Sunday, July 23, 2017

Helicon Follow Up Study Shows Equity in Funding Has Actually Gotten Worse in the Last Five Years

Good morning.
"And the beat goes on............................"

In 2010, Holly Sidford published a study Funding Arts, Culture and Social Change that rocked the nonprofit arts world with the confirmation of what many in the field intuitively knew, and many more suspected: that the vast majority of funding from philanthropic sources, including foundations, individual donors and public agencies went to the largest (overwhelmingly euro-centric, white) urban cultural organizations with the biggest budgets, and that such disproportionate funding to those organizations that already had the most was at odds with, and unreflective of, the diverse demographic make-up of the country and the arts sector.  

The firestorm set off by this landmark report, sent the nonprofit arts into deep reflection, and out of that inward look came a robust and more honest than before discussion of structural racism, equity in general, the root causes of this inequity, and what might be done about it.  Over the past five years, the sector has moved to better understand inequity, structural racism, and institutional bias with trainings and widespread consideration of the issues.  Individual organizations and sub-sectors of the field have issued policy changes designed to identify inequity, root out the causes and make fundamental changes.  Those same groups have sought to promote increased diversity and to move towards a new equity paradigm that would begin to rectify the sad state of affairs the report brought home.  GIA and many of the national service organizations have led the charge with serious and substantial efforts to address the issue of inequity on all its fronts.

And now, Helicon Collaborative's update to their initial report:  Not Just Money: Equity Issues in Cultural Philanthropy has concluded that:

"despite important efforts by many leading foundations, funding overall has gotten less equitable, not more. This means that cultural philanthropy is not effectively — or equitably — supporting our evolving cultural landscape."

So apparently, despite all our best intentions and our good will efforts, not only have we failed to make even a slight dent in the inequity of funding disproportionately going to the big, white, rich urban cultural organizations - at the expense of the smaller and rural organizations, especially those serving people of color, people with disabilities and the LGBT community.  MORE of the total funding is now going to the largest cultural organizations, not less.  So far anyway, all the efforts to the contrary have not yielded any substantial or measurable change from the situation five years ago.  Indeed, from an equity standpoint, things are worse, not better.

Is it reasonable that after five years, we are not yet beyond the phase where we pay more attention to the issue, educate and talk among ourselves to move in the direction of a solution?  Or is that seemingly slow plodding about right?  Or is that delay unacceptable?  What is the next phase then, and on what timeline?

The report also noted that this reality appears systemic and is embedded at the local level as well as a national situation.  And thus even in diverse cities with a large culturally diverse population, and a substantial portion of the arts sector serving that group - still those populations and organizations get nowhere near an equitable portion of the total funding.

Of the ten cities the new report studied, only San Francisco achieved funding equity:

"The notable exception to the general patterns is San Francisco, where two decades of intentional and collaborative work to boost mid-sized and smaller cultural organizations and increase cultural equity — by both public sector funders and private foundations such as the Walter and Elise Haas Fund, James Irvine Foundation and Hewlett Foundation — has produced funding distribution patterns that more closely reflect the city’s demographic profile and the diversity of the local cultural sector. As a result of these intentional strategies, not only does San Francisco have more diverse nonprofit cultural groups per capita than other cities, those groups also receive a significantly larger share of arts foundation funding than their counterparts in the other urban areas we studied.
In San Francisco, approximately 32 percent of cultural groups have primary missions to serve communities of color, low-income communities, LGBTQ populations and disabled communities, and approximately 32 percent of arts foundation funding is allocated to such groups. (DataArts)"

But San Francisco is the exception. In consideration of the why and how of the national disappointing reality, the report notes that:

1.  The decision making process of foundation funding allocation is principally in the hands of those older, white, upper class individuals who have always held that power.  Even at the program level, there has been very little growth in diversity.

2.  As to individual donors, which category now constitutes a greater share of total arts funding than foundations, the report observes:

"because people with incomes over $100,000 are more than twice as likely to be white and urban than Black or Latino or rural, we can surmise that most of the high-end arts donors are white and living in cities. (U.S. Census).  We also know that individual giving in the arts heavily favors larger institutions. In the ten cities Helicon studied, individual donations to larger cultural organizations — on average — were six times greater than contributions to organizations of color and those serving lower-income communities. (DataArts)."

