Sounds Good, But Not So Easy

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

Economies of Scale:
Years ago there was talk about mergers and acquisitions in the nonprofit arts field, and some discussion about how that borrowed business approach might be replicated in our sector as a way to reform our business model.  Alas, it turned out that the unique nature of art and thus of each arts organization did not lend itself to combining forces so easily.

More recently, there has been renewed discussion of figuring out ways to share certain business costs thus saving money for cash strapped organizations - and, again, bringing an outdated business model closer to something more efficient and functional.  But so far, we haven't done much more the broach the subject - with virtually no talk about specifics.

Currently, we have separate arts organizations across all disciplines - of varying budget size, staffing and fundraising capacity.  Each of these organizations share a very similar  organizational hierarchy - including an Executive Director, Finance person, Development  Directors, Marketing people, Project Managers, and various support staff people (not counting artistic people).  Larger organizations have departments for the above, mid-sized organizations have single people doing each task, and in smaller organizations, people wear multiple hats.

On the expense side, personnel costs (including payroll taxes and health care (if any) account for the largest line item, followed by rent and utilities, marketing and advertising (including not insubstantial printing costs), development costs, and general operating expenses.  Income and revenue vary widely.

So exactly where might organizations form co-ops and share some of these costs, realizing that the unique nature of each arts discipline and organization very likely demands de-centralized authority and decision making?

Let's take them individually:
1. Personnel costs:

• It is difficult to see how executive decision making across several organizations can be centralized.  And prior isolated experiments in outsourcing marketing, publicity and even fundraising tasks has been universally disappointing.  While organizations can share ideas, best practices and other ways to be more productive, sharing personnel seems fraught with complexities and hardly something many would even consider.

• Health care costs (to the extent it is offered at all) can, on the other hand, very likely drop IF we use the power of numbers as the bargaining chip.  Some of that (though not nearly enough) is already going on and private sector companies have stepped into the breach to provide the middle man 'organizer' role.  Doubtless, concerted effort could yield an even better approach.

2.  Finance:

• Certainly accounting and bookkeeping functions can be outsourced, and again, to the extent local or regional collaborative efforts could likely get off the ground, even better deals than might be had.

• Conversion of unused municipal facilities that could provide low cost office space to nonprofit arts groups might lower rent costs, but getting from ground zero to occupancy would require concerted (and time consuming) political engagement locally and the spate of bureaucratic hurdles that would need to be gotten over would be daunting to say the least.  While the current real estate marketplace might be an ideal time to acquire property, ownership of dedicated private sector office space exclusively for (shared) nonprofit arts groups would take considerable capital outlay, the source of which remains problematic.  Collaborative efforts to negotiate more favorable rent terms for multiple tenants is seemingly a potentially fruitful area to explore, yet finding the right (and unencumbered and thus available organizations to participate in such a cooperative enterprise) would not be easy.   

• For the most part, we already have access to discounts on basic supplies, equipment, and communications (IT) expenses and thus further meaningful savings in this area won't likely justify the effort to try for more.

3.  Marketing:

• Advertising:  The differences (and even unpredictability) of performance schedules, the diversity of extent and potential audiences, the uniqueness of artistic offerings, as well as fundamental differences in philosophy, and much more, complicate even simplistic attempts at the most rudimentary cooperative / collaborative marketing efforts.  Still, this is one area where the economy of scale and the negotiating power of our numbers  makes much, much more possible - though any such efforts would require not only a lot of leg work, but (perhaps more importantly) considerably more trust in each other than we currently seem to have banked.  Whether the purchase of bloc online or print news space, billboards, radio or television time or otherwise, we could conceivably get a lot more bang for our buck if we were organized.

• Print:  A long time ago, I suggested that just in California - if we (the arts) were to open our own state of the art (no pun intended) printing facility we could probably produce the highest quality work (posters, brochures, banners et. al.) for a fraction of what we pay now in the aggregate.  Online applications would make it easy to use, and shipping is off the shelf reliable and puts every organization virtually "next door" to a facility.  The problem of course is the upfront financial commitment to get it off the ground and the buy-in by enough of the community to move forward.  But this is clearly one ripe area to investigate.

