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Fundraising Is Now Everyone’s Job Too

by:

Joe Patti

Yesterday I noted that I was interested to learn that $5 million in revenue was something of a dividing line between theaters which supported themselves primarily by ticket revenue (above $5 million) and those that received the majority of their support via donations (below $5 million).

That doesn’t mean that the larger revenue theaters don’t need to do much fundraising. Back in January there was an article in American Theatre that talked about how artistic directors are increasingly expected to join the executive directors and development staff in soliciting donations.

For some years now I have written about how marketing is the responsibility of everyone in the organization. It appears this is becoming the case with fundraising as well.

Michael Ritchie, artistic director of Center Theatre Group … puts the situation more urgently.

“Everyone in our building is ostensibly a fundraiser,” he said. “That’s the new reality for nonprofit theatres. We are all more dependent than ever on the success of our fundraising efforts. Fundraising is no longer optional for an artistic director; it’s an imperative.”

In an August 2017 American Theatre online article reporting on artistic leadership succession, Disney Theatrical Group president Thomas Schumacher suggested a reason for the new urgency: the global economic crisis of a decade ago. “Any artistic director who gets hired today will also be expected to go out and raise an awful lot of money,” said Schumacher, who spent five years on staff at the Mark Taper Forum. “That’s just different.”

The artistic directors they interviewed for the story varied in how comfortable they felt being part of the solicitation efforts. Some were comfortable with it from the start, others mentioned the fear and anxiety they felt. At the same time, many spoke about financial difficulties which had forced them to become more adroit in these types of interactions. Many estimated they spent between 25-30% of their time on fundraising, though one estimated it much higher:

Abe Rybeck, the founder and executive artistic director of…The Theater Offensive in Boston, said, “Sometimes it feels like I spend 120 percent of my time doing fundraising, and it also feels like that’s way less than I’m supposed to be doing.”

One thing I was really curious about after reading the article was whether the added responsibility of fundraising had changed the perception of the artistic director’s role in an organization. For a long time there was something of a stereotype that the managing or executive director of a theater was there to keep the artistic director’s ambitions in check. While there have definitely been some contentious power struggles in this arena, I think the stereotype may have served to perpetuate the roles by giving license for the artistic director to say yes until being told no.

This may have been another facet of the larger general stereotype that artists didn’t need to know about business and such considerations would only serve to limit their vision. Likewise, getting artistic directors involved in fundraising might be a manifestation of the recent general push for artists to cultivate business skills.

Since artistic directors are being asked to get involved with the one area of a non-profit organization everyone would be happier to avoid, I am hoping it has gone a long way toward dispelling the perception that the artistic directors are the irresponsible dreamers of the organization. Reading what the artistic directors had to say about participating in donor solicitations, it is pretty clear they have an appreciation of the costs of executing their vision.

Advocacy, Arts in an Age of Technology, Fundraising, State of the Arts, Working In The Arts

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The Broadway Box Used To Be Such A Nice Neighborhood Til Those Non-Profits Moved In

by:

Joe Patti

Rob Meiksins had a piece on Non-Profit Quarterly that discussed what the non-profit Second Stage Theater’s recent ownership of the Helen Hayes Theater on Broadway might portend in terms of economic and production models since Broadway theaters have long been commercial enterprises.

Second Stage Theater becomes the fourth non-profit currently producing in a Broadway stage. Meiksins wonders if this represents a growing trend that will break over 100 years of history for Broadway.

In addition to this being an interesting topic to ponder upon, I wanted to point the article out because Meiksins takes the time to explain the difference between Broadway, Off-Broadway, Off-Off-Broadway, Regional Theater and Community Theater.  If you aren’t really familiar with the theater world, this can help you understand a little bit about these terms. Though there are further gradations, especially in regional theater, that even theater people can be confused about.

Meiksins goes into a bit of the history of how each of these classifications emerged from a desire to offer alternatives to the preceding structure. In some cases it was a matter of geography—development of significant institutions outside of NYC. In other cases it was a matter of pushing creative boundaries.

Often the differences between each category are economic. I was interested to read that non-profit theaters with revenues in excess of $5 million gain more than 50% of funds through earned ticket revenue while those with budgets below $5 million depend more heavily on donations.

