It seems of late that Andrew Taylor’s writing on Artful Manager has been been inspiring me to connect ideas he presents with those I found in other articles. My entry yesterday is one recent example.

Usually I feel elated and proud of myself for seeing connections between ideas from different places. Some thoughts his writings evoked yesterday were rather disturbing though. I started thinking about subjects everyone wants to think they are on the right side of, but if they make an honest assessment, find they share a burden of blame.

I was reading Andrew Taylor’s Measuring Value keynote speech delivered to the NJ Theatre Alliance. It is mostly a discussion of how any institution or individual that is providing funding to a non-profit concern wants to track the value of the non-profit’s operations on the community. People and institutions are interested in a return on their investment be it serving greater numbers, how effectively these numbers are being served or any other criteria.

He goes on to note that as time goes by, it is the measures that define arts organizations rather than the mission and the elements of the organization that make it unique.

Nothing terrible about this to be sure. But it was a couple sentences he quoted that elicted some memories of other articles. The first is from psychologist Kenneth Kenniston:

“We measure the success of schools not by the kinds of human beings they promote but by whatever increases in reading scores they chalk up.”

The second is from two attendees at the conference at which Andrew spoke:

“Said one participant, “we’re constantly trying to fit ourselves into what others want us to be.” Said one funder on a panel discussion, “We’re moving away from relationship-based philanthropy,” toward funding based on matrices and aligned with corporate brand.”

I recently read two articles where school focus on what type of graduates they were producing lead to some discomforting results.

The first was Jonathan Kozol’s article in the September issue of Harper’s magazine, “Still Separate, Still Unequal: America’s Educational Apartheid.” Among the educational disparities he notes, (and as you imagine, there are many) is that at affluent schools, students have choice of electives like journalism and computer graphics while the poorer schools had vocational courses like multiple levels of hair dressing and sewing.

Essentially, there is an expectation about the jobs students at each school will fill when they graduate regardless of their achievements or aspirations.

I mention this as something of a counterpoint to another recent article, this one from the New Yorker, “Getting In- The social logic of Ivy League admissions.” by Malcolm Gladwell. He basically talks about how the Ivy League schools shifted from merit based admissions to other criteria in order to keep their student body a predominantly WASP demographic.

Among the criteria, according to Jerome Karabel’s The Chosen, which Gladwell quotes, were manliness –

“The admissions committee viewed evidence of ‘manliness’ with particular enthusiasm. One boy gained admission despite an academic prediction of 70 because “there was apparently something manly and distinctive about him…”

Things that kept people out of the Ivy League were equally intangible-

“…they found handwritten notes scribbled in the margins of various candidates’ files. “This young woman could be one of the brightest applicants in the pool but there are several references to shyness,” read one. Another comment reads, “Seems a tad frothy.”

The Ivys’ focus shifted from merit

“to a ‘best graduates’ approach to admissions…The Ivy League schools justified their emphasis on character and personality, however, by arguing that they were searching for the students who would have the greatest success after college. They were looking for leaders, and leadership, the officials of the Ivy League believed, was not a simple matter of academic brilliance.”

True, academic success doesn’t equal success in the real world.(Witness Harvard grads and C students, George W. Bush and John Kerry.) This is another example though of how measuring the success of schools by the type of human being they promote can have negative results for certain groups.

I am not saying the No Child Left Behind measures are good. I actually slogged through writing all this to make the following suggestion–if this sort of institutionalization of expectations happens from middle schools all the way up to Ivy League, is it occuring in our arts organizations as well?

The Ivys are doing this sort of thing, Gladwell says, to protect the perception of their brand.

In the Second World War, as Yale faced plummeting enrollment and revenues, it continued to turn down qualified Jewish applicants. As Karabel writes, “In the language of sociology, Yale judged its symbolic capital to be even more precious than its economic capital.” No good brand manager would sacrifice reputation for short-term gain.

He also uses the following anecdote:

“I once had a conversation with someone who worked for an advertising agency that represented one of the big luxury automobile brands. He said that he was worried that his client’s new lower-priced line was being bought disproportionately by black women. He insisted that he did not mean this in a racist way. It was just a fact, he said. Black women would destroy the brand’s cachet. It was his job to protect his client from the attentions of the socially undesirable.”

Though this example has a tinge of racism, this is a real concern for any brand–“Sometimes when companies try to create more of a mass market, a lot of the early adopters feel the brand is being bastardized,..”(from Entrepeneur.com)

So reading these different articles this week got me thinking. Are arts organizations trying to protect their brand either consciously or unconsciously by keeping the bulk of the perceived undesirables out and just letting a token few in? We talk about needing to diversify our audiences and perform outreach to different communities. But do we really want them showing up?

The Kozol article cites schools claiming “rich variations in ethnic background” but in actuality had 2,800 black and Hispanic students, 1 Asian and 3 whites. When arts organizations are claiming to have diverse audiences, are they basing it on similarly tilted numbers? Are they only expending energy and resources to maintain a ratio at which they feel comfortable using the “ethnically diverse audience” tag.

I am not saying it is intentional or maliciously done. I am just asking people to honestly examine the situation the arts are in and figure out if the system is placing limits on who our organizations can appeal to.

If as, I quoted in Andrew Taylor’s article, arts orgs are feeling pressure to conform to a corporate brand or be what other people want us to be (ie people with money), what about feeling pressure to maintain a certain aura for individual patrons? There are certain types of people who give lots of money who essentially keep our doors open. Are we afraid they will stop giving if they feel our ballet/symphony/theatre loses its cachet?

When we read in Kozol’s article or hear on the news that in New Orleans the affluent moved to the suburbs leaving the poor in the city, can it help but enter our subconscious that if the affluent leave us, those left won’t have the means to regularly buy enough tickets or donate enough money?

I am sure there was similar hand wringing at some point over whether offically telling people not to worry about dressing up, it is okay to come in jeans, was going to destroy the brand. That hasn’t driven too many people away. But with the whole controversy over the inconsiderate patrons who come in late and talk on their cell phones or to their friends, there is already additional erosion to the brand transpiring. Can arts organizations afford to risk further potential damage to their public image?

You may damn me for being so politically incorrect and posing these insensitive questions. I am partially playing devil’s advocate, but partially serious. You may think your company is enlightened and doesn’t have any of this taint upon them. But really, unless you are wholly independent of private, foundation or government funding, I feel safe in saying you ain’t as pure as you think. I am certainly not making that claim and I live in a place where I am in the ethnic minority.

When I talked about arts organizations bearing some of the blame at the beginning of this entry, I was essentially referring to a situation I have talked about before where organizations say they aren’t elitist, but don’t make an effort to alter that perception either. I think all these questions I have posed about fear of brand erosion contributing factors to this reluctance to act. (That an some are elitist.)

But at the same time, as I noted, arts organizations are in a sort of trap of expectations. We can resolve to honestly change our programming and really go about cultivating a new audience over the long term and making our offerings accessible to them. There are foundations out there who will be thrilled to underwrite it in return for…you know it…reporting measurable results.

It is a lot tougher to change audiences and donors. Many of the decisions they make are beyond an organization’s scope of control. If they want a Cadillac and they feel you are offering an Elantra, they may leave. When they leave, the Cadillac dealer and the real estate company that specialize in multi-million dollar homes who both underwrite your shows each year may decide to leave as well. (I have seen the ad the bank puts in my playbill and the one they put in the symphony’s playbill. Its pretty clear whose money they value more.)

Then maybe some of your board members leave because they no longer have the opportunity to socialize with the people they want to network. Your fundraising capacity suffers a little more because now you no longer have the matching funds for foundation grant proposals.

In the face of such possible outcomes, is it any wonder an arts institution might feel they were making their organizational identity subservient to measurable outcomes and brand identity? Is it any wonder they keep desperately catering to a segment of the population that is quickly dying off? (And not just for their $10 billion in bequests!)

From the “clowns to the left of me, jokers to the right” file.

Last week, Artsjournal.com linked to a Backstage story about a Republican proposal in the House of Representatives to get rid of funding for the NEA, NEH and PBS. Looking at donation rates from 2001, they concluded that “The funding could easily be funded by private donations.”

The proposal was part of the Republican Study Committee’s “Operation Offset” report which looks for ways cut the federal budget to pay for the damage caused by Hurricane Katrina.

Now there are many arguements one may make against this certainly. But what inspired my entry today was the recollection of an entry on the Artful Manager a month ago about the delay in the Senate’s vote to repeal the estate tax.

The Artful Manager quotes an article by the American Arts Alliance that noted:

A 2004 Congressional Budget Office study reported that eliminating the estate tax would result in an estimated 22% decline in charitable bequests. A report issued by the Brookings Institution indicates that a repeal of the estate tax would result in a total loss of about $10 billion in charitable giving each year.

The amount the Republican Study Committee says the private sector contributed to non-profit arts in 2001–$11.5 billion. So that leaves 1.5 billion for everyone to fight over, eh?

Well actually, that is comparing apples and oranges. The 10 billion probably includes bequests to hospitals, churches, United Way, Red Cross along with arts organizations. The RSC’s $11.5 billion probably includes direct giving in fundraising campaigns as well as bequests.

The point is though, the House members are projecting private giving can make up for the loss of the NEA at the same time the Senate is considering a move which will remove the incentive for a segment of private giving. Even if the arts only get $2 billion of the annual bequests, that is still huge and there are some who will lose big.

If both efforts succeed, it will be a devestating blow from two directions for some organizations.

The vote to repeal was delayed according to Senate Finance Chair Charles Grassley, “It would appear “unseemly” for Congress to push through a repeal of the estate tax while also coping with the hurricane disaster in the Gulf” (nod to Artful Manager for the link)

What to do? Well again I must bow in deference to His Artfulness who links to the following discussion on the Western States Arts Federation website which examines it all better than I can.

I was just perusing some websites I hadn’t looked at in a bit and came across the Panel on the Non-Profit Sector website. The panel was convened by The Independent Sector, a coalition of about 500 charities, foundations and corporate giving programs.

Back in June, the Panel on the Non-Profit Sector submitted recommendations to Congress regarding issues facing non-profit organizations. On September 30, they finished soliciting comments on a draft of supplemental recommendations they will make to Congress in October.

Their recommendations should be of interest to anyone involved with a non-profit organization. They not only outline steps Congress and the IRS should and shouldn’t take, but those that organizations themselves should enact.

The document includes proposals on Federal and State oversight of non-profits (there should be more and better coordination between state and federal level); Better Standards for Reporting to the IRS; More Stringent and Frequent Reviews of Tax Exempt Status; and Abusive Tax Shelters and Charitable Organizations, Amended Rules for Non-Cash Contributions

There are a couple areas I haven’t mentioned and the standards for different size organizations vary so the report bears reading if you have concerns in any area related to these subjects.

The sections that seemed particularly pertinent to current events were those dealing with excessive travel expenditures and compensation for Board Members and Executive Officers. Essentially, they suggest stricter standards, tougher penalties and greater transparency on Form 990-

Compensation reports on the Forms should clearly distinguish between base salary, benefits, bonuses, long-term incentive compensation, deferred compensation, and other financial arrangements or transactions treated as compensation (for example, interest-free loans or payment of a spouse’s travelexpenses) to the individual

.

There are also suggestions on the size, structure and composition of Boards. The panel cites the problem of:

Failures by boards of directors in fulfilling their fiduciary responsibilities may arise when a board leaves governing responsibility to a small number of people, some of whom may have conflicts of interest that can mar their judgment. Other problems emerge when a board disperses responsibility among many people, thereby lessening the obligations of each and by default, increasing the authority of the chief executive officer.

Many board members do not have the training or information necessary to understand adequately their fiduciary responsibilities or common practices for the boards of charitable organizations.

Other sections deal with the related issues of conflicts of interest and audit committees.

The Independent Sector has a statement of their commitment to accountability and transparency right on their main page so the nature of the suggestions, which essentially embrace these concepts, should come as no surprise to anyone.

Since this is also obviously an attempt to take a proactive stance and provide guidance to non-profits before the Sarbanes-Oxley Act starts to be applied to that sector, it will be interesting to see what steps Congress takes.