The leadership of the Metropolitan Opera recently announced
that they were lowering most of their ticket prices for next season. At the same time, they announced that it is now clear that their highly successful movie theater broadcasts are cannibalizing ticket sales for their live performances.
Neither development is surprising; when movie theater tickets for an opera performance are $25 and seats in the Met for the same performance are $380, audiences are going to change their attendance habits.
This is an important moment for all arts managers, particularly for those with large budgets and high fixed artistic costs. The Metropolitan Opera might be our largest performing arts organization but it is hardly unique. Many of us are facing both the aftereffects of decades of increasing ticket prices as well as the emergence of new forms of entertainment, many of which are virtually cost free. There will be pressure on us to reduce ticket prices while maintaining (or improving) artistic quality.
The question is, if ticket prices are reduced how will we balance our books? The answer must be a radical increase in ticket sales as prices are reduced (which I believe is unlikely), a jump in fundraising (which I believe is entirely possible though many of my peers disagree) or a dramatic reduction in costs.
It is no wonder that orchestra boards across the nation are looking to reduce the salaries of musicians so dramatically and why several ballet and opera companies are being pressured to reduce numbers of performances. Many boards are as dubious as I am that we will see a large increase in demand for tickets. And most arts boards will do anything to lower annual fundraising requirements; suggesting that fundraising needs to jump considerably is anathema. So the logical step appears to be lowering cost. The labor problems in Detroit, and Louisville and Minneapolis and schisms between board members and artistic directors in many companies are just the beginning. Don't be surprised to see labor actions and departing artistic leaders across the nation in the coming years.
I have never been frightened by fundraising. I am convinced that if the artistic product is exciting and the marketing is strong we can find new sources of contributed revenue. I do not think that massive cost reductions are necessary. In fact, I worry that the efforts of some organizations to reduce costs will make them uninteresting and uncompetitive and they will actually lose more money. But I do believe that there will need to be some adjustment to cost structures, especially for the highest priced talent like guest soloists, conductors, choreographers, etc. I am already witnessing a softening in the fee demands of all but the most famous artists. (Not coincidentally, these fee reductions are coming at a time when European arts organizations are losing large amounts of their government funding and cannot afford to pay high fees either.)
The next 10 years or so will be challenging. It is not going to be pretty or fun for anyone in the field.
One must hope that a new equilibrium will emerge that allows artists to work for a fair wage while allowing the best arts organizations to create new revenue and expense profiles that are supportable and sustainable.
I have written many times that artistic leaders need to dream well into the future about the transformative projects that will excite and surprise their audiences. In fact, the most damaging impact of the current economic challenges facing the arts today is that artists are forced to focus on money as much, if not more, than art. As a result, too many organizations are not producing big, exciting arts projects. By playing it safe they are in danger of losing the interest of their audiences and donors.
But I am now also convinced that executive directors need to dream as well. They need to dream about the funding base, the composition of their boards and the public profile they hope to enjoy five years from now.
Too many arts managers develop strategic plans that suggest incremental changes to funding levels. Rarely are these plans sufficient to support the artistic dreams of the organization. Arts managers must be willing to work backwards: imagine the funding stream that you think your organization should have five years from now and then work backwards determining the steps required to get to that funding level. For many arts organizations, this means increasing the potency of the campaign to raise money from individuals substantially. For others, the corporate sector must be approached in a far more aggressive fashion.
Dreaming of a far larger donor base requires, of course, a complementary vision for board composition. I recommend designing the 'perfect board.' How many members can contribute at basic levels? How may are needed to give at higher, perhaps heroic levels? What are these levels? How many board members should be artists? Business leaders? Socialites? Should some board members come from specific industries or professions? When one delineates the ideal board, it is far easier to work towards creating it. Too many plans simply call for "strengthening the board;" this is too general to be a true roadmap for the organization or its nominating committee.
These pictures of future fundraising streams and board composition are most effective when they are linked to the artists' dreams for future artistic projects and the marketers' dreams of potent institutional marketing campaigns.
Many planners incorporate these dreams for the future in a vision statement. In fact, many think of a vision statement as a substitute for the mission statement. I think the two are quite different. The mission is the way we will measure success: what we will do, who we will do it for and where we will operate. The vision statement, however, delineates how we will work towards achieving this mission. I prefer to place the vision statement at the beginning of the strategies section of a plan since it provides the over-arching picture of the way the institution will function. All of the specific strategies that follow are important elements of that vision.
