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Info You Can Use: B Corporations

January 24, 2011

by:

Joe Patti

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.

Info You Can Use, New Initiatives, Terms and Ideas

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Next Season Is So Great, It Has A Codename!

January 19, 2011

by:

Joe Patti

If you use the Firefox web browser as I do, you may have noticed links on the Google search page that take you to the community they have built around the “fire foxes” (red pandas) they adopted at the Knoxville Zoo. Or a link informing you that the next version of their web browser is code named Tumucumaque after the Brazilian national park that Mozilla is supporting in partnership with the World Wildlife Federation.

My initial, and admittedly, cynical reaction is that this smells a little bit like greenwashing. Though as an open source and non-profit project, Mozilla can weather the suspicions and pessimism a little easier than most.

Since people do respond to these efforts if they feel they are sincerely done, it occurred to me that connections like this on the local level might be a win-win for non-profit arts organizations and those with whom they partner. Such an effort could bring positive attention to both organizations. Partner with an observatory to dedicate your season to a newly discovered star or planetary body. Adopt students at schools/boys and girls club/future farmers of America chapter you already work with to present a “Student of the Month” where the student’s art work is on display on your website or in your lobby.

You could even duplicate the code name route and turn the T.B.A. listing in your season brochure into the focus of intrigue and speculation. Having it connected with a partner organization may help you avoid spending more time thinking up clever code names than you did in season selection.

If you start a partnership with a local science museum, just be sure to vet any suggestions they may make thoroughly. You don’t want to end up advertising Project Nematode just because one of the scientists thinks they are the coolest critters around. Theatres have enough parasitic worms associated with them already!

Marketing/PR, New Initiatives

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Grouse: What You Do When Your Salary Is Too Meager To Afford It

January 18, 2011

by:

Joe Patti

It looks like it was a weekend for griping about performing arts. Ken Davenport at Producer’s Perspective opened the floor on an atypical Saturday post asking people to share their gripes. He promised to make it a monthly ritual if he got more than 10 responses and he easily passed that mark. A summary of the comments in one sentence would be – “How can they charge such high prices for tickets, yet pay me so little if I can shoehorn my way into a position at all.” There are a few complaints about audiences thrown in for good measure. The general source of the comments seem to be people living in and around New York City with a few people coming form other places. The tenor of most of the comments will be familiar to you if you work in the arts at all and are familiar with the New York City scene. Those aspiring to careers are following the same path those before them followed. This includes tales of people both inside and outside the business wanting them to work for fun or for experience.

My initial thought was that Broadway won’t change because it doesn’t have to and that people need to look elsewhere for their experience. While a similar situation is just about as institutionalized outside of New York City, those organizations are at least marginally aware that they need to find a better way to run their business and interact with their employees.

Which brings us to the second post I came across. Barry Hessenius posted an entry on his blog noting that essentially every job description for an executive director and senior management of an arts organization seems to be taken from the same template without any effort to acknowledge the actual specific needs of their organization.

He provides a tongue in cheek translation of this:

“The successful candidate will be a strong leader with excellent management and interpersonal skills. S/he will have the proven ability to build productive relationships with a broad range of internal and external constituencies, and have the demonstrated ability to work collaboratively with the various segments of the community. S/he will be an experienced supervisor with the ability and willingness to mentor staff and encourage staff development. S/he will foster an atmosphere of teamwork and collaboration among staff and volunteers throughout the organization. S/he will have a strong working knowledge of programs, production, board relations and operations. S/he will have excellent financial management skills and a track record for achieving budget goals…”

Into this:

