the new world in which we live.
It has been harder, for sure, to balance our budgets and has required arts managers and boards to be nimble in the face of the new environment in which we operate.
But blaming "the economy" is not way to sustain ourselves.
Many arts organizations are now facing the same scenario: following the stock market crash of 2008 and the subsequent great recession, fundraising revenue has fallen precipitously and ticket sales have stagnated. As a result, boards across the nation (and the world) are convinced that the world has changed, funding will never regain past levels, and budgets must be cut severely.
This must be the reason why so many regional orchestras are seeking massive wage cuts from their musicians and why many other arts organizations are looking to reduce, reduce, reduce.
Anyone who has read my writing before knows I think this is a recipe for disaster for these organizations and for the arts ecology in general.
I also think the logic is flawed.
The stock market is at record levels, most arts donors never saw their incomes fall or lost their jobs, and those arts organizations that have continued to do great work and market well are doing just fine, thank you. The organizations that have yet to recover are the ones which have tried to "save their way to health." They have pruned budgets so far and so often that they are no longer the dynamic institutions they were before the recession.
So what to do?
First, these organizations must change their mindsets immediately. They must plan the exciting projects that get people talking about them again. They must reenter the conversation.
But they must also find the resources to pay for these new projects.
My favorite technique for jumpstarting fundraising is a special challenge grant. I ask one or several of my best donors to guarantee their gifts for a period of three to five years. I then ask that this pledge take the form of a challenge grant that must be matched with new and increased gifts. This provides the impetus, and the confidence, for organizations to pursue fundraising with more vigor.
I came upon this approach by accident. When I arrived at American Ballet Theatre we were drowning in debt (over $5 million of it). I asked Chairman Peter Joseph, who was also our biggest donor, to guarantee five years of his annual pledge of $1 million. I announced this $5 million Peter T. Joseph Challenge, which astonished my board and donor base and did not cost Peter any more money than he would have given us anyway. And we matched the entire amount with new gifts and increased gifts from existing donors in less than two years, thereby eliminating the entire deficit of the organization and funding many new artistic and educational initiatives.
Turning around arts organizations is mostly about changing the psychology of an organization. If we can get people who are closest to us to believe in our work and proceed with confidence, we can find the resources we need. (After all, for most organizations, the amount of extra money we need to raise to return to health is rather modest.)\
A major challenge grant is one easy to implement tool for inspiring excitement and hope.
It is a true pleasure to read about the health and harmony that reigns at the Kansas City Symphony. At this difficult time when so many orchestras are facing economic turmoil, the Kansas City Symphony is balancing its budget and just signed a three-year contract with its musicians. (As if this were not enough, the contract was agreed to one year early -- it begins in July, 2014!)
Having lived and worked in Kansas City, I know that the Symphony is one of the great treasures of a community that values its arts organizations highly from the world-class Nelson-Atkins Museum to my alma mater, the Kansas City Ballet.
This is one instance where having a new hall is a true asset; the Kauffman Center for the Performing Arts is a beautiful, new facility but it is also an independent institution and the Kansas City Symphony does not have to divert its attention to funding or managing it.
This is a great advantage. We see in Minnesota and Nashville how an orchestra can lose focus when it begins to raise funds for a new facility. It is easy to see how musicians and the public can come to believe that the capital effort has taken priority over operating funding and the true mission of any orchestra -- making music.
However, there are other ingredients to the success of the Kansas City Symphony:
- Strong artistic and executive leadership: Michael Stern, the Symphony's Music Director and Frank Byrne, its Executive Director make a great team who have worked hard to create strong base of support for the symphony.
- Stable board leadership: Shirley Helzberg, who recently stepped down as chair of the board, has played an immensely important role; she has ensured the board, staff and musicians are working toward the same goals.
- Supportive culture: Strong leadership and a clear plan have allowed every member of the organizational family to feel important and secure. In fact, the lawyer representing the musicians in the latest round of negotiations stated, "What we see in the Kansas City Symphony is a culture of mutual respect. A lot of orchestras talk about respect, but the Kansas City Symphony really practices it. I think that what perhaps makes the difference aside from mutual respect, is a sense of optimism. Things are looking brighter and brighter. That really goes a long way to helping the musicians accept less-than-ideal terms and conditions."
- Diversified revenue streams: In addition to performing its own annual concert series, the Kansas City Symphony also is the pit orchestra for the Lyric Opera of Kansas City and the Kansas City Ballet. This provides multiple strands of income to the organization.
- Commitment to community engagement: The symphony makes 60 outreach appearances each year and is dedicated to building bridges to every part of the Kansas City community.