Without a clear vision for the future, executive directors are doomed to making marginal changes that do not truly move their organizations forward. And without a bit of dreaming, it is difficult to create this vision.
Arts professionals are an inspiring group; they truly believe in what they do and almost always think that doing more of it is better than doing less. They are convinced they can assist their communities by reaching more people, expanding existing programs and creating new and diverse programming strands. In fact, assemble a group of arts professionals together under the umbrella of an arts organization and the richness and diversity of programming ideas will almost always be remarkably impressive.
But many arts organizations do not rein in this explosion of ideas and attempt to do too much. They have never met a program they did not like.
They spread their programming and marketing budgets over an ever-growing number of projects.
This is dangerous and can result in:
- Too many underpowered projects. Arts organizations rarely get credit for mounting an endless number of sub-standard projects. Developing a smaller number of truly astonishing programs is far better for attracting audiences, donors and press attention than producing an agglomeration of thrown together programs. Those projects that are planned over a longer period of time, include exciting and diverse elements and are executed flawlessly are the ones that transform arts organizations.
- Exhausted staff. When an organization attempts to do too many projects in too short a period of time with too few resources, staff can become drained and depressed. Staff members are typically not excited by volume of work but by quality of work. All arts staffs work hard; the ones who believe the product justifies their investment of time and energy are the ones who are happiest. The ones who feel they are consistently producing work that could have and should have been better are typically dissatisfied.
- A mismatch between activity levels and income. Since there are so many wonderful arts and entertainment options available to most consumers, ticket buyers will not be attracted to sub-standard programming. Therefore, just because an arts organization increases the number of productions does not guarantee income levels will rise. In fact, the additional expense associated with creating new programming strands will often not be covered by additional box office revenue, especially if marketing budgets are not increased in tandem. Arts organizations that consistently produce the highest quality work are also the ones with the best fiscal results.
- An inability to attract new, larger donors. These days, virtually every arts organization is trying to increase fundraising revenue by wooing high net worth individuals who may not have supported the organization in the past.
But these individuals have the opportunity to experience the very best and will typically not settle for less. Creating a truly strong slate of programs is an essential prerequisite for engaging these individuals and to receiving major donations from them.
The desire of arts managers and artists to want to do more is important, attractive and draws people to our organizations. Controlling these impulses is vital, however. Programming levels must only grow with the organization's ability to do more well.
Dear Secretary of State Kerry:
Congratulations on becoming our nation's leading diplomat. Everyone hopes and prays that you will build on the great work of your predecessors to make the world a safer and happier place.
While you have access, no doubt, to a wealth of advice and knowledge, I humbly suggest that you fully exploit the expertise of your arts community and the power of cultural diplomacy.
Since the time of the pilgrims, America has experienced virtual separation of art and state. We have no Secretary of Culture and no national cultural policy. As a result, the potential power of the remarkable (privately funded) arts ecology that has been created in this nation has been traditionally under-utilized in our diplomatic efforts.
Why is this a problem?
Because we are wasting a huge diplomatic resource. Other nations have used cultural activities to build bridges on a sustained and widespread basis. The recent work of the Chinese government and the British Council are just two such examples.
But I am not suggesting we duplicate their efforts and send large numbers of American artists abroad. This is very expensive and I question whether the pay-off is large enough. When we tour abroad we tend to reach the most educated and worldly members of society. Are we really changing minds when we perform for the elite?
But the time is right for another form of cultural diplomacy. Other national governments do care deeply for the role of culture and the arts. They spend time and resources to ensure the health of their cultural institutions. And right now, these institutions are threatened. Governments across the globe can no longer afford to support their arts institutions and are desperate to find new funding strategies. We in America have developed approaches to building private levels of support and can transfer this knowledge to everyone's benefit.
Of course you know that the best diplomacy involves building relationships. And when we go abroad and teach arts leaders how to find new resources, we are building relationships that can last forever.
And we are sending an important message: while we are proud of American artists, we acknowledge that the artists of every nation are important and we want to help them succeed.
This approach to cultural diplomacy also has the advantage of being very inexpensive. It does not require exporting large orchestras or dance companies. It simply takes one person with expertise who is willing to teach others and costs little more than an airplane ticket and a hotel room.
I am sure you are spending a great deal of time addressing crucial areas like the Middle East. You should know that some of us have been welcome visitors in Damascus and Ramallah because the governments there are anxious to see their orchestras and theater companies prosper.
