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Several weeks ago I read in a British publication an article about the reasons corporations support arts organizations. The central message of the piece was that corporations support the arts because they benefit from the reflected glory of the arts organization. When the corporation is visibly linked to an organization that is known to produce important art, the corporate brand benefits.
What interested me about the article was how trite it was; the notion that corporations like to be associated with high quality arts events is not new. Every arts manager or student of arts management in this country knows this.
In fact I remember doing an interview on television in the mid-1990s on the same topic. My mother called me after it aired concerned that I would never receive another job (and was liable to be fired from the one I had) because no corporation would sponsor my organization if I was so blatant about their reasons for their support.
The fact that this article was being written some 15 years later in England is an indication of the relative lack of sophistication of fundraising knowledge outside of the United States.
This is not necessarily something of which to be proud. The reason that we have far deeper knowledge of fundraising relates directly to the lack of government support for the arts in our nation. (We can trace the separation of art and state in America to the Puritans who believed that music and dance were evil.) If we were going to have arts in America (or private schools, universities and hospitals) we needed to attract private funding.
As country after country announces substantial cuts in government arts funding -- and the economic challenges the European Union nations are now facing should only hasten this trend there -- the need to develop more sophisticated knowledge of fundraising techniques is only going to grow.
I know this is one central reason why American arts managers are constantly being asked to speak and teach in Europe and Asia and why several have been asked to move to other nations to run important arts organizations.
I expect acceleration in this activity. I would not be surprised to see a large corps of younger (and older) American arts managers moving overseas in the coming ten years.
In fact, if I were younger (and had far better language skills) I would seriously consider building an arts management career overseas.
The opportunity to be a fundraising pioneer in China, Italy, Russia or the Arab world must be a great one and, no doubt, there will be many American arts managers who grab hold of it.
Having had the chance to work and consult abroad, I know that what one learns is as important as what one teaches. The possibilities of experiencing life with far more government funding, of introducing approaches for donor engagement and experiencing the diversity of great art are not to be undervalued.
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| It makes no sense to me that the arts are not embraced more emphatically by politicians these days.
I understand that the country was founded by Puritans who believed that music and dance were evil. That has led to a separation of art and state and a far lower direct subsidy for the arts than in many other nations.
I also understand that there is a deep fear, even contempt, for all that is considered elitist in this nation (until one's child turns out to be talented -- then the elitist tag magically disappears) and that many people mistakenly believe that arts organizations primarily serve the elite. (These people should visit the hundreds of community arts organizations, arts organizations of color, rural arts organizations and grassroots arts organizations that I get to visit every year.)
But at a time when unemployment is the key political issue and when virtually everyone in politics is struggling to find ways to reduce the ranks of the unemployed, why doesn't some smart politician realize that the arts are one way to help solve this problem?
No, I am not talking about the arts employing more people, though that would be a wonderful thing. (Franklin Roosevelt's WPA comes to mind.)
I am talking about the way the arts can help train people to be creative thinkers and entrepreneurs.
Virtually every economist agrees that for the United States to thrive, we need to reignite the spirit of creativity and invention that formed the foundation of the major corporations that now employ so many of us.
That is one rationale for encouraging small businesses -- new products and inventions are often developed by small entrepreneurial ventures.
But successful small ventures can grow to become big economic engines and major employers. Google, for instance, which started as recently as 1998, now employs over 30,000 people!
But economists are also lamenting the dearth of creative entrepreneurs. Who is going to be the next Bill Gates or Steve Jobs or Sergey Brin? How do we continue to be the innovative leader of the world as so many countries pass us in test scores?
That is where the arts come in.
Who better to train young people to think creatively, to exercise their own unique ways of thinking than we in the arts? The success of arts organizations and artists depends on the ability of people to be creative and make something new.
I am convinced that if all children were able to partake in a consistent arts education, we would create a larger group of innovators who would become the corporate leaders of tomorrow.
By allowing children to exercise their creative muscles, by encouraging them to think outside the box, by allowing them to invent, we must be abetting their ability to innovate with confidence as they grow older.
No, it isn't a short-term fix. Installing meaningful arts education programming takes time and doing, so will not reduce unemployment before the presidential election.
But it could be a very low-cost approach that leads to huge long-term benefits.
Isn't there one serious politician out there who agrees with me?
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Last night the Kennedy Center production of Follies closed on Broadway. Follies, a musical by James Goldman and Stephen Sondheim, tells the story of a reunion of chorus girls and features one of the greatest scores ever written for a Broadway musical. Our production received strong reviews, led to the recording of a cast album and will be re-mounted in Los Angeles at the Ahmanson Theater this Spring.
