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Yet another American symphony orchestra has suspended operations. The Napa Valley Symphony recently announced that it was laying off its entire staff and ceasing performances for the foreseeable future. In a statement to the local newspaper, the Symphony's chairman stated, "The board of the Napa Valley Symphony Association voted to suspend all operations and to explore the wisdom of dissolving. I expect a decision within the month -- there's too much that's unknown. We don't have all the answers. I'm not sure we even have all the questions."
This was an honest assessment of the situation facing the Napa Valley Symphony and so many other institutions. It was not unusual in today's difficult climate for all arts organizations, especially symphony orchestras which face high fixed costs and a difficulty attracting audiences.
What was remarkable to me was the next statement by the Chairman.
"We were dealing with the unforeseeable and the unforeseen."
Why was this innocuous statement so telling? Because from all accounts, the Napa Valley Symphony was funded, to a remarkable extent, by one individual. When this generous philanthropist was killed in a car crash last year and his estate was tied up in probate, the major source of funds for the symphony was cut off. (The same donor was the central funder to the theater where the symphony played; the theater has already closed its doors for the same reason.)
No arts organization can rely on simply one donor, no matter how generous. Donors die, lose their resources, lose interest, move away. When an arts organization can count only one or two or even a handful of major donors, it is always at risk.
It is seductive to have angels, people who are so engaged by the work of the organization that they are willing to give much or all of what is needed to support its mission. But this generosity can be a double-edged sword. It can reduce pressure on the organization to find a larger family of donors and can give the angel far too much power.
This is not dissimilar to what is happening now in Europe as central governments in England, France, Italy and Germany, not to mention Spain, Portugal and Greece, are not able to maintain the level of arts funding they have granted in decades past. As a result, the arts organizations in those countries, which were used to receiving up to 70 percent of their budgets from one government grant, are struggling. They did not create large, supportive families because they did not have to.
And now, like the Napa Valley Symphony, they are suffering. The Napa Valley Symphony was not dealing with the unforeseeable and the unforeseen; its demise was all too predictable.
And, unfortunately, there is no easy fix. One doesn't build a family quickly. It takes time to build relationships and it requires consistent artistic success, strong marketing and a helpful board.
Arts organizations with a handful of major donors take heed: use this largesse to spur new gifts; be grateful for the major donors, and be inspired to find new ones while you have the chance.
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| I have written before about the Kennedy Center's comprehensive arts education program: Any Given Child. This program assesses the arts education opportunities in a given community (offered by schools, arts organizations, community groups and others) and designs a comprehensive kindergarten through eighth grade sequence that utilizes all of these opportunities in a format consistent with the school curriculum in that community. It is a new approach that is affordable and gives each student (any given child) a less haphazard arts education than is available in most communities.
This is a relatively new program. I developed the concept in 2008, with support from the Ford Foundation, and executives from my able Education Department -- Darrell Ayers and Barbara Shepherd -- took the concept and ran with it. They began implementation in Sacramento, California just two years ago. Since Kevin Johnson, the dynamic mayor of Sacramento, agreed to make his city the first Any Given Child site, six other communities have adopted the program: Springfield, Missouri; Portland, Oregon; Tulsa, Oklahoma; Austin, Texas; Las Vegas, Nevada and Sarasota, Florida.
On a recent Sunday about 40 participants in the program from these seven cities met in Washington, D.C. to share their experiences to date: the challenges they face, the successes they have enjoyed, the opportunities for improving the program.
It is important to note that the participants came from the school systems, funders, arts organizations and local government -- the cluster of individuals required to introduce and nourish a comprehensive program like this one.
One challenge that is universally experienced is the shrinking pool of public funding for arts education. No one who works in arts education can ignore this reality. But the comprehensive nature of Any Given Child, the fact that every student is given equal access to an arts education, and the modest cost of the program, has allowed the arts educators in these seven communities to make a strong case for continued public funding.
Important participants in our meeting were local funders -- executives from private foundations -- who appreciate the impact that a systematic arts education can offer and have been generous investors in Any Given Child in their communities. In many cases, their early commitment to the program inspired other local funders to join in as well.
Several representatives from arts organizations were present as well. They understood that by placing their arts education offerings within a larger context, the students in their communities stood to benefit. It might be easier to operate in a vacuum but it is not as effective.
Watching these arts educators, arts leaders and arts funders work together was truly inspiring. Their commitment to their communities, their excitement to be part of a new national venture, and their willingness to share their knowledge indicated why they are so effective in this work.