The challenge for non-profit Second Stage Theater operating in a space classified as a Broadway house with the attendant higher union pay rates and staffing is,

….nonprofit theater companies like Second Stage have to rely much more heavily on ticket sales to offset the higher expenses they are incurring in these large, formerly commercial venues. Although they are far more accessible price-wise to the average theater-goer than a Broadway show, they are still far more expensive than the average Off-Broadway house. This is also reflected in the TCG report which indicates that larger theaters had a lower than average subscriber renewal rate: subscribers were not returning for another year at the same rate as they do for less expensive houses.

There is an implication that the additional presence of a non-profit entity producing within the “Broadway Box” may represent a shift away from the commercial content on Broadway toward quality fare with a more focused agenda. Another article mentioned that Second Stage summer 2018 production of Straight White Men by Young Jean Lee at the Helen Hayes Theater will mark the first time a play by an Asian-American woman has appeared on Broadway.

It may be difficult to imagine interest in the big splashy productions like The Lion King, Wicked and the upcoming Harry Potter and the Cursed Child ever waning to the point that additional Broadway venues are sold to non-profit companies. However, it bears remembering that the biggest hit in recent Broadway history, Hamilton, transferred to Broadway after being wholly funded and developed at the very non-profit Public Theater.

There are a number of other differences between typical Broadway productions and non-profit theater that aren’t covered in the article that can serve to illustrate how significant a trend toward non-profits might be.

For example, Broadway productions are typically funded by investors who theoretically have an opportunity to recoup their money if the show does well versus non-profit productions which are supported by donors and ticket revenue (as I am sure most readers are probably aware.)

There is also a continuity that exists from year to year and production to production in non-profits whereas, other than the person with the keys to the door, commercial Broadway theaters start from a blank slate when a new show moves in to the space.

Somewhat unspoken in all this, except in the title of the Non-Profit Quarterly article,  (Nonprofits On and Off Broadway: The Search for Enterprise Models), and some oblique references, is that there is a potential for a new hybrid business model to emerge from all this activity.

It wasn’t so long ago that the hot topic on arts blogs was basically “What’s so great about non-profit status?” There was quite a bit of discussion about alternative organizational structures and business models. While the conversation has largely settled down, the need for options hasn’t disappeared.

Business Models, Leadership, State of the Arts, Working In The Arts

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Love/Hate Relationship With Focus Groups

by:

Joe Patti

The Guardian had a long read piece on focus groups earlier this month. As I was reading, about how the companies commissioning the focus groups had difficulty accepting the results, I was struck by how similar it sounded to the accusations of elitism and arrogance often leveled at arts and cultural organizations.

I began to realize that this type of arrogance isn’t really distinctive to arts and cultural organizations, it is pretty much characteristic of any entity offering services and goods to the public, be it corporations or politicians.  If anything, the fact that the arts and culture sector worries about being out of touch may be to their credit.

The article says focus groups get a bad rap across the board,

The public resents the mediocre outcomes of a focus-grouped world, feeling that the culture of consultation dumbs down our politics, entertainment and just about everything else. The clients who commission focus groups to give feedback on a new product or political initiative resent the obligation to listen to ordinary, non-expert people, and often feel humiliated by their judgments. Everyone imagines the participants to be idiots.

The companies who commission focus groups tend to hate the group participants, which the authors and those interview for the article attribute to various reasons. Some from the political or corporate class resent having to listen to “the people.” A number of focus group facilitators commented that clients are overly focused on the fact that participants are being paid and as a result think there is no need to feel respect or gratitude for the participants.

I thought this passage was particularly applicable to the arts:

Another complaint made by clients is that the people in the focus groups are not the target consumer…people from the agency would sit behind the screen during a focus group, and when it was over they would say: “Boy, did you bring in a bunch of stupid consumers. Our consumer isn’t like that. Our consumer is young, sophisticated, and bright. You brought in a bunch of dummies … They don’t know anything about this product.”