At a time when many Americans are looking to cut the budget of the State Department, you have an entire arts sector ready to work with you.
Just call on us.
Michael M. Kaiser
One of the frustrations of being a consultant is that one doesn't have control over the implementation of the plans you develop. Several times in my consulting career I have worked hard on creating plans for an organization only to see them sit on the shelf while the organization struggled. That is one of the reasons I have never been able to be a full-time consultant for very long.
Sometimes it even makes one question whether or not planning really does make a difference.
And then comes along a client like the National YoungArts Foundation.
Eighteen months ago, I was approached by the great Lin Arison about helping the organization she founded with her late husband, Ted, about helping YoungArts with its planning. I then met Paul Lehr who had recently become the organization's chief executive. Paul came with enthusiasm, energy and ideas to this organization that gives high school-age aspiring artists life-changing experiences: master classes with Mikhail Baryshnikov, Plácido Domingo, Frank Gehry and Bill T. Jones just to name a few of the luminaries who give their time and expertise to inspiring and shaping the next generation of American artists.
It doesn't take long to fall in love with the mission of YoungArts but for all the organization has achieved (former YoungArtists are people like Desmond Richardson, Vanessa Williams, Viola Davis) it wasn't functioning like a world-class arts institution. Programming was not substantial enough, visibility was relatively low and too few donors had joined the YoungArts family.
I helped Paul, Lin and the board and staff members of YoungArts to craft a plan to bolster its programming, visibility and funding. The plan was completed exactly one year ago and presented to the board.
To say YoungArts is a different organization today is a great understatement. Paul took the plan and ran with it, creating a new organization with dizzying speed.
A few accomplishments:
YoungArts recently purchased the historic Bacardi Building in downtown Miami and Frank Gehry is leading a master planning exercise to turn it into a great arts education campus. When the new campus is completed there will be year-long performance and learning opportunities for YoungArts students and graduates.
New programs in Miami, New York City and Los Angeles have been created.
Visibility has increased substantially as the result of a major institutional marketing campaign; for example, The New York Times ran a major profile of the organization. For those who are skeptical that this kind of marketing can have a major impact, applications for the YoungArts program have almost doubled to 10,000 from one year to the next.
Fundraising has increased 66 percent in one year, with a high percentage of first time donors.
The HBO series Master Class, a major YoungArts project, is now entering the curricula in schools across the nation.
Paul and his small staff have done wonders in a very short amount of time -- testament to their passion and hard work.
But it is also testament to the power of planning -- when the plan is actually implemented.
Many arts organizations are facing a difficult time of year when they are in the midst of their seasons, working hard to find the resources they need to pay all the bills, getting ready to announce their seasons for next year, creating subscription brochures and finishing (or starting) their budget for the next fiscal year.
For most arts organizations, any one of these activities is enough of a challenge: we are understaffed and underfunded. Just putting on stage a full complement of performances is enough to tax us. And mid-season is when we (should) acknowledge where we are falling short in terms of financial performance. Are ticket sales simply not as strong as we had expected? Is our fundraising operation not producing the level of revenue we had planned? Must we adjust our spending or implement emergency fundraising or marketing programs in response to shortfalls? (Those organizations that do not do adjust by this point in the season probably will not have an opportunity to do so and will suffer the year-end consequences.)
But the challenge to every arts manager is to balance these essential activities for this season with those that will make next year a success.
Have we created a slate of programs for next season that are exciting, challenging and supportable? (Of course, those managers who follow my recommendation to begin programming years before the season have a substantial edge in creating important seasons without a last minute rush to finish.) Are we ready to announce this new season to our 'family members' - ticket buyers, donors, volunteers, board members - in a way that gets maximum attention? (In addition to mounting a press event for our seasons at the Kennedy Center, which includes a lunch where journalists can discuss the season with our programmers, we also host a reception at my home for major donors so they can learn about the season before it is announced.)
While all of this is going on, we must also be developing our subscription packages; this requires more than designing a pretty brochure. This is the moment for us to rethink our pricing strategies, our performance times, the benefits we offer subscribers and the way we approach special performances like opening nights and galas. Too many managers feel so stressed at this time of year they glide over these important decisions and lose the opportunity to press several important strategic levers.
And, of course, we must do all of this while completing the budget for next year. It is not appropriate to announce a season if the budget is not virtually completed. How do we know whether we can afford the art we are announcing? How can we develop appropriate ticket pricing schemes if we do not know the level of earned revenue we must attain? And how can we create appropriate special events if we are not aware of our fundraising targets?