• Publicity:  I have personally been involved in two attempts to outsource publicity to private sector firms - one of medium size effort, one quite large, and both were unmitigated disasters.  The private sector public relations industry is ill-suited to our needs and frankly, in my opinion, incapable of providing the services we both want and need at an affordable fee.

4.  Fundraising:

• At their heart, arts organizations are very territorial entities, not given to sharing with their brethren (whether that is because they are conceived of as "competition" or for other reasons). One of the areas arts organizations are least likely to cooperate is in development.  Donor lists are valued proprietary assets and joint fund raising projects are few and far between.  The techniques and tools we all use to raise funds - from membership perks, to events, to solicitations are already widely known to everyone.  

In the final analysis, there are two principal factors that keep us from using the sheer power of our numbers to reap the benefits of economy of scale:

• First, such efforts require a level of cooperation and collaboration that does not yet exist.  To get to such a level would require both a rethinking of our "business culture" and enormous resources (time, then money) that simply isn't available.  

• Second, is the issue of "trust" - working together to move forward for mutual gain and benefit is somewhat foreign to our thinking.  We simply aren't comfortable outside of our smaller frames of reference, and while we are willing to share some things, consider some kinds of collaboration, and even cooperate in some experiments, by and large we aren't ready yet to work together even in simple back office functions.  It just seems an insurmountable hill to climb. 

Yet that isn't enough reason not to continue to try to figure out how to take advantage of our numbers, and to experiment with cutting costs and improving efficiency by sharing certain functions and costs.

Have a great week.
Don't Quit.
Barry 

Interview with Peter Coyote

Good morning.

“And the beat goes on…………………………”

Noted author, actor, former founding member of the California Arts Council and long time arts supporter - Peter Coyote - sat down with me for a quick Five Question Interview:

Barry: State Arts Agencies across the country continue to experience draconian budget cuts. There has been a debate centering on whether or not these agencies should get out of the grant making business, and focus their more limited resources on a variety of leadership initiatives – ranging from research and advocacy efforts to professional development and brokering intersections for collaboration. As one of the original members of the California Arts Council when Jerry Brown created it in 1976, what are your thoughts as to where the primary focus of a state arts agency should be in 2011 and beyond?

Peter Coyote: To my mind there are two reasons for the budget cuts. One, is that most people (including legislators) think of the arts as entertainment and decoration. Those that do not, often think of it as high-status branding (art reflecting disposable income and culture.) The second is that the major institutions, while they have the social/political power to make end runs directly to legislators and guarantee their funds, have divorced themselves from the community and popular arts, thus divorcing themselves from the motive power of democracy. The prior California Arts Council (CAC) addressed both those concerns and did so effectively. By reminding legislators that art was “a creative, problem-solving mechanism” and proving its utility in solving problems for the State, we were able to create 14 inter-agency agreements with State Agencies who picked up 50% of the costs of our programs. They did this because creative problem solvers addressed their Agency problems, giving them “wins” and the tax-payers value for their money.

While this does not address “status” concerns, it demonstrated clearly to the legislature (which funded our programs again and again, even when they were admittedly experimental) that one cannot be “excellent” as a plumber, legislator, doctor, or carpenter, unless one can integrate practical, problem-solving skills with the intuitions. The arts are the primary mechanism for teaching this process (maximal interplay of both brain hemispheres), and the fruits of this---people having an experience of hundred percent commitment and concentration---redound through the entire society.

Furthermore, our strategy of paying people for work (not making grants) obviated the resistance of most conservatives in the Legislature. We felt that if the artists made a living wage for half-time work, they would make the art for free (we were correct), but that the State should not necessarily be in the position of “giving away” tax-payers money. This was not an absolute when it came to major institutions, but even here, we encouraged them to work in the schools and communities to build awareness, skills, and also to obviate class-antagonism. (A blue-collar father whose daughter is being taught singing by the opera is not going to complain about the subsidy for middle-class seats that most grants supply.)

