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Positive Signs For Reimbursement Of Overhead Costs

November 9, 2015

by:

Joe Patti

You may remember back in January that I wrote about the new rules promulgated by Office of Management and Budget (OMB) requiring that any entity receiving federal funds much cover at least 10% of a non-profit’s overhead costs.

Don’t worry, its okay if you don’t remember. But this is relatively important and bears repeating.

One of the concerns at the time was that state and local governments and other funders might pressure non-profits with whom they contract or provide grants to waive a their right to receive overhead costs. The OMB rules prohibit this, but if a non-profit isn’t aware of the rules or are afraid to advocate for themselves, the problem may continue.

Given this context, it was a positive sign when the L.A. County Board of Supervisors voted to adopt the OMB guidelines and to write a letter to the state government to do the same.

It may not seem significant for a governing body to agree to adhere to the conditions under which federal funding was allocated, but as Non-Profit Quarterly notes there are “rob Peter to pay Paul” concerns about how funding may be manipulated.

Rules do not implement themselves without strong nonprofit monitoring and oversight—hopefully, as in this case, in partnership with government authorities. In this case, not only are the supervisors talking to state officials, but they will also be developing an implementation strategy in consultation with Los Angeles nonprofits, which we presume, based on what we have seen as policy statements from CalNonprofits, ought to address how to ensure that higher indirect cost reimbursements do not occur at the cost of lessening service delivery.

As I had noted in my earlier post, the National Council of Non Profits created a guide to educate organizations about the rules and provide responses to assertions from funding entities that the rules don’t apply.

One thing I had mentioned was that arts organizations should note that these rules likely apply to the funding you receive through your state or regional arts organization:

One- it doesn’t matter whether it is called a contract or grant or any other term, the rules are based on the substance of the transaction.

Two – Sub-recipient non-profits who are required to acknowledge part of the funding is received from the federal government are covered under these rules.

Advocacy, Government Relations, Info You Can Use, Legal Topics, State of the Arts

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Arts Make For Good Medicine

November 4, 2015

by:

Joe Patti

There is a recent article in the Boston Globe about Harvard Medical School requiring its students to take arts courses that bears reading. (h/t Thomas Cott)

The Yale School of Medicine, for instance, requires students to scrutinize paintings in a museum to improve their skills at observation and empathy — a program that has been replicated around the country, including at Harvard and Brown. At Columbia, incoming medical students are required to complete a six-week narrative medicine course.

[…]

They are “a tool to help doctors understand people and their conditions.” They help doctors see beyond the disease, the “narrow biological aspect,” to the illness, which includes anxiety, fear, and the whole human experience of being sick, he said.

If there were ever a good illustration of the benefit of arts participation and practice to society, helping doctors be more effective diagnosticians, communicators and bring more empathy to anxiety inducing interactions with patients is pretty compelling.

And if it can do this for highly trained medical professionals who work under extremely stressful environments, well then it can probably provide similar benefits to elementary and high school kids as well.

I am not making an unwarranted leap of logic when I say this. The med student quotes in the articles could as easily be attributed to a high school learning environment. Insert the term high school in the following sentence and you can probably find something similar in an interview with a high school student.

“Medical school is so intense,” she said. “There’s a lot you have to suppress in yourself.” The more students learn to express their feelings through the arts, she said, “the less traumatized you will be.”

I was especially struck by a piece about the Comics and Medicine course at Penn State College of Medicine linked to in the Globe article. I had never thought about the use of graphic novels to help doctors to understand the point of view of their patients, but also as a medium to tell their own stories.

Now they are registering based on recommendations from other students. Trey Banbury, a fourth-year medical student at Penn State who took Green’s course, said he was surprised when a comic helped him understand what mania looks and feels like for psychiatric patients.

“The graphic novels we were asked to read were simply incredible,” he said. “There are many things that cannot be said, but have to be shown.”

Students in Green’s class are required to do two things: read graphic novels and talk about them, and create their own graphic narrative. “What I help them do is take a story from their med school experience and turn it into a comic,” Green said.

Expert designers and artists are brought in to help students craft their comics. Like many in the course, Banbury had no prior experience in drawing. His comic, Perspective, shows how med students struggle with the stressors of medical school.

There are many layers to the benefits here. First, the doctors gain insight into what their patients are experiencing from reading graphic novels. Then they have to deal with the challenge of explaining themselves to an another person who will execute their comic, much as a patient has difficulty communicating their problems to a person who is not experiencing them.

As the large Baby Boomer generation ages, the type of skills these exercises develop in doctors will become increasingly important.

Art(ist) Education, Working In The Arts

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Are You Running Your Arts Org According To A 19th Century Social Movement?

November 3, 2015

by:

Joe Patti

Last month Non-Profit Quarterly had a piece on four impulses that shape non-profits. These impulses often contradict each other to some extent which results in the internal philosophical conflicts those of us in the non-profit arts often experience.

While the results are familiar to many of us, you may not be aware of some of the underlying causes and historical movements which have shaped general perceptions and expectations of non-profits.

