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.
Almost every arts institution I know is trying to increase the potency and productivity of its board of directors. As we experience (often dramatic) reduction in government and corporate grants and as we compete harder for earned income and foundation grants, we all hope that a stronger board will give generously of their own resources and will solicit their friends and associates on our behalf.
Yet when I ask most arts leaders about the nature of the board members they are hoping to attract, the response is typically very general in nature and can be reduced to: we want rich people. This lack of specificity makes it difficult to target potential new board members.
(I will leave it to other columns to discuss how we turn rich board members into generous donors and productive solicitors. Leave it to say it is not guaranteed; when I joined Alvin Ailey in 1991 we had two of the richest Americans on our board -- neither gave, or raised, one penny to the institution!)
I find that it is far easier for a nominating committee to create a strategy for attracting strong candidates and to implement that strategy if they employ a simple tool I call "the ideal board."
The ideal board is a zero-based approach to designing a board. It starts with the assumption that the board has no members and we describe the salient characteristics of the board members we want.
But it does not assume that all board members possess the same characteristics. Of course we would like many generous people of means but we cannot assume that every person on our board will give the same amount. While it is useful to set a board minimum gift, we should encourage our board members to give more than this minimum. (This requires the organization to make it attractive to give more than the minimum s-- through sponsorship credit, public recognition, etc.) I begin the development of the ideal board by specifying a number of board members I would like to see giving at each realistic level for my organization. A few may give the minimum, more may give an additional 20%, and a few may give at very high levels.
But I also specify the sectors of the economy I would like to include on the board (those that reflect the most potent industries in my region), the number of members with social connections to other potential donors, the number of artists or intellectuals I would like to include, the number from other geographic regions, etc.
After the Nominating Committee members agree to this list of specifications, they can place current board members in appropriate categories. (Those who fall into no specific category probably do not belong on the board.)
The search for new board members who meet one or several of the criteria can now begin. But it can be a very focused search since the entire board can now understand exactly what is needed. And as we begin to 'fill the boxes' the search can become increasingly focused on those criteria we are still missing.
There will be so much written about Nelson Mandela in the wake of his passing -- about his personal history, the struggle for equality in South Africa, his political contributions -- but, I fear, there will be little discussion about his impact on the arts of South Africa, and the world.
When Mandela was elected President in 1994, the arts in South Africa were in turmoil. The major state-funded arts organizations were focused, almost exclusively, on Euro-centric 'white' arts -- opera, ballet, theater, and symphony. It was clear that, in the wake of such major political change, these organizations would have to be transformed for both political and economic reasons.
At the same time, a host of independent organizations were far more diverse but were threatened because they had lost the funding they had received during apartheid from foreign corporations which were forced to make contributions to NGOs as a price of doing business in South Africa.
President Mandela created a group of South African arts leaders and a few foreigners (I was one of them) to develop a plan for arts funding in South Africa. We reported to Mr. Mandela's wife at the time, Winnie Mandela, who was serving as deputy Minister of Culture.
I will never forget being invited to our first meeting in Pretoria when, after a brief address, Mrs. Mandela intoned, "Mr. Kaiser will now address us on behalf of the people of the United States of America." Dozens of cameras swung to capture my remarks. Unfortunately no one had ever thought to tell me I was expected to make a speech! I have no recollection about what I said, but it probably was no less meaningful than most of the other speeches that were made at that meeting or many others.
In fact, our group was not terribly functional. There were endless meetings and little action. Many of the participants thought that this was the time for the government to pour additional resources into the arts sector. Others of us believed the priorities of the new government would be placed in housing, education and health care and that we needed to develop new sources of funding for the arts. These arguments waged on for months and, in the end, we did not deliver what was requested.
But that did not stop Mr. Mandela and his administration.
A serious effort to redirect arts funding to indigenous groups was pursued.
One of these groups was the Market Theatre. Founded by Barney Simon and Mannie Manim, the Market Theatre was the home of the most important anti-apartheid plays including the works of Athol Fugard. I returned to South Africa at the request of the Rockefeller and Ford Foundations to save the Market Theatre. In the end, it was the Mandela government that truly saved the Market Theatre by making the first of many large grants.
Today, South Africa can boast of a truly diverse range of arts organizations producing everything from opera to African dance to a cappella choruses. Arts funding is not perfect -- where is it perfect? -- but it is growing and changing. Having made periodic trips to teach in South Africa for the past 20 years, I can attest to the steady maturation of its arts ecology.