So if your arts manager friends are looking particularly tired these days, give them a hug and a knowing smile. In a few months, their lives should return to their normal state of chaos.
For many arts organizations, raising money appears to be the most difficult and least predictable activity. So much so that board members will often suggest just about anything to reduce annual fundraising requirements, from cutting art, to slashing salaries, raising ticket prices or investing in unrelated business areas. The mystery surrounding fundraising has led many people, usually board members, to ask: What makes a good fundraising executive?
The answer is complicated.
Many people believe a good fundraiser is an out-going person who has good table manners, can charm donors and gives a good party.
And, indeed, socially adept people do have an easier time with certain aspects of the development job: making people feel welcome, connecting prospects with staff, artists and other donors, providing high levels of customer service, etc. I admire the ability of many of my colleagues who can make anyone feel comfortable and part of the organizational family. They are more than charming; they are intuitive, thoughtful and smart.
But I have also worked with highly skilled and successful development executives who are not particularly gracious or good in social situations. (I, myself, am essentially shy and like few things less than cocktail party banter with people I do not know. Even so, I have had a measure of fundraising success.)
These fundraisers have a solid command of the work of the organization and are able to make donors believe that their money is being put to good use. They may not win points for hosting a lovely lunch but they are considered smart, professional and responsible.
But whether fundraisers are ruled by their heads or their hearts, they all must be analytical and creative.
They need to be able to listen to donors and determine their interests and needs, to craft the appropriate approach to any given prospect, and to develop a package of projects and perquisites that will engage that particular donor. They must also be able to steward each donor, giving them such a positive, warm experience that they want to continue an association with the organization. They must truly appreciate that their main function is to build a large, growing, diversified family of supporters who will remain loyal to the institution through good times and bad.
This requires talent, intelligence... and introspection. Good fundraisers appreciate their own strengths and determine how to use other staff members, board members and artists to compensate for their weaknesses. I know I always seek to collaborate with those who are far more relaxed socially than I am. Few people have it all.
No fundraiser can work in a vacuum anyway. Strong fundraising results from an exciting artistic product supported by a strong marketing effort. Even the best fundraiser cannot raise money consistently for an organization that does inferior work.
Indeed, there is no, single best 'type' of fundraising executive, but when you find someone who can use their skills and talents to attract and captivate donors, hold on to them for all it's worth!
A fascinating article recently published in the L.A. Times revealed the results of a new study commissioned by the Evelyn and Walter Haas Jr. Fund that evaluated reasons why arts organizations and other not-for-profit institutions have problems meeting their fundraising goals. An important observation made by the authors of the study was that virtually half of development directors expect to search for new jobs within the next two years. One central reason offered for this high turnover rate is that development directors do not perceive that they have the full support of their organizations, including their bosses. The study concluded that fundraising success requires the involvement of everyone in the organization.
There is much to glean from this study but two points truly resonate:
1. It is not surprising that fundraising targets are not met when so many fundraisers expect to leave their positions. Fundraising is called development because we are trying to develop relationships with donors. The most generous funders are typically those who get to know our institutions, trust our people, and feel comfortable investing with us. These donors are the ones whose gifts will grow over time, will support major capital campaigns and will stay loyal during poor economic periods and through difficult situations. When the chief fundraiser leaves an organization, there is a discontinuity in donor relationships that can be very damaging. (That is one of the many reasons I suggest that others in the organization meet and work with donors - one can protect against someone leaving if there is more than one relationship formed between the donor and the institution.) If such a large proportion of our head fundraisers depart their organizations so often, one can imagine that donors are feeling very disconnected from the organizations they may support.
2. Fundraisers are entitled to feel abandoned when the entire organization does not appreciate their roles in making fundraising happen. While donors may form relationships with one or several executives, they are, most often, engaged by the work of the organization. In truth, every artist and educator plays a huge, de facto role in fundraising. But this role can be amplified (and there can be more resources for arts-making) when there is an explicit relationship formed between donor and artist. When donors get to know the artists, appreciate their passion and talent, and want to support their work, fundraising revenue can grow rapidly. Fundraisers must have the cooperation and support of their artists and the leaders of the organization must facilitate the formation of these relationships. But the members of the development department must do their part as well. They must appreciate that they are a conduit for these relationships and cannot feel like they 'own' all relationships with major donors.