The four impulses author Lester Salamon identifies are voluntarism, professionalism, civic activism, and commercialism. He describes tensions between them as this:

“They are not-for-profit organizations required to operate in a profit-oriented market economy. They draw heavily on voluntary contributions of time and money, yet are expected to meet professional standards of performance and efficiency. They are part of the private sector, yet serve important public purposes.”

On occasion it is noted that the 501 (c) (3) section of the tax code doesn’t mention the arts at all. The stated purpose is for “religious, charitable, scientific, literary, or educational purposes, or for testing for public safety, or to foster national or international amateur sports competition, or for the prevention of cruelty to children or animals.”

When Salamon discusses the historical precedents of the four impulses, most of the examples revolve around the charitable care of medical, mental health and economic problems. In the context of this history the reason why the tax code might primarily focuses on caring for social issues and doesn’t mention the arts becomes a little clearer.

The end result is that the arts have essentially inherited the political and social expectations of the entire sector. For example, Salamon notes that conservatives idealize non-profits as charity performed by passionate volunteers supported by private donations rather than government support. Liberals, he says, focus on the limitations of non-profit effectiveness to call for more government involvement.

Salamon provides an extensive chart mapping out how the four impulses manifest in areas like objectives, strategies, operating & management styles, and organizational structure. Even though non-profits have proven to be very resilient, you can see how trying to serve the different impulses can result in a hodgepodge approach that may rob the organization of its effectiveness.

For example, in terms of management styles. When working with volunteers who are donating their time, there is a need to be informal and flexible. However, to address legal and fiduciary requirements, a level of professionalism is needed which involves formal rules and processes. Yet in the arts especially, people want to arrive at decisions collaboratively by group consent (civic activism). But then there is an expectation of commercial viability (run like a business) which can demand a tight, disciplined structure that can respond to a changing operating environment.

I can think of some examples of commercial entities who have managed to be successful about adopting the positive outcomes described above, but I can’t think of a non-profit arts organization that has been able to do all of those things well. The general consensus is probably that non-profit arts organizations fall short of having the discipline to adapt to changing environments and maintain commercial success.

Though to be fair, that describes a great number of commercial businesses as well. Many non-profit arts orgs never really aspire to economic success. Often increased funding/revenue means the ability to expand access while maintaining the same profit/loss balance (or defraying some of the existing deficit). That is an outgrowth of the four impulses.

I am not necessarily advocating that non-profits decide which impulse(s) they need to jettison in order to operate more realistically. Though it may be valuable to at least engage in some examination and consideration. Knowing the history that influences the philosophy of non-profit operations can help you recognize if you are saddling yourself with expectations that really aren’t valid to your particular endeavor.

Essentially, now that you know that they grew out of 19th century social service theory that has no relation to what your organization is all about, are you perpetuating some unproductive practices because you thought that is what good non-profits are supposed to do?

General Musings, Management Philosophy, Terms and Ideas, Working In The Arts

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Can You Care In An Unreasonable Way?

November 2, 2015

by:

Joe Patti

Seth Godin says he figures Apple computers reached their peak about three years ago.

Since then, we’ve seen:

Operating systems that aren’t faster or more reliable at running key apps, merely more like the iPhone…

Geniuses at the Genius Bar who are trained to use a manual and to triage, not to actually make things work better…

Software like Keynote, iMovie and iTunes that doesn’t get consistently better, but instead, serves other corporate goals. We don’t know the names of the people behind these products, because there isn’t a public, connected leader behind each of them, they’re anonymous bits of a corporate whole.

Compare this approach to the one taken by Nisus, the makers of my favorite word processor. An organization with a single-minded focus on making something that works, keeping a promise to users, not investors.

Mostly, a brand’s products begin to peak when no one seems to care. Sure, the organization ostensibly cares, but great tools and products and work require a person to care in an apparently unreasonable way.

If you are nodding your head in agreement upon recognizing that Apple’s achievements have sort of leveled out, stop a second and think about whether you are running things to make them better or just to triage and serve organizational goals.

When I read the sentence about the software not getting better but serving other corporate goals, Trevor O’Donnell’s posts about marketing reinforcing the arts organization’s image of themselves, rather than reinforcing the customer’s image of themselves having a good time, came to mind.

Obviously there is more involved with offering consistently better experiences to those who participate in the events and services you provide than good marketing. Good service, good marketing, good environment are all interdependent.

It is difficult to recognize issues that exist when you are close and involved with them which is why the Apple example is so useful. When we realize that some elements of a highly successful company have leveled off, it becomes a little easier to perceive parallels in our own operations.

The real challenge comes in the last sentence of Godin’s I quoted. What are the areas in which you and your staff can care in unreasonable ways?

What does that mean? What does it look like for your organization? Your customers can probably give you a hint if you ask (they may be already telling you, emphatically and unsolicited).

There may be people in your organization already invested in something with an unreasonable degree of care who are assets to your organization. It may not be necessary for everyone in your organization to all care about the same thing in order for you to be successful.

Given the number of hats worn by people in non-profit arts organizations, it would be a blessing if you had even a few employees that exhibited unreasonable care in different areas in a manner that was balanced within the organization and within themselves. (Trying to channel unreasonable care into all your areas of responsibility is likely to drive you crazy).

Audience Relations, Business Models, Marketing/PR

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