While the production did not recoup its full investment on Broadway, it did far better financially than I had planned.
It also brought more visibility to the Kennedy Center than any other single production in the Center's history.
Time will tell if this visibility contributes to the fiscal health of the Kennedy Center. But for me, Follies is representative of the large-scale, ambitious, risky project that arts organizations need to produce if they are to capture the imagination of new and diverse funders and audience members.
It also demonstrates the benefits of long-term artistic planning. We decided to produce Follies in 2006 - a full five years before the production was mounted at the Kennedy Center. This gave us the time needed to assemble an artistic team and a cast. It also gave us time to find a group of donors who would support this large, expensive project.
The box office success of the show in DC, coupled with other fundraising and ticket sales success, provided the resources needed to bring the show to Broadway where it received stellar notices.
There have been dozens of national news stories about Follies, about the subsequent recording and about our impending tour to Los Angeles.
We have made sure that our donors know about this production and its success. And over 200,000 people will have had an opportunity to see the show in New York (not to mention the 48,000 who saw it in Washington.) Just the signage in front of the Marriott Marquis Theater in New York City (with 'Direct from the Kennedy Center' prominently displayed) reached hundreds of thousands more people.
No one production creates lasting acclaim for any arts organization and Follies did not change the history of the Kennedy Center, but one or two major events a year, over a course of years, creates the impression of an interesting, vibrant arts organization. (Of course not every production can be as risky, large or expensive; but not every production has to be.)
This can only help future ticket sales and fundraising, and provides insurance against an unsuccessful production or even season.
But there is an important corollary benefit: when an arts organization has success with a high visibility project, more important artists are willing to collaborate on future projects. I am convinced that one important legacy of Follies will be that theater artists of stature are increasingly willing to come to Washington to work. This will make our work better, more visible and far more likely to attract support.
This is a lasting benefit that cannot be overestimated.
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I spend a great deal of time writing about the imperative for arts organizations to focus on revenue. Adding revenue allows arts organizations to pursue their missions and meet financial obligations.
Yet, unfortunately, it is far easier for boards and staffs to concentrate on expense control as a solution when money is tight.
This is understandable: limiting expenses seems so much more controllable than searching for new revenue especially when the economy sours and many people question whether additional earned and contributed income can be achieved. In fact, I have observed that boards will do just about anything to reduce the pressure on fundraising even if it means reducing the ability of the organization to pursue its mission.
Raising more revenue is a much healthier and mission-driven approach to solving cash problems. But this does not mean it is the only approach that should be pursued.
One important technique for cash-strapped organizations is developing a payables strategy.
Most troubled arts organizations exert one form of payables control: they simply don't pay their bills on time. But there are more sophisticated tools available for managing payables and every arts organization that is facing cash constraints (and many are in this economic climate) should, at least, explore them.
The basic premise when approaching a mounting pile of payables is that almost no one benefits when an arts organization goes bankrupt, especially creditors. Because the liquidation value of most arts organizations is so low, creditors face losing everything they are owed in bankruptcy.
So developing an extended payout plan is almost always a palatable option for creditors, as long as the payout plan is believable.
I also seek forgiveness of debt wherever possible. When I arrived at American Ballet Theatre in 1995 we owed $5.5 million dollars to a variety of creditors. I asked my secretary Rhoda Oster to approach every vendor to whom we owed money. In most cases the debts were small and so old that the artists had written them off. Rhoda achieved almost $250,000 of forgiveness.
It is also essential not to use all the cash on hand to pay off old payables unless it is essential to do so and, especially not to pay the squeakiest wheel first simply because they complain. Prioritize your debts based on whose services you need the most, not who screams the loudest.
Many arts organizations use a large emergency grant to pay off as much as possible as soon as possible and then find themselves in another cash bind. The longer the cash emergency lasts, the harder it is to find donors to make emergency grants.
I prefer to keep money on hand and only pay as much as is necessary.
Reducing payables is an incremental task; shrinking the payables stack every month indicates a successful turnaround.
Achieving a payables plan with each vendor can only be achieved if you are communicating with vendors. Too many organizations refuse to answer vendor calls (because they can be so unpleasant) and provide no information about when payments may be forthcoming. This simply angers the vendors and makes it harder to come to a longer-term solution.
And finally, as with all aspects of fixing a troubled organization, celebrate successes. When the entire organization celebrates the shrinking level of vendor debt, everyone becomes more confident that solvency can be achieved.
