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Building Cathedrals, One Budget At A Time

July 11, 2011

by:

Joe Patti

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, Management Philosophy

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To Cut Or To Keep Arts Classes

July 6, 2011

by:

Joe Patti

I am starting to wonder if the same forces that are seeing the arts disappear from K-12 schools are starting to encroach upon university level education to the same effect. There have been recent articles about eliminating the liberal arts degree. Given the amount of debt you get into going to a 4 year university, there is a concern about having a degree in practical fields like business or science one can translate directly into a job.

But I am seeing first hand that there are pressures to even retain arts classes. We just had an acting faculty member retire and I was talking to the chair of his division about when the ad to replace him might go out. Unfortunately, replacing him is not going to be automatic because there are a number of factors the upper level of administration considers before giving approval for a search.

The first is whether the class can pay for itself. It isn’t a surprise to anyone that instruction in the arts is more expensive than in other disciplines because the student – teacher ratio has to be smaller in order to be effective. One professor to 16-20 students instead of 30+. When it comes to arts classes then, general arts classes like survey world music are preferred over specialized classes like piano, voice, violin, etc because the ratio can be higher.

I should also mention for those who aren’t aware, my facility is located on community college campus so the price per credit is $95 versus $350 a credit at the system’s 4 year campus. It’s much more affordable for students to take classes here, but the college has to serve a lot of students to generate appropriate levels of revenue.

The decision to replace the acting teacher won’t entirely be made based on money. The fact is, many students who take performing arts classes are apparently not graduating. No one is suggesting there is causation in that. It looks like the type of student that are taking the courses aren’t persisting.

The courses aren’t filling up until nearly the end of the registration period which means that many in the classes may not have the organizational skills and motivation to be there that other students in the college have. Whether they have procrastinated their decision to enroll or just recently moved to the area, they may be in the class because their first preferences were full. They may not be fully invested or even able to commit to pursuing a course of study through graduation due to personal motivation or external forces.

Whatever the reason, if you are an administrator making a decision about what courses to offer and you notice that even if people have done well in a course, they aren’t likely to persist in their studies, it may not be entirely unreasonable to ponder if resources were better directed.

Some of the solutions mentioned in my conversation with the chair were not unlike those suggested for the arts in general. One was having the value of the class to students redefined in the course listings–what skills are you going to come away with, what requirements does this course fulfill, etc. Just as we talk about the value of the arts to communities.

Another was basically just increasing word of mouth advertising. Essentially talking to the counselors about steering students toward the classes earlier in the enrollment process. One potentially promising development is that the college had made orientation mandatory for all students recently and the process starts with an hour long presentation in the theatre. Since many attendees have appointments with counselors soon after their orientation, hopefully the presentation with its goofy skit will result in students being more inclined to want to register for arts classes.

At the very least, I hope the orientation sessions will end my experience where alumni tell me they graduated from the college and didn’t know there was a theatre.

This situation has been the cause of a lot of thought for me. It is easy to damn people who make decisions to cut the arts purely on the basis of return on investment. Saying a course in the arts can’t help a person get a good job will raise a chorus of howls as people reach for studies that may show otherwise. For a lot of college arts programs across the country, this may be the prime criteria for cutting or keeping.

I have a harder time finding an argument against a fairly loose definition of success like is the person likely to graduate. Talking about the value of the arts to bolster creativity and learning capacity will fall flat against that.

These students aren’t the ones getting caught up in the arts lifestyle devoting all their time to their art rather than attending to their other classes. Those guys are familiar to me because they are always hanging around the theatre. I know which ones have started getting Ds and Fs. Which ones are doing well. Which ones had to remove themselves from that life so they could turn their lives around. Which succeeded and graduated and which failed.

There are a whole bunch of others that I never really see until they get up on stage for the final performances at the end of the semester and perform before an audience for the first time in their lives. No matter what their motivation for registering for the class in the first place, they are up there now demonstrating what they have learned. If they aren’t graduating, I hope they are at least taking something constructive away from the experience.

Art(ist) Education, General Musings, State of the Arts

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What’s Good For The Grágás Is Good For The Arts Organization

July 5, 2011

by:

Joe Patti

I was reading that Iceland is in the process of updating it constitution and is soliciting feedback from its citizens. The constitutional council is posting drafts of each section online and are integrating some of the responses into the constitution. Actually, because so much of the activity is occurring online, they have suggestions from an international audience via their Facebook page. I am not sure if they have implemented international suggestions, but the people running their Facebook account seem to be doing a pretty good job of responding to those who post about the process.

I was thinking that this might be an approach that an arts group looking to serve a community might use as they began to generate an organizational structure. There seems to be some wisdom in getting everyone involved at the point of constructing the framework and having them continue to feel invested in the organization years into its operation because it has taken the community’s needs into account. A barn raising of the Internet age, if you will.

Of course, the tricky question is the degree to which you involve everyone. Trying to please everyone on a committee doesn’t end up pleasing anyone as we well know. There has to be a small group of people deciding what the focus of the discussions will be about. That is the function the 25 member constitutional council in Iceland serves.

On the other hand, going into the process with a lot of pre-conceived notions around which you will plug in community suggestions might also yield a product that no one really gets excited to be involved with. Deciding from the outset the organization will do Shakespeare when the community indicates a live music and visual art center is needed, for example.

Crowd sourcing feedback is probably never going to be a substitute for the good judgment based on hard work and research that starting any business requires. A serious look at demographics may show that the population can’t support a music and visual arts center for more than five years versus the prospects of a destination Shakespeare festival. However, using social media tools to disseminate information about why a music and visual arts isn’t going to viable may garner a good deal of faith and respect in the burgeoning organization when the community clearly sees they have done their homework.

