Dispelling some untruths about managing the arts

Summer time is conference time, which inevitably leads to discussions about the state of the arts. The topic has been picked up around the blogosphere too. Yesterday I went to an event by the Austin Creative Alliance called “Crisis & Opportunity: An Open, Structured Dialogue” and a familiar discussion evolved.

I think it is time to reframe the discussion. The current discussion is based on some untruths. Let’s dispel them.

“The arts are in crisis.”

That was the premise, the starting point, of the meeting. Seeing some of the shifts in the Austin cultural environment, and indeed recent big (near) bankruptcies like the Philadelphia Orchestra and New York City Opera, things do seem bleak.

But Drew McManus recently wrote about a webcast on the supposed crisis among American orchestras in a post entitled “Relax, It’s Not A Crisis”

Within the first few minutes, the entire event seemed to be unfolding along the lines of predetermined outcomes. No one bothered to define “crisis” or juxtapose the Detroit fiasco and the bankruptcies alongside the equal numbers of healthy, extraordinary examples of groups doing well during the economic downturn (LA, San Francisco, Nashville, Chicago, etc.).

So are we really in crisis? Everyone and everything has been affected by the economic downturn, but what seems to be suggested is that the arts in particular are endangered. But much more than macro and micro economic factors, and certainly also cultural participation and consumption trends, doesn’t it ultimately come down to individual organizations and how they are run? Which leads to:

“You guys suck at business.”

These words were uttered by Kevin Benz, editor-in-chief of the soon to launch CultureMap Austin. While there might be some truth in that statement, the insinuation is that arts organizations need to be run like businesses.

Let me give you four compelling reasons why this is not the case: Enron, Lehman Brothers, Washington Mutual, and General Motors.

On the other hand, and importantly, the nonprofit moniker has too often been used as an excuse for a lack of accountability, efficiency and success. What it means then, to run an arts organization like a business, is to be held accountable. Patrons and donors have invested in your organization with the expectation of a return. Not in shares or profit, but in what you promised them in your mission statement. Everything is measurable, including how you fulfill your mission statement.

“We need a new model.”

Interestingly, at the Austin event the discussion immediately led to a comparison between nonprofit, for profit and limited liability low-profit corporations. Before I could object to this direction, Marshall Jones, executive director of the Wine & Food Foundation, already told the room that tax statuses are not business models.

Indeed, your organization’s tax status is just a legal construction. There is nothing broken with the nonprofit framework. What is broken is the way in which people operate in that framework. Think about it: a nonprofit status doesn’t dictate your marketing or development strategy; a nonprofit status doesn’t dictate what kind of staff you hire and in what positions; a nonprofit status doesn’t dictate what office furniture you need.

The success stories in aviation do not come from people who tried to change the laws of physics. It was the innovators and adventurers that took advantage of exactly those laws that changed the course toward our mission to fly.

You don’t need a model. You need a mission.

But if you’re hell-bent on a model, Clara Miller (via a presentation by Andrew Taylor) says it best: “There is only one business model: reliable revenue that exceeds expenses.”