3.  The leadership of our cultural organizations also plays a role in funding allocation:

"These organizations have longstanding relationships with both individual donors and foundations (and sometimes overlapping board memberships), which help them attract and sustain generous funding for their work, but also influence donors’ views of what the cultural sector is and what warrants support. For these reasons, diversity in the leadership of larger cultural institutions is centrally important to achieving greater equity in cultural funding." 

4.   Corporate, government and board / trustee contributions all likewise disproportionately favor the larger, urban, white euro-centric arts organizations - likely for the same reasons.

So what do we do in the face of this challenge?

The report suggests that:

1.  "The status quo tends to perpetuate itself. Without specific goals for change and timelines to achieve them, current patterns will remain the same or further deteriorate. People tend to resist change but at least in some instances, what might look like resistance to doing things differently may be due to a lack of clarity about how to move forward."

Resistance to the idea of funding going not to your organization, but to another - even if for the best of reasons - is not surprising.  Organizations, like people, usually don't rush to embrace remedies to problems that may be at their expense.  The principle of survival trumps altruism and even principle itself in many cases.  I understand that focus and zeroing in on specific, concrete objectives may help to make it easier to move forward, but this isn't rocket science.  If 50% of the arts organizations are smaller, serving nominally underserved communities, then equity demands somewhere near half the money goes to them.  An under ten percent allocation to them is not equitable -- period.  So the question is then:  what formula for funding allocation is equitable, and how long do we need to successfully initiate that formula as the norm?  (And I am not necessarily suggesting we reduce the funding challenges to a formula - I am just suggesting that if we are serious about getting to equity, then we absolutely must move from the current reality, and do so sooner rather than later).

2.  We somehow get the wealthy donors to include equity funding in their giving strategies and provide leadership to move individual donors in general to expand their funding priorities.  The report suggests foundation can help educate this class of donor.

While there is strong evidence to suggest that we still live in a society in which racism continues to exist and which negatively impacts a broad cross section of our society, the issue of equity in funding for the arts may be more of a class issue than one of race per se.  The culture that silently works to perpetuate funding going to the largest, well heeled, euro-centric, white dominated urban cultural organizations is largely based on the good old boy network of wealth.  The nouveau riche aspire to join the ranks of the elite who serve on cultural boards, support the organizations and donate their wealth, not necessarily because they favor those organizations over the smaller, multi-cultural underserved organizations that are denied an equitable share of funding, but because they wish to network with those that may provide them access to the world that helps them maintain their wealth and status, and be a part of the elite group that control and run things.  And the reality of that universe is long standing.  It's a club that people want in, and there is a legacy with major cultural institutions that this is one of the rarefied entry points.  In some ways, it has almost nothing to do with the art, and everything to do with the social circles attached to the arts organization.

And that world, that mind-set exists in San Francisco as much as anywhere, yet in this city foundation leadership, concerted and coordinated efforts and the political will to do something about inequity in funding has made a difference.  Can that same changed attitude and resolve be replicated elsewhere.  Certainly it can.  Will it?  That's a much tougher question.

3.  We commit more to collaboration and working together to address the issue.

Collaboration and cooperation are not only a good idea, they are likely essential to making much progress.  But more important, and a likely necessary pre-requisite to working more together, is the will to make the changes.  That will has to come from decision makers.  I am not sure we have that will, at least not from top to bottom of our organizational structures.  And without that will, I seriously doubt a report five years from now will report a much different reality.

All three of these strategies are valuable, but one has to question whether any of them are likely to change the reality.

I think the Helicon report is certainly right on one critical point: It will take courageous leadership by key foundations and civic / cultural leaders of wealth and power to initiate the change and make sure it happens.  Someday, those on the bottom of the pyramid may acquire the wealth and power to force the change, but that day - much like the day when the country unifies on acceptance of more tolerant and embracing policies and practices, when political consensus on who we are as a people is apparent - is a long way off still.  In the meantime, progress is made by leaders with vision and courage and the belief in, and commitment to, doing the right thing.  That doesn't seem to be the current prevailing instinct.