Obviously, the same process can be used by existing organizations to strengthen their place in their community or even realign themselves with the existing needs. Iceland isn’t starting from scratch, after all. But there has to be real conviction in the organization to effect change. There can be a lot of organizational inertia trying to keep things from truly changing. If the change is coming due the realization that the faith and investment of the community has been lost, there could be a lot of resistance to overcome before truly constructive conversations about changes can transpire.

By the way, Grágás refers to the Grey Goose laws of Iceland that were in use until the 13th century. Therefore, I took some poetic license in the title of the entry to make it fit the goose-gander saying. The constitutional council using social media is known as Stjornlagarad.

Audience Relations, Leadership, Management Philosophy, Terms and Ideas

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Those Daring Leaders Of Non Profits

June 29, 2011

by:

Joe Patti

A nod to our friends at the Non-Profit Law blog for noting that CompassPoint Non Profit Services and the Myer Foundation who teamed up three years ago to bring us the report I blogged on, Ready to Lead, studying trends in emerging leadership of non-profits, has come out with a new Daring To Lead, studying the status of non-profit executive directors.

The last time they studied this topic was 6 years ago, before the recession. Their new findings are worrisome in terms of the lack of succession planning but encouraging in respect to the amount of enthusiasm and lack of burn out the majority of executive directors feel in the face of the recession. Their three main findings deal with those topics: succession, the recession and executive director morale.

Finding 1
“Though slowed by the recession, projected rates of executive turnover remain high and many boards of directors are under-prepared to select and support new leaders.”

Due to the recession impacting their retirement plans, fewer executive directors left their positions than planned. A small percentage (9%) of respondents cited the lack of an appropriate successor as a reason for remaining. So while there hasn’t been as large an exodus as was once feared, little has been done to prepare for that eventuality.

“Executives and boards are still reluctant to talk proactively about succession and just 17% of organizations have a documented succession plan. Even more problematic is the extent to which many boards are unfamiliar with the dimensions of their executives’ roles and responsibilities. Just 33% of executives were very confident that their boards will hire the right successor when they leave. Performance management is a critical means of being in dialogue with an executive about success and its metrics, yet 45% of executives did not have a performance evaluation last year…Without consistent, meaningful engagement in what the job requires, many boards are under-prepared for their critical role in executive transition.”

The report also cites some numbers which indicate a series of mishires by boards and unclear expectations by boards and executives. One of the biggest challenges executive directors face is establishing an effective partnership with boards and getting the support they need in the early years of assuming the new role.

“It appears that many boards see executive transition as ending with the hire, when in fact leaders—nearly all of whom are in the role for the first time—need intentional support and development as they build efficacy in the executive role.”

Finding 2
The recession has amplified the chronic financial instability of many organizations, causing heightened anxiety and increased frustration with unsustainable financial models.

Hardly a surprise that many non-profit leaders are worried about whether their organization will continue to exist in these difficult economic times. Many executive directors reported having less than 3 months of cash reserves. According to the report, the common guideline is to have between 3 and 6 months. Many first year leaders are faced with the most daunting of situations.

“Thirty-two percent (32%) of executives in their first year on the job have less than one month of operating reserves; in other words, those on the steepest part of the learning curve often have the smallest margin for error.”

It it any wonder than that a listening tour by Building Movement in 2004 found a lot of prospective leaders in the next generation, while chomping for greater responsibility in their organizations, were reluctant to assume the executive position. (My post on their report here)

Finding 3
Despite the profound challenges of the role, nonprofit executives remain energized and resolved.

The very encouraging news in the face of all this.

“Forty-five percent (45%) reported being very happy in their jobs, and another 46% reported that they have more good days than bad in the role. Levels of burnout, especially given the economic climate, were low; 67% of leaders reported little or no burnout at all. In fact, leaders distinguished between burnout, which they associated with disengagement and ultimately leaving the job, and the realities of fatigue and elusive boundaries between their work and personal lives that go with the job. Forty-seven percent (47%) of executives reported having the work-life balance that’s right for them, while a significant minority (39%) said they did not.”

One of the biggest challenges executive directors reported they faced was human resource management. Attracting people, retaining them once they were trained and had skills to find better work and motivating those that stick around toward a unified organizational goal comprise a tough task for these leaders. There seemed to be a loose process of delegation and sharing of responsibility that didn’t approach formal mentoring.

“And a large majority (81%) reported having someone on staff that they trusted to make important organizational decisions without consulting them. Explicit executive mentoring of other staff was a relatively infrequent practice, with 31% of executives reporting being in an explicit mentoring relationship.”

The leaders themselves eke out a rough system of acquiring leadership training/mentoring/coaching/peer networking to improve their own skills.

Few executive leaders spend significant time interacting with boards of directors. 55% responded as spending less than 10 hours a month on board related activities which is at best 6% of their time. According to the report, other studies have found that executive directors who spend 20% of their time on board related activities are most satisfied. Most of those responding to the Daring to Lead survey were dissatisfied with their board relations.

As succession planning has been one of my favorite topics, you know I am going to suggest people should read the results. It is only 20 pages long. They make suggestions at the end about how to improve the overall situation. The general thrust of their advice is clear before you reach it–basically boards need to do a better job of succession planning and find ways to support and engage with the executive director more frequently and effectively.

One area that isn’t really covered in the body of the report but that is mentioned in the calls to action at the end is for funders to recognize the role they play in perpetuating the current situation and how their initiatives can move things in a more constructive direction.

Boards, Leadership

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