To answer you more directly: the primary focus of a State Arts Agency should be: the re-integration of popular and “high” arts to build forceful, effective coalitions and re-thinking the fundamental utility of the creative process to the State and tax-payer. Let’s remember that those cultures in which design figures most prominently (think Asia) are currently kicking our butts in designing useful, attractive, products that consumers want. Art is R&D for the culture, and failing to understand that costs the culture the same thing it would cost an industry when its R&D funds are cut.


Barry: A number of arts leaders in California are proposing to newly elected Governor Brown that he create a high profile, 911 type Commission Task Force – which would include nonprofit arts & culture people, private sector business and government representatives, academicians and civic leaders – to make specific recommendations leading to the nation’s first strategic plan to promote, facilitate and nurture creativity as essential to the state’s growth in the next hundred years. How do you think such a group might proceed to try to re-establish California as a citadel of innovation?

Peter: Governor Brown’s initial impulse to create an Arts Council of primarily working artists was inspired. Artists are the most conversant with the creative process, and by applying it directly to the Council and its programs continued to innovate and win high support from the legislature and the public. (If you remember, the Senate kept trying to abolish the CAC by forcing us to take members of the Senate into our deliberations, etc. to “find us out.” The result was, that we converted everyone they sent into rabid partisans of our projects, to the degree that for my last appearance before the Senate Finance Committee, all the members, were comically dressed in “hippie head scarves” to say good-bye.

You’re on the right track discussing “creativity” rather than art. Art tends to lead directly towards commodities, and one wonders how much the State should be directly concerned with the support of a specific commodity. Creativity, on the other hand, is a human resource that can be nurtured as a part of education and aid. It’s application will result in art (as well as increased skills in a number of area) but the language frees you from certain Conservative/Liberal conflicts that are unnecessary.

Unless you have a governor, willing to at least enter suitable funds in his budget as a “State” activity, whatever you win from the private sector will be constrained by their demands (a danger.) My “pitch” to Governor Brown when he placed the first $20 million dollar Arts request before the Legislature, was “to give us a chance. If we can’t win it, we don’t deserve it.” The presence of that incentive was a formidable organizing aid, and that year, our budget rose from 1 to 5 million, even as Prop. 13 was creating a ten-percent across the board cut for State Agencies.

The other requirement is to have ALL the stakeholders present. It’s my belief however, that the creative engine is and will remain working artists, and that they should predominate. It doesn’t take many businessmen to “talk sense”. Karney Hodge, the Director of the American Symphony Orchestra League, was the lone business-man on our CAC but rapidly rose to be one of the most prominent members. When he and I (as Chairman) agreed, there was rarely any Council dissent on policy. In the arts world the situation is usually reversed. One consults the Board and Staff of the symphony, not the musicians; ditto for the Opera, Ballet, and major theaters. Consequently policy is skewed towards the concern of business and financial people, with the result that we have amazing edifices for our arts…and dwindling audiences and support. Time to do things differently, and have the humility to engage the true source of creative expression in policy planning.


Barry: There is a widening gap between the Millennial generation of artists and arts managers and the traditional nonprofit arts sector – which has been slow to embrace and fully integrate newer technologies – with the result that the current nonprofit sector is increasingly seen as irrelevant to that generation. Do you have any thoughts on how, that issue might be addressed?

Peter: This is ass-backwards to my mind. Art will never be technologically “saved”. You can’t computerize an opera; all the CGI effects in the world will not save an inept movie. You are missing the role of the non-profits sector as the “mulch” which strengthens the roots and produces the “blooms” for higher culture. If you think of these institutions as R&D you’ll realize that failure is a necessary requisite, just as it is in a corporate R&D lab. The fellow who invited the LP record and the Transistor for RCA labs, had only those two inventions to show for 30 years of work. Were the rest a failure?