And we must, it seems to me, focus on moving that leadership to act.  That must be the focus, otherwise we are spinning our wheels.

There's a line in an Eagles song:  "Things in this life change very slowly, if they ever change at all".  Unfortunately, this sad report is a confirmation of that sentiment.  I guess we take comfort in the knowledge that while change is slow, it is also likely inevitable.  The tragedy is that while inequity continues, people suffer, damages are done, and it is harder to move forward on multiple fronts.

One hopes that we won't have to wait for wealth to transfer to the people of those communities who now suffer the inequitable distribution of funds, because while over a long term, that kind of transfer will likely happen to one degree or another, it may take a long, long time.

Read the whole report, raise the issues locally, and work to unify our sector to move in the right direction - towards equity.  So that five years from now - equity in funding is more a reality.

Have a good week.

Don't Quit

Sunday, July 16, 2017

Giving Circles and the Arts

Good morning.
"And the beat goes on...................................."

A decade or so ago, Giving Circles (loose aggregations of small groups of people - more often than not friends or business colleagues - that pooled small amounts of money and, as a group, determined where to allocate the funds) started to gain prominence in philanthropy, and portended to grow to be a major factor in charitable giving.  These pools of funds allowed individuals to increase the impact of their otherwise limited giving, and, in the process, allowed people to become more involved in their communities and with each other.

Because of the attractiveness of involvement, networking and impact, the phenomenon grew, and today there are likely thousands of such groups of varying levels all around the country. There hasn't been substantial research on the numbers of such circles since their early launch, and, while there are a couple of aggregation groups that seek to identify some of these groups under common banners, those efforts are extremely limited.  So we don't exactly know how many of these groups exist, the dollar total of their giving, nor where the money substantially goes.  We don't know if that number is growing or not and to what extent, as we don't know how many new Circles launch each year, and how many existing Circles cease to be.   Moreover, all these Circles will be populated by different demographic groups and the age, education, income level, jobs, geographic location and more variables will play into how individual Circles operate.

Is the potential of Giving Circles in the tens or hundreds of millions of dollars, or more?  Will Giving Circles ever reach, or surpass, the giving of Crowdfunding, or foundations?  Open questions, the answers to which are important - for the whole nonprofit universe.

Very likely, there are some of these groups that allocate some of their funding to arts groups, though it is unlikely that the percentage of the total of such funds is very high.  If you have a dozen or so friends who, say, each contribute $1000 per year to a Giving Circle, perhaps one or more of those people favor support for the arts, and thus maybe a percentage of the total pot of that group might go to the arts in a given territory in any given year.

If Giving Circles represent a large (and maybe growing) potential source of funding (and that is an open question), the challenges are:  1) how do the arts (as a sector) make the case for some portion of these groups allocating their funding (or percentage thereof) to the arts (in general); and how do individual arts organizations work to actually become recipients of these kinds of gifts; and 2) Is it possible to create and sponsor new Giving Circles that give most, or all, of their funding to  the arts?

On the first issue, it is very hard for an individual arts organization to even identify where there are Giving Circles that might potentially consider them as recipients, let alone who such groups are.  Individual organizations simply don't have the resources or time to address that challenge.   And that information doesn't appear to be easily accessed.  What might be helpful would be for someone on a national level to tackle the problem of identifying existing Giving Circles and how they might be contacted.  That will remain difficult, as only those Giving Circles that have expanded their membership and the total of their funding pool to the point where they have affiliated with a Community Foundation as a donor advised fund may be easily identified (and that number has to be very small, particularly as growing to that level somewhat defeats the original intent of the Giving Circle phenomenon as being small, intimate and offering its members hands on participation in the consideration of which organizations to support).  It would take a major effort, even in siloed individual territories, to compile an accurate listing of Giving Circles.  Compounding the problem is the likelihood that Giving Circles may operate for a limited period of time, then cease to exist.  We just don't know.  The information would be valuable to have - and not just to the arts sector, but to the entire nonprofit universe, and it remains a major effort for the entire nonprofit community.