Just one more element of a remarkable legacy for a remarkable man.
I was sitting in a meeting of a board development committee of one of my clients when someone uttered the conventional wisdom, "We need to grab at every opportunity."
Everyone nodded in knowing consent and happily created a long list of actions the committee and the staff should pursue in the coming months.
But it got me thinking: Here is troubled organization which has a thin staff and a modestly involved board with an ambitious plan for survival and growth.
Can this group really afford to grab at every opportunity?
I think not.
I am increasingly convinced that one of the reasons organizations fail to implement their plans -- often after a relatively rigorous, time-consuming and expensive planning process -- is that the plans do not set out clear priorities.
Believe me, I am as entrepreneurial as the next person, and I believe in grabbing major opportunities when they arise. A well-timed, well-executed special project, fund-raising event or marketing activity can help boost visibility and revenue. But almost every arts organization is a small enterprise and every time a project is added to our lists of ventures, something else must be deleted. Otherwise we are in danger of spreading our organization -- and the attention of donors and audience -- too thin.
Board members must learn that we simply cannot grab every opportunity.
Some project ideas sound good but are not worth the time, energy, focus and financial cost. It is wonderful when board members bring us their ideas and staff leaders must be open to them. But board members must be willing to hear that one of their pet ideas simply cannot be executed at that time because of scarce resources and other, higher priority projects.
I believe that planning consultants are often to blame (and I am a proud, if often guilty, consultant myself) for creating too-long lists of activities because, in an effort to provide our worth to the clients, we provide laundry lists of activities they should pursue.
But I think planners who say "focus on these three things over the next year" are doing a better job for their clients than those who produce 25 pages of strategies. Shouldn't part of the planner's job be to evaluate the items on their lists of possible projects and determine which few are most potent and implementable given existing staff, board, volunteer and financial resources?
Doesn't focusing a board and staff on the truly important activities help prevent them from pursuing only the items that are comfortable while ignoring those activities that will truly create health? I have observed far too many boards that discuss cultivating donors, finding new prospects, writing thank you notes, etc. without ever asking for funds and others that will get excited about a very modest marketing activity that takes inordinate amounts of staff attention that leaves no time for actually using the event to cultivate interest in the organization.
Grabbing at every opportunity sounds nice but it just isn't smart.
I think there is a great deal of confusion about the meaning of 'cultivation event.' Every arts organization I know mounts several of these a year - from pre-performance lectures, to drinks parties in board members' homes, to lectures by curators to studio showings. These events are typically considered important elements in the organization's fundraising strategy. They can take a good deal of board and staff time to organize but they must pay off in future donations. Right?
Well, not always.
As obvious as it may seem, cultivation events only have an impact if they are part of an overarching cultivation strategy for a given donor. Bringing a group of people to one cultivation event is not enough. Too many people are invited (or often even begged to come) to an event by a board or staff member, enjoy the evening, and are never heard from again. The organization has devoted scarce time and resources to creating the event and gets little in return. Then they start over with a new group of prospects at the next event.
Smart cultivation requires:
- Developing a target list of prospects who are the most likely to support the organization. These are the people who should be invited to cultivation events, not those we have to beg to come simply to fill a room.
- Creating a series of cultivation events that are exciting and likely to draw our major prospects. Too many cultivation events are simply not special enough--that is why we have to beg marginal guests to come in the first place.
While we cannot expect any prospect to want to spend several nights a month with us, we should work to engage someone three or four times a year.
- Following up with every prospect who attended to determine whether the cultivation strategy is working or not. Is this simply not the right prospect for us (in which case we should amend our prospect list and find new people to add), is there an additional interaction required (invitation to the studio to watch rehearsal, meeting with the artistic leader, talking with a board member, etc.) or is it the right time to solicit a gift?
- Sharing information with our prospects at regular intervals. While cultivation events can be potent, especially for those prospects who value an enhanced social life, we can heighten their impact by sharing important, positive information about the organization with our prospects, ideally in a personal phone call or meeting. News about major grants received, important artistic accomplishments or awards, tours booked, new board members, etc. will confirm to the prospect that the institution is thriving and worthy of attention.
When this news is shared by an artistic leader, board officer or other luminary, it has even greater impact.
A thoughtful cultivation plan, well executed, greatly increases the odds of building new streams of revenue, convincing board members that they can raise money, and generating excitement inside and out of the organization. An unfocused set of events does exactly the opposite.