Many clients resent the arrogance of focus group participants, who (in their view) have way too much confidence in their own opinions, and too little humility about their own lack of expertise. Most of the time, clients hate the participants because these ordinary people provide an unbearable reality check: “[Clients] can’t believe that their customers don’t care about them or their product,” said Andy Tuck.

Sound familiar? Having preconceived assumptions about the demographics of the audience/community base you serve? Or perhaps you have created an idealized image about the community you serve? Whether they are rich or poor, they are intelligent enough to recognize what a gem they have in your organization and gratefully receive what you provide.

Yes, there is always that one person who said they have lived in the community all their lives and never stepped foot in your building before and are amazed by what they see. They are the exception to the general rule though.

Except that you are hearing this while standing in your organization. The reality you will probably experience standing on a random street is that a life lived without stepping in your building is the rule.

But as I said, I think there is some consolation to be taken in realizing that this type of arrogance is pretty much the natural result of wanting everyone to appreciate what you have built whether it is a company, political organization or arts and cultural entity. While we need to fret and worry a little that our egos are getting in the way of connecting with as wide a segment of the community as we should, we don’t need to necessarily fret that corporations and political campaigns are better at it than we are. Their research and execution are just better funded –and often times even that falls flat.

Advocacy, Audience Relations

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Can Your Organization Afford Empathy?

by:

Joe Patti

For about a month now I have been pondering a post Seth Godin made about the limits of empathy and how it might apply to customer relations in an performing arts setting.

In the context of a customer who wants a refund on a car purchase after a broken limb prevents them from driving, Godin writes,

But empathy doesn’t require you to reach into your pocket because the customer has rewritten the terms of the deal and is undermining the business you’ve built to serve others.

Instead, it means that you can see his pain and that you’re completely okay with this person not buying from you again. That through the mist of pain and percocet, it’s entirely possible that he doesn’t have the reserves to be empathic to you, that he can’t see it through your eyes. And you probably can’t force him to.

So empathy leads to, “I hear you, I see you, and if you need to walk away, we’ll understand. We hope you’ll see it the way we do one day, but right now, I can’t solve your problem.”

We have occasionally had situations where people feel we should give them a refund for a performance that has occurred due to situations where they chose not to attend. Some times it was because they decided it was too cold, it rained too hard or because their road hadn’t been cleared two days after it stopped snowing. None of this providing an impediment to hundreds of other people. Other times there are some strong indications that they want a refund because they decided they wanted to do something else.

I am not sure how often Godin’s scenario of people wanting a refund on a car because they broke an arm actually happens. The reality is, people do have the option of doing something other than participate in an arts and cultural activity and often exercise that option. We can’t necessarily be philosophical in the way we respond to requests for refunds in the face of this reality.

One alternative is to have so much business that you are okay if a person chooses not to buy from you again.

We are all experienced with this type of scenario. Drew McManus just experienced that this past week.

In the context of Godin’s post, Drew was trying to rewrite the terms of the deal –pay a penalty if you want to change or cancel. It’s right there in the reams of small print you acknowledge when you buy the ticket. In American Airlines’ mind, it would be undermining the business they have built to serve others if they just let anyone cancel or reschedule.

On the other hand, not to excuse these policies, this summer American Airlines wanted to give pilots and flight attendants a pay raise outside of contract negotiations in recognition for a difficult time employees faced during the merger with US Airways and Wall Street sent their stock plummeting.

““We are troubled by [American’s] wealth transfer of nearly $1 billion to its labor groups. In addition to raising fixed costs, American’s agreement with its labor stakeholders establishes a worrying precedent, in our view, both for American and the industry,” J.P. Morgan analyst Jamie Baker wrote

So the fact that empathy is apt to be punished might be contributing to a cascade effect in corporate/organizational culture.

Perhaps one positive result of many arts organizations being small enough that they worry about losing customers even over ridiculous refund requests is that there is a tendency to treat constituents with a higher degree of empathy than they would receive elsewhere. Perhaps working on providing that can become something of a competitive advantage for some organizations.

There are no clear prescriptive answers to the type of refund requests I mentioned earlier. Each has to be addressed as they present themselves with the understanding that we may or may not damage our relationship with someone in the process.

Audience Relations, Business Models, State of the Arts, Working In The Arts

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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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