But to the extent that it is possible to begin to identify specific Giving Circles, or approach the field of such Circles in a given territory, we would still need an arts sector-wide strategy to facilitate approaching them, whereby we prepare case making materials that urge Circles to consider the value of supporting the arts, both to be used in a generic sense as we make the case to Circles in general, and as individual arts organizations might make the case to specific Circles.

On the second issue of how to encourage the formation of Giving Circles that are essentially exclusively vested in supporting the arts, we again need the case making materials, and, further, we need to develop strategies to recruit and enlist potential donors to launch such Circles -- either as generic supporters of the arts in general, or as supporters of specific individual arts organizations.  One place to start, might be within the lists of strong individual arts supporters that already anchor support locally for specific organizations.  We might be able to recruit some of these people to go the extra step of forming Giving Circles.  Or, we might approach various workplaces, civic groups, parent organizations, seniors, military veterans, hospitals or whatever.  Thus, if a tool-kit, with a power point presentation, bullet point material, open letters etc., touting the value of the arts, arts education, arts and seniors, arts and healing, arts and the military, and so on were available, arts groups in any given location could use that to encourage new Giving Circles to form that focused on the arts.  Fertile recruitment might exist in local PTA's, AARP chapters, Veterans groups, medical groups and hospitals and more.  Perhaps, local arts agencies could be the beneficiaries of grants that would allow them to make such forays into their local communities on behalf of local arts organizations.

To be sure, tapping into the Giving Circle wing of current philanthropy, will depend on a sector wide effort, first in identifying, then in the education of, extant Circles,  coupled with media coverage of consideration of arts specific Circles.  This will likely take at least regional, and more ideally, national funding support by the arts to tackle the challenge on a field wide basis, from which progress, development of materials, and best practices can help individual arts organizations make the case for their funding from Giving Circles.  It might be easier in the short run to promote, encourage and nurture the creation of new Giving Circles that focused primarily on the arts than in targeting existing Circles.   This kind of effort is really part of the larger effort to move public will towards the valuation of the arts across the board.

The point is that the Giving Circle wing of philanthropy may be substantial (though we don't know for sure), and that we need then to find ways to effectively tap into it for the future.  And if it is a substantial source of funding, the these questions are worth some consideration.

Have a nice week.

Don't Quit

Sunday, July 9, 2017

In Times of Deep Division and Turmoil, What is the Role of the Arts: Refuge or Resistance?

Good morning.
"And the beat goes on......................"

And Should You Market Towards One or the Other?

For some artists, creation is virtually always a political act and their art is directly related to what is happening in society.  They want to influence and impact with their art; to provoke, console, to relate. For others, their creation never relates to the politics of the times, rather it stands separate and independent in whatever statement it makes, or doesn't make.  They create their version of beauty for the beholder.

The decision belongs to each artist.

Audiences too may make a similar decision, with some people drawn to exhibits and performances that respond to the issues and feelings of the times, and others put off by art that carries a message of any kind relative to current events.  Some people find comfort, solace and strength in art that address how they are feeling towards those current events.  They are attracted to art and artists who can help them make sense of what seems hard to fathom.  Art can provide a refuge from the clamor and din of strident voices and warring factions, and that can be a powerful attraction.

For others, artists that address the turmoil are using art as a pulpit to lecture and preach and it amounts to propaganda, and irrespective of its level of excellence, it is off-putting and they want no part of it.  To them it only contributes to the divide, rather than helping to heal.

Again, the decision belongs to the audience.

But art organizations - presenters and exhibitors - have a similar decision to make in what they present and exhibit, and how they market their performances and exhibitions.  Does an organization elect to present art that more obviously than not seeks to provide either refuge or encourage resistance to its audience?  Does the organization present art that does one or the other, but consciously choose not to emphasize or highlight that aspect?  Some performances and some art will be more provocative and elicit more strident supporters or detractors,.  And in a no win situation, the decision not to make that decision is itself subject to criticism in some quarters as a sell-out.  