In the coming years we hope to add many new cities to our Any Given Child community. Perhaps, just perhaps, we can develop the data to convince politicians that arts education is not frivolous but should be a central part of the education of all American children.
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I am often asked whether for-profit executives can make good not-for-profit executives and my response is always the same: there are many for-profit managers who could thrive in the not-for-profit world but they must understand the differences in mission and the differences in the way corporations and not-for-profits function.
Not-for-profit organizations are like large families. While some within the family may have more authority, the family as a whole only functions well when all members are reasonably happy and feel respected and engaged. A child can ruin the peace in a family if it is miserable; an unhappy faction within a not-for-profit can cause no end of damage, as well.
Too many board members of arts organizations do not fully comprehend this phenomenon. They do not appreciate that those in power must use that power wisely and must work to build harmony among many disparate people with differing ambitions all of whom contribute something to the well being of the organization.
When someone in authority -- a board chair or an executive or artistic director for example -- uses power unwisely, the entire organization can come to a screeching halt.
We have seen too many examples of this behavior in recent years. We have witnessed numerous boards threaten to shut down orchestras if the musicians do not open up their contract and accept lower pay and fewer weeks of work. We have seen the Miami City Ballet upended by the demands of a few board members that the company's founder, Edward Villella, retire.
In each case the family is torn apart by the actions of a few. Corporate CEOs can often make dramatic decisions on their own; that is true because everyone within the corporate family is being paid, often very well, to obey top management. Not-for-profit organizations, however, depend on the goodwill of many people, who are either volunteers or relatively poorly paid.
Huge changes in strategy must be made with substantial planning and forethought.
When not-for-profit leaders act like bullies, there is inevitably a long period of bad publicity, anger and resentment. When this anger becomes public, donors, volunteers and audience members start to look elsewhere. If you do not believe me, talk to the leadership of orchestras which have undergone substantial reductions in pay and work for their musicians and ask how happy the family is today.
While the family nature of not-for-profit organizations might seem like a liability, preventing rapid, decisive action, it is also a huge asset. During periods of achievement, family members bring friends and associates into the family, thereby providing new life and support for the organization. During times of challenge, engaged family members will rally around the organization and provide time and money and solace.
Those of us who love our work in the not-for-profit sector revel in the shared experiences with our family members.
But we also know we cannot act without keeping their feelings in mind.
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While most arts managers and board members don't turn to financial forecasts when they are looking for a lift, I must admit that I find them inspiring. I find possibilities for change, growth and renewal in projections for income and expenses.
Of course we in the not-for-profit world should never judge our success by the financial results we produce. Our missions relate to programming success, audiences reached and communities changed.
But when I create a financial plan as part of a strategic planning effort, I can see the impact of the plan in the way the numbers change over time. I can 'create' a believable new financial future for the organization.
I have been developing new financial plans for three organizations in recent weeks.
One of them needs to bolster its individual fundraising effort substantially to overcome current financial problems. I have no doubt it can. While many on the board and staff are skeptical when I discuss proposed strategies, I hope the financial plan I am creating gives them inspiration and motivation.
A second organization intends to increase its level of programming substantially and needs to find new sources of earned and contributed income to pay for is level of growth; the plan for this organization should produce all of the additional income required if it is implemented well.
And the third organization needs to find new earned income; it cannot continue to rely on growth in contributed income if it wants to maintain fiscal stability. This organization is starting a new for-profit business that should take the pressure off of its highly successful development effort that has been growing rapidly but is starting to reach diminishing returns.
In each case the financial forecasts for the future look radically different than the income statements for the past five years. And yet, in none of these instances are the forecasts simply wishes -- instead they emerge from the organization's strategic plans.
To me, these financial forecasts are the exclamation point of the strategic plans. They are a tangible demonstration that the strategies included in the plan have an impact.
Yet in too many plans for arts organizations, the words of the strategies do not match the music of the financial forecasts.
Proposed aggressive marketing, fundraising and board development strategies do not seem to result in commensurate changes to the expected fiscal profile of the organization. Major new initiatives are proposed yet the numbers rarely change by more than three or four percent per year.
This makes it hard to believe the organization truly believes its plan -- that there is no real conviction that a change in strategy will actually result in something. This makes the entire planning process seem pointless, at best, and dampens the motivation of arts organizations to pursue dramatic changes in strategy at worst.
Organizations that devote time and energy to developing strategic plans must have the courage to imagine truly different futures. And the financial forecasts that should end every plan should reveal one aspect of this new tomorrow.