“We want someone smart enough to help us figure out a cool vision for our future (that one is stumping us); someone who will attract great talent to the staff (though we can’t pay the staff very much) and whom the staff (despite working conditions that are hardly ideal) will love and follow anyway (someone who will hopefully get them to perform above their potential, because actually we’re understaffed by all reasonable criteria). We want someone who can make various factions of the board (currently somewhat dysfunctional and at each other’s throats) work harmoniously together and take on an ever greater workload (or in the alternative someone who will assume the board’s workload for them because it’s highly unlikely they will do much more than they are doing right now – which isn’t that much). We try not to micromanage, but we still do. We’re looking for someone who can get the best out of us, but someone enough like us so we are comfortable with them; someone who will push themselves, but not necessarily push us too hard. Did we mention that we want someone who can raise a lot of money? “

I have only excerpted a small portion of his translation so you will want to visit the entry to read the whole thing. I have also excerpted a portion of his sample job description. Trust me when I say you don’t need to go to the entry to read that. You have seen it many times before. I did a verbatim Google search on a couple phrases from Barry’s sample and found a number of job listings using them. I understand a desire not to reinvent the wheel, but if you are looking for the same person as everyone else, most organizations are bound to be disappointed. There are only so many of those paradigms to go around. The truth is, most organizations are indeed looking for someone a little different from the rest.

Boards, General Musings, Leadership, Management Philosophy

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Bidding to Be Bumped

January 17, 2011

by:

Joe Patti

You may or may not have heard that Delta Airlines has a new process by which the airline allows passengers to bid how much they would be willing to accept to be bumped off an over sold airplane. While I suppose this is an improvement over the old process by which they factored in when a person bought their ticket and how much they paid for their ticket when the airline decided who to bump in the absence of volutneers, the move seems to announce they are giving up any pretense at offering customer service. It seems like they are announcing their intent to overbook and that if you fly with them, you take your chances. Granted, every other airline may hold to the same philosophy and Delta is just being honest and open. I am just saying that it is bad customer service and public relations.

I can’t find who said it, I believe it might be Malcolm Gladwell or Daniel Pink, but I have seen someone cited a number of times in recent months that any policy decision which is made to benefit employees/your company is not a customer service decision. This seems especially the case here as it appears Delta is counting on a little game theory to reduce the amount in travel vouchers they give out by having people bid secretly against each other.

The basic thing I think they need to ask is- does anyone really come to the airport and go through full body scan/pat down at security with the intention of not flying? The fact that there have to be compulsory bumps can attest to the fact people generally don’t. I am sure someone will do an analysis of the most overbooked flights and the best bidding strategies and then go on the Today Show to talk about how someone can fly around the country virtually free if their travel plans are flexible enough. Most of us will be arriving at the airport with the specific intent to fly that day. Offering money doesn’t build a relationship with a customer, even when it is done openly and voluntarily at the gate.

Heck, do people show up to a performance willing to be turned away or have a disappointing experience even though they don’t have to arrive an hour early to get through security? Does getting your money back improve your relationship with a performing arts organization even if the parking was free and easy to find and the cost of dinner and a babysitter weren’t factors in the evening?

Perhaps other performing arts venues have changed their approaches, but even though I know not everyone will show up to a sold out show, I don’t oversell the house. Regardless of whether it is a reserved seating or general admission event, I always have a few seats held back to use at my discretion to resolve problems. I suspect there aren’t many places that would regularly oversell their houses. This is not just because of fire regulations, but because unlike the airlines, many places view performance tickets as a contract to provide a service. You can refuse people entry, but selling tickets you have no intention of honoring can be considered fraud. It is also pretty bad public relations so most of us avoid it even if we have no idea if the state would consider overbooking to be fraud.

My point isn’t so much to pillory the airlines. You could read enough of that over the last 10 years to have gotten your fill of it. I just wanted to provide a reminder about customer service being about relationships. Something that can’t be improved by providing an easier way to inconvenience people. Voicemail putting people on hold did not improve the experience over having a live person doing the same. This is something to remember when you consider emulating the airlines and their fluctuating pricing schemes. Yes, it may provide an improved yield per seat, but if your organization has been working to improve its relationship with the community, a more opaque pricing system is not going to accomplish that.

Audience Relations, Marketing/PR, State of the Arts

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