The non-profits are seen as irrelevant, because the profit sector has its head up its ass and doesn’t realize that without mulch, you inevitably wear out the soil and produce nothing. I’m not willing to accept that the non-profit sector is irrelevant. If you go to small theaters around the Bay Area they’re jam-packed and sold out; small festivals and arts events are sold out. The problem is thinking in terms of Bigger and Smaller, or better and worse. WE NEED IT ALL. Picasso and Matisse thrived in a Paris that was FILLED with painters, most of them bad. So what? They created the climate and the background for genius to flourish. Mediocrity is always the background for excellence. Trying to preserve simply the excellent and dispense with the rest is not the way Nature (or art) works. The “widening gap” is ignorance, which, luckily, can be dispelled with deep thought and energy.


Barry: Why is it so hard for the arts to broker meaningful partnerships and intersections with the entertainment industry, and do you have any suggestions as to how the arts might proceed to work more closely with Hollywood?

Peter: Why is it so hard for a preacher to have meaningful relationship with a hooker?


Barry: What advice would you give newly elected Governor Brown in terms of how the state might support the arts in California?

Peter: He knows. He’s done it once.

Thank you very much Peter.

Have a great week.

Don’t Quit.
Barry

Reactions

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

Ongoing Conversation Reactions:

1. The Overbuilt Arts Infrastructure:
In response to the blog conversations of late on the overbuilt nature of the arts (Including NEA Chairman Rocco Landesman's blog) several quick observations:  Is the sector overbuilt?  If by that people mean are there too many arts organizations - the answer is no.  How can there be too many arts organizations?  That's like saying you can have too much fun.  There can never be too much art and thus never be too many artists or arts organizations.  If, however, we mean are there too many arts organizations given the limited financial resources and funding available to support all the arts organizations there are, then the answer is yes, of course.  The demand is simply - at least at the present - greater than the funding currently available.  Is this a problem?  For those struggling simply to survive - most assuredly.  But the marketplace - our marketplace of funders (government and private) combined with the donors, audiences and patrons - will settle the issue and some will survive while others will not.  All of the component parts of our marketplace will prioritize their support based on their own criteria.  That is simply the reality.  It really isn't the province of funders and audiences and donors to tackle the issue, other than to cast their votes with dollars, time and attendance, and they will do so.  Technology, shifts in public interest and taste, talent and skill and much more will impact what survives, what thrives, what doesn't.  The conversation, if we need one, should be about what criteria we will employ to make our decisions about where to place our limited resources.

2.  The State Arts Agency Elimination or De-Funding Crisis:
With the (for now anyway) elimination of the Kansas State Arts Agency, and the threats to SAAs in South Carolina, Texas, Washington, Arizona and other states, and the proposed cutbacks to the NEA, we have finally come to the point where we face a domino effect and the reality that our political advocacy must be addressed as, at least, a partial failure.  As usual, Ian Moss provides an excellent summary of the news on his blog Createquity.

There has been some excellent commentary on what went wrong and what direction we ought to take, none more passionate than Arlene Goldbard's blog reaction.  Arlene is a gifted writer and one of our best thinkers.  She posits what others have argued - that economic arguments long in vogue as the front line of our defense in these instances belie the point, and urges us to fight for government arts funding as indicative of who we are as a nation, as a people. It's not about the money she says.   As many before her have argued, the arts should be supported because of their intrinsic value and for our values as a people.  I have no quarrel with that position.

But with respect to government funding, we must never lose sight of the reality that we are dealing - like it or not - with politics.  And in politics, you use every single argument you can.  It is myopic to focus on one thread - be it the economic value we add or the value creativity adds to civic life or what our commitment or lack thereof says about us as a people.