The question looms - from a strictly marketing perspective - are organizations better off marketing art as refuge or as resistance?  Does one approach stand a better chance of attracting a larger audience?  Or are they better off not considering the issue or making a conscious choice in their approach to marketing?  Or at least not making a point of it?  And do they know their audiences well enough to make the right decision?

Any decision on the marketing question, is likely to be based, in large part, on an organization's understanding and appreciation of its own audience, their preferences and their mind-sets.  Marketing seeks to increase audience size and share and is directly related to financials, and so whether or not to characterize offerings in troubled times as providing refuge or offering the chance for resistance (or purposefully doing neither) will depend on the belief that with certain audience segments, such characterization, one way or another, will increase ticket sales or deplete them.  That decision may be more accurate if based on some data, if data is available, but it may also be a decision that might more properly be governed not by standard marketing considerations, but by the decision aligning with the organization's mission and vision.

The easiest and safest path is, of course, not to characterize either the content of the offerings or the intent of programs in any way - neither as meant to console nor as a call to action (whatever that action may be).  Yet that may be avoiding an important decision the organization should not be avoiding.  Thus the whole decision may be a moral one for the organization on one hand, or a purely practical decision on the other.

And whose decision is this?  The executives, the staff, the Board or the organization's ecosystem community?

The questions seem to be worth asking, even if there are no right or wrong answers.  By asking, the organization may learn something about itself and come to understand both the art it is presenting and the audience it attracts.  That may be valuable information.

Have a great week.

Don't Quit

Sunday, July 2, 2017

Disruptive Innovation

Good morning.
"And the beat goes on.................."

In an article by Greg Satell in the Harvard Business Review on innovation he notes:

"...every innovation strategy fails eventually, because innovation is, at its core, about solving problems — and there are as many ways to innovate as there are types of problems to solve. There is no one “true” path to innovation.
Yet all too often, organizations act as if there is. They lock themselves into one type of strategy and say, “This is how we innovate.” It works for a while, but eventually it catches up with them. They find themselves locked into a set of solutions that don’t fit the problems they need to solve. Essentially, they become square-peg companies in a round-hole world and lose relevance."

He goes on to describe four types of innovation:

  1. Sustaining innovation:  Most innovation happens here, because most of the time we are seeking to get better at what we’re already doing. We want to improve existing capabilities in existing markets, and we have a pretty clear idea of what problems need to be solved and what skill domains are required to solve them.
  2. Breakthrough innovation:  Sometimes, as was the case with the example of detecting pollutants underwater, we run into a well-defined problem that’s just devilishly hard to solve. In cases like these, we need to explore unconventional skill domains.
  3. Disruptive innovation
  4. Basic research 
It is the third category that caught my attention.

"When HBS professor Clayton Christensen introduced the concept of disruptive innovation in his book The Innovator’s Dilemma, it was a revelation. In his study of why good firms fail, he found that what is normally considered best practice — listening to customers, investing in continuous improvement, and focusing on the bottom line — can be lethal in some situations.

In a nutshell, what he discovered is that when the basis of competition changes, because of technological shifts or other changes in the marketplace, companies can find themselves getting better and better at things people want less and less. When that happens, innovating your products won’t help — you have to innovate your business model."

And I wonder if that might not apply to our sector and our efforts to stem the tide of audience decline, and even public valuation.  I think it may be possible that we are getting better and better at things people want less and less. 

While we have made some strides in trying to innovate in response to the challenges of high tech and other changes in the marketplace (by, for example, experimenting with other delivery forms of our performances and exhibitions), we have largely kept at improving what we have long done.  And despite the attempts to innovate in response to the challenges by continuing to improve what we do, that may not be innovation at all.  What we may need is innovation that has more to do with our business model than innovation related to our core offerings.  The offerings may not be the entirety of the problem.  We may need to disrupt our whole approach to innovation.

Innovation in changing our business model is, of course, more difficult than innovation in changing our offerings or how they are delivered, in part because there are government and other constraints on the nonprofit model itself.  But therein may lie the crux of the challenge to how we innovate.

Have a great week.

Don't Quit