One of the tell-tale signs that a troubled arts organization is off course is when one or several board members announce they are revising the bylaws of the organization.
There is nothing wrong with revising bylaws; in fact it is helpful when bylaws accurately match the governance activities of the organization.
But when board members believe that amending the bylaws actually fixes an organization they are sadly mistaken. I have yet to see an arts organization that is troubled because its bylaws are outdated -- the number of board meetings, the structure of board leadership or the way committee chairs are selected have changed since the last by-law revision.
Arts organizations are in trouble because they do not create enough revenue to equal expense; ticket sales, tour fees and fundraising are not substantial enough to cover costs. It is that simple.
Board members who suggest that their contribution to fixing the organization will be updating the bylaws are not truly addressing the key issue facing the organization. They are simply rearranging the deck chairs on the Titanic.
In fact, from my vantage point, board members often assign themselves to this task to avoid addressing the real problems.
In particular, it shields them from doing the fundraising necessary to bolster revenue. Most board members are afraid to ask for funding from their friends and colleagues under any circumstance. This is especially true when an organization is sick and the board member harbors some embarrassment about the way the organization is functioning. Volunteering to address issues with the bylaws gives the board member an easy excuse for avoiding asking for money: they are too busy working on behalf of good governance.
To be sure, there are other tactics that board members use to avoid asking for funds. Many ask for more and more data, suggesting they cannot make an ask without 'enough' data at hand. When the data is provided, usually by an overworked staff, a new request for data is provided.
Others ask for endless revisions to the way fundraising prospect lists are formatted. I worked for one arts organization that was mounting a special capital campaign - it took months and months to begin solicitations because one member after the other of the campaign committee asked for charts to be redesigned. "How can we ask for money if the prospect lists are not user friendly," I was asked repeatedly.
I have never seen an organization raise money based on the design of its prospect list. The key is to develop a realistic list of prospects, to cultivate the people on the list and to ask for money.
Not one creditor will be satisfied by up-to-date bylaws; no artist will accept compensation in manicured prospect lists.
Board members of troubled organizations must be willing to ask for funds if they want to see their organizations survive and thrive. And board leadership must be willing to say so clearly and explicitly.
Not much else matters when cash is tight.
I am not a fan of having numerous standing board committees for arts organizations. I appreciate the need for a finance committee, a separate audit committee (the same people who approve the budget at the beginning of the year should not be responsible for auditing financial performance at year end), an executive committee (that can operate when the entire board is in recess), etc. But I prefer board members to spend time in the community, building support for the organization, rather than to sit in endless committee meetings.
But there is one committee that is crucial, and that is carelessly assembled all too often: the governance committee (sometimes called the nominating committee).
The governance committee has four central roles:
- Determining what the composition of the board should be in the coming years. I call this formulating the 'ideal board.' This requires an evaluation of the needs and strategy of the organization and a determination of the kinds of people -- level of resources, professional expertise access to others, etc. -- who are needed on the board.
- Evaluating the current board members to determine who is and who is not fulfilling their obligations to the organization, asking those who can no longer be effective to leave the board, and creating goals and objectives with remaining board members for their participation in the coming year.
- Creating and implementing a strategy for acquiring the board members needed to ensure that all of the requirements outlined by the 'ideal board' are met. (This is the nominating aspect of the charter of the governance committee, but note this is only a part of the committee's responsibilities.)
- Developing and implementing a succession plan for board leadership. The selection of a chair is a critical activity -- the chair must be able to manage the board, lead by example with respect to giving and soliciting funds, collaborate with staff and represent the organization in a number of settings.
Each of these roles and activities is crucial and has a major impact on the future of the organization. Those serving on the Governance Committee must be able to analyze needs, evaluate people, develop strategy and command the respect of those within and outside of the organization.
They must have connections and knowledge of a broad and diverse cross section of the community.
Too often, a nominating committee is created by assembling a group of friends who are sociable and well-connected. But when members of this committee all come from the same social set, it means that only one part of the community will be mined for new board members. This limits the organization's ability to build earned and contributed revenue.
It is especially important that the chair of this committee command the respect of the entire board. The committee chair will be responsible for leading the efforts to evaluate board members and to select a new board chair. These can be difficult and emotional processes. A well-chosen committee chair can make these processes far easier for the organization and can avoid the schisms that too often develop when making these decisions.