In politics, especially the politics of the budgetary process (which dominates all politics), there  is never only two sides to an issue - but multiple sides.  It isn't about the money, and it is.  Whatever way an elected official votes - yes or not, in favor or in opposition - there will be constituents, supporters, colleagues, and even the media who want the official to vote the other way,  Politics is about compromise and about finding "cover" - some reasons why a politician can say they voted the way the did.  Almost every political vote - especially as to what gets funded and what does not - is a lose / lose position for the one casting the vote.  While some may be happy the vote went 'their' way, many more will be unhappy, some angry and some even incensed.  The funding 'pie' is only so big - not big enough to address all of the worthy claimants who want a piece.  Even those who seemingly win by a vote, are often disappointed they didn't get everything they wanted - didn't get it all.  Politicians learn very early on to seek out ways to minimize the unhappiness, to keep those who are likely to be angry with them to the smallest number, to placate them with votes on other issues.  No vote occurs in a vacuum; no vote is ever truly on the merits.  As often as not every vote is a trade-off for something else.  Every politician must take into account (for every vote) the positions of their backers and major contributors, their party, the  politics of their local district, the lobbyists who bombard them daily, and whom they (for a variety of reasons) need, the media, friends, colleagues and their own views and values.  As often as not, there is no right or wrong vote.  That depends on the position of the various interest groups impacted by that vote.  Politicians seek to alienate the fewest numbers. 


It is thus folly to rely on any one argument in trying to sway those with the decision making power.  The smarter and more practical approach is to offer as many reasons as possible to convince them to, if not champion your position, at least not oppose it.  Who knows what argument will work with any given decision maker.  No one can afford to forget that these people are going to piss someone off no matter how they vote, and that not every argument works with each of them.  They are looking for some kind of cover to justify their support for one interest group over another, and to align those votes with all the other criteria that goes into any single vote decision.  It is risky behavior indeed to be too smug, too sanctimonious, too lofty when playing politics, irrespective of being right or wrong.  Yes you must take value positions, but within sight of the goal of getting whatever it is you are trying to get.  Dogma works only occasionally.  Politics is the art of the practical.

Then too, the reality is that they listen to some people more than others - and that includes long time supporters (read money contributors), friends, esteemed colleagues, trusted advisors, experts, the press, family and others.  These are by and large ambitious people, with agendas, and to a degree they constantly find themselves in the proverbial rock and a hard place.

Now we can whine, bitch and moan, regret and otherwise not like this reality, but politics IS a reality and it is also a game with its own rules.  If we choose to play that game but ignore the rules, then it should not come as a surprise when we do not succeed, and that is the crux of why the SAAs and even the Endowment, once again finds itself in trouble. We want to win, but too often only on our own terms.  Playing only by your rules, when those are not the rules of the game you are playing is like teaching a pig to sing.  You better be prepared for two things.  First, you are likely to get very frustrated with your lack of success, and second, after awhile you are very likely to annoy the pig. 

I support and applaud any possible way we can best position ourselves to protect, defend and yes, even expand, government support - because I think government funding as one of the threads of our revenue model, is critically essential, and that it will be catastrophic if we lose it. Some arguments take greater resources to sell to both decision makers and the public; some take longer than others, some resonate better, some are easier for us to defend -- all should be used in  concert - including the one we simply refuse to fully support - digging into our own pockets and otherwise raising the requisite funds to start and maintain meaningful political action committees and backing candidates supportive of us.  Very often in politics, victory has absolutely nothing to do with your argument or how you frame it - it has rather to do with your perceived political clout and how you exercise that power - and it has to do with the relationships (over time) that you have developed with those who cast the votes.  The longer and stronger the relationship, the better the chance you have for a vote your way.

And because you never want to give ammunition to those in politics who oppose you, we might want to dial down the overbuilt arts sector debate for the time being.  Telling everyone there are too many arts organizations then asking for more money allows the opposition to wonder why we need the money we have if there are, by our own admission, too many arts organizations already.  While that can of course be explained easily enough, it deflects our attention and energy away from otherwise making our case and playing the game that we need to defend ourselves and minimize the damage that we face this year, and it makes it easier to shift the debate to the opposition's terms.  There is always an opposition, and success is often dependent more on neutralizing the opposition than in rallying your supporters.