And this makes it far easier to get to the vital task of building revenue!
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I have written before of the work my colleague, Brett Egan, and I are doing in Muscat, Oman where we are helping manage the inauguration of the Royal Opera House Muscat.
The opera house is an astonishingly beautiful venue which has already hosted productions of Turandot and Carmen, performances by Plácido Domingo, Renée Fleming, Yo-Yo Ma, Christoph Eschenbach, American Ballet Theatre and La Scala Ballet, amongst other attractions.
Two weeks ago we announced the season for this January through March, a mix of Western, Eastern, African and, of course, Arab art that fulfills the institution's mission of being a place where all cultures can be enjoyed.
I was particularly taken with the remarkable accomplishment of this institution sitting at several performances of Swan Lake by the Mariinsky Ballet last week. The first response of many when I told them I would spend Christmas and New Years watching Swan Lake in Muscat was, "Who will come to see it there?"
The answer is simply: anyone who can get a ticket. Every one of the five performances was sold out.
The audience was filled with a diverse group that every American arts organization would envy. Not surprisingly, there were many expatriates who make their homes in Oman or the United Arab Emirates, not a few of them with their children. One could hear French, Italian, German, and English accents in abundance.
But I was struck by the number of Omanis in the audience -- both those who had already experienced ballet and those for whom this was a first experience with a tutu. There were also a fair number of Indians; India, after all, is just a short plane trip away from Muscat and many Indians live in Oman.
There was a genuine sense of excitement about experiencing something new and about visiting such a glorious new building. And while Act I of Swan Lake seemed to perplex many in the audience (something common to audiences worldwide!) by the end of Act II, the 'white act', the audience was swept away. There were gasps at the beauty of the White Swan Pas de Deux, appreciation for the magnificent corps de ballet and the inevitable applause for the four cygnets.
Virtually no one left during either intermission. The entire audience stayed for the three hour performance and stood and cheered at the end. (It was interesting to watch the audience grow more and more comfortable with applauding after each solo or group number; I have learned from running a few ballet companies that this applause is crucial -- it gives the dancers time to catch their breath.)
Such an experience reminds me that there is truly no Eastern art or Western art or Asian art, etc. There is only art. And great art has the power to move us because great artists speak to us no matter what the language.
It was a great holiday week.
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| Arts management is still a very young field. Thirty years ago there were very few professional arts managers, university programs were few and far between and virtually nothing had been written about the tenets of the field. Today there is still not a solid body of arts management theory though there is far more written and many undergraduate- and graduate-level courses in the field are being offered. This does not mean that there aren't very accomplished arts managers who are leading great orchestras, dance companies, theater companies and more. In fact, I am continually astonished by the talent and creativity of arts leaders, providing strong service to the community while maintaining fiscal stability. I have spent the better part of thirty years trying to learn about the best in arts management practices and I frequently write about specific leaders and organizations that are doing great work; I hope these stories of accomplishment are inspiring. But the pool of organizations I know and work with is severely limited. I recently received an unsolicited email from Ted Pappas at the Pittsburgh Public Theater, a regional theater company that has been in the black for eight consecutive seasons. The company, fully unionized, gives 240 performances a year and has not one penny of debt! The work is adventuresome and the audiences are large; in fact, the budget of PPT has grown to over $6 million. When I read this email, I realized that I need to visit Mr. Pappas and learn more about the way he and his colleagues accomplish this feat. I am sure there is much to learn. This consistent level of success is never an accident. This got me thinking. How many other PPTs are out there? Who else has a compelling story of service to their community matched by strong administrative capabilities? I invite you to write to me at kaiser@kennedy-center.org. I want to hear about the work you do and the way you do it. I want to know about the nature of your performances, exhibitions, classes and publications and the way you plan, market, find resources and manage your board, staff and volunteers. And don't be surprised if your story appears in a future blog or book or if I turn up on your doorstep one day. I promise it will not be unannounced! In fact, I am fully committed to launching a learning tour in the coming year of the nation's best-managed arts organizations. I am convinced that great theory can be gleaned from great practice. Observing the way the best arts managers do their work will, at least, illuminate the best practices in our field and, at best, will lead to a far richer body of arts management theory. I know I have much to learn (many of my readers indicate by their comments I know exactly nothing at all!) and I am anxious to learn from the best. I can't wait to hear from you. Happy New Year! |
