Educated Giving

Since I talked about funding yesterday I thought it might be useful for readers to know a bit about how funding decisions were made.

Foundations typically ask for mission statements, information about programs, goals that have been met and financial statements. The information they require is often similar, but just different enough that you spend as much time recasting existing informaiton as you would had you written it from scratch. This is why the paper I cited yesterday encourages foundations to consolidate their reporting.

All this basic information is available to the public by law. The IRS and most states hold this information on file for public viewing. It can be very difficult to find out how to acquire it though.

Another option is to visit Guidestar.org. Many donors and grantors go there to learn about organizations they are considering giving money to or to find out what organizations meet their giving criteria. Anyone can access the information there.

Some of the information is provided by the organizations themselves so the amount available tends to vary from place to place. You can pretty much depend on at least finding the 990 filing. The latest filing I could find for most places was the 2002 filing which covers the 01-02 ficial year. The 990s give information on earned and unearned revenue, revenues and expenses, mortage information, etc. You can also discover the salaries of the highest paid officers and employees. A 990 is a good place to look if you are considering a job with a non profit and want to know about the financial stability of your future employer.

For most organizations, Guidestar also lists profit/loss and balance sheet financial statments. You can get the same essential information from the 990s, but it is much simpler to read in this format.

As mentioned earlier, you can also learn about the institutional missions and goals, the names of people serving on the board of directors and types of programs the organization conducts.

Guidestar is very easy to use. Check it out if you are even the least bit curious about an arts organization.

Shifting Funding Criteria

Yesterday the Artful Manager entry referred to a statement by the board of directors of the Independent Sector calling for a change in the way non-profits were funded. In addition to calling for the support of indirect project costs as Mