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Info You Can Use: Reward Disloyalty

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H/t Daniel Pink who linked to a story about a “Disloyalty Card” being used by independent coffee shops in Singapore. If you go to one of 8 coffee shops and pick up a card, go to any of the other 7 to get stamps and then come back to the original, you get a free cup of coffee.

I know some arts organizations who have tried these sort of programs to encourage patronizing other organizations with mixed results. What appealed to me about this approach was the rebellious, counter culture feel of it. I had this image of a program that encouraged people to be disloyal to movie theatres and Netflix.

What probably works for the coffee houses is that they can create a bit of an edgy or cool vibe with their stores. If arts organizations are going to try this, they either need to have the same vibe or link it to a series of shows that have that sort of feel. No one is going to feel like they are walking the path less traveled if they find themselves in a staid, completely conventional experience.

My impulse would be to avoid using it during something like a First Friday event where it might look more like a bingo game where people breezed through to get their cards stamped. That doesn’t seem particularly productive. An opportunity to do it across the course of a few months to a year could encourage people to make a more deliberate progress- see a show one weekend, walk through a gallery the next month, go to a dance concert and take visiting friends to the contemporary art museum.

It doesn’t appear that the Singapore disloyalty program requires you to visit all 8 of the coffee shops, just frequent more than one. Even disloyalty programs need to be convenient so it doesn’t make sense to force people to wander all over the place just to get a free cup of coffee. The same would likely apply to a similar program with the arts. Even if all the participating venues were in close proximity, it wouldn’t really be effective to force people to frequent places that didn’t appeal to them.

Structuring the program to encourage people to try a few new things is good. There should be a variety of disciplines represented, but they should get credit for going back to the places they liked rather than only rewarding them for hitting every place once.

Heck, it probably shouldn’t be confined solely to places that were built with the intention of housing art. Get the coffee shop or bar that hangs work by local artists involved. Even better–approach the bars and coffee shops with some opera or classical music performances like the Yellow Lounge program in Germany I wrote about a few years ago or Opera on Tap. Getting these sort of performances into the mix would make for an interesting disloyalty program.

Give The Gift Of Autonomy For Christmas

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So the big tragedy of non profit arts organizations is that while we are the champions of creativity, we don’t really provide all our employees the most conducive environments for being creative. Sometimes good things happen despite us. Because the workload to personnel ratio is usually slanted in favor of the work load, there often isn’t a lot of opportunity for people to stand back and do some creative problem solving that might result in the alleviation of some of the work load.

A recent post on the Drucker Exchange criticized the industrial age view that long hours and great effort equates to productivity when that simply is not so any more. Andrew Fuqua recently made a related post on the benefit of “slack” in the work place. His post was generally about the computer programming industry, but there were many lessons non-profit arts organizations can take away.

One of the things he says a programming company should do is, “managers must stop assigning tasks.” Instead, it is up to teams to decide how the work will be done. Of course, for non-profit arts organizations, this assumes there are enough people to comprise a team rather than 1 person (or half person departments). But essentially he says, managers shouldn’t be making assignments, handing out work or be an individual contributor.

“Well, gosh, then what should a manager do? Well, I’ll tell ya! You could manage more people. You can still step in when the team needs help (but not too quickly). You are still an agent of the company, handling legal stuff, signing off on expenditures, etc. You can still manage risks, especially if you are a skilled Project Manager.”

Even if that doesn’t sound like something that is viable given the size of your organization, there are other things he suggest that are definitely applicable.

“Keep an eye on the system, looking for improvements
Ensure cross-training is happening (not by making assignments, but making the team handle it)
Understand the dynamics of the organization
Understand how value is created
Protect the team from interference
Make the organization effective; learn to look at it as a system
Support the team
Clear roadblocks
Watch interpersonal interaction — watch when one team member pulls back, withdraws in a brainstorm (for example)
Help the team learn TDD by making room for them to learn (time – remove the schedule pressure while they learn)
Understand the capacity of the team (also a team and scrummaster job)
Think through policies, procedures and reward/review systems and improve them (what messages do they send?)
Understand what motivates knowledge workers (see the previous reference to Pink) and let creating that kind of environment be an imperative”

Arts organizations can definitely benefit from looking at the dynamics of the organization and looking at themselves as a system of interrelated and interdependent parts rather than different segments performing different functions. This approach will help the organization understand where the value they possess lies. It may not only be the stuff you are selling tickets to, but in the expertise that is possessed by the group.

You will see a lot of these factors mentioned as valuable in management texts. The one suggestion Fuqua makes that jumped out at me was in regard to watching when a team member pulls back and withdraws in a brain storm. That can say a lot about the interpersonal dynamics of the organization. It may be viewed as one less person providing opposition to your ideas, but it could be damaging to the organization long term to have someone feel disassociated from the rest of the organization or team.

You might note that Fuqua references Daniel Pink and his talk about what motivates knowledge workers. That motivation is autonomy which repeated studies have shown is more effective than cash rewards.

One of the things Pink talks about is a Australian software company, Atlassian, which periodically gives their employees 24 hours to work on whatever they want. The only proviso being that they share it with the entire company at a party they throw at the end of that period. Apparently the practice has contributed to the solving of a number of problems and the creation of new products.

Imagine what might be produced if you let a bunch of creative arts people loose of their everyday constraints for 24 hours with the promise of beer at the end!

One of the things I know is very important to a lot of people I work with in the arts is professional development opportunities. Again, this is something Fuqua references. Often the biggest thing inhibiting arts people from getting the professional development is the funding. One solution to this problem goes back to my comment a few paragraphs ago about understanding that the value possessed by the organization may not solely reside in the product you are selling to the public.

Your organization may possess expertise that is valuable to other arts organizations and for profit businesses. You might arrange for a cooperative professional development day where all the arts organizations get together and have their staffs provide learning opportunities for each other. You might be able to likewise trade your expertise to area businesses in exchange for training or advice.

Best of all scenarios–your organization (or cooperative of arts organizations) puts together training programs to sell to businesses based on your expertise. Perhaps seminars in team building, creative brain storming, or the selection and lighting of visual art in commercial office spaces.

Info You Can Use: Crowdfunding Legislation Update

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Thanks to Ken Davenport’s post on the subject, I discovered the bill to facilitate crowdfunding I wrote about at the end of October is nearing approval. The House (H.R. 2930) approved the measure early in November and the Senate’s proposed bill (S. 179) is in committee.

As discussed in my earlier post on the subject, the existing rules for inhibit small investments made by many people because S.E.C. rules kick in after threshold of 500 people. These bills provide a little more leeway.

William Carleton has a good comparison of the passed version of H.R. 2930 and the proposed S. 179. Of most immediate concern to most people will probably be that where the House bill places the per investor, per year limit at the lesser of $10,000 or 10% of annual income, the Senate bill caps investment at $1,000. The North American Securities Administrators Association apparently agrees with the Senate on this point.

At that level, and given the level of required reporting and investor notice, I wonder if it will be worth it to too many people to attempt crowd funding in this manner. But again, I am thinking in terms of the investing prospectus one receives. Presumably, there will be less information to provide to investors in the case of crowdfunding efforts.

Trent Dykes at The Venture Alley provides the details of the House bill. I was particularly interested to see what sort of protections an investor had against fraud.

Not that it isn’t enough motivation to defraud, but you can only raise $1 million annually using the exemption provided by the bill ($2 million if you provide audited financial statements.) In addition to providing warnings of risks to potential investors and sending a collection of information and reporting to the S.E.C., one protection people will have is that the money will be held in escrow by a third party until 60% of the target amount has been raised. Presumably, if the amount has not be raised by the target deadline, additional arrangements must be made to retain it. There are also provisions that ensure the people handling the offering and cash management are qualified to some degree. People with a history as a “bad actor” as determined by the S.E.C. will be prohibited from offering investment opportunities.

As I am not an expert in investing law, I don’t know how vulnerable these arrangements are to fraud. Presumably, moreso then your typical investment opportunity. Individuals will just have less of their personal fortunes exposed to the fraud.

For some people in the arts, this might offer a viable alternative to the non-profit model. I imagine the return on investment might manifest as a hybrid of traditional donor benefits and cash. Providing preferential treatment to encourage people to remain emotionally invested in the organization in addition to paying out cash dividends will probably help keep them financially invested in the company.

Hopefully the limitation on the investing level will insulate arts companies from demands to operate themselves to maximize investor return. Even if the cap is set at $10,000, people aren’t going to be getting immense returns enriching their bank accounts (at least not for a few years). Who knows, perhaps a company will realize so much success thanks to this, they will grow to the point the will be subject to regular S.E.C. investment rules.

Now that this form of investment looks to pass the hurdle of legislation, how long before the arts community will pass the mental hurdle of considering anyone who uses it to finance their operations as selling out their purity and ideals?

Info You Can Use: Internship Guide For Arts Organisations

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The subject of paying interns has been in the news fairly frequently. This summer I noted that while non-profits are currently exempt from some of the rules of the Fair Labor Standards Act, this may not be true for long. Classifying employees as interns or independent contractors may not be valid, even for non-profits depending on their work situations.

In the England, arts organisations (yes, I am intentionally using British spelling) have a legal responsibility to pay interns according to minimum wage standards. The Arts Council of England just published a guide to these rules. While these wage laws don’t apply the entities in the U.S., the criteria for what constitutes an intern are very close to those applicable to for profits in the U.S.

The guide also provides suggestions for designing a meaningful internship experience and for writing appropriate ads for these positions. Therefore the guide can be a good resource for those looking to get ahead of possible changes in the labor laws and seeking to provide a positive working environment.

Info You Can Use: Age Related Discounts May Be Illegal

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Hat tip to Thomas Cott at You’ve Cott Mail for making us aware that attempts to attract younger audiences through special pricing may be a form of age discrimination. The D.C. Office of Human Rights has determined the special pricing offered to young people at 30-35 years old are a form of age discrimination.

What this specifically applies to are practices by theatres like Arena Stage and Kennedy Center. I wrote about the Arena Stage’s plan (toward bottom) back in May and felt Chad Bauman’s blog post on how he was implementing it gave theatre people a lot to think about.

Now there is some cause for rethinking.

The D.C. Office of Human Rights asked for a justification for the pricing and determined it was not sufficient to warrant the exemption senior citizens enjoy.

“The report says that the theaters had not demonstrated that the discounts are justified by business necessity, because patrons older than 35 do not have the same opportunity to buy tickets at a reduced rate.

It does offer the thought, though, that there may be an emerging need for discounts to young professionals, particularly given many young adults do not begin their careers until they are at least 25 to 30 years old, and face other financial challenges.

The report recommends that pricing be broadened so that the same type of discounts are available for those 30-64. It does not appear that the office plans to enforce the recommendations by following up further with theaters to see if changes are made.”

While the article says the D.C. office may not monitor compliance, this is a practice that may come under scrutiny elsewhere. Like Ladies’ Nights discounts at bars, there is theoretically the potential that all age based discounts in every situation including restaurants and retail sales might come under review. (Finally, I can order off the kids’ menu!) The article doesn’t say what the basis for senior citizen exemption is. An earlier article quotes the head of the D.C. Office of Human Right as saying:

“Students and seniors may not have the means for a full ticket, so it is reasonable you offer discounts to those segments,” Velasquez said. “With this situation, if you’re a professional who is 34 years old? I am not sure. That’s the reason behind the inquiry.”

I can’t believe that is the entirety of the rationale for allowing it especially since they apparently rejected the idea early careerists would need it based on income or the lack of arts education schools. If income is a prime factor in exempting senior citizens, there is a chance that someone could use the median wealth of retiring baby boomers compared to that of their parents as the basis of arguing that it is as erroneous to assume they need a discount as it is a 34 year old professional.

Pricing isn’t and shouldn’t be the only method by which to attract younger audiences, but it is a pretty powerful motivator. There may be other ways to structure attractive pricing to the same segment of the population based on or complemented by some other criteria. The Office of Human Rights only rejected the reasoning the theatres submitted. That doesn’t mean a compelling line of reasoning doesn’t exist.

Info You Can Use: So You Think You Want To Merge

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It seems discussion of non-profit mergers is becoming more prevalent of late. I recently became aware of a research document created by Wilder Research and MAP for Non Profits looking at what factors contribute to or inhibit the successful merger of non profits in the pre-merger, merger and post-merger phases.

There were actually some parts of the document, What do we know about nonprofit mergers? Findings from a literature review, focus group, and key informant interviews, that were very familiar. So much so I thought perhaps I had already written a blog post on it already. It doesn’t seem that is the case. However, since their report includes a literature review in addition to surveying they conducted themselves, it is likely I read some of this before.

They raise some good questions and provide some interesting advice on many aspects of a merger on issues like the name of the new organization, getting a third party involved to shepherd the process, doing due diligence on each other, issues about conflicting organizational cultures, creating a clear time line for the process.

One suggestion they had was to involve your top five funders in the process in order to gain their investment. That may be very sound advice as at least one case they mentioned found that most funders treated the merged organization with its newly expanded capacity as if it were one of the constituent entities effectively cutting their support in half.

Many organizations chose to merge as a result of some sort of crisis, either the loss of leadership, financial problems, change in the operating environment, etc. According to the research, one of the worst times/reasons to merge is if one organization is at the brink of financial ruin. Other than the fact that the new organization will inherit the problems of the troubled organization and that it is not prudent to negotiate anything from a position of weakness, research shows that even mergers between relatively sound organizations don’t necessarily result in a financially stronger combined organization.

The following are areas that they identify as needing to be addressed during the merger phase. There is a similar list for the pre- and post- phases.

2A. Key stakeholder involvement
2A1. Executive staff champion
2A2. Board commitment to the merger process
2A3. Client, consumer, and funder involvement in planning

2B. Role of staff in merger process
2B1. Staff involvement in planning
2B2. Communications with staff throughout process
2B3. Staff’s perception of the effect of the merger

2C. Integrating formal and informal structures
2C1. Attention to cultural integration
2C2. Attention to board and mission integration

2D. Providing due diligence to the process
2D1. Clear decision making process
2D2. Clear and realistic time frame

They provided the following factors which contribute to a merger’s failure:

-Lack of capacity, sophistication, or skill in the board or executive leadership
-Leadership’s inability to communicate well or to effectively influence others
-A weak or declining balance sheet or imminent financial collapse of one organization
-Programs or services that are not particularly unique or of distinctive value to the community
-Organization’s fear of losing autonomy or change
-Differences in governance, culture, or mission
-Board and staff opposition to the idea of merger
Engagement purely for survival, not from strength
-People involved do not see the real work involved in a merger
-Loss of key leader during the process

Info You Can Use: Standards For Your Website

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Apropos to my post yesterday about standards for arts marketing personnel is today’s a review of arts organizations’ online marketing efforts. Drew McManus unveiled his 2011 Orchestra Website reviews today.

Drew has been doing this for a number of years now. Bless him for it because it is a pretty time and labor intensive effort. From the number of social media reactions to the post, it is pretty evident that his efforts are appreciated by a large number of people. Drew will actually be on a panel at the National Arts Marketing Project this weekend called “Your Website Is Ugly.”

So don’t let yourself think that you can’t learn anything from the reviews, the standards he uses are applicable to pretty much anyone who is trying to communicate information and sell tickets using the internet as a medium. Basically everyone then.

The great thing to take away from the report is that you don’t need a big budget to be effective. Two of those who appear the top ten rankings are ensembles with smaller budgets.

Tomorrow (11/9) Drew will take a more detailed look at the scoring for the different organization. If you don’t have time to read the reviews, here are some of the things which kept some sites from getting better scores-

“A lack of direct buy tix links for events featured on the landing page.
-A convoluted donation shopping cart (some systems actually required users to remove ticket purchases before they could add a donation).
-A lack of search features and/or sitemaps.
-No social media share buttons on convert event pages.
-Concert calendars that displayed nothing more than an event’s name (no what/where/when details, no “buy tix” link, etc.).
-Inefficient optimization for tablet platforms.”

Now that I have a person with the time and ability to implement the solutions to some of these problems, I am forwarding Drew’s posts on to her.

Info You Can Use: Arts Marketing Standards

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Thanks to Tim Roberts at Arts Research and Ticketing Service Australia who recently linked to UK Arts Marketing Association’s new Arts Marketing Standards. The standards outline what abilities you should have at four different stages of your career:

Level 1 – Assistant – officer
Level 2 – Senior Officer – new manager
Level 3 – Manager
Level 4 – Head of department/director

These standards are rigorous and thorough. Level 1 standards run 130 pages and each subsequent level adds about 20 pages. Actually, since some of the standards don’t apply to Marketing Assistants, there are many pages that just read “It is not anticipated that Marketing Assistants will have responsibility for…” and it isn’t as intimidating as the 130 page count may seem. On the other hand, the head of department/director has 190 pages entirely full of standards they might be expected to meet.

They also have devised some toolkits to help different entities use the standards:

Employer’s Toolkit
Marketer’s Toolkit
Trainer’s Toolkit
Job Description Templates

The employers toolkit suggests the following use for the standards:

“This booklet outlines how the standards might be used by those working as employers of arts marketers within cultural organisations across the UK to:
•Plan the marketing role/s and job descriptions needed in your organisation.
•Carry out a performance review, building understanding of where the current strengths and skills are within your marketing team and gain a clearer insight into skills gaps within the team
•Input into appraisals and planning of staff training and development

There are eight modules that comprise the full standards. I will leave the reader to explore them all. To give a sample of what is contained,  the first module, “Provide marketing intelligence and audience, visitor and participant insight” has 3 subsections the first of which is, “Assess the marketing environment.”

That in turn has three subsections, the first of which is “Map organisations within their current and future marketing environment.”

The standards for that look something like this (click to enlarge):


So the obvious question is, would these sort of standards be helpful for U.S. arts organizations to adopt?

Actually, I don’t think there is any doubt that they would. The true question would be whether they could and would be effectively applied on a large enough scale to bring about meaningful and significant change.  If so, should similar standards be developed for other roles within arts organizations?

These standards in conjunction with the toolkits might be of the most help to some of the smallest arts organizations who might have the least experience with marketing. The toolkits provide grids noting the general expectations for different positions normally found in a marketing department including box office.   It can help them construct expectations that are suitable to the needs and resources possessed by their organization and make more appropriate hiring decisions.  In other words, people may think they need a director of marketing when they need someone to perform the tasks of a manager or senior officer.

 

Crowdfunding Become Crowdinvesting?

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In the “stuff you aren’t supposed to do” theme of yesterday’s post, is a piece from Slate about legal restrictions on crowd funding.

While thousands of people can donate to your cause via sites like Kickstarter, SEC rules prevent those same people from investing in your company. If you figure people will donate to people in return for tshirts or other small thank you gifts/services, there is probably a fair bit of potential in getting people to invest in the same project with the possibility of financial return. But the rules say no way.

“Under current law, that is often illegal. A longtime Securities and Exchange Commission rule, designed to protect unsophisticated investors, limits the number of stakeholders certain private companies can have. If you hit 500, you often have to go public. That means opening your books to additional scrutiny and your business to the whims of the market. And being public is just not a feasible option for a tiny business looking for start-up funding. Thus, an artist can receive thousands of $5 donations on a site like Kickstarter, but an incorporated farmer cannot accept investments from thousands of interested small-timers.”

These are some of the same rules that govern investing in Broadway shows and are meant to prevent people from losing large amounts of money because they were not entirely aware of the risks of investing. There is certainly some wisdom in having them.

There are some moves to change this situation. President Obama included such a revision in his American Jobs Act. Even though the act failed to pass, the basic idea has bi-partisan support and some law makers are asking the SEC to change the rules. One petition to the SEC asks for an exemption for investments made in $100 increments as a way to prevent people from losing their life savings. Given that the exemption would mean less oversight of the activities, there is good potential for unscrupulous operators to take the money and run.

Laura Horton at the Legality website has a post that discusses all the legal issues and the efforts to change the rules at length. She reports that the legislation being introduced in Congress, (as opposed to the petition for a rule change to the SEC), would allow a business to raise “$5 million in capital, with a limit on individual investments of the lesser of $10,000 or ten percent of an individual investor’s income.” Horton notes that these companies would be exempt from some of the usual reporting. Hopefully at $10,000 a person, they wouldn’t be exempt from as much as a company getting funded $100 at a time.

Crowd funding at these levels could open the doors for a lot of possibilities, including starting an arts related business. This model might provide a viable alternative to the non-profit structure. It could provide the tools to not only to get an organization started, but also to sustain it over time.

As for how fraud will be prevented, Horton says,

“those in favor of crowdfunding find that investor protection rests on a fundamental aspect of this financing, opening it to lots of people for investment. This “crowd” aspect creates transparency, which may temper the effects of deregulation. There is also a stronger sense of community support through this style of investing. Crowdfunding makes venture capital accessible to small-scale business owners.”

I have to confess some skepticism about this approach being viable in the long run. A crowd can provide good oversight in a small geographic community or when it is performed by investing clubs who meet to research and decide who to fund. My suspicion is that if this type of investment is going to reach any sort of scale, people are going to be doing it over the internet and will rely on Amazon.com type reviews to make their decisions. Presumably, the rating mechanism will be a little more rigorous and have better protections against those who might try to game the system than most online rating websites. It is still likely the system will still be vulnerable to some degree of subversion.

But who knows, it may create a burgeoning industry of companies who meet those soliciting funding and perform objective evaluations and audits. They could post all their findings online accompanied by video interviews, photos of operations, etc for investors to use in their deliberations.

Info You Can Use: Commerciality Doctrine (What The Heck Is That?)

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Hat tip to Non-Profit Law blog for providing the link to Charity Lawyer Ellis Carter’s 2009 post about the Commerciality Doctrine. As you can probably tell from the title of this entry, I wasn’t really aware of this doctrine at all, but it is actually very important in terms of an organization’s 501 (c) (3) status.

According to Ellis,

Commerciality Doctrine has evolved in the courts and is applied to determine whether an organization complies with Section 501(c)(3)’s requirement to operate exclusively for exempt purposes. A key factor indicating an organization is operating in an excessively commercial manner is that its activities are in competition with those of for-profit commercial entities.

Reading what criteria the courts use as a test for whether a non-profit organization is operating in an excessively commercial manner, I start to get a little nervous:

-pricing to maximize profits;

-generation and accumulation of unreasonable reserves;

-use of commercial promotional methods, such as advertising;

-sales and marketing to the general public;

-high volume of sales;

-the organization uses paid professional staff rather than volunteer labor;

-the organization discontinues money losing programs; and

-the organization does not receive significant charitable contributions.

Most organizations probably don’t have to worry about accumulation of unreasonable reserves and seating capacity may limit high volume of sales. If arts organizations start to adopt dynamic pricing for shows, they may have to watch how high they push prices. But a lot of non profit arts organizations have professional staffs who have replaced volunteers somewhere in their history. Even those without professional staffs use advertising, sales, marketing and discontinue money losing programs. How do you not flirt with violating your status under this criteria?

So is it actually good to keep those money losing programs around? Apparently so…

Factors evidencing the absence of a commercial purpose include the following:

-lack of competition with for-profit entities;

-below market rate pricing;

-relatively insubstantial reserves;

-lack of commercial advertising practices;

-the absence of sales to the general public;

-low volume of sales;

-use of volunteers and low-paid non-professional staff; and

-significant charitable contributions.

This list almost makes a virtue of incompetence and lack of ambition.

But the first thing I thought of after reading this list was, what about the Roundabout Theatre? How the heck have they avoided being shut down on this basis. Except for requiring as significant charitable contributions as anyone else, they are a non-profit that essentially fails on every one of these measures.

They actually may have run afoul these laws and I am just unaware of it. Plenty of commercial Broadway producers have expressed criticism about the way the Roundabout and other non-profits like Lincoln Center enjoy a competitive advantage over them. Back in 2000, long before he became chair of the NEA, Rocco Landesman wrote,

“increasingly the template of success comes from the commercial arena, which is, in the end, not dedicated to the art so much as to the audience. The uber-model for this trend is ”the American Airlines Roundabout Theater,” whose artistic director, Todd Haimes, saved a bankrupt institution by adapting contemporary, market-savvy, the-audience-is-king techniques of modern corporations. Pleasing the customers, giving them what they want in the form they expect, works for Coca-Cola –…It would, I suppose, be hyperbolic to say that Todd Haimes has had a more pernicious influence on English-speaking theater than anyone since Oliver Cromwell (and it wouldn’t be nice, either, since Mr. Haimes is a personable and honorable man)”

Now it should be noted that Landesman’s piece expressed regret that the non-profit theater movement toward a commercial orientation due to market forces has meant that little original work is created any more. Though he has “accused Haimes of running a wolfish commercial operation in the sheepskin of a publicly funded institution.”

The idea that decision making in non-profits shouldn’t be motivated by a need to compete with commercial entities is probably part of the basis for the criteria of the Commerciality doctrine. Although Carter provides an example of it, I wonder how often and strictly the Commerciality Doctrine is applied to non-profits. With cuts to arts funding at all levels and an oft repeated litany that performances should be self supporting or not occur at all, is it fair to require that non-profits ignore the pressure to support themselves with strategies that create more earned revenue?

Todd Haimes has said as much,

“I feel enormous pressure to generate income for our theater,’…`I’ll do anything within reason, as long as it goes back into the nonprofit purpose of the Roundabout,” Haimes said. “So I’m trying to be more creative.”

With a $40 million budget in 2008, $12 million in donated and needing $13 million in sales, most of us are not anywhere near Roundabout Theatre’s ability to raise scowls from commercial competitors. We do face similar pressure to perform well and might well find our ambitions causing problems for our tax status given that so many other aspects of non-profit operations are being examined.

Info You Can Use: Efforts You Can Skip…Maybe

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From time to time I advocate for carefully evaluating the technology tools ones organization uses rather than jumping on what appears to be the hottest new thing everyone is apparently using. Not every tool is appropriate for every organization.

It was with great interest that I started to read Taproot Foundation president Aaron Hurst’s piece, Five Investments You Can Skip. In it, Hurst follows a similar theme in suggesting that non-profit organizations of a certain size and scope consider giving certain “must haves” a pass. Upon reading them, however, I was a little skeptical about some. The five he suggested were:

1) Volunteers. Recruiting and managing volunteers generally isn’t worthwhile unless you use at least 50 per year, they do at least 50 hours of service each (or fewer volunteers and more hours each), and you invest in volunteer management systems. Short of that, it’s almost certainly a waste of time.

2) Websites. Most nonprofits (the small neighborhood ones) would likely be fine with just a Facebook page. A template site would do the trick for slightly larger group. Only 25 percent of nonprofits need customized web design.

3) Board. There is a tremendously high fixed cost to training your board to facilitate donations (in kind or cash). If your board can’t generate a large part of your budget (say, 20 percent), you are likely to find them getting in the way of fundraising success and eating up senior staff time (and increasing burn out). If that’s the case, your organization would likely see more success with a smaller board focused solely on audits and the legal requirements of governance.

4) Social Media. Does it drive your advocacy, fundraising, or program success? It does for likely less than 2 percent of nonprofits. Everyone else is wasting a ton of time and energy on it. Much like my local car wash that urges me to “like” it on Facebook.

5) Strategic planning. You need a strategic plan, but for most organizations it can be a lot lighter than most MBAs want to admit. It doesn’t need to be perfect and frequently should be more of a living document.

Numbers 3 and 5 I can agree with pretty readily. The suggestion to eschew websites in favor of a Facebook page in number 2 seems to be contradicted by the implication in number 4 that social media, including Facebook may be a waste of time and energy.

I did consider that what he says might be true for non-profits in general. I don’t think it is applicable to arts organizations where providing up to date information about events and activities pretty much necessitate a web presence that is adaptable to your specific needs. I have a difficult time imagining that Facebook is a good option for most non-profits given that they need a site that distinguishes them and their mission from everything else one might come across on the web.

His suggestion that only about 2% of non profits are seeing any benefit from social media made me wonder 1) what he based that on and 2) if true, it may just as likely be due to lack of understanding about how to use social media effectively.

Number 1- Not investing in volunteers, held a number of reversals of opinion for me. At first I assumed he opposed investing in Volunteer management software, then I realized he meant not having volunteers at all. This seemed the most controversial of his points as reflected by the long and impassioned comments that followed. Hurst answered those objections with some research that supported his assertion that volunteer programs weren’t effective below about 50 people.

“When an organization reaches 50 volunteers AND achieves an effective volunteer management model, not only do they lead and manage their organizations better, but they are also significantly more adaptable (i.e., reflect the capacity to be a learning organization), sustainable and better resourced (i.e., have skills, knowledge, experience, tools, and other resources to do their work).”

On the other hand, the way I read it, a small number of volunteers, even poorly managed, help to leverage organizational effectiveness at lower budgets.

“Organizations with 10 to 50 volunteers, regardless of whether they are managed well, are statistically equally as “effective” as their counterparts without volunteers on all measures of organizational effectiveness (capacity), yet their average (median) annual budgets are almost half…This implies that organizations that break the barrier of 10 volunteers, regardless of whether they have figured out all of the best practices necessary to manage those volunteers, are equally as capacitated as their non-volunteer-based organizational peers, at perhaps just shy of half the cost…it is important to challenge the assumption that an organization cannot aspire to a more fully “volunteer-engaged” organizational model. Lastly, it is important to acknowledge the need to conduct further rigorous research to test the cause-and-effect assumption of this important finding.”

The other thing about the study Hurst cites is that it seems to be focused entirely on whether volunteers contribute to organizational effectiveness in executing their programs. It doesn’t seem to examine the role of volunteers in furthering organizational goals in terms of advocacy, awareness building and generally representing the organization to the community. If these factors are measured as part of some criteria, it is not clear.

Despite the doubts that one may harbor about whether all his points are well supported, there is some validity to Hurst’s essential idea that it may be worthwhile to assess whether the implementation of all those best practices everyone knows you need to be employing really provides the best return on investment. It is understandably difficult to be a confident skeptic in the face of widely recognized best practices, but these days it could contribute to long term survival.

Are We Being Nudged Toward Partnerships

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I have started to wonder if there is going to be an increased emphasis on partnerships and perhaps even mergers in the non-profit arts. I often read about mergers by non-profits outside of the arts. Although the presenters consortium upon whose board I sit is in the middle of conducting a merger with a sister organization, I don’t hear about arts organizations doing it that often.

However, the Mid-Atlantic Arts Foundation has recently announced a new granting program, Southern Exposure, which will support the presentation of artists from Central and South America. (By the way, you don’t have to be located in the Mid-Atlantic States to apply.)

Most of the program isn’t outside of what you might expect of such a program except that it will “support projects that are developed collaboratively by presenter consortia based in the United States and its territories and ensure that engagements take place in at least three different cities or towns.”

The Western State Arts Federation (WESTAF) used to have a similar program termed “hub grants” as part of its TourWest grant program up until a few years ago. From what I have heard (which may not be accurate) they discontinued it because of lack of wide spread participation. (We actually participated in a couple years.) But now that times are financially a little tighter, will arts organizations on a national level be more amenable to partnering?

But really, back to my original question of whether a trend might be developing in which organizations are encouraged to partner. One cause of my speculation is that this summer I saw a grant program sponsored by the National Endowment for the Humanities for community colleges that required recipients to involve up to 12 other campuses.

Looking at the Mid-Atlantic Arts Foundation website, there are signs that they might be going in the direction of encouraging arts organizations to partner more often.

“Over the last five years, MAAF has built a core of program initiatives designed to address specific issues of regional arts support. The work of the Foundation has been focused on:
[…]
-Developing an infrastructure for touring and presenting
-Making connections beyond the region
-Developing partnerships
-Strengthening existing networks
[…]
-Exploring sub-regional initiatives and collaborations with subsets of MAAF state members
[…]
“

Now granted, the Southern Exposure initiative might have just fit their pre-existing efforts. Given that it does fit into their plans, if Southern Exposure proves successful, they may start to encourage similar collaborations more often.

Hawaii has an active presenting consortia (as do our brethren in the 49th, Alaska) so we are thrilled because this program plays to our strength. Plus, there is a project involving a group from South America we have been kicking around for a couple years. I will be the first to admit, this sort of cooperation isn’t easy to arrange and manage. It helps to have a little incentive. It would be great to see other groups adopt this practice. (Especially if you want to bring me out to consult with you! 😉 )

Info You Can Use: Expertise As Entertainment

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So much to do and so little time to do it! I am a little short on time for my post today but I wanted to direct attention to Eric Ziegenhagen’s TEDxMichiganAve talk, Expertise as Entertainment.

There have only been 74 views so I know you all haven’t seen it yet!

What Ziegenhagen talks about is the increasing prevalence of expertise being valued as an attraction. He focuses a lot on restaurants. It is no longer dinner and a show, dinner is the show. With the increased appreciation of culinary skills of chefs thanks to myriad television shows, people are valuing exposure to that skill as an attraction.

Restaurants in turn are designing the dining experience in response to this interest by providing information about the different components of the meal and providing more opportunities to watch the preparation process.

Ziegenhagen speaks of one restaurant that sells tickets to their seatings essentially intending them to be scalped. They apparently researched the laws governing resale of tickets and designed their reservation process in a way that permitted them to be transferred.

Ziegenhagen references the burgeoning TED lecture franchise as a evidence that people are beginning to value what is basically the pre-show lecture/post show talk back as much, if not more, than the actual show itself.

Looking at them in that context and taking a look at what makes the TED talks so engaging and interesting may provide some insight into how to make pre and post show talks more valuable to your audiences. (Clue: It might mean bringing in someone with no association to your organization at all.)

The Little Things Are More Engaging Than You Think

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If you are like me, the changes in the economy and people’s expectations about their interactions with the arts probably has you avidly watching for the new theories, techniques and technologies that may be relevant to your operations. Faced with uncertainty and rapid change, it is easy to forget that there are simple little gestures which we repeat over and over whose performance our audiences value. The explicit, big gestures using the newest techniques may pique interest and get them in the door, but it is going to be the small, mundane things that help keep them.

Some of these are passive things that are part of the organizational culture which we barely recognize we do. They don’t require a lot of time and energy but result in constructive activity. It can be something as easy as just leaving the door open as an invitation for something to happen.

I met today with one of the architects working on our facility renovation. I am anticipate we will be having a lot of these sort of meetings which cover small changes that will have a significant impact on the way audiences experience our facility.

One thing I talked to him about was putting more outlets in our scene shop. This isn’t to accommodate more power tools, but rather to accommodate the gathering of students and others. At the moment, the table area we typically use for meetings, lunch and effecting repairs has started to turn into a learning commons. Students are plugging in so many computers and other devices that they have extension cords crossing in front of the staircase to my office which I subsequently trip over.

I realized this afternoon that this gathering is actually the result of a decision I made three years ago to make the area more welcoming. Prior to that, on days we didn’t have classes or activities in the shop, I would leave the shop door locked and the lights off. All the better to show how ecologically responsible we were by keeping our energy usage to a minimum. Students were theoretically supposed to enter through another door to attend classes but often passed through the shop if the door was open.

As enrollment grew over the last few years and I saw exterior gathering areas becoming more crowded, I started to leave the lights on and the door open on a regular basis. Over that time, the number of people seeking a place to study or chat grew (granted, a little strange given that scene shops are noisy places, but there you are.)

Now we have faculty from visual arts and music who don’t normally teach in our building coming in to eat their lunch. The area has become something of a learning commons and collaborative space for students and faculty. I have students designing a poster and postcard for the show next month running up to my office with their thumb drives to get feedback on their work. Before the hammering started this afternoon, one of the music teachers was pounding on the meeting tables to teach a percussion sequence to a student.

I don’t know how long this may last. I can definitely attribute some of this activity to the dynamics between specific students and that may disappear when they graduate.

I can’t directly link any increase in attendance to this gathering of students so leaving the door open hasn’t helped my revenue situation much in a time when that is increasingly becoming a concern. However, since no one on staff has to design a poster or postcard for the next show, we are able to spend that time in other pursuits. When it comes time to distribute the materials, I bet the students will be interested in helping given their ownership of the piece. This afternoon, the students helped populate areas of the theatre during a photo shoot we were doing in support of a space naming campaign we hope to launch fairly soon. Potentially, their presence might yield income if those images are used in the campaign.

I know this sounds a little vague and hard to quantify. What I am advocating for is basically not forgetting about the assets you have to offer to your community and making them available for use by your constituencies. Some activities may take a little more effort than just leaving doors unlocked and lights on. For example, even though you want to go home, you leave the concession stand open, the lobby lights on and the restrooms open while people stand around chatting and chatting and chatting because the welcoming environment creates an intangible, but valuable positive impression of the organization even though it isn’t as effortless as it may appear.

In some cases you may be able turn a weakness and inaction into a strength. Don’t have money for landscaping? Plant wild flowers that attract butterflies. The front area won’t seem as much a rambling mess with butterflies flitting around.

What you do may not even be connected with your physical plant. Maybe the diner everyone on staff eats at all the time can turn into the site of an impromptu consultation session on how to create haunted houses and wire up holiday displays. That sort of thing reminds everyone that 1) Your organization contributes to the economy by patronizing area business; 2) Enhances the value of the diner in the community; 3) Makes people aware of the knowledge and expertise represented by your organization. I am sure there are fourth, fifth and beyond reasons, but note none of these have anything to do with specifically trying to attract people to your shows. Yet they engage your community at the cost of making a little extra effort at a place you were going to anyway.

It is key that you treat these sort of activities like giving someone a gift– you can’t have an expectation of something in return. If there are positive results, it may take years for it to manifest in a manner you can attribute to your efforts but it may not do so in the way you anticipated. Just as in personal relationships, what you value and want from your friendship with someone may not be the same as what your friend perceives as the valuable aspects of their relationship with you.

Info You Can Use: Does Friending A Candidate Endanger Your Non-Profit Status

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The Non Profit Law blog linked to a really great publication put out by the Alliance for Justice that explains whether your online activity might run afoul prohibitions in your 501 (c) 3 status. This is the clearest explanation of these issues I have read.

“This guide aims to answer the questions nonprofit managers most frequently face regarding the Internet and social media.”

The document covers situations that don’t involve online activity, but really it is the social media element that comprises the uncharted territory that people aren’t clear about. The document makes a distinction between lobbying, which a 501 c 3 non-profit can do and supporting a candidate, which they can’t.

Though sometimes the distinction is very subtle. For example, you can make a post on Representative X’s Facebook account, “Rep X, support the arts by voting Yes on Bill 123.”and that is direct lobbying. If you post a slightly different message, “People of My State, tell Rep X, to support the arts by voting Yes on Bill 123, ” and that is considered grassroots lobbying because it is a general call to others to take some action. If you post, “We love Rep X because she supports the arts and voted Yes on Bill 123,” that is promoting a specific candidate.

Except in some very specific circumstances, you can’t link to a candidate’s website. In fact, you can’t link to any website that promotes a candidate and you are responsible for making sure the content of the site doesn’t change since you first linked to it.

For example, you are doing a renovation and link to the website of the company that is providing you with sustainable wood as a way of proving to your constituency that you are acting responsibly. If the supplier changes their website to criticize a candidate’s stance on logging, your organization might be in trouble.

There are also restrictions on allowing employees to use company equipment, even on their time off, to express support for a candidate.

In answer the question posed by the title of this entry, no, you can’t friend a candidate on Facebook or follow them on Twitter. They are free to friend and follow your organization. Even though etiquette suggests you follow them in return, the IRS suggests you don’t.

About the only time you are safe to have a promotion of a candidate on your website is if you allow Google to place ads on your website and have no control over what they are placing.

There are a lot of other questions answered in the document as well. Since a lot of 501 (c) 3 organizations are associated with 501 (c) 4s which have looser restrictions, they provide some detailed guidance about how closely connected their activities can be. The guide also deals with setting policies for renting your mailing lists, guest bloggers, moderating blog commenters, using photos, hosting videos.

It is clear that there are going to be a lot of nuances specific to the activities of different organizations. However, if you have had questions about what is permissible as lobbying and prohibited as campaign support, and don’t have a tax lawyer immediately available, this is a good place to start to find your answers.

Info You Can Use: Emergency Planning Tools For The Arts

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Two entries today you lucky readers. My list of things to blog on is getting longer than I handle and still have the subjects remain relevant.

Technology in the Arts blog had a very cool tool for the arts featured this week- Arts Ready, an online tool to help arts organizations create a plan for any emergency, including “incapacitation of a key staff member, a financial crisis, and of course a natural disaster.”

The tool helps you create a readiness assessment which generates a to do list of changes to be made and sends you periodic reminders about deadlines or to re-evaluate the plan. It also offers the ability to store critical documents at a cloud computing site in case the physical documents get damaged. They also have a “battle buddy” tool used to develop relationships with area organizations.

“…so that you can build a relationship and eventually become Battle Buddies- pledging to lend a hand if the other needs help. If you do need to declare a crisis, you can choose how much information to share with whom, and you can track your progress towards gathering the needed resources online.”

It would be great if organizations developed partnerships and alliances constructive to their daily operations in the course of seeking allies to assist in the event of an emergency.

There is a cost to the service, but because this sort of thing is only really effective if a lot of organizations are involved, the developer, SouthArts, is seeking support from state arts agencies to help offer discounted memberships.

Info You Can Use: Board Action In The Age of Technology

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Hat tip to the Non-Profit Law Blog for providing a link to a piece on the Charity Lawyer blog about board votes by unanimous written consent.

An organization upon whose board I sit was recently revising its bylaws and the subject of voting on courses of action between meetings arose. We were especially interested in the legality of voting by email.

I can’t imagine we are the only ones having this conversation and fortunately, Ellis M. Carter at Charity Lawyer provides some answers.

“Unlike directors voting at a meeting which may require only a majority of the directors to approve any board action, most states that permit action by written consent require unanimous approval. Once an action by written consent is signed by all of the directors, the written consent resolution will have the same effect as a unanimous vote of the Board.

In such cases, a consent resolution will be sent to each individual director by mail, email or fax for his or her signature. To streamline the signature gathering process, the written consent document can permit counterpart signatures. This means that each director can sign the signature page of his or her copy and the signed signature pages, when taken together, are considered a validly executed document.

[…]

Generally, the action is considered to be taken on the date the last director signs the consent. For recordkeeping purposes, the signed consents must be kept by the secretary in the corporate minute book. Additionally, the resolution should be entered into the minutes of the next board meeting and made part of the official record of the corporation.”

In respect to emails, in order to remove any question of legality or whether an emailed response may have been made by an unauthorized person who gained access to an unattended computer, it is best to use a password protected electronic signature such as is available in Adobe documents. If that is too difficult, Carter suggests just printing the email, physically signing it and send it back by fax, regular mail or a scanned attachment to an email.

Info You Can Use: Dynamic Pricing That Doesn’t Alienate

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Last week I was reading about some interesting ticketing structures being used by theatre groups in Chicago. Theatre Wit offers what is described as a Netflix subscription model where they provide unlimited admission to their shows for a monthly fee of $36. They also employ dynamic pricing with their single ticket sales and increase the cost based on demand.

What really intrigued me was the model being used by Filament Theatre Ensemble. Instead of selling tickets, they ask people to sponsor an element of the production as the price of their admission.

“In lieu of tickets, customers can sponsor costumes, props, and set pieces, finance two hours of rehearsal space, or pay for the production’s licensing fees. Big-ticket items such as the rent for the performance venue are broken into small portions and spread over the entire run of the show, so that all of items on the website are priced between 10 and 35 dollars. “

What I really loved about this system is that there is dynamic pricing by default but it is presented in a very positive and constructive way. It also provides a degree of transparency about the costs of mounting a production to audiences and gets them invested.

“Seeing as there is a limited number of items available in each pricing category, dynamic pricing is built into the system: once all of the 10–15-dollar items have been sold, patrons have to purchase something in the 15–20-dollar range if they want to see the show. However, contrary to Filament’s expectations, the lowest priced items aren’t the ones that sell first. Patrons are willing to spend a few extra dollars to sponsor something they can identify with—a cool prop, or a distinctive costume—rather than paying a smaller amount that will go towards office supplies…

However, from the company’s perspective it is more important that sponsoring a particular item, instead of purchasing a ticket, increases the audience’s emotional connection with the performance and with the company. Ritchey recounts, “A lot of times people would come up to us after the show and say I got you guys an hour of rehearsal space or I got that costume.” People get excited about what they have contributed to the evening’s performance. In addition to that, viewing all of the elements that go into a production online gives the audience a sneak preview of the show. Having seen all of the costumes and props in advance, the audience immediately feels connected to the production when they recognize those items on stage.”

According to the article, there are still a few issues to work out. Specifically, arranging for admission of people who come to the door to “purchase tickets.” I am guessing given this unorthodox approach, it may be difficult to explain the remaining sponsorship opportunities to those who show up at 5 minutes to curtain and just want to get in rather than choose between a ream of paper and audition space.

I find stories about alternative approaches like these and the one Andrew McIntyre related about Toronto’s Passe Muraille’s Buzz Festival very encouraging. Slowly arts organizations are beginning to discover valid approaches to audience engagement and keeping themselves viable through experimentation.

Info You Can Use: Talk About Someone Else

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One of the biggest dating no-nos is monopolizing the conversation and talking only about yourself. Most of us are probably pretty good at recognizing when we are personally committing this faux pas. How about organizationally? How about on social media?

In some respects, non-profit organizations are like awkward teenagers when it comes to social media. Lacking experience in talking to new people, they tend to stick to the topic of themselves. However, the same rules by and large apply. There ain’t nothing social about social media if you aren’t including other people in the conversation.

A tip of the hat to Technology in the Arts for calling attention to the post on Social Strand Media, 7 Things Nonprofits Can Talk About on Facebook Besides Themselves.

Author Tracy Sestili suggests the following topics that one might use (which I edited down a bit so read the original.)

1. Industry news on your topic – Don’t just regurgitate the news for them, they can set up a Google e-alert for that, but rather, aggregate the news in a way that is engaging by asking them what they think. Don’t just post a link to a news article, read it and ask a question about their opinion.

2. Newsletters – almost all e-newsletters have an option where you can view the newsletter online in a browser….

3. Share pictures – Facebook folks love pictures and it’s the perfect place to showcase the people who make the organization run or people that you impact…

4. Comment on current news – even if it’s not completely related to your organization, showing that there is a human behind the Facebook wall goes a long way with your constituents….

5. Re-purpose content (photos/videos – not text)…

6. Public opinion – ask your fans what they think about decisions you are struggling with internally…

7. Be shameless – Facebook fans of nonprofit organizations like to help out online. They like to be given calls-to-action where they can make immediate impact. So, ask them to help spread the word to 2 or 3 people in their network…

While I have been doing a number of these things for my theatre already, I don’t employ these techniques as frequently as I should. My problem is trying to decide on a voice for the organization on social media. I want to make people aware of challenges facing the arts, but not beat them over the head. Be whimsical, but not too silly. I want our audiences to become bigger consumers of arts experiences which may mean pointing them to events other people are sponsoring. Of course, in the process of becoming a credible source of this information, I don’t want my own performances to suffer.

Info You Can Use: You Tweeted What About Me?!

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So after my post a couple weeks ago about why it is bad in a legal sense to have a restrictive social media policy, I am sure some of you have been wondering under what circumstances you can actually discipline someone for what they post online.

Well thanks to a piece on Forbes website, we have an answer (and hat tip to Gene Takagi)

As I had mentioned in my earlier entry, you can’t forbid, and therefore punish, any attempt to organize employees in a discussion about employment conditions. Under labor law, this is termed “protected concerted activity.” If a person is speaking for a group of employees or attempting to organize a discussion among employees, it is protected.

However, there are some tricky nuances to this and a link on the Forbes article to a National Labor Relations Board report, “Report Concerning Social Media Cases,” delves into the matter and presents specific cases to explain why the employee was or was not protected by the law. As Kashmir Hill, the author of the Forbes article notes, it is actually pretty easy and interesting to read for a government document.

My read is that with the current state of social media it may be fairly difficult to fire someone for complaining about work conditions. Essentially, if other employees chime in either on or off line to agree that an employer is a jerk for making employees work under certain conditions, the speech is protected as representing a group complaint. If other employees just comment that they are sorry to hear a situation upset the poster, then the poster may not be speaking on behalf of other employees.

It is only when a comment passes a certain threshold where a person is wishing violence upon people or making statements which are maliciously false that protection of representing a group complaint may not apply. However, being called a power-hungry, martinet jackass does not meet the standard for maliciously false. Suggesting a restaurant buys rat dropping to make their ground beef go further probably would.

Complaints that are clearly representative of an individual’s opinion aren’t protected, especially if they do not invite or receive the agreement of other employees. The same with complaints about the job which are not terms and conditions of employment like saying your store gets the ugliest customers in town.

One interesting fact that came up in a number of the NLRB case studies is that you can not have a blanket policy prohibiting people from posting pictures of themselves in company uniform or in connection with the company logo. ”

“…Employer’s logos or photographs of the Employer’s stores would restrain an employee from engaging in protected activity. For example, an employee could not post pictures of employees carrying a picket sign depicting the Employer’s name, peacefully handbill in front of a store, or wear a t-shirt portraying the Employer’s logo in connection with a protest involving terms and conditions of employment.”

The NLRB documents didn’t say it outright, but presumably you could fire someone if they posted a picture of themselves drunk in uniform at a strip club or urinating on your corporate logo. Though I have no idea if a number of employees urinating would be considered a group cause or not.

Another part of the NRLB document I found useful was two case studies starting on page 19 that first discussed a company’s social media policy that they considered to be too broad. In the second case, they found the policy was lawful but the other prohibitions were too broad. Finally, there was a case where a company’s policy restricting employees’ contact with the media was deemed lawful.

I felt all three were very useful because they all contained rules that any of us might include in our policies. In the first two cases, it is good to know what types of language one should keep out of policies. The last case included restrictions on media contact out of a desire to have one voice speak for the organization. Again, a situation for which many organizations strive.

“…we determined that a policy that stated that “the company will respond to the news media in a timely and professional manner only through the designated spokespersons” could not be read as “a blanket prohibition” against all employee contact with the media. Additional language in the rule referring to “crisis situations” and ensuring “timely and professional” response to media inquiries further clarified that the rule was not meant to apply to Section 7 activities.

Similarly, we concluded here that the Employer’s media policy repeatedly stated that the purpose of the policy was to ensure that only one person spoke for the company. Although employees were instructed to answer all media/reporter questions in a particular way, the required responses did not convey the impression that employees could not speak out on their terms and conditions of employment.”

Info You Can Use: Tools To Chart Your Organizational Impact

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A partnership of GuideStar USA, Independent Sector and BBB Wise Giving Alliance has created a free online tool, Charting Impact, which non-profits and foundations can use to assess themselves and help in “telling the story of your progress in an accessible, concise way. People want to help you make a difference – through donations, volunteering, and more – but often struggle to find a succinct, consistent resource that clarifies what nonprofits want to achieve and what they have already accomplished.”

The process has participants answer five questions about their organization to help gauge where they stand. Completing the report is meant to complement rather than replace program reviews and strategic planning. The final assessments appear on the site which is intended to be a central resource for those wishing to support a non-profit to obtain more information and assure themselves that the organization has a self-evaluative process in place.

One thing I found very interesting upon viewing some of the sample reports is that the process involves a CEO review, a Board review and a Stakeholder review and informs the reader if those groups have read and signed off on the report. Though the organization can manipulate the results by providing the contact information for stakeholders they know will never be critical of them, the anonymity afforded the reviewers provides an opportunity for the organization to receive some valuable feedback about themselves.

Charting Impact is still pretty new so there aren’t a lot of people who have completed the process. It will be interesting to see how prevalent its use as a resource will be. It already integrates some of the information on organizations GuideStar collects and fulfills a part of BBB Wise Giving Alliance’s charity certification process. If the process is viewed as credible, there is a potential that foundations and funders may require organizations to engage in it to receive a certain level of funding.

It would be unfortunate if Charting Impact became too much a gold standard that individuals wouldn’t make even small donations to organizations that hadn’t engaged in this introspection. I don’t necessarily see that happening any time soon. It would be nice amid all the stories we read about excessive salaries for non-profit executives and mismanagement and corruption to have a measure that provided the general public with confidence about organizational effectiveness.

Stuff To Ponder: Ticket Office Openness Vs. Security

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Currently I am involved in talking with architects to plan a renovation for our theatre. Part of this will involve razing and moving our ticket office. In the course of other theatre design projects with which I have been involved, as well as those related to me by colleagues, there seems to be a desire to have a more open and friendly ticket acquisition experience for audiences.

Since people are purchasing online and using credit cards to purchase tickets, the thought is that the reinforced bank teller window (an image recently invoked by Rocco Landesman) can give way to a more open concierge desk set up with an aperture to a secure backroom available for deposit of cash receipts.

Thinking this might be an option we should consider, I emailed the theatrical architect with whom the lead architect is working. The fact our ticket office is located outside rather than in our lobby adds a little twist to the concept. My concern was mostly with how to secure the desk area and keep it clean when we aren’t using it without resorting to bulky contraptions or unattractive steel roll up doors. Though sheltered from the rain, we would have to figure a way to avoid having money fly away in a breeze. I thought with some good design and procedures, we could overcome these hurdles and provide a more welcoming atmosphere for our patrons.

The problem is that while the move toward cash-less transactions enables us to move toward a more open and friendly experience, thieves are making corresponding changes in the tactics they use to exploit the new transaction formats. We may end up right back behind the reinforced teller windows again before too long.

With his permission, I am sharing part of the response I received from architect Paul Luntsford of PLA Designs.

“Due to the increasing problem with skimmers and RFID scanners, debit and credit card transactions are moving to the secure and controlled window. By the way, this skimmer/RFID scanner thing is really getting bad. We went to see Les Mis tour show last Friday at our huge, union run, city-owned 3000 seat theater. I used the ATM in the lobby to get some dough to buy junk during intermission. That night, or technically the next morning at 3AM, my debit card was used online at the Apple store to attempt a $1 test purchase by some unsavory character who had managed to compromise my RFID data from my card when I used the ATM in the lobby! So, you need to consider that all electronic transactions happen behind a window, and that window has an embedded wire mesh that is bonded to ground and acts like a Faraday shield to prevent capture of RFID data when the card is processed by one of YOUR people.”

While the credit card company may be at fault for not properly encrypting information, that fact will be of little comfort if people start to associate your brightly lit lobby with a dimly lit alleyway in a bad neighborhood where they may be preyed upon. As security of the cards improves, (and hopefully theft techniques lag), we can hopefully look to maintaining a more open transaction environment. If not, along with good cash handling procedures, you may end up having to train employees on safe credit card handling procedures like not passing the card back out side the Faraday cage without replacing it in a protective sleeve.

Info You Can Use: Correct Organization Of Personnel Files

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Hat tip to Emily Chan at Non Profit Law blog for sharing a link to a Blue Avocado piece on how personnel files should be maintained. More specifically, what information should not be stored in a personnel file, if retained at all, and what should be kept in separate files.

Some of the prohibitions made sense given the need to maintain privacy of medical records and the fact that some documents must be released to federal inspection and it is inappropriate to provide access to the details of an entire employment history. It makes sense that nothing should be placed in the file that employees aren’t aware of.

There are some other factors I don’t know I would have ever considered when setting up a system of personnel records.

Following are the most important items to exclude:

* Any writing regarding the employee’s performance that the employee has not seen should not be in the file. For example, while the performance evaluation that was presented to the employee should be in there, a complaint memo from a department manager about an error the employee made that was never shown to the employee should not.

* Working notes or logs that a supervisor has kept for her own benefit, usually to assist in the drafting of a performance evaluation. The notes should be destroyed after documenting anything of importance in the annual performance evaluation.

* Any medical information (including drug testing information) about the employee from any source should never be in the employee’s personnel file, but rather in a separate, more restricted confidential medical file. This separate medical file could also include any medical-related information such as documents related to Workers’ Compensation, FMLA and ADA.

* Complaints or investigation reports (harassment, discrimination, ethics, licensing etc.). Any complaint about an employee that is subject to an investigation should not be in the employee’s personnel file, but in a separate complaint file. For example, if an employee is accused of sexual harassment, the only thing that should be lodged in the personnel file is any disciplinary action taken against the employee or a substantiated report of wrongdoing — but not the original complaint or investigation notes.

* These items also should not be kept in a personnel file, but in separate, confidential files:
o Hiring Documents, such as letters of reference, background investigation reports, or I-9s
o EEO Statistical Information for the EEO-1 Report
o Payroll records

In short, to manage all of this personnel information we suggest four sets of files:

1. A personnel file for each employee
2. A separate medical file for each employee
3. One folder that has Forms I-9 for all employees
4. A file (or set of files) for all employee payroll records

Ellen Aldridge, who wrote the Blue Avocado piece, also provides a downloadable check list of items to include. She follows the material cited above with information about what things employees can add to their files, how long you need to keep information, how to store the files and suggested policies and protocol for accessing and reviewing files.

The one thing I questioned, (literally-I ask about it in the comments section of the article), is the suggestion that notes a supervisor has been keeping to base a performance evaluation on be destroyed. The supervisor might be documenting incidents of absence, mishandling of cash or even episodes when customers praised an employee to a supervisor or were witnessed using exceptional judgment and initiative. Wouldn’t you want to retain this evidence if the employee challenged a poor evaluation or to defend the employee against potential layoffs?

There hasn’t been a response to my comment as of publication time. Perhaps the the advice will be to formally include these records as part of the evaluation and the destruction advice refers to informal handwritten notes versus a spreadsheet the supervisor has been maintaining.

If anyone has insight or wants to share their own best practices, I would be interested to learn the answers. My guess is that a modified version of these practices should be applied to volunteer records as well.

Info You Can Use: Acknowledging The Arts Experience

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Welcome readers of You’ve Cott Mail and myriad other places. I appreciate your interest in the blog and yesterday’s entry about speaking more honestly about how an arts experience can occasionally be disappointing.

It is with some chagrin that I have discovered NEA chair Rocco Landesman talked about this very subject at the Chautauqua Institution about two weeks ago. One always likes to fancy they have stimulated lively discussion through the introduction of a timely subject. But of course, even I have made posts on the subject before so I can hardly expect to be the only one thinking about the subject.

If nothing else, the fact that Landesman has been speaking about it gives some indication that it is indeed timely and worth discussing. I have tagged this entry as part of my “Info You Can Use” series because Landesman mentions a number of ideas for better audience relations as well as noting some approaches that arts organizations have already put into practice.

“We might see an organization with an artistic director and a co-equal audience director. Rather than a manager of visitor services who reports to the director of external affairs who reports to a deputy director.

We might see fellowships for audience members…What if we complemented artist residencies with audience residencies, where we paid some audience members to attend exhibitions and performances? Or, better yet, what if arts organizations gave stipends to “audience fellows,” so that the fellows could go see whatever they wanted to see at other arts organizations?”

This last bit about encouraging audiences to see performances at other arts organizations isn’t as far fetched as it may initially sound. Back in 2006 the Marketing Director of the Broward Center for the Performing Arts made a comment on the blog about the organization’s plan to let patrons know about performances at other venues. Looking at their website, I can’t quite tell if they are still providing this information, but it looks like the marketing director is still there and hasn’t lost his job over the program.

More from Landesman: (my emphasis)

I visited the Seattle Art Museum, and they now offer “highly opinionated tours,” in which people paid by the museum walk through the galleries talking about the things they like, but also the things they don’t like. One of these docents led a tour in which he explained why Seattle’s Pollock isn’t really a very good Pollock at all.

We need to stop pretending that every single audience member needs to like every single thing we do.

Nick Hytner at the National in London, actually has his box office staff track subscribers’ likes, dislikes, and preferences, and has them e-mail the members and suggest some of the plays they way want to skip. I think acknowledging the viewers’ own tastes—in addition to curators’ and directors’ tastes—is absolutely key.

Madeleine Grynsztejn, the director of the Museum of Contemporary Art Chicago put it extremely well. She said that arts professionals need to learn how to maintain their expertise, while relinquishing control. Madeleine will always have more expertise in contemporary art than I do, but I am still entitled to my own relationship with it, my own experience of it….”

Admittedly, some of these steps are a little bolder than we might be comfortable taking. This is info you canuse, but I make no claims about whether you will wantto use it. Certainly, one probably doesn’t have to adopt something as extreme as advising people not to attend a show. Just acknowledging that the arts experience can occasionally be disappointing in the course of normal conversation may earn good will through its simple earnestness.

Landesman covers other topics in his talk which might be worth a listen to many–especially for the flash mob performance which interrupts it midway. Much of the rest of his talk revolves around the same general theme of the need to support artists and artists needing to eschew the role of being separate and special to become more involved and present in their local communities.

Info You Can Use: Variety of Thoughts On Dynamic Pricing

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It seems like dynamic pricing may start to creep into the non-profit performing arts sector as a common practice. Stories about it are starting to crop up more and more frequently. When the topic of changing prices based on market demand comes up, people often use the phrase “like the airlines do.”

So should I be surprised when today I saw a story about how Opera Australia got advice about dynamic pricing from the airline Qantas?

In the beginning of July, there was a story about dynamic pricing in the Los Angeles Times. Chad Bauman at the blog Arts Marketing did a good job addressing the recent move toward dynamic pricing in a post earlier this month.

Of course, who knows. Maybe dynamic pricing is just a hot story because newspapers see others during stories on dynamic pricing. Still, it is a conversation non profit organizations need to be having, if only to decide it isn’t for them.

I actually started a discussion on the Performing Arts Administrators’ group on LinkedIn back in May. I had some concerns about the approach to pricing suggested by a guy I was partnering with on a show. It ended up that I misunderstood what he was proposing.

There were only a few responses and the conversation appeared to have run its course when I went away on vacation at the beginning of June, but when I returned I found a slew of new responses. I think it reflects some of the concerns and thoughts people have about the practice.

One of the first responders, Mark Wladika, said the practice of variable pricing left him feeling manipulated, though allowed if people were aware from the outset that “hot shows will see an increase,” it might represent a middle ground. Another commenter, Omar Miller, noted that if the maximum variation was only going to be $5-$10, the potential revenue gains may not be worth the loss of good will if audiences felt manipulated. A concern for the good will of the community was echoed by a number of commenters.

As the conversation went on, the need to communicate the policy clearly seemed crucial as well as limiting it to single ticket purchasers and exempting subscribers. It was noted that lowering ticket prices at the last minute has the potential to alienate those who bought earlier at a higher price and end up reinforcing a procrastinating behavior.

Joanne Bernstein, a Chicago based arts consultant, advised that the decision to change a price be based on a rise in demand rather than proximity to a performance date. She argues that people are busy and should not be penalized for not being certain about their plans just because it happens to be less than 24 hours before a performance.

Maggie Christ brought up the legal issues surrounding variable pricing citing NYC laws that require if a range of prices is implied, the maximum price as well as the minimum price is required. For example, you can’t say tickets starting at $15 without noting that the top price is $500. Which, of course, gives a pretty good indication about the cost of most of the tickets and the probable location of those $15 seats.

Toronto based arts consultant, Linda Rogers, pointed out that some arts organizations are limited by the capacity of their ticketing systems. Airlines and many Broadway houses using services like Ticketmaster and Telecharge have a greater ability to alter their ticket structure in response to demand than most arts organizations. I have to agree there because the process we have to follow to charge a higher price on the day of the show is pretty clunky.

One comment I particularly liked came from Kara Larson, an arts consultant from Portland, ME.

“Two important points: 1) People value what we do differently. Correctly differentiating initial prices and dynamically raising them in response to demand allows people to decide for themselves what seats, timing, and price is right for them. The ones who want to wait for a sure-fire hit will often happily pay for the privilege. 2) Being responsible stewards of the organizations people charitably support means making the most of opportunities to earn revenue given our programming. Passing up opportunities to make revenue means asking for more donated support. And vice versa.”

In a later comment she made a pretty thought provoking suggestion about a different way to approach dynamic pricing:

“The base interest is understanding demand in our markets well enough to price ALL our tickets optimally. Building a rational projection model and adjusting it when we discover errors should be our first and most important task regarding pricing. Only when we err (significantly, in my opinion) do we need to correct by pricing dynamically. Dynamic pricing is an admission that we got the prices wrong in the first place, so badly that it’s worth it to the bottom line to invest in a new system for correcting them.

At the last arts center where I implemented dynamic pricing, the revenue increase was significant in the first season and less in the second. To me this was good news, because we had taken what we learned in year one and applied it to the base ticket pricing, so had less correcting to do at the last minute. Remember, whenever you price upward dynamically, you’ve already sold some (and often most) of your tickets at the wrong price.

I suggest that instead of spending what seems, industry-wide, to be an increasing amount of time debating the merits of dynamic pricing we all spend some time collectively developing much better predictive models for pricing in the first place.”

Some members of the group are moving forward with using dynamic pricing. Steve Carignan, Executive Director of the Gallagher Bluedorn at the University of Northern Iowa says he is moving forward with dynamic pricing this season. He asks,

“Performing arts has for a long time been linked to a discount mentality (devaluing our product and trying to cut our way to a smaller loss). Is it our customers who are uncomfortable or us?”

Liz Olson of the NYU Skirball Center for the Performing Arts made a comment that gave me cause for concern.

“…I don’t think that foundations or donors will look at variable ticket pricing fondly. They like when we are able to show self-sustainability but from what I have seen donors tend to punish non-profits they deem as operating “too much like a for profit.” (as seen in the endless debate about overhead costs and executive pay at nonprofits.)”

Does anyone have any insight into the validity of this? Have any foundations made comments of this general sort? Another commenter said she didn’t feel this was the view foundations and donors viewed attempts at dynamic pricing. However, neither offered much in the way of explicit evidence for either view. I hate to say that from what I have read, either could be the dominant perception at this time. Or perhaps the practice isn’t wide spread enough that foundations have developed a clear policy and approach.

Info You Can Use: Shall I Pay Thee?

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Our friends at the Non Profit Law Blog linked to a presentation intended to be a guide about compensated time for non-profits. The reason the presenter, Veneable LLP, this is so important is because issues related to compensable time are becoming increasingly prevalent.

– Employers are failing to identify, record, and compensate “off-the-clock” hours spent by employees performing compensable, job-related activities.

– One third of surveyed respondents indicated that their organization had been hit with a wage and hour claim in the past year.

– Today, wage and hour class actions outnumber all other discrimination class actions combined.

– According to the U.S. Department of Labor, more than 80 percent of employers are out of compliance with federal and state wage and hour laws.

The presentation is in PDF format so you can proceed at your own speed and there is a helpful chart at the end that summarizes it all. The laws about compensable time are a little tricky, especially related to travel.

Among the topics the presentation addresses:

      -If an employee works unauthorized over time, do you have to pay them? (Yep)

-Waiting time vs. Off Duty – Do you have to pay an employee who is waiting for a task? (phone to ring, machine to be fixed, package to arrive)

-Difference between compensable and non-compensable “on-call” statuses

-Are employees paid when they attend lecture/training/conference/meeting?

-How comp time can be used in lieu of over time pay

-Are employees paid if they are encouraged to perform work/volunteering for a charity?

-Is your internship program legal?

-What types of travel require compensation? What types don’t? Are employees paid for work they complete on their laptops while traveling?

-If an employee is required to take their work-issued Blackberry or other work related equipment home with them, is any compensation needed?

-Do you have to pay employees if a snow storm makes the street impassable for two days?

As I mentioned, some of these issues are a little tricky and nuanced. Those dealing with employees who do a lot of traveling may find it useful to download the guide as a quick reference. I could quote you back the answers on a lot of these issues, but I would be hard pressed to explain all the travel rules.

Info You Can Use: Federal Employees As Board Members

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Well this one falls under the heading of, “I did not know that.” The Non Profit Quarterly reports that the Office of Government Ethics has proposed changing a rule that prohibited federal employees from serving as officers on a board without getting special permission.

I had no idea that federal employees faced that sort of restriction. I guess we either never approached a federal employees to be on the boards of the organizations at which I worked.

Actually, according to a link on the OGE’s website, until 1996 “a number of agencies had a practice of assigning employees to participate on the boards of directors of certain outside nonprofit organizations, where such service was deemed to further the statutory mission and/or personnel development interests of the agency.”

In 1996, the Department of Justice issued an opinion that a section of the US Code prohibited this type of activity. The restriction was based on concerns about board officers having fiduciary responsibilities that might conflict with the loyalty owed the United States.

But the Office of Government Ethics feels times are a changin’

“In an era when public-private partnerships are promoted as a positive way for government to achieve its objectives more efficiently, ethics officials find it difficult to explain and justify to agency employees why a waiver is required for official board services that have been determined by the agency to be proper,” OGE wrote. “The potential for a real conflict of interest is too remote or inconsequential to affect the integrity of an employee’s services under these circumstances.”

The comment period for the rule ended early this month. I wasn’t able to determine what the time line for the next phase of the rule making might be.

I don’t imagine non profits will line up outside federal buildings throwing their best come hither looks at employees when the OGE issues their final ruling. (Okay, I lie. I can imagine non profits lined up giving federal employees come hither looks. It is very amusing.) But if you have tried to recruit a federal employees before or have been thinking of doing so, the opportunity may present itself in the near future.

Info You Can Use: Arts in Medicine

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A commentary by Dr. Gary Christenson on the Minnesota Medicine website offers the most complete listing of the benefits of arts in medicine I have yet seen. Whether the piece inspires you to partner with medical services or not, it provides evidence of the benefits of the arts to use alongside illustrations of the intrinsic, economic and educational values.

The commentary starts out relating an anecdote about an actual emergency “stat” call for musicians in a hospital. While acknowledging that such an incident is a rare occurrence in medicine, Dr. Christenson shows that the arts are already playing an important role in the practice of medicine:

(my apologies for the length of the citation. While I did pare it down to a large degree, there were just so many exciting and compelling examples, it was difficult to decide what to excise.)

“Although some might be inclined to dismiss the arts as a triviality, luxury, or unjustified expense in a time of concern over rising health care costs, research is showing that use of the arts in health care can be cost-effective. For example, a recent study done at Tallahassee Memorial HealthCare demonstrated that using music therapy when preparing children for CT scans significantly reduced use of sedative medications, associated overnight stays, and nurse time, and resulted in a cost savings of $567 per procedure. It also decreased the need for repeat CTs because of poor-quality scans. When extrapolating those numbers to all pediatric CT scans done in the United States, researchers estimated a potential savings of $2.25 billion per year.”

1. Studying the arts makes medical students into better doctors.

“In our state, storytelling and theater have been used to teach students how to effectively take a medical history. Last year, for example, Mayo Medical School and the Mayo Clinic Center for Humanities and Medicine partnered with the Guthrie Theater to offer the one-week selective “Telling the Patient’s Story,” which drew upon improvisation and storytelling to teach students to take and report patients’ medical history.”

“Harvard Medical School has found that training medical students in the visual arts can help them develop their clinical observational skills. Students who participated in formal training consisting of art observation exercises, didactics that integrate fine arts concepts with physical diagnosis topics, and a life-drawing session demonstrated better visual diagnostic skills when viewing photographs of dermatological lesions than students who only received conventional training.”

“The arts also can convey lessons in ways traditional lectures cannot. It isn’t surprising that the top-rated lecture by first-year medical students on the University of Minnesota’s Twin Cities campus for seven consecutive years was a reading of physician and playwright David Feldshuh’s Miss Evers Boys by Guthrie Theater actors. The play, about the Tuskegee syphilis experiments, illustrates ethical issues related to informed consent and human experimentation.”

2. The arts have therapeutic benefits.

“Museums such as the Museum of Modern Art in New York and the Minneapolis Institute of Arts have programs for patients with Alzheimer’s disease and memory loss that use visual and cognitive stimuli to evoke memories. Dance has been shown to improve the mobility of patients with conditions such as fibromyalgia and Parkinson disease.”

“Storytelling has been noted to improve the quality of life for cancer patients,10 increase lung function associated with asthma, and reduce symptoms and doctor visits. One report noted that regularly playing the Australia didgeridoo decreased apneic episodes for patients with obstructive sleep apnea.”

3. The arts can help prevent disease.

“..a campaign to decrease heart disease in England found that people were much more responsive to the message, “Dance makes the heart grow stronger” than to “Exercise makes the heart grow stronger.” Dance is one of the best ways to improve health on a number of levels. In addition to its physical benefits, dance enhances social engagement, which is important to overall health and well-being, and it’s one of the best activities for delaying the cognitive decline associated with Alzheimer’s disease.”

4. The arts can improve the patient experience.

“…a body of research has shown that patients tend to be less stressed, less anxious, require less pain medication, and ready for discharge earlier when their environment includes views of the natural world.”

“Bedside visits by musicians and artists also distract children from pain and help them explore their feelings about their illness.”

5. The arts can promote physician well-being.

“…Although many physicians were involved in the arts before entering medical school, they put those activities on hold during their training. University of Minnesota medical students have an opportunity to keep those interests alive… The program…provides students with a small financial award to pursue and develop their interests and skills in such diverse areas as painting, drawing, singing, clowning, photography, and playing an instrument as a way to find relief from the rigors of medical study.”

Using the arts to reduce costs, provide relief and focus to patients and produce more effective doctors, what isn’t to love? As with all things, arts are only one part of bolstering well-being and providing better medical care. There is certainly a potential for it to become a much more important element in providing better medical care if employed and studied to a greater degree.

Dr. Christenson provides 20 footnoted references for his commentary which seems a good place to start for those looking to develop programs and partnerships to integrate the arts in medicine. The research is also obviously a good basis for advocacy about the value of the arts.

Building Cathedrals, One Budget At A Time

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In something of a complement to my post on Wednesday regarding the factors influencing decisions about providing arts classes in higher education, Friday I attended a retreat on budgeting with the rest of the college leadership.

Now if that sounds like something you would dread attending, I was right there with you. I had a copy of The Economist in my portfolio just in case things got too boring. However, it was really a very engaging and educational experience. I have a feeling that the facilitator that was hired to run the session probably anticipated the dread with which we were approaching the day because she started out by telling us we needed to change our perception of what we were doing.

She began with a story/parable about walking along a road and seeing two emaciated men banging away at blocks of stone. Asked what he was doing, the first man sighed that he was chipping stone. The second man seemed to be working with a greater spirit than the first and when asked what he was doing, the second answers with a beatific look on his face, “I am building a cathedral.”

I had heard that one before, but I had to admit that it did pretty much describe how most of us probably approach budgeting–as a burdensome chore. The fact is, we can approach it thinking about what doing a good job on the budget can enable us to accomplish. Its hard work, but no harder than constructing, painting and lighting a set for a play.

The problem for most of us is that no one admires what a good job we did on the budget like they will for the set. Few of us had the guidance of experienced people in crafting a budget. I have clear memories of the different areas of knowledge imparted to me by technical directors and master electricians and carpenters. My memories of practical instruction in budget and finance by mentors is a bit more hazy.

And, of course, it is easier to dream of building cathedrals when you actually have money to budget toward that goal, small as it may be.

In any case, inspiring parables aren’t going to keep morale high very long if things turn mind numblingly boring. Fortunately, this wasn’t the case. We soon broke up into groups. By luck of the draw, (actually, they had us count off by fives), I ended up in a group with the two people whose decision making most impacts my budget. The topic was–what aspects of the process most impact your budget and operations.

Since the theatre does a pretty good job of supporting ourselves with earned revenue compared to other areas, I don’t receive much of my budget from them. However, some years they will take money from our revenue, some years they won’t. But I never know. I said this sort of thing made it very difficult to plan and gave me no incentive to have money left over at the end of the year. Fact is, we could actually be more self supporting and engage in an equipment replacement program that would not require us to ask them for money if our surpluses were allowed to accumulate.

No sort of action or solution was suggested. Nor did I expect one. It was good to have a fairly safe forum in which to address this situation. It probably helped that I was relating a “building a cathedral” opportunity where I envisioned our small annual surplus being used toward a bigger goal.

The day was full of shuffling around to other groups to address other aspects of the budgeting process. One particularly interesting session had us looking at the strategic plan which is what is supposed to be guiding funding priorities. We were tasked to boil each section of the plan down to a sentence that provided a helicopter view of the section so that anyone in the organizational chart could read it and understand how their work contributed to the plan. One of the results was that the language we used to describe our section was similar to that of a couple other groups. This was encouraging because obviously, you want a degree of unity between parts of the strategic plan.

The problem was, that the facilitator was initially unclear about the significant differences between three of the sections. There was something of a suggestion that parts of one section really should be organized under the umbrella of a different section. I was rather impressed by the effectiveness of the exercise in revealing that some clearer delineation might be needed so that everyone in the organization understood their place.

The last phase of the day was creating a common set of criteria for funding that would be shared across the organization as budget requests were passed up the ladder.

These criteria were:

-Aligns with strategic goals
-Leverages resources, strengths and opportunities
-Possess motivation and capacity to implement
-Has data justifying the need and plan to assess the impact

One of the biggest problem faced in the current budgeting process is apparently the lack of supporting data. Requests were being passed up without sufficient rationale based on numbers, industry needs, etc

Then we looked back at the problems with the budgeting process we identified at the beginning of the day and tried to determine if the criteria we had created would help address them. In the end, the problems we felt they couldn’t address were the result of either external factors we didn’t have control over (i.e. the way the overall state system operated and things they required). The other general area was the mysterious process by which things that never even entered the budgeting review process got funded. A working group was formed to address how to make that process more transparent and perhaps more aligned with the common criteria. I am optimistic about the ultimate outcome of the efforts. I don’t think we will ever be rid of funding that circumvents the process, but I am fairly confident there will either be more transparency or less of it occurring.

Most of all I was quite pleased with the entire experience. It is certainly an exercise an art organization might use in order to get everyone invested in the budgeting process and discover the problematic areas related to the practice. It definitely needs a skilled facilitator to lead it. Money has great potential to be a contentious issue and it is easy to get side tracked by specific issues rather than working to identify the root causes.

Info You Can Use: Social Media Tips

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In May Tech Soup hosted a series of Monday Twitter chats on the topic of Social Media. They provide a summary of the discussions on their forums. The discussions covered the use of Twitter, Facebook and Videos. Since I have read a fair bit on the use of these, I was most interested in their final discussion which covered the effective use of Tags.

I add a lot of tags to posts I make both here on the blog and connected to social media sites I use at work. I am just never sure if what I am tagging is actually effective. It seemed like being fairly generous with tags was good everywhere except Twitter.

“Blogs, photos, video, and bookmarks can benefit from the use of many tags when they are uploaded. Twitter, again, distinguishes itself, however, by favoring a “less is more”and approach to tagging. It is an accepted convention on Twitter that too many hashtags is unhelpful and, in fact, makes a tweet look too busy and difficult to read. Use tags to not only find content but to identify individuals or organizations who are creating or sharing useful information and, in the case of Twitter, to engage in actual real time conversations or tweetchats.

Individuals who are new to tagging might find themselves asking what tags are best to use for their content. For starters, it is worth considering what types of words might be used to describe your content. A helpful question to ask is, “who is this content intended for?” Understanding who your intended audience is and what terms they might use to seek out your content will help you narrow down on the most appropriate tags to use.

If you are just beginning to use tags, it is often helpful to explore and use tags on broad topics such as “nonprofit,” “art,” and so on, to reach out to a broad audience if you are not familiar with more specific tags for your content. As the article Thirteen Tips for Effective Tagging suggests, “be a lemming” and follow what others are doing which can also help you discover more specialized, niche tags.”

I found the advice at the end regarding paying close attention to what other people are using to be particularly valuable. Even if you think you know the hot buzz words from your industry, they may not be the most effective on social media. Tech Soup links to a piece, 40 Hashtags for Social Good which notes that nonprofit is a more popular tag than nonprofits. In the chat about Twitter, Janet Fouts cautions people to research the hashtag they intend to use in case someone else’s of it results in a collision of messaging.

I found the recap of the chat about Twitter to be helpful just because it can be very difficult to get your point across in the limited number of characters and I can also use more guidance. On top of that, the advice is to be as brief as possible in order to leave room for other people to comment and interact with you. Tech Soup also suggests a number of tools that allow everyone in the organization to share the burden of monitoring and creating tweets.

Your experience may vary, of course, so read whatever might be helpful.

News You Can Use: Musicians Are Delicious

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If you're ready for a zombie apocalypse, then you're ready for any emergency. emergency.cdc.gov

As you can see in the above, the Centers for Disease Control have finally acknowledged the threat of a zombie apocalypse. Hat tip to Tyler Cowen for bringing this important government service to my attention.

From the CDC website:

“If zombies did start roaming the streets, CDC would conduct an investigation much like any other disease outbreak. CDC would provide technical assistance to cities, states, or international partners dealing with a zombie infestation. This assistance might include consultation, lab testing and analysis, patient management and care, tracking of contacts, and infection control (including isolation and quarantine)…Not only would scientists be working to identify the cause and cure of the zombie outbreak, but CDC and other federal agencies would send medical teams and first responders to help those in affected areas.”

Actually, while this is really on the CDC site, they use the subject of a zombie attack to reinforce the need to have good emergency plans and supplies prepared for any disaster. Some examples:

“First Aid supplies (although you’re a goner if a zombie bites you, you can use these supplies to treat basic cuts and lacerations that you might get during a tornado or hurricane)”

“Pick a meeting place for your family to regroup in case zombies invade your home…or your town evacuates because of a hurricane.”

“Plan your evacuation route. When zombies are hungry they won’t stop until they get food (i.e., brains), which means you need to get out of town fast! Plan where you would go and multiple routes you would take ahead of time so that the flesh eaters don’t have a chance! This is also helpful when natural disasters strike and you have to take shelter fast.”

While the whole zombie attack craze may have peaked and is already on its way out. (Yeah right, zombies are not that easy to kill!) The tongue in cheek approach mixing “fiction” (the government will never really seriously admit the zombie problem we face) with the real message they are trying to communicate–and offering social media options to spread the word–could easily be used by arts organizations to communicate their core message.

On a related topic, a study was recently released providing information that will be of great importance to arts people when the zombie attack comes. According to the Freakanomics website,

“A new study argues that musicians have more highly developed brains than the rest of us….New research shows that musicians’ brains are highly developed in a way that makes the musicians alert, interested in learning, disposed to see the whole picture, calm, and playful. The same traits have previously been found among world-class athletes, top-level managers, and individuals who practice transcendental meditation.”

So when the zombies come, all you really need to do is be faster than the musicians or point out the location of their delicious, highly developed brains to the zombies. Of course, given that musicians have a heightened alertness and calmness, they will likely possess the composure needed to effectively flee themselves, so you will have to be especially canny.

(Thank god for the CDC. I was wondering how I was going to address the Freakanomics piece without feeding the egos of my Inside the Arts brethren who are mostly musicians.)

Info You Can Use: Speak Passionately, Persuasively…and Briefly

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I love it when, in the course of a few minutes, I come across different web pages that seem to go together like chocolate and peanut butter in a Reese Peanut Butter cup.

In this instance one link was provided by Drew McManus who noted Harvard Business School’s “Elevator Pitch Generator.” Based on the old scenario that you might get lucky enough to gain access to a powerful decision maker in a place away from their gatekeeper staff like an elevator, enterprising people are encouraged to find a way to talk about their idea or business in a compelling way in under a minute. The pitch generator coaches you through the process of formulating that pitch.

After answering who you are, what you do to bring value, why you are unique in delivering value, what your immediate goals are and how the listener is involved in those goals, the generator analyzes the pitch. The generator tells you your word count, how long it might take to deliver it and notes how many times you repeated words. You have the opportunity to revise your pitch or email/print it off for use.

The second web page I came across (I apologize for not properly noting the source of the link) was on Katya’s Non-Profit Marketing Blog. Katya Andresen references Charles Green’s Trust-Based Selling where he talks about the six toughest questions customers ask sales people.

Katya uses this to create the 5 Toughest Questions Donors Will Ask:

1. Why should we choose to donate to your organization?
2. What makes your organization different?
3. What experience do you have?
4. We aren’t interested, why should we pay attention to you?
5. Why is your overhead so high?

She provides suggested answers to each and acknowledges there may be more toughest questions to add by asking readers what tough questions they have been asked.

The response I liked the best was to the last one, probably because it was expounded up at length in a separate blog post of its own.

“This is not about salaries. This isn’t about overhead. It’s about your heroic staff, creating amazing arts programs that transform the people you touch. The end results of your efforts is the story you tell in your fundraising pitch. That’s not self-serving! Your CEO talking about the lives you change is not self-promotion—it’s the beating heart of your mission. Say it loud and proud.

If I were at your arts organization, I’d tell an incredible story about one child touched by a single performance. And I’d say what made it possible was my small, dedicated team. With a donor’s support, more of that magic can happen.

You raise money by talking about the impact of your work—not about budget line items. If a donor demands to see the numbers and asks about pay, tell a great story about one of your staff to illustrate my point: that nothing wonderful happens without a creative, committed team. (I assume your staff isn’t being paid $1 million a piece—that’s something I can’t spin.)

The bottom line: Don’t be afraid of talking about your people. They aren’t overhead – they are change agents. If they do great work, put them front and center in your stories of transformation. To use a theater term, they deserve center stage.”

There is so much focus on minimization of overhead as a measure of a non-profits success, mostly brought on by a very small number of charities paying executives a great deal of money, that it is helpful to have a little guidance on the subject. Mostly, she is reminding us that it is the work that really matters and that is what should be talked about. Saying we need to pay a liveable wage to retain talented people may sound too similar to the arguments banks make that they need to pay big bonuses to retain the top talent for people to make a distinction. It is probably better to focus on the fact you are employing people who bring both talent and passion to effect change and follow Katya’s advice not to focus on the money.

It seems to me that you can use the elevator pitch generator to hone how you talk about your organization, especially to donors. Talking about how people have been affected may need to take longer than a minute to be properly persuasive. But while you don’t want to gloss over a compelling anecdote in order to tell the story of your organization in under a minute, what is said still needs to be lean and to the point.

Info You Can Use: Tix, Pix, Kits and Internships

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I am a busy, busy boy this week which is why I ended up not posting yesterday. Hopefully things will calm down a little by next week. So by way of recompense for not posting yesterday, I offer you four links to practical information for use in your arts organization. I am sure at least one of these links will prove useful to you.

First up, Richard Kessler recently posted a toolkit for getting parents involved in arts education, Involving Parents and Schools in Arts Education: Are We There Yet? What is special about this guide is that it is written by parents for parents. Presumably, parents will know what best motivates them to get involved. As Kessler says, “You have to admit, there’s something to be said about a guide that emerges directly from the work of parents, educators, and partners, rather than from staff.”

I haven’t gotten a chance to look at the whole thing, but I am encouraged that the second chapter is “Understanding Parents” and the fifth chapter is “Motivating Parents” with the “Educating Parents” in between. In the arts I think we often want to skip past the understanding and educating parts and move straight to motivating audiences into the action of attendance. The handbook reminds us of the proper order of things. The guide is 45 pages long. Fifteen pages are devoted to interacting with parents, the other 30 odd are sample forms, checklists and templates to use in organizing parents toward a school arts event.

Next, a link from our friends at the Non-Profit Law blog to the Department of Labor’s fact sheet about what is allowed during an internship under the Fair Labor Standards Act. It should be noted that these rules only apply to for-profit businesses at the moment, but a footnote they state (my emphasis) “Unpaid internships in the public sector and for non-profit charitable organizations, where the intern volunteers without expectation of compensation, are generally permissible. WHD is reviewing the need for additional guidance on internships in the public and non-profit sectors.” So it might be prudent to design your current internship program with the for-profit guidelines in mind.

Chad Bauman talks about a plan that the Arena Stage formulated to wean people off student discounts. They used to offer $15 tickets to people under 30 during the week prior to the performance. The problem was, once they turned 31, their ticket price went up to $60. It appeared this steep price jump was discouraging people from continuing to attend.

Now their plan is to offer a “pay your age” pricing for 3% of the seats starting two months before the first performance. The hope is to not only create the idea of paying an increasing amount as you age, but also emphasize the importance of buying tickets early rather than the week of the performance.

This program is still only available to people under 30. You don’t pay $85 if you are long lived. In the comment section of the entry, Bauman addresses the potential sticker shock a person might get upon turning 31 and finding they now have to pay $60 instead of $30. I really appreciate his view of cultivating a person over 10-15 years.

“Once a patron turns 31, and we have already gotten them into a pattern of buying early for a discount, we would then offer them a 3-play preview subscription acquisition promo probably in the range of $99 for three plays (or $33 per ticket). After they “age-out,” my next major priority is getting them to subscribe. Then once they subsribe, I will work to get them to upgrade their subscription packages. This is a long term strategy that really looks at the customer over a span of 10-15 years. From first time PYA buyer to full season subscriber and donor will probably take 15 years.”

Finally, if you use images from the internet and are confused about the difference between royalty free and copyright free images or aren’t really even sure about acquiring images to use, Tentblogger has a good comprehensive guide (with supporting images, of course) dealing with all these questions and more.

Stuff To Ponder: Transparent Community Driven Grant Processes

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The Hawaii Community Foundation just recently completed the first round of granting for their Island Innovation Fund. I was really very impressed by the way they went about their very transparent granting process. Instead of having a grant disappear into the bowels of the foundation offices, they got the community involved in the process of providing feedback and guidance at every step.

The blog for the local technology radio show, Bytemarks Cafe, did a good job last October of summarizing the approach they took.

On my preview, the proposal review was a 4 step process. The first step in the process is the Concept, where you submit your idea and any associated material, be it photos, video, documents or presentations. There is an open period for submittals and a deadline to meet.

Next the process enters into the Collaboration phase where proposal material is made public (public as in registered users of the site). The public has about 30 days to comment or ask questions. Applicants are able to respond to comments and make improvements to their Concept.

During the third phase, HCF personnel will review the revised Concept. Projects that best demonstrate the principles and goals of the Island Innovation Fund will be ask to submit a Proposal.

Finally in phase 4 the Omidyar Network and Hawaii Community Foundation staff will review and evaluate Proposals. The most compelling proposals get invited to present a 15 minute presentation to an independent panel of judges for final selection. This judging is open to the public. Winning proposals will be announced one week after the final presentations.

I listen to the radio show pretty regularly, but I must have missed the show where they originally discussed this because I would have definitely participated in the feedback portion of the concept phase. I think that is the best part of the entire program. Not only does it allow applicants to understand what the community needs are and adjust their application accordingly, but it also provides the Hawaii Community Foundation (HCF) with a better understanding of what the community needs from them.

It is something of a win-win for everyone. Even if the applicants aren’t proposing something that fits into the HCF or fund goals, they get valuable feedback about their concept should they wish to pursue it with another granting organization. Those who are invited to proceed, but don’t get funded also receive important feedback and I believe some will be allowed to reapply for the next round. Being able to walk away knowing how to make your proposal better and speak about it effectively is valuable in itself because you often don’t get any feedback in that vein from granting organizations.

In understanding what the community needs, HCF can begin to think about their own approaches and priorities, including assumptions about community needs they may have made. Perhaps some of the proposals didn’t adequately address how the specific submitter would effectively approach a need in the community. The need still remains and now HCF may be able to bring resources to bear having read the feedback on the community forums suggesting what considerations need to be made in effecting a solution.

I should also note that even the final presentations to the independent panel was conducted very publicly and was streamed live over the internet. The video may still be viewed on the Island Innovation Fund website.

Now in a bit of serendipity, Diane Ragsdale addressed the pursuit and funding of innovation in the arts on her blog today. She mentions that receiving funding for innovative work can actually destabilize an organization as they try to meet the heightened expectations that such recognition brings.

But she also notes that often the most innovative work is passed over in favor of more tame versions because real innovation risks failure by necessity:

“Finally, it’s perplexing and annoying to others in the arts sector when funders give ‘innovation grants’ to projects and organziations that are not, actually, innovative–particularly when one knows the projects that did NOT get funding. I’m not sure how this happens but I suspect it is in large part because ideas that are truly surprising, that may even defy written rules and conventions, are unlikely to make it all the way through the grantmaking process at most risk-averse foundations (in no small part because they make lawyers nervous).”

I am not going to claim that those awarding money from the Island Innovation Fund, even given their intriguing granting process, are any less risk averse than any other foundation out there. However, I would think that efforts toward innovation in the arts would benefit from a granting process like the one they conducted. The one benefit I hadn’t mentioned yet about this program is that even if one isn’t an applicant for the grant, just participating in the question and commenting phase can help a person refine their own nascent ideas and understand how better to execute them.

Info You Can Use: Beware Non-Profit Identity Theft

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Non-Profit Law Blog editor Gene Takagi encourages all non-profits to take note of a recent investigation by Forbes magazine that uncovered someone redirecting non-profit registrations to a post office box in Las Vegas. The majority of the registrations have been for religious organizations, but the weakness in the IRS’ system could be exploited to hijack nearly any non-profit’s registration.

Someone has hijacked the tax identity of more than 2,300 tiny or defunct nonprofits, apparently taking advantage of a hole in a new electronic Internal Revenue Service filing system to list the same person as a charitable official at the same mail box drop in Las Vegas.

[…]

A search on Melissa Data of nonprofits in that zip code produced 2,370 listings. A random spot cross check by Forbes of dozens of them on the official IRS site listed Alexander and the N. Rainbow Blvd. address in every instance. The nonprofits originally were located elsewhere all across the country.

[…]

Another nonprofit listed by the IRS as being led by William Alexander out of Las Vegas is Godsline Ministries. The clothes-donation charity used to be located in McMinnville, Ore.–and died there about seven years ago, according to Rob Rabon, who ran it with his then-wife. “It only lasted two or three years,” he said. “We went to the state and filed papers dissolving it.”

Yet the IRS proclaims Godsline alive and well, with the same tax identification number as when the Rabons ran it.

The problem has its roots in the recent requirement that non profits making less than $25,000 file a statement to that effect. If you recall, there was a big panic last year that these small non-profits would lose their status because they were unaware of the requirement. Since these small entities don’t have a lot of resources, the IRS endeavored to make it easy for them to verify their status with a simple postcard or online filing.

Because so few details are required in the filing, there isn’t a lot of verifiable data being supplied to the IRS. This makes it easy to slip in and replace the authentic organization. The Forbes articles notes that the names of the small non-profits in danger of losing their status were published in an attempt to make people aware of the impending change, but in fact may have been serving to let fraudsters know which organizations were vulnerable to identity theft.

Info You Can Use: CultureTrack Survey Results

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Welcome SoundNotion fans. Come in, take a look around while you are here.

I just got around to reviewing the results of the recent Culture Track Survey. As always with surveys, there were a couple interest tidbits to be gleaned. I looked at the Cultural Track report and then the longer research report. Both are pretty easy to read since the bulk of the pages consist of a graph and a few sentences reflecting on the findings.

One result that caught my eye was in regard to corporate sponsorship. I don’t often see audience perceptions surveyed on this subject.

 

Perceptions of Corporate Sponsorship

If you are making an economic argument for the value of the arts, you should probably be pitching it to businesses as well as governments as a way to enlist corporate support both in your lobbying and fund raising efforts. Just be careful not to make the case so strongly that you start to encourage people to use your organization to charity-wash their reputation lest you become a little tainted by association.

The report talks about barriers to attendance, what motivates people to be subscribers, how influential social media is on the attendance decision (not as much as you might think, though growing). The finding that didn’t jibe with my experience at all was that people plan their attendance well in advance.

“Both visual and performing arts audiences have become significantly less spontaneous and are planning their attendance much farther in advance.

· Only 5% of 2011 respondents visit a museum or exhibition on the same day they make the decision to attend, compared to 17% in 2007.
· Just 3% of respondents attend a performing arts event on the same day of their decision, down from 9% in 2007.”

The only way I can reconcile these numbers is if these reflect planning only and not acting to purchase tickets. Even broken down by subgroups, both infrequent attendees and young seasoned omnivores are planning well ahead in the 50% range and a few days in advance in the 37% and 44% range, respectively. I suspect people may plan in advance, but purchase later.

If there is truth in this, then I am feeling a little more secure in how early I start to promote events. I have often wondered if I am wasting time and money by not just concentrating most of the efforts to the last 5 days before a performance. The results say being able to access information well in advance of an event is highly valued.

The research report had more detailed results about the survey. If you are particularly interested in specific data about the ways different groups are using social media and technology to learn about events, you may want to take the time to study the results (PDF pages 20-33, 37-41).

Some results not related to social media/technology that you may know about, but bear repeating-

-Watching and listening to the visual and performing arts often occurs outside the exhibition / performance hall

-Enjoyment, spending time with or supporting loved ones, and interest in programming play roles in decisions

-Cost, lack of interest, and inconvenience are all barriers to entry

-No one factor contributes to the subscription buying process more than others, but exclusive events are less important than other benefits (last bit is interesting to know-Joe)

-For those that visit cultural organizations less, the reduction is focused on cutting expenses rather than a loss of relevance

-Frequency of attendance is a better indicator than income in terms of determining likelihood of contributions

-On site information helps enrich visits to cultural organizations

One response that interested me was: “Respondents from cities were significantly more likely to indicate that their home city should be considered a cultural center.”  I am intrigued by the idea that city dwellers more than suburban and rural residents place a high level of importance on being perceived as living in a cultural center. If you live in a rural area, you probably have priorities that don’t emphasize a cultural life. I guess the same is true of the suburban experience. Perhaps suburbanites value having their homes within easy commuting distance of work and great culture and don’t have a high expectation of a great cultural life in their town.

 

Info You Can Use: Insurance Pocket Guides for Artists

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As part of their never ending battle to become the best friend of everyone in the arts profession, Fractured Atlas has created a website for a series of pocket guides to insurance for performing and visual artists they have developed. There is a specific guide to each discipline- music, teaching artists, theatre, dance, public artists, visual artists, craft artists and film. There is a note that guides for other groups like independent contractors and radio producers are on the way.

The guides are short and pretty easy to understand. There are fun little prompts to get you to read further

“Since this is a solo operation, I don’t have anyone I pay but I do shamelessly ask friends to move my gear. Done under duress or not, that’s still considered volunteering. Do them a favor. Volunteer Accident [Insurance]

And the answers found on those pages also employ a little humor:

“In a claim, you pay the first $250 and the insurance company will cover the rest. That’s to keep you from filing a claim for the $30 of Medicated ChapStick you bought your trumpet player after your six hour rehearsal. “

The guides cover everything from general liability coverage for groups and individuals, volunteer accidents, workers’ comp, property coverage (including instrument insurance), touring, disability, health and insurance for boards of directors.

But probably of most value is recent guide they have added about the new health reform law and how it relates to artists. I had been wondering what the implications of the law might be for the arts. Though there is clearly still work to be done, from what the guide says, many artists can breath a little easier and should be able to have insurance and a place to live instead of choosing between them.

Fractured Atlas encourages everyone to participate in getting health insurance:

If we’re going to hold insurance companies accountable, then we must also ensure a stable risk pool with full participation by everyone in the United States workforce. We are all players in the system, and our actions impact its economic balance.

That’s why the law includes an individual mandate which requires that all Americans have health insurance or face tax penalties. The only way to prevent a spiral of ever-increasing premiums is to ensure that we’ve all got some skin in this game.

Info You Can Use: Good Governance Policies

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There is an old adage about the cleanliness of a restaurant restroom being indicative of the care being used in the kitchen for food preparation. There really isn’t an actual relationship between these two facts, but a dirty restroom is enough to give one pause.

The Non-Profit Law blog says the IRS takes a similar stance on whether you check Yes or No on your Form 990 about the presence of policies in the following areas:

* Conflict of Interest Policy (Part VI, Section B)
* Executive compensation approval process (Part VI, Section B)
* Document Retention and Destruction Policy (Part VI, Section B)
* Gift Acceptance Policy (Schedule M)
* Meeting minutes document practices (Part VI, Section A)
* Review process of Form 990 by the Board of Directors (Part VI, Section B)
* Whistleblower Policy (Part VI, Section B)
* Joint Venture Policy, if applicable (Part VI, Section B)
* Policies regarding chapters, affiliates, and branches, if applicable (Part VI, Section B)

It is not illegal to lack these policies, but their absence can be a sign of poor governance and therefore contribute to a decision by the IRS to subject an organization to greater scrutiny.

Emily Chan notes that just because you have policies in these areas doesn’t mean you are covered. It is important to evaluate the policies to ensure they are appropriate for your organization and its ability to adhere to them, comply with the law, are understood and actually practiced.

She supplies the following helpful info: “Note changes to policies are not required to be reported to the IRS unless such polices or procedures are contained within the organizing documents or bylaws and regarding certain subject matter such as conflicts of interests. See Form 990 Instructions.”

If an organization doesn’t have a policy, Chan advises not rushing to formulate them out of a desire to appear to be exercising good governance for public relations reasons (and to perhaps avoid the IRS’ steely gaze). Poor policy being nearly as bad as no policy. Proper policy takes time to formulate so give yourself the time to develop it. In her tips for evaluating existing policies there is an implication that one should avoid adopting the policies of other organizations in any significant degree.

The guidance she provides for creating new policies is:

Thoughtful considerations about how to get to “yes” can include questions such as:

* Which policies have a higher priority based on the circumstances of the organization? For example, an organization that frequently accepts non-cash gifts may have a more pressing urgency to adopt a useful gift acceptance policy as opposed to an organization that hardly, if ever, accepts donations from the public.
* What are anticipated governance issues or past governance issues that these policies should address?
* What kind of capacity limitations – staff, financial resources, or otherwise – should we be mindful of in drafting and adopting a new policy?
* What is the projected timeline for drafting such policy and presenting it to the board?
* If anticipating a prolonged delay (due to resources, time, etc.) before formally adopting such policies, what problems might this cause and what can the organization do to help mitigate these risks?
* Is the organization prepared to explain to the IRS, its constituents, or others why it currently does not have a certain policy and articulate its action plan moving forward to adopt one?

Additionally, it is important to note an organization lacking the recommended policies is not without any recourse on the Form 990. For example, Schedule O (2010) allows for supplemental narratives to further explain the policies or processes used at the organization to address these governance concerns.

Stuff To Ponder: Surveying The Whole Person

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Two thought provoking articles about surveying popped up on my computer today. While you may not think surveying is terribly exciting, I encourage you to read on. I promise there is no talk of statistical analysis.

The first I found on the Createquity blog where Crystal Wallis recounts how the North Carolina Arts Council turned to folklorists from the North Carolina Folklife Institute to help establish an arts council in one of the counties. Once Wallis explained the reason the state arts council tapped the folklorists, it made perfect sense to include them. Then I started wondering why more surveys don’t involve folklorists.

Folklorists, as it happens, are some of the best trained interviewers out there. They also have a particular advantage when it comes to arts research: folklorists are trained to seek out and recognize creativity in all forms, especially that which comes from people who don’t consider themselves “artists.”

From all accounts, it looks like the folklorists achieved excellent penetration into all corners of the community, including many niche populations that revealed the diverse historic and present influences in daily life. They didn’t just identify these elements in the community, but spoke with them as well.

Wayne Martin, Senior Program Director for Community Arts Development at the North Carolina Arts Council, explains the benefits that came from using folklorists in this project.

* Authenticity

“By having folklorists trained in interviewing, we got some really eloquent statements that we were able to quote exactly. The results of the research were in the words of residents, which was a different tone than when other consultants would come in and write about a place. We were confident that the assets they reported on were valued by those in the community, lending an air of authenticity and connection we hadn’t had from other reports.”

Martin’s words came back to me when I read the next article on Asking Audiences blog. Peter Linett talks about a New York Times piece criticizing a Brooklyn Museum exhibit on Plains Indian tipis for being bland, blaming the use of focus groups and visitor surveys in the planning process.

Linett addresses the problem most arts organizations face when asking audiences about future programming. Programming per popular acclamation of committee results in something that is uninspiring to everyone. Foregoing feedback entirely risks appearing highbrow and elitist. Because people are often at a loss to offer suggestions and questions on topics they know nothing about, the best intentions to avoid confusing complexity and condescending simplicity result in a middle of the road product in which “you can sense the oversimplifications even if you don’t know enough to say exactly what they are, and you can feel the flat, pedantic tone.” While Linett makes this observation in term of museum exhibitions, I am sure you can think of similar examples in other disciplines.

Linett identifies a likely source of the problem. (emphasis his)

But that’s because we’re starting with a narrowly cognitive, educative purpose in mind. We’re interested in what visitors know about tipis rather than (for example) what they feel, what they wish, what they fear, what they find beautiful, what they find sad. We’re looking at a single, isolated aspect of human connection to the material. It’s not necessarily the most interesting aspect, but it’s the one that museums, as Enlightenment institutions, have traditionally cared about most.

What kinds of questions would we ask if we cared just as much about emotional, spiritual, social, ethical, imaginative, and physical connections to that material? How would we start a conversation with our audiences about those kinds of engagement…

Upon reading this last bit, I was struck that this was what the North Carolina folklorists were asking of those they surveyed — or at least these elements were present within the answers they were recording. The greater degree of authenticity Wayne Martin observed in the survey results was likely due in part to answers that reflected these aspects of the interviewees’ connections with arts and the idea of a county arts council.

Surveying on an emotional rather than an intellectual level makes a lot of sense. People react to art and even the idea of the arts on a visceral level that they can have difficulty verbalizing. Surveying factual information isn’t going to help elicit a truly valuable response because people often don’t know why they do or don’t like art.

At least once a day when I am reading about arts topics in a newspaper article or a blog, there will be a comment that says “as long as no tax money is used for it…” and/or “art(ists) should support themselves.” I suspect these phrases are just convenient ways for people to get past the fact they don’t really know how to discuss how they feel about the arts. Certainly this inability is shared by those who want to offer praise as well. Asking Linett’s questions about what people felt, feared, admired and pitied might bring more sophisticated answers and avoid that question all performing artists fear–“How did they memorize all those words/steps/notes.”

Info You Can Use: What Is Lobbying and Can I Do It?

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I wasnʻt looking for it, but I fortuitously stumbled across a post from last year on Charity Lawyer Blog regarding lobbying and what sort of activities constitute lobbying and what doesn’t. There are a number of activities that don’t constitute lobbying, many of which are obvious such as sending your season brochure to people or efforts made with one’s own resources and time. There are other nebulous areas which may leave one wondering if they qualify as lobbying or not that are addressed by writer, Ellis Carter. I have only included a short list of the permitted activities.

# Some communications with executive or administrative officials. Communications with executive or administrative officials or their staff where (i) there is no reference to a specific legislative proposal; (ii) no view is expressed on such a proposal; or (iii) the official or staff person will not participate in the formulation of the legislation are not lobbying.

# Attempts to influence regulations or other administrative or executive action. Attempts to influence regulations or other administrative or executive action (including those that are implementing legislation) are not considered lobbying, even if the recipient of the communication is a legislator. This is because the action sought is not itself legislation.
[…]

# Responses to legislators asking for technical advice. Responding to written requests from a legislative body, committee or subdivision (not a single legislator or informal group of legislators) for technical advice or assistance on pending or potential legislation is not lobbying.

# Nonpartisan analysis, study or research on legislative issue. Making available the results of nonpartisan analysis, study or research on a legislative issue (with no direct call to action if it is communicated to the general public) is not considered lobbying. This must constitute an objective, educational presentation but may express an opinion or conclusion as to the desirability of legislation.

# Discussions on broad policy issues. Discussions of broad policy issues requiring a legislative solution are not lobbying, so long as the merits of the specific legislation are not discussed.

While I knew that 501 (c) 3 organizations could lobby, I didn’t know that the amount they could expend was determined on a scaled percentage of the organization’s total exempt purpose expenditures. This gets a little complicated because there are different percentages for direct lobbying and grassroots lobbying and what sort of funds those percentages apply to so I will direct you to the Charity Lawyer blog entry for more detailed information.

The definitions of direct and grassroots lobbying, according to the blog are:

* Direct lobbying. Direct lobbying is a communication with a legislator, an employee of a legislative body, or any other government employee who may participate in the formulation of the legislation that both (1) refers to a specific legislative proposal and (2) reflects a view on that proposal.

* Grass-roots lobbying. Grass roots lobbying is a communication with one or more members of the general public that: (1) refers to a specific legislative proposal, (2) reflects a view on that proposal, and (3) includes a “call to action”, directly or indirectly encouraging the recipient of the communication to engage in direct lobbying.

Carter points to the Alliance for Justice website as a resource for more information on lobbying and advocacy.

Info You Can Use: Board Minutes

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Emily Chan over at Non-Profit Law Blog has written a two part series on board minutes. Both entries comprise a fantastic resource for anyone who has questions about the format and content of board minutes and the laws surrounding them. I was fortunate enough to be working on my most recent board minutes when part 1 was published and made some changes in response to the suggestions she makes. I am also a big arts administration geek and excitedly awaited the second installation of the series so I could post about it.

Part One is mostly about the format and content of the minutes. In it, she enumerates some common mistakes that are made.

* Failing to document a quorum was present;
* Failing to document or provide a clear description about a board action taken;
* Drafting a transcript of everything said at the meeting, including information that might be harmful to the organization if read by someone with access to the minutes (e.g., employees or members) or by a court reviewing a board action;
* Drafting and distributing minutes to directors after a lengthy period of time has passed;
* Waiting to approve minutes from past meetings until a substantial period of time has passed, decreasing the likelihood that mistakes will be caught and corrected; and
* Failing to maintain a reasonable document management system, resulting in the loss of minutes from past meetings.

The format of the minutes can vary, but a person unfamiliar with the organization and the issues it faces should be able to easily understand what happened in a meeting and what decisions were reached. Chan outlines what specific information that should appear in the minutes. She also discusses what information should be kept confidential, how a board should proceed into executive session to keep that information confidential, how the minutes should reference the executive session and how the minutes of the executive session should be kept.

The format should be standard from meeting to meeting, including the detail in which decisions are recorded. Minutes should be issued before the next meeting or within 60 days of the last meeting and kept forever. I always wondered about that last part. Minutes are among the items the IRS advises a non-profit keep for ever.

Which provides a segue to Part 2 of the series which deals with the legal aspect of board minutes. Directors and members both have a right to access the board minutes. The rules relating to access vary from state to state, Chan deals with California’ laws.

The IRS also has an interest in seeing the minutes. The bulk of the entry is devoted to discussing what practices are important to stay in compliance with rules and regulations for non-profits related to governance, tax code and audits.

Different agencies of your local and state government may also want access to minutes, especially if the organization is involved with legal actions associated with decisions made by the board. In the course of the merger my presenters consortium is seeking to pursue with a sister organization, the secretary of state requires copies of board minutes where different decisions and resolutions were discussed and passed.

Info You Can Use: Rebutt This!

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This first one is more of a project to contribute to than use, but ultimately useful just the same. Via the Americans for the Arts blog, an artist in Pennsylvania, Amy Scheidegger, got a little steamed when she overheard two teenagers dismissing the arts as a valid pursuit. “Art is, like, the most worthless degree anyone can get. Like, haha, they have a degree in making shit with popsicle sticks.” Scheidegger decided she was going to put together a book of responses to the idea that art is worthless, an Artistic Rebuttal Book.

She has put out a call for entries to be included in the book.

“For anybody who wants to contribute to the book with their own statement on the importance of art, or where art is hiding that the normal non-artist doesn’t see, or statistics about how much money is spent in any art-related field, whatever you want really, that cites the importance and everywhere-ness of the art we live and breath, now’s your chance to voice your love of art!

YOU don’t even have to be an artist, maybe you just know one (married one, birthed one or just appreciate their hard work, etc) And the statement can be about any kind of art as well: theater, dance, music, visual, the written word, movies, you name it,”

March 12 is her deadline so she can take an abridged version to law makers on Arts Advocacy Day. May 15 is her hard print deadline.

Second tip of the day:

You may or may not know that Facebook has changed their Pages layout. Those are the non-personal pages that businesses can make for themselves. Thanks to the Technology in the Arts Twitter feed, an article about how to best use the new features came to my attention. You should read the tips if you have a Facebook Page account because the changes become permanent whether you opt-in or not on March 1 and some settings you may have turned off will get turned back on by default.

One thing they don’t talk about that I have finally gotten to work with the upgrade is the Username function. I could never get a short, easy to remember username to register so I could actually post a Facebook address that wasn’t 60 characters long and full of arcane symbols. (e.g. www.Facebook.com/mytheatre) I was always told the name was available, but when I confirmed I wanted it, the webpage just hung. Today, first try I finally won the battle and have a nice brief address. If you too have had this problem, the solution may be at hand!

Info You Can Use: Free Speech and Copyright Law Resource

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There is a handy online guide about free speech and copyright and the arts, appropriately named Online Arts Rights, created by the Center for Democracy and Technology. While you ultimately want to consult a lawyer about such things, the site provides a good resource if you have questions on a variety of subjects.

They tackle issues related to “Sexual Content, Violence, Political Speech, Hate Speech, Depictions of Real People and Sampling and Appropriation.” Another area looks at the role of an artist and an online content provider and issues they should take into consideration. A third area deals with the penalties under U.S. criminal and civil law as well as how the government can and can not apply regulations.

Because so much content is being delivered over the internet, they also touch briefly upon how one might run afoul international law. As you might imagine, there is very little concrete to tell because it is often unclear what laws apply. Those where the content was created, those where the servers and routers are located or those where the recipient is located. On a related note, the site also addresses violations of an internet provider or content host’s terms of service and how material protected by the First Amendment won’t protect you from having your account shut down.

Info You Can Use: Helping Your Publicist Help You

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Last week Ciara Pressler had an entry on Fractured Atlas with tips about increasing your chances of getting press coverage. Her number one tip struck a chord with me.

The #1 way to maximize your chances for coverage? Trust your press reps to do their job. The time to hash out goals, strategy, and timeline is at the beginning of the promotional period, not on Draft 7 of the press release or in the middle of the night on email a week before opening.

The collaborative nature of the arts can work for us, but at times, against us. A creative environment inspires us to have ideas about more than just our own role, and some of the best results come from the synergy of a group. But the bottom line is that we all have a specific job to do,…

I have been in a position where others, whether they were actually in a position to direct my activities or not, micromanaged promotional efforts. Glad to have put those days long behind me. Now I get to micromanage and make people miserable! Seriously though, regardless of my position, I like to have a general plan in place well before an event is upon me and not make any major alterations. I am sure that is true for most people. You don’t want to be in a situation where you have to invest a large number of resources, be it financial or your own brain power and physical energy, to accommodate a drastic change of direction.

Some brief excerpts of other tips that I particularly liked:

Respond quickly.
As in minutes, not hours, and never days. Landing a placement can literally be a matter of being first to respond. …

[…}
Be brief & buzzy.

When a reporter asks you a question, whether by email, phone, or in person, it is not a cue to launch into your 20-minute (or even 5-minute) philosophy of the state of the arts in America….

Know what you’re there to promote.

If you’re being interviewed, stay focused on the topic of the article or segment….

Let the photographer do her job too.

It’s the publicist’s job to know which photos will work for a particular publication…

[One of my particular pet peeves. I have waged constant battles with people who are fine directing a show, but awful at getting people to look natural in a photo shoot and won’t cede control. -Joe]

Understand that media is a business.

A reporter is subject to an editor is subject to an editorial calendar is subject to the publication as a whole is subject to advertisers. If there are four major shows opening in a given weekend, there may not be room for a review of a new company’s first production. If an outlet’s primary audience is musical theatre lovers, they will likely pass on covering a Shakespeare play. Especially in the age of search engines, priority will be given to topics that will draw the most – or most desirable – audience to a publication.

I didn’t edit down this last one because this sort of response is common to those outside an arts organization as well as within. I got a call last week from a person telling me it wasn’t very helpful that they learn about the show from a feature story in the weekend entertainment section of the paper on the same day as the event. We had the event on websites, including those focused toward local families, newspaper and radio spots and had been listed in calendar sections repeatedly for a couple weeks. (Not to mention the brochure and email blasts we had been sending.) Fortunately, people who had been purchasing tickets identified each of those places as a source of information or I might despair at having paid for all that advertising. I explained to him that I had no control over what the newspaper printed and when. I noted that papers usually waited to print a story with big headlines and eye catching images until a time when the information was immediate and relevant because that is what people valued. I added that we were very pleased that they had chosen to cover our event amid all the rest of the things going on.

The Importance of Asking Why

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Daniel Pink had a piece in The Telegraph last week discussing the importance of everyone in your organization being on the same page about why you are in business. He cites a study performed by a professor from the University of Pennsylvania’s Wharton School where telemarketers were split into three groups, one that was given reading materials before making calls that discussed personal benefits to working as a telemarketer, another group read stories from those who have benefited from the funds raised by the telemarketing and the third group who were given no reading materials at all. After a month those who read the articles extolling the benefits to the telemarketer were no more productive in their fund raising than those who received no reading materials at all.

“People in the second group – who took a moment to consider the significance of their work and its effect on others’ lives – raised more than twice as much money, in twice as many pledges, as they had in previous weeks and significantly more than their counterparts in the other two groups…

Grant and some colleagues uncovered similar results in another call centre study. There, when employees spent just five minutes talking to the recipients of the funds they were raising, those employees spent twice as much time on the phone with prospective donors and raised nearly three times as much money as they had in the past. And Grant found the same phenomenon in a study of lifeguards at a community aquatics centre. A group of lifeguards read stories from previous lifeguards about rescuing swimmers. Then, a month later, those lifeguards worked more hours, and received higher ratings from their bosses, than a similar group that wasn’t reminded of its purpose. “

People in the arts tend to be so passionate about what they do, they probably don’t have as far to go as those in other industries when it comes to knowing why itis what they do. But is everyone in the company basically united behind the same purpose? We are often told that everyone in an organization should be able to recite the mission statement. But failing that, they should at least all be able to voice the same basic organizational purpose. There is a tendency to groan and perhaps roll ones eyes at the thought of being tested on the mission statement. In many cases, it can be indicative of a poorly written mission statement that it doesn’t roll easily off the tongue. Reading how effective people who are mindful of the organization’s purpose can be, spending a little more time committing the mission statement to memory doesn’t seem like such an onerous task.

Granted, it doesn’t have to be the mission statement that has to serve as the purpose. It could be something on a more granular level like the front of house staff and volunteers deciding that over the next year they are going to help reduce any intimidating elements in the attendance experience and get people excited about the shows.

As Pink’s article draws to the end, he offers an activity to put into practice. “Once a week, at that staff meeting, spend a few minutes revisiting the question. Talk about the purpose of the week’s activities. Discuss your efforts’ effect on other people’s lives. Remind each other why you’re doing what you’re doing in the first place. “

Thank You, Volunteers

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Tech Soup had a tweet linking to a post on HandsOn blog post containing tips for writing thank you notes to volunteers. One of my initial reactions to some of the suggestions like writing the notes out by hand and writing drafts first, made me think that if we had time to do that, we wouldn’t need the volunteers in the first place. We actually do hand write our Christmas cards to volunteers and follow HandsOn’s tips about personalizing the message by acknowledging things they have done or contribute to our efforts. But that is a really long undertaking.

While thinking about adding writing a first draft to the process for every person makes me groan, they are correct that the more you write, the better you get and the easier it is. Also, thanking everyone by hand once a year like we do at Christmas does make the process onerous. Acknowledging people throughout the year as they provide great service breaks the effort up a bit more. It is probably more impressive to the volunteer when they receive a note out of the blue in the middle of April than at a traditional time like Thanksgiving or Christmas.

I have read many of the tips they offer before, though it is always helpful to be reminded. A tip they give that I have never really considered is the first one.

1) Focus on the volunteer.
Before you write the thank you note, try writing the volunteer’s address on the envelope and write it out by hand. As you’re writing their address, think about your relationship to the volunteer; think about where they’re living and how they’re serving. It will help you to write an individual message for that volunteer.

I think that addressing the envelop first and thinking about the volunteer is a good exercise for focusing your mind on what you want to say in the message. Often I will come to a person’s name on our list and my pen will sit poised over the paper as I try to recall all the contributions they have made. Addressing the envelop fills that time and can help you generate some thoughtful remarks as you think about them. The suggestion of thinking about where people are living intrigued me a little. I never really focused too much on that, but just thinking about the process of thinking of where my volunteers live reminded me that those who volunteered for the various organizations for which I have worked have been retirees living on fixed incomes and have invested a fair portion of their limited resources in travel and preparation for volunteering. Some of the best volunteers I have had were families in the lower income range where the parents were trying to instill the values one derives from volunteering.

As something of a corollary to this subject, the blog has a link in the right column to an Acrobat document, “The Nine Basic Rules for Volunteer Recognition.” It reiterates some of the same things about timing and degree of recognition.

1. Recognize . . . or else — The need for recognition is very important to most people. If volunteers do not get recognition for productive participation, it is likely that they will feel unappreciated and may stop volunteering with your program.

2. Give it frequently — Recognition has a short shelf life. Its effects start to wear off after a few days, and after several weeks of not hearing anything positive, volunteers start to wonder if they are appreciated. Giving recognition once a year at a recognition banquet is not enough.

3. Give it via a variety of methods — One of the implications of the previous rule is that you need a variety of methods of showing appreciation to volunteers.

4. Give it honestly — Don’t give praise unless you mean it. If you praise substandard performance, the praise you give to others for good work will not be valued. If a volunteer is performing poorly, you might be able to give him honest recognition for his effort or for some personality trait.

5. Recognize the person, not just the work — This is a subtle but important distinction. If volunteers organize a fund-raising event, for example, and you praise the event without mentioning who organized it, the volunteers may feel some resentment. Make sure you connect the volunteer’s name to it.

You will have to follow the link if you want the other 4 tips. The last tip reminded me of an embarrassing incident over 15 years ago when I was misquoted in a story about volunteers that made it sound like we used volunteers as cheap labor rather than that volunteers often provide a service which will often command a respectable wage. Thinking back on the incident and groaning a few years later, I realized it might have been better to focus more on what volunteers bring as individuals– mothering artists in the hospitality room, being as organized and motivational as a drill sergeant with a pleasant demeanor that made people forget how tired they were–rather than discussing them as a labor force. In many cases they are bringing the same passion for our cause as our employees are.

Info You Can Use: Microvolunteering

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This information has been out since this summer and I have this sense of being vaguely aware of the company being mentioned in tweets, but there was no mention of its significance or I would have covered this at the time. I figured this was reason enough to mention it here and spread the word. (Or I was just living under a rock, but I couldn’t have been the only one.)

A company called The Extraordinaries has essentially shrunk Amazon’s Mechanical Turk service down to the cell phone level with a service called Sparked. I should clarify that this isn’t Amazon’s service offered through cell phones and the service rendered is voluntary rather than the paid work Amazon offers. The similarity is that it connects the needs of companies, in this case non-profits, with volunteers willing to do the work.

According to a piece on Springwise.com,

“…it enlists both individuals and groups of company employees to contribute their expertise to a nonprofit in even the smallest chunks of time. Nonprofits begin by posting requests to the site; those, in turn, are routed to would-be volunteers based on their skills and interests. Examples might include translating a page of a document into Spanish, for instance, or helping to choose a new logo; The Extraordinaries even has pre-built “kits” that turn a series of best practices into tasks for volunteers. Willing volunteers then complete the requests during a spare moment via iPhone (through a dedicated app) or web browser—or they can share it with their colleagues.”

Sparked uses the term micro-volunteering because the tasks are broken down into whatever segments of time you have available. You could conceivably perform tasks on the train commute into work or in a taxi on the way to a party. There are some examples of work that has been completed on their blog, including a recent story about a logo that one volunteer reworked.

I am probably not the first to say it, but given the way today’s digital culture is shaping interactions, I have to think this mode of activity mediated through technology is going to begin to figure largely in organizations’ volunteer programs. It doesn’t help with ushering and important face to face interactions, but it could help with promotional efforts, research, evaluation and maybe even editing program books and designing the covers.

Though I can see it now, people are so impressed with our organization when they attend a show, the decide to start microvolunteering on their iPhones during a performance leaving the staff in a quandary about asking them to stop.

Info You Can Use: More Foreign Artist Withholding

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The issue of the 30% with holding the United States levies against foreign artists doesn’t seem to be going away. Last year I wrote about my victory, with some help from the IRS, in educating my disbursement office about reading tax treaties with other countries. I thought between this new found knowledge and preparing the paperwork well in advance of a performance, most of the problems would be behind us.

Boy was I wrong.

When I returned from the Christmas holidays about two weeks ago, I had a letter from the IRS specifically directing us to withhold 30% from the payment we were making to an artist and then send them proof of having done so. You would think from such a letter that the performers were absconding from the country with huge amounts of cash, but we really aren’t relatively paying them all that much. Especially when you consider their agent gets a cut too. I don’t want to imply that the laws should be applied inconsistently, but it seems like the IRS is either focusing undue attention on small potatoes or they have shifted resources to scrutinize all foreigner artists’ activities. (I still say they would get more bang for their buck going after everyone sheltering money overseas.)

This story has a happy ending, at least for my organization. We received a letter from the IRS today saying the group has entered into an agreement with the IRS and we were specifically directed by name not to withhold the money. Still, the whole incident shows that the IRS is apparently stepping up their activities in this area and you need to be more aware of the laws surrounding withholdings. Artists from Abroad is a good place to start.

Info You Can Use: B Corporations

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Daniel Pink had a tweet today to a Washington Post story about Maryland companies signing up to be classified as a “B” corporation in that state. The B for Benefit Corporation will allow for-profit companies to operate to pursue social ideals.

You may ask what is to keep any company from operating in socially responsible ways? Many companies align themselves with causes to burnish their image, after all. It is actually the stockholders which may pose a problem apparently. According to the newspaper:

“These hybrid entities pay taxes and can have shareholders, without the risk of being sued for not maximizing profits. Companies can consider the needs of customers, workers, the community or environment and be well within their legal right.

A benefit corporation, for instance, could choose to buy from local vendors at a higher cost to reduce its carbon footprint, much as the Big Bad Woof does. The company, as a part of the incorporation, is required to file an annual report on contributions to the goals set forth in the charter and submit to an audit by an independent third party. “

This is different from the L3C structure I have mentioned before. Like the L3C, this structure is not recognized by the IRS. Though I am not sure if it is in the same nebulous area the L3C because it doesn’t seem like B companies are meant ever qualify as a program related investment for foundations. Though there is probably a lot about the structure not covered in the news article.

More information about B corporations may be found online at a site created to advance these type of organizations. I didn’t find any discussion about how the IRS views these organizations and if there are significant restrictions to investing. According to the site the need for a B corporation are: (my emphasis)

“B Corporations address two critical problems:

* Current corporate law makes it difficult for businesses to take employee, community, and environmental interests into consideration when making decisions; and
* The lack of transparent standards makes it difficult for all of us to tell the difference between a ‘good company’ and just good marketing.”

This is an effort they are trying to take nationwide so if you are interested, don’t think it isn’t applicable to you just because you don’t live in Maryland. This could be a viable structure for an arts related organization. While the status doesn’t provide any tax breaks, doing well on the required audit can be a positive signal to interested investors.

Stuff To Ponder: Volunteer Bill of Rights

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One of the many items I bookmarked to write on when I returned from my holiday break was an entry Robert Eggers did on the Volunteer Bill of Rights he helped institute at DC Central Kitchen. He said he took his inspiration from a concept championed by restaurant reviewers in the 1960s and 70s that diners had rights and didn’t have to take what was set before them if it was sub-par. (Hard to imagine there was a time when you didn’t send cold food back to the kitchen.) Eggers says this is what drove restaurants to offer better service and improved and expanded diners’ culinary knowledge to the point where we are now focused on the provenience of our food. One result he says is that every city now has great dining establishments rather than just a few cities.

In the same way the Internet provides a channel for customer driven feedback, Eggers feels that encouraging volunteer feedback and involvement will drive innovation faster than hiring expensive consultants. (DC Central Kitchen has 14,000 people volunteer every year which certainly does represent a lot of brain power.)

DC Central Kitchen’s bill of volunteer rights is:

ALL volunteers have the right to:
* Work in a safe environment.
* Be treated with respect by all staff members.
* Be engaged in meaningful work and be actively included regardless of any physical limitations.
* Be told what impact your work made in the community.
* Ask any staff member questions about our work.
* Provide feedback about your experience.
* Receive a copy of our financial information or annual report upon request.

They want their volunteers to ask the tough questions that will help them operate better, but Eggers says the middle right is the most important.

“….but the most purposeful of these is the one right in the middle—the right to “be told what impact your work made in the community”. THAT’S the kicker. We want, and think it’s critical, that every nonprofit in America be prepared to answer that question, in detail. No more fuzzy, feel good platitudes. No more bromides, brothers and sisters—it’s about facts and figures. Verifiable, Hard Core, Detailed Deeds.”

And following his philosophy of using the feedback of volunteers to make DC Central Kitchen run better, he solicits the assistance of the reader and offers some himself.

“We are an open source organization, so feel free to use this Bill of Rights in your shop. Add more rights if you see fit. If they rock, let us know so we can adapt our version. Call if you want and we’ll talk about how we trained our staff to translate talking to volunteers about these rights into opportunities to elevate the idea of what we are doing, together, so that folks can’t wait to come back—with friends, time and wallets in tow.”

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Butts In The Seats by Joe Patti is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.
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