Happy Valentine's Day.  Tell your Congressperson you love the arts.

Have a good week.

Don't Quit,
Barry

I'll Hufff and Puff and Blow Your House Down

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

Here We Go Again:

Last month Bob Lynch sent out an email noting that in the last Congress the Chairs of the various committees overseeing aspects of the arts, including the NEA,  all received an "A" rank by Americans for the Arts, while, unfortunately, all their replacements in the new Republican controlled House received an "F" ranking.

That note was, unsurprisingly, followed by an email from Nina Ozlu Tunceli at AFTA noting what had been reported in the New York Times and elsewhere, that there was a large 170 member plus House Republican contingency that is again seeking the elimination of the NEA.  And that announcement was on the heels of a half dozen or more states that similarly faced efforts to eliminate state arts agency funding.

So here we go again with new rallying cries to defend our local, state and federal funding revenue streams.

One aspect of the growth in arts organizations (and advantage of being 'overbuilt') over the past decade ought to be that we have even more supporters whom we can call upon to take up our cause and mount whatever campaign may be necessary to yet once again protect that which we  have previously won.  To be sure there are two groups within our sphere that will respond to new cries for action and effort:  smaller state and local agencies that depend disproportionately on government funds (including the state's whose 40% share of the NEA budget is a sizable percentage of their whole budget who will find it essential to join this fight), and (perhaps) the larger urban cultural institutions that receive decent sized grant support from these agencies (organizations with Boards that have at least some Republican representation).  But it will take a large effort on every level to turn back the anti-arts forces so I hope everyone gets involved and no one sits on the sidelines.

Again we will make the argument that it makes no sense to cut funding that demonstrably returns a far greater economic return than it costs.  The jobs we create, the industries we support and the economic activity we generate clearly make the investment in us a positive 'value',  We will, of course, have to again attack and question those who argue for our elimination on "principle".  And very likely, as in past fights, we will again have to come up with some program or approach that (in the case of the NEA for example) benefits communities across the country so that we can argue that a "no" vote on the Endowment takes  support from local communities.  We may even have to adopt some new strategy that appeals to Congress' penchant for moving away from federal government programs in favor or state or local programs by proposing something radical like we reverse the current funding formula from the 60 / 40 split between the feds and the states and flip it to a 40 / 60 arrangement in favor of the states.  (Please note I am NOT proposing this strategy, but merely acknowledging that it will probably take some kind of quasi-radical move to give cover to those who now publicly stand against us, but can be moved to our side by a major effort coming from each of their local communities).

Whatever approach we take, whatever strategy we adopt, whatever we have to do to once again defend the government thread of our funding model (whether local, state or federal), the upcoming fight(s) are again going to suck time, energy, and money from our ever more limited stores.  And the reason we are once again in this sad position is that we simply refuse to develop real political clout. We continue to be reactive  when we should have been, for some time, proactive in anticipatory defense.  We continue to refuse to support individual candidates, run for office ourselves or raise the funds to hire more lobbyists.  Now I fully accept that even with political clout we would likely still have to play this silly game, but WITH political clout it would be an easier war to wage and to win.  Alas, when you build your house out of straw like the little piggy, it isn't surprising when the Big Bad Wolf huffs and puffs and blows it down - over and over again.  One can hope the Wolf runs out of breath of course, but that remains a highly risky strategy that tends to favor the Wolf.

How long can this go on?  I know I sound like a broken record here, because I have said this so many times -  but it isn't enough just to tell our stories, it isn't enough to just make our case (no matter how convincingly), it isn't enough that God is on our side -- Every state and many local regions should develop a local PAC with a sizable cash reserve so the playing field is equalized (and which can complement the national effort of the Arts Action Fund).  Maybe this will be the wake-up call that finally motivates us to do just that. 

In any event, here we go again.  So get ready folks, the inevitable battle is enjoined.

Have a good week.

Don't Quit
Barry