I am hopeful this important study will raise many questions that encourage discussion and collaboration among executive directors, artistic directors and development directors. If so, we may see both fundraising revenue and the tenures of development directors increase markedly
It is official: I am a lame duck. My contract as President of the Kennedy Center expires at the end of next year and the board has just assembled a search committee to look for my successor. I am deeply grateful to have had the opportunity to lead this amazing institution and have enjoyed (almost) every minute of my tenure. But after 12 years as President, it is time for someone with a new and different vision to run the national cultural center. (I was meant to depart at the end of 2011 but I needed to stay to ensure that our affiliation with the Washington National Opera went smoothly. It has.)
I hope the Search Committee finds a remarkable person to run the Kennedy Center, someone who can take the institution to new places and can educate and entertain our audience in ways I could not even imagine.
But I would caution the members of this Committee (and any other search committee working in the arts today) not to ignore several key 'truths':
-- The health of any arts institution emerges from its programming. While board members searching for a new leader often believe that fundraising skill and experience are the keys to success, no one can raise funds for a boring institution for very long. I know that my stated enjoyment of fundraising has gotten me many jobs, but I know equally well that I have been lucky to work with organizations that did stellar work.
-- There is not one correct way to run an arts institution. The board should not be looking for 'another Michael Kaiser.' The search committee should be hoping to find someone who can tell a coherent story of their own that links programming, marketing and fundraising success.
-- The new leader must not alienate the remainder of the senior staff. The leader of every institution gets far too much of the credit when things go well. In fact, it takes an entire staff to make an arts institution function. One must be very careful that the new leader can work with those staff members who are most integral to the success of the organization. I have observed too many new leaders gut the senior staff and then fail. The organization loses not just the new leader but the strong staff who were critical to its success.
-- The ability to program well for a large, multi-genre arts organization like the Kennedy Center is about creating an exciting set of programs for each season. The chief executive functions as a portfolio manager, assembling programs that address many constituencies and prove attractive to ticket buyers and donors. It is not about having one or two good ideas -- it is about conceiving and assembling an annual package. The committee must test the ability of each serious candidate to create such a season.
I am confident that the Kennedy Center Search Committee will find a great new leader. I, for one, cannot wait to see how the institution grows and changes in the coming decade.
Eight months ago, the Miami City Ballet was a mess. The remarkable Edward Villella was beginning his last season as artistic director, the organization had run out of cash, its executive director had left and the survival of the institution was truly in doubt.
Recently I went to a board meeting of the organization where the new artistic director laid out her ambitious plans for next season and for the expansion of the school, the new executive director reviewed anticipated changes to marketing and fundraising strategies, a budget was approved for the next fiscal year without much fanfare and a marketing partnership with the Miami Heat was unveiled. Oh, and Nutcracker ticket sales were $150,000 higher than last year and an upcoming gala in Palm Beach had outsold last year and ticket sales for the next two sets of performances were outselling last year as well. Special gifts of $7 million had also been received.
And the New York Times
recently gave the company a great review. Alastair Macaulay wrote
, "It's always a delight to revisit the company; these dancers flood the auditorium with warmth, finesse and pride in their work."
There are many heroes in this epic drama: Ana Codina Barlick, the Chairman of the Board, has maintained her steadfast commitment to creating a sustainable institution. She is one of the best and most courageous board officers I have ever encountered. Several major funders, most notably the Knight Foundation, have stepped up to fund the turnaround plan. Lourdes Lopez, the new artistic director, has approached this challenge with grace, energy and talent and Dan Hagerty, the new executive director, has worked hard, despite great cash flow pressure, to change the narrative of the organization.
That is not to say that the turnaround is finished. Cash flow is still tight, the fundraising effort still needs a boost and marketing efforts must be expanded substantially. There are still many aspects of the organization's plan that must be implemented before the turnaround can be completed.
But the change in just a few months is extraordinary and illustrates one of the amazing aspects of turnarounds: the entire culture and mood of an organization can change in just a few months.
And this mood change is not simply cosmetic.
As the board and major donors become more optimistic, they also become far more willing to engage their friends and associates in the work of the organization. Good news definitely begets more good news in an arts turnaround.
That is why turnarounds can happen in just a year or two; we only need a few major gifts, an exciting artistic program, some good news to announce and a plan to build momentum.
Of course, without the remarkable dancers of Miami City Ballet, who were selected and trained by Edward, the turnaround could not have happened, and would not have been worth the effort.
But this story will have a happy ending and Miami will have a robust dance company to call its own.