"And the beat goes on………………….."
GIA - HOUSTON - DAY ONE:
Note: There is no way I can possibly cover all the material I absorbed in today's sessions and do justice to it all tonight. So, I am going to hit a couple of highlights and then come back later in the week and cover the rest. And that is likely to be my approach tomorrow as well. I also plan on a separate post on the GIA Preconference on the Unique Practice of Arts Grantmaking this weekend.
Session: Getting Beyond Breakeven 2.0: Exploring the Opportunities and the Limits of Making Investments Towards Change
"In 2009, TDC (Consulting) published Getting Beyond Breakeven, a study commissioned by the William Penn Foundation and the Pew Charitable Trusts, which reviewed the capitalization needs and challenges of arts and culture organizations in Philadelphia. The study found weak financial health despite strong financial literacy, and identified two potential reasons for the disconnect: 1) strategic plans ungrounded in market knowledge, and 2) a chaotic market for philanthropic dollars that does not always encourage behavior that leads to financial health. Five years later, TDC has conducted a follow up study" which has found:
- "Organizations remain financially weak (70% undercapitalized and negative available unrestricted net assets grew in the aggregate from negative $14 million in 2007 to negative $25 million in 2011).
- Competition between arts organizations (particularly for contributed dollars) intensified, caused by: i) a lack of organizations exiting the field, ii) a tendency towards growth (caused in part because "growth" became the default metric for success) especially among larger organizations, and iii) a net decline in paid audience attendance.
- The market is in transition - including generational shifts, donor motivational changes, foundation adjustments in approach and priorities. In 2007 these external market conditions were not considered important by the area's arts organizations in terms of organizational planning, whereas now the exact opposite is true.
- 90% of the organizations had a strategy to keep old and grow new audiences, but only 20% had the financial resources to pursue the strategy.
- Whereas in 2007 individual donors made up the biggest part of contributed income, in 2011 foundations had picked up the slack caused by the 2008 economic problems."
- "If we (or they) could only get to scale, our financial problems would be solved.
- Spending more on marketing means more people will come.
- We need to invest in more fundraising staff because we need to find more individual donors.
- If we invest more in the highest quality art and market it relentlessly, then our organization will thrive and grow."
The report's conclusion was that growth is not the goal in and of itself. Rather, when investing in growth that actually contributes to sustainability, "organizations and their supporters need to challenge their core assumptions and be relentlessly honest about their goals, what kind of investment it will take to actually achieve those goals, and whether those goals are achievable." The following questions, the report suggests, ought to be asked:
- What are we chasing when we invest in marketing or fundraising?
- What is the role of program growth in fueling mission and sustainability? How do we pay for more program investment and what are the revenue goals?
- How do answers change for organizations with different scales, business models and revenue dependencies?
- Where are the points where funder and organization priorities align?
- Shared knowledge base
- Shared identity
- Leadership and grassroots support
- Funding and support policies
- What is the shared goal?
- How is the knowledge base defined?
- What are the consensus approaches? What models are to be used?
- What infrastructure will prevail?
- Who owns / controls the field (and how is the "field" defined?
- What are the influencers: e.g., the changing ecology of the arts, the evolution of the participant's framework.
- In 1950 12% of respondents agreed with the statement: "I am an important person".
- In 1990 80% of respondents agreed with that statement.
- We have come to the point where experiences that cannot be captured and embodied in a "selfie" are not experiences worth having.
- The unavoidable media overload reduces compassion, empathy, moral reasoning and tolerance.
- There has been an aggregate increase in the number of hours the middle class works of 660 hour per year. So, many workers no longer take lunch breaks.
- There has been a decline in trust of everything from the medical profession to politicians to the media to business and beyond.
- The movement from digital back to vinyl albums in music.
- The return to favor of Black & White photography.
- The rise of serial episodes in television.
- The Slow food movement.
- authenticity - relationships, not transactions
- slowing down, not speeding things up
- conversations, not marketing or sales
- doing less, not more