| The holiday season is a time for giving and getting gifts. This is what I would like to receive this year: 1. An online 'fact check' capability that mirrors the spell check function. I am a passionate believer in the power of the Internet to benefit the arts (and the rest of the world) but there are so many incorrect statements of 'fact' that simply mislead people. Wouldn't it be great if all online documents came with warnings about statements that simply are not true and the statements that were simply wrong were not stored on-line for posterity? 2. A cure for what is ailing the entire American orchestra industry. I know I am not smart enough to figure it out but there must be some answer to the problems that seem to be affecting virtually every orchestra in our nation: smaller audiences, lower donations, pressure to reduce numbers of musicians and services and benefits. We are losing so many orchestras that provide important service to their communities and others are being forced to reduce their number of performances and the size of their education programs. Please, someone, develop a cure! 3. More attention to serious music, theater and dance on PBS. Support for public television seems to be eroding. I have to believe this is a direct result of a dearth of strong arts programming. We need our public television stations to broadcast the nation's best performances regardless of where they are produced. Increasing arts presence on television would be a huge service and would attract a larger viewer base that is used to making contributions to the organizations they care about. Perhaps, additional arts programming would allow PBS to raise the funding it needs. 4. A serious discussion about the power of arts education by senior government officials. If our economy is going to become robust in the long-term we need to think about the way we are going to develop the next generation of creative thinkers. The arts can play a major role in this endeavor. We need the leaders of the Department of Education, the National Endowment for the Arts, the National Endowment for the Humanities and the relevant leaders of Congress to discuss practical ways arts education can help the nation. 5. Greater public appreciation for the work of grass-roots arts organizations which provide education, inspiration and entertainment to the underserved and provide access for new audiences and emerging artists. 6. Boards, staffs and artists of arts organizations to reduce the time spent discussing ways to cut spending and increase the time spent discussing ways to increase revenue. There are few problems faced by most arts organizations that could not be solved if revenue were increased. If we want a healthy arts ecology and far happier and more productive relationships within our organizations, it is time to focus on revenue. I appreciate that this is a long and ambitious list. Some might say I am greedy to want all of this in one year. But imagine what an amazing new year it would be if I got all of my wishes!
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Those of us who work in the arts are experiencing a perfect storm: a long, deep recession that has reduced contributions, ticket sales and taxed the good will of board members and other supporters, technological advances that provide new forms of entertainment at virtually no cost, and the diminution of arts education in the public schools that has put future audiences in jeopardy.
While this recession is certainly having an impact, I believe it gets a disproportionate share of the blame for the problems facing most arts organizations. The other challenges pose as much, if not more, of a problem.
Why is this relevant?
Because people who think that the arts ecology will return to what it was when the recession finally ends are setting themselves up for a major disappointment. And those arts managers and board members who do not prepare for a new world order are not acting in the best interests of their organizations.
The arts world is changing forever.
The separation between the 'haves' and the 'have nots' is going to widen in the future. Some organizations are going to develop exciting art, market their art well and build a loyal cadre of ticket buyers and donors.
Many others are going to continue to create undistinguished art, pursue anemic marketing efforts, overtax a few loyal donors and continue to try to save their way to health by cutting costs at every turn.
The problem for this latter group is that they will eventually save their way to sickness by producing art that does not compete with other forms of entertainment, losing their loyal donors and audience members.
This should not be read to mean that only large arts organizations will survive. There will always be new, start-up arts organizations because artists are always going to need to create. And some (hopefully, many) of these new organizations will do work that is so compelling that they can attract large families of their own.
Conversely, we are already witnessing many large organizations that are doing such a poor job of managing their resources that they are beginning to fail.
Rather than just a few large organizations serving a broader geographic base, I believe we will see a mix of large, mid-sized and new, small ones populating our arts ecology.
But, unfortunately, it will not just be artistic quality alone that determines which organizations survive. Successful organizations will create important art but they will also have skilled managers who can do the marketing, fundraising and board development required to create a substantial revenue flow.
That is unfortunate. One wishes that every arts organization that produces interesting art could survive and thrive, but I doubt this will obtain.
Arts managers and board members must prepare for this new world order by ensuring that their organizations have the management skills needed, and arts funders must ensure that enough training is available to create knowledgeable board and staff members.
In the end, I am an optimist. I believe that if we devote more attention to these requirements for success today, we can create a thriving arts ecology in the future.
But we had better take positive action and not wait for a recovering economy to save us.
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| Anyone who knows me knows I plan everything. Everything. I don't like surprise parties. I don't like to be asked to make impromptu speeches. I don't like to learn about problems from my staff after the fact.