It cannot be easy to achieve balance in the orchestra world today. No doubt, the board, staff and musicians of the Kansas City Symphony work very hard and sacrifice to achieve artistic success and fiscal stability. But clearly, it can be done.
I have written before about visiting Prague, the beautiful capital of the Czech Republic.
This visit was different for two reasons. While my previous reason for visiting this city was to teach arts managers, this time I came for the annual summit of the Kennedy Center International Committee on the Arts. This is a group of major patrons, both American and foreign, who support the international work of the Kennedy Center. Each year we visit a major city and enjoy the culture, people and sights of the city.
This visit was also distinguished by the weather: just preceding our visit, there was a long and intense rainy streak that caused massive flooding in Prague and elsewhere. Many museums and parks were closed; the itinerary for our group had to be reformed every day.
What was not unusual about this trip was that some of the most exciting moments were not associated with visiting churches and museums or sampling local culture or food. Instead, the Committee members were fascinated to interact with the arts management students at our DeVos Institute of Arts Management -- my "children."
Since we have so many former Fellows in Prague -- those who studied with us at the Center -- I thought it would be interesting for the members of the Committee to hear them discuss the way the Fellowship experience changed the way they do their work.
The Committee members have observed my teaching before, but they never heard from our former students or had an opportunity to evaluate the true impact of our teaching activities. They were fascinated as they heard six of the Fellows describe the new approaches to fundraising and marketing they now employ. Lukas, for example, who is head of marketing and development for a local theater, now receives 40 percent of his funding from individual donors -- up from zero five years ago.
Eva, who is executive director of an orchestra that plays contemporary Czech music, said her problem now is not selling tickets but to find larger venues since her concerts routinely sell out.
Marek, who runs two music festivals (one of which he founded 18 years ago), now holds an annual fundraising gala that attracts over 1,000 guests each year.
And on and on.
Each Fellow had an important and impressive story to tell.
What was most interesting is that they all agreed that the most important thing they learned at the Kennedy Center was courage, the courage to ask for money, the courage to embrace a new funding paradigm, the courage to do something different than others in the Czech arts ecology.
In the end, my Committee members were truly inspired and engaged; they recognized that their philanthropy, which helps fund our international fellowship program, is of true importance.
This in itself was a good lesson for my Fellows. Showing donors the impact of their work is the best tool for ensuring that their giving continues and grows.
In the end, the power of doing good work overcomes a flood any day!
Liz Forgan, the former chair of the Arts Council of England, gave an interesting interview
to Rupert Christiansen in The Daily Telegraph
in which she criticized the wealthy of her country for not supporting the arts. While there are a few families who have been extraordinarily generous, she argues, too many of the newly wealthy are not helping support British arts institutions.
In particular she pointed to the "hedge fund boys" whose great wealth, she believes, should be shared.
She compared them, unfavorably, to Russian oligarchs who have been supporting arts ventures in their homeland (and abroad I might add). She wonders if they are uncultured or simply uncharitable.
I find her comments well-intentioned but a bit naive.
The truth is that people who gain wealth do not automatically become philanthropic in England, the United States or anywhere else.
Arts institutions -- and all not for profit organizations for that matter -- must make it engaging, fun, enlightening and inspiring to participate. They must earn their donors.
One can only imagine the letters the wealthy of England receive daily asking for funding. The remarkable web of excellent arts institutions in that nation are suffering from reductions in government subsidies as are their peers across the globe.
But what are these supplicants offering back?
How are these individuals to be rewarded for their contributions? What visibility will they receive for their largesse? Will they be able to partake in social events that are enjoyable and rewarding and bring them in contact with their peers? Will they have access to artists who they find inspirational? Are they being offered a menu of projects to fund that intersect with their particular interests?
Good fundraising results from a strategic campaign mounted by the arts institution that binds the donor to the institution, it does not emerge from the sudden achievement of wealth.
Arts institutions that raise substantial sums (and many in England do) mount programming that is innovative, have done the institutional marketing required to entice new donors and have a well-crafted fundraising plan. They create lists of strong prospects, cultivate them well and select the appropriate solicitor to ask for the gift. They also recognize that the first gift should not be the last so they ask for reasonable sums, foster strong relationships with new donors and work hard to increase the size of each gift, year after year.
Of course one wants the wealthy of any nation to help build the artistic ecology of their homelands. At this time more than ever we need the active participation of many people. But those with the largest economic stake in our society must be educated about the value of the arts in creating a healthy society and enticed to participate.
Moralizing, in my experience, to bully them into giving is not the appropriate tool for building a donor base.
Developing a smart approach to a given prospect, that suggests we know that we must give something back, is.