Resource Guide for Non-Profits

by:

Joe Patti

By way for an Arts Presenters newsletter I was directed to a worthwhile resource for non-profits of all kinds put out by Mellon Financial Corp, Discover Total Resources: A Guide for Nonprofits. (Downloadable PDF, by the way.)

Though billed as “a descriptive checklist to be used as a guide, or self-audit, by boards, staff and volunteers to assess the degree to which they are tapping a full range of community resources: people, money, goods and services,” the document is much more than a mere checklist. It provides great ideas and some of the best fundamental guidance about how to run a non-profit I have seen in or out of textbooks.

It does indeed provide a self-discovery audit for your organization, but some of the real value as one might imagine comes in the Money chapter. No coincidence, I am sure, that it is the longest chapter. Though honestly, read them all.

I single out the Money chapter because it is the area of greatest concern for non-profits and it is dense with good guidance about topics like internal financial controls and being wary about earning income outside the purview of your non-profit status. Some of the grant and fundraising notes are familiar, but the summary of options is good.

One option I had never heard of before is a Program Related Investment.

“Stated simply, a PRI is an equity investment, loan or loan guarantee made by a foundation to serve a charitable purpose. It is sometimes called a social investment. Unlike grants, PRIs must be repaid, sometimes with the addition of a low interest rate.”

They seem to be used for social service programs which may be why I hadn’t come across them before. Doesn’t seem to be any reason I can see for them not to be use in the arts. Though their use may be more complicated than the summary can do justice to.

While reading I had a “duh, why didn’t I think of that” moment when it came to the idea of consortia and other cooperative efforts between organizations. One of the suggestions they make is that groups can leverage their pooled resources to obtain higher quality products and services than they could alone. Among the examples they give are purchasing supplies in bulk and perhaps sharing legal and accounting services.

I often talk about how block booking efforts are going to become a financial necessity in the near future for arts organizations, but I lacked the wit at the time to make the logical extension of that idea to other operational areas. Some of the examples the document gives about cooperative efforts might be worth reading to spark ideas and surmount blind spots like mine in ones thinking.

Cool People Hang Out At The Furniture Store

by:

Joe Patti

The newly opened Honolulu Design Center is really trying to change the way people think about the place home and office furnishings has in their lives by positioning this facility as a gathering place.

If you have never considered your furniture store a center of social activity, you aren’t alone. The HDC figures this is the first time anyone has ever tried anything like this. If you look at their plans closely, you can see they have really done some thinking about their target audience.

The three story building has a cafe, a wine bar offering 90 choices and a 90 seat fine dining restaurant which will feature some of the furniture they are selling in their 6 showrooms. There is also an events area where Jazz is performed on Thursday nights and Wednesday and Sundays are film nights.

Just as Home Depot and Lowes offer little classes for the do-it yourselfers, HDC offers seminars that fit the lifestyle of their target clientele. The Small Business Administration held a micro-enterprise workshop for people wanting to start their own small business with monthly seminars on other topics to come. Another workshop offered helps people view home construction as an interconnected system so that all the segments integrate well together and result in low operating costs.

A television show, “Generation X and WhY Inquiring” will be filmed there featuring students

“-ages 9 to 17 – from various schools who will discuss and debate…the dynamics between boys and girls and issues ranging from harmless teasing to more serious topics like safety, drugs and health. Other important areas like global conservation, pollution, oceans, Social and educational issues…”

A number of thoughts passed through my mind. First that it must be nice to have the money to build the place as well as the money to buy from this place. While I am told there are pieces I could afford, $42,000 leather couches are more in line with what they offer.

Still, even though they are in a good position to recoup part of their investment being located next to the construction site of two towers of condos which need to be furnished, they are taking a big chance with this project. People might buy coffee or wine while perusing furniture–but are they going to go to a furniture store, nice as it might be, for dinner and a movie?

I also wondered if all the performing arts centers that have been built in the last few years at costs the exceed those of that Honolulu Design Center by millions have had as good a handle on how to serve their target audiences as the furniture place does.

In some respects, clues about what to offer and how to position themselves already exist. As mentioned earlier, they have upgraded the classes that Home Depot offers. They also seem to have improved on Target Stores’ Design for All campaign. At the prices they are charging, they certainly aren’t offering design for all, of course.

As I observed in an entry two years ago, humans seem to have an intrinsic need for art/beauty/meaning/purpose in their lives. Target Stores aim to bring the semblance of the aesthetic high end stores like HDC possess within the reach of everyone. HDC has moved a step further and is trying to bring many elements of the lifestyle their furniture already represents into one location.

To their credit, this isn’t some new initiative that marketing research indicated was a good idea. It is just another chapter in the company’s long history of sincere investment in local arts and culture. Their weekly print ads feature local visual and performing artists and promote their work and upcoming performances.

Thinking about what lessons could be derived from this for the arts, I came up with a great deal of “if onlys”- If only arts organizations had the kind of money to do market research to develop a great plan for serving the needs of a target audience; if only they could maintain a consistent staff and cohesive vision to see the plan through (Took HDC 8 years to come to fruition); if only they had the funding enabling them to ignore the distracting noise of earned/unearned income woes.

What I ultimately end up thinking is that HDC may serve as an example of what an arts organization should be– an unexpected arrangement that suits the community in which it is located rather than based on a standard set in other places. Somewhere out there may be a mini-van dealership/daycare/athletics field/community arts center catering to dual career-soccer parents.

After Two Years-An Answer!

by:

Joe Patti

Well it took me 2 years to find the answer, but I did it! Two years ago I was looking for the economic law that technological advances will make it possible to produce goods more efficiently, but because the performing arts create works in much the same way they did 500 years ago, they don’t enjoy the benefits of this law.

An article on the New Music Box website on New Music Economics revealed what I had forgotten–it isBaumol’s cost-disease!

Matthew Guerrieri does a good job covering the topic in the New Music Box piece. Much better than my brief treatment two years ago which was more about bemoaning the failure of technology forcing my theatre to go old school with our ticketing and lighting. (Though my entry is arguably more entertaining.)

If you are thinking about not reading the article, give it a second consideration. As Guerrieri notes, the Baumol effect is “one of the main rationales behind government subsidization of the arts.” Opponents of government funding of the arts try to find exceptions to the rule. Becoming familiar with the arguments on both sides can be key to your arts advocacy efforts.

Perfect Career Predictor?

by:

Joe Patti

Reflecting upon my use of Robert Pirsig’s Zen and the Art of Motorcycle Maintenance to discuss the definition of quality, I wondered if my support of his grading experiment might have been an early predictor of my involvement in the arts.

It seems to me that a person who valued insightful comments on their papers might be more likely to gravitate toward professions that provided more intangible rewards like esteem and self-actualization rather than high pay and material perks. On the other hand, I wonder if people who valued a specific letter or numeric grade over extensive commentary might be more likely to join professions with clearer remuneration.

I did a brief search for studies that might have examined this and didn’t find anything. I suspect the failure to do so is more a factor of not knowing what terms to use in a search than lack of research related to this topic.

About three years ago I included a Harvard Business Review article about the single perfect customer satisfaction survey question in an entry about customer service. (How willing would you be to recommend company X to a friend?)

I would be interested to know if there is any research out there that might support the dependability of using a single question to determine if someone in high school or college was disposed toward a career in the non-profit field based on what form of feedback they valued most on their assignments.

If there was a correlation between preferred form of feedback and profession, perhaps the perfect career path question might be: “What do you find more valuable in assessing the progress of your academic career, a letter/numeric grade or extensive written/verbal feedback?”

Does anyone know of research studies that might prove or disprove this notion?