While this lack of spontaneity perhaps is a personal liability, I do believe it has helped the organizations I have managed. I believe arts organizations need to plan so that we don't waste anything. We do not have a dollar or a minute to spare. And we cannot be arguing over a project when we are working to complete it. Our path must be clear from the outset.
But lately, as I work with dozens of arts organizations that are creating strategic plans I have come to believe that planning is also a very beneficial form of institutional therapy.
Planning uncovers layers of anxieties, resentments and broken dreams that reside with board members and staff members alike. These hidden (or not so hidden) feelings can hinder strong, honest communication within an organization exactly as they corrode productive relations within a family.
This is especially true for organizations that foster low levels of staff or board turnover; the longer a cohort stays together, the more likely long-seated resentments will develop that affect communal spirit and action.
Planning helps reveal these underlying tensions but it does more. Since planning focuses on a future, not necessarily bound by the specific tensions of today, it allows for a positive healthy resolution that puts teams back together.
Two examples:
1. A regional orchestra has survived a deeply divisive period when the musicians and administrative staff have seen their salaries and benefits reduced substantially. While the planning process has not healed all wounds, it has allowed all sides to move on, focusing on the future and how artistic success can lead to fiscal success which can eventually lead back to full salaries and benefits for all.
2. A museum in the throes of fiscal turmoil has been forced to reduce the resources available to everyone within the organization. Like many troubled organizations, each department started hoarding -- everything from paper clips to interns. The lack of collaboration that resulted made it more difficult for the museum to recover. The planning process revealed how the organization could reallocate funds to allow for more healthy growth and could foster more cooperation among the artistic, marketing and development teams.
These examples are by no means unique. When I sit down, as a consultant or a manager, with board and staff members in the planning process, I almost always hear a great deal of unburdening. And, invariably, when we are finished, I am told, "I feel so much better -- that was like a trip to a therapist."
There is nothing like escaping from present day turmoil and focusing on the future to realign one's thinking.
If your organization is suffering, try planning! You may find that things seem a lot brighter. And when we are happier with our prospects, this radiates to our ticket buyers, donors, board members and the press. |
| I am always amused (disturbed?) when someone attached to a not-for-profit arts organization (usually a board or staff member) rationalizes an annual deficit with: "Every opera company/symphony/ballet company has a deficit."
Tell that to the Oregon Symphony, which has been in the black two years in a row. As reported in an illuminating article by Anne Adams in the Portland Monthly, the Symphony earned a surplus of over $190,000 on an annual budget of $13.9 million during the 2010/11 season.
Most interesting to me was the statement by Symphony President Elaine Calder, "For the second year in a row revenues have exceeded expenses, despite the additional cost of taking the orchestra to New York's Spring for Music festival and making a recording of the Carnegie program."
The Carnegie program did not feature 19th century European chestnuts. It included Ives' The Unanswered Question, Adams' The Wound Dresser, Britten's Sinfonia da Requiem and Vaughan Williams' Symphony No. 4. (It was recorded on the PentaTone label.)
So how can a symphony orchestra earn a surplus performing less than standard works, touring to New York, and making recordings? I would like to hear an explanation from all of the board members of symphony orchestras (and opera companies and ballet companies...) who are convinced that the only way to attain fiscal health is to cut salaries, eliminate touring, scotch special projects like recordings and reduce the size of the orchestra.
And I would love to hear from a board member in Charleston who said to me after my Arts in Crisis tour that "your idea that exciting art and big projects create fiscal success may work in New York City but they don't work in mid-sized cities." He must mean this approach would work in a megalopolis like Portland, Oregon but not a hamlet like Charleston, South Carolina.
I am afraid NOT every arts organization has a deficit. That is simply not true. And it is dangerous logic. When I arrived at the Kennedy Center in January 2001 we were one quarter through our fiscal year. I was told that we were projecting a deficit for the year but, "as long as it is under a million dollars the Finance Committee says it is OK." It might have been 'OK' to the Finance Committee but a decade of 'OK' operating deficits had leached the cash out of the organization and we could not pay our bills on time.
When an organization accepts deficits, they are placing themselves in a precarious situation. Fortunately, the Kennedy Center was able to right the ship and earn surpluses that created a cash reserve. But had we suffered one or two unexpected losses in 2001 or 2002 we would have faced a difficult situation.
In the challenging economic times we live in, it is especially important to protect our organizations by insisting on earning surpluses and conserving cash. Even the Oregon Symphony saw a modest decline in unearned income last year; but its focus on important programming and its firm fiscal management meant that the organization did not suffer as a result.
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