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I had the great pleasure of visiting the Museum of Chinese in America in Chinatown in New York City. There is much to enjoy in the beautiful facility designed by Maya Lin (the co-chairman of its board) including the interesting, and remarkably diverse exhibitions and public programs. But as impressive an operation as it is, I was far more impressed by the way MOCA is funded.
Most culturally-specific arts organizations depend extensively on government and foundation funding. It is no secret that I worry deeply for these organizations since these two sources of funding are the most cyclical and also the most limited in number. An arts organization that depends on a few foundation grants and annual funding from one or two government agencies is going to be limited in size, unable to handle inflation adequately, and is subject to wide swings in funding.
Unfortunately, this is the fate of most African-American, Latino and Asian-American arts organizations in our nation. Yet these very same organizations are crucial elements in our national arts ecology; they educate young people, give access to the arts to underserved audiences and artists, and produce some of the most important artworks of our time.
For the past twenty years, since I arrived at the Alvin Ailey American Dance Theater, I have worked to change this funding paradigm, with limited success. Most arts organizations of color still have not been able to develop the individual donor bases that Eurocentric art organizations enjoy. These organizations typically raise 50-65% of their funds from individual donors, giving them a cushion against economic downturns and access to a potentially unlimited pool of potential donors. Organizations of color, however, typically receive only 6% of their funding from individuals.
Imagine my surprise (and delight), therefore, to learn that MOCA raises over half its funds from individual donors! Its wonderful interim director, Jessica Chao, its energetic young staff, and its dedicated board have done wonders to create an institution that can grow and prosper in a consistent manner. Not only do the board members and staff solicit funds from individuals, they also have created an astonishingly successful annual gala that raises over $1 million each year. This is not totally surprising; those organizations that build large individual donor bases are in a far better position to make their annual special events truly profitable.
The institution, like every arts institution in the nation, has challenges it must address. (And, like most arts organizations, appreciates its problems far more than it celebrates its successes.) But MOCA has created a foundation for its operations that will allow it to develop and prosper. I have no doubt that it will meet every challenge it faces and will continue to grow.
The Museum of Chinese in America provides a model and inspiration for all other organizations of color. While building an individual donor effort is not easy and takes time and discipline, it can be accomplished, even by a modestly-sized, culturally-specific museum. MOCA demonstrates that it is certainly worth the effort.
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I write occasionally about the large proportion of young people who are not interested in the arts. When I do so, I am often excoriated by my readers who are young, passionate about the arts and believe that I am out of touch with their generation.
I do stick to my conviction that far too many of our young people have not had access to the arts and, therefore, do not make the arts a part of their lives. I believe that older generations have failed these young people by reducing access to the arts in schools and, at best, delayed their opportunity to enjoy and benefit from arts participation. I spend a good deal of my time trying to remedy this situation; the Kennedy Center's new Millennials Project is one effort to do so.
But, of course, there is still a large segment of our younger population that does embrace the arts and are as passionate about them as anyone of my generation. In trying to lobby for access for all younger people, I am not intentionally minimizing their involvement or contributions to the arts.
I had an opportunity to witness younger people in action recently in Miami at the annual YoungArts week. YoungArts is a wonderful organization that provides life-changing opportunities for high school musicians, dancers, writers, etc. (I have had the great pleasure of serving as a consultant to YoungArts and am excited about their ambitious plans for the future.)
During YoungArts week, talented high school students have the opportunity to learn from world class experts (e.g., Robert Redford teaching a master class on filmmaking), to share experiences with their peers, and to create performances of their own. For many of them, this week represents the highlight of their high school years.
(YoungArts also produces an HBO series MASTERCLASS that features major artists like Plácido Domingo or Michael Tilson Thomas teaching younger students. There is also a teacher's guide for teachers in all subject areas to use these programs to teach about leadership, discipline and focus.)
Watching these young people perform is truly life-affirming for those of us who care deeply about the future of the arts in America. One recognizes that while not every child today has the opportunity to dance, act, sing or play an instrument, there will always be a group of extraordinary people who have a need to express themselves and the have ability to do so. We need to continue to provide vehicles for these young artists to develop their talents as well as a stage on which they can perform.
Nonetheless, I still want to make the arts accessible to every child and I still believe that those young people who have the opportunity to exercise their creative muscles will be better able to function in what is now a creative economy.
And I want to ensure that there are audiences in the future who can enjoy performances by those young artists I had the pleasure of seeing in Miami and the thousands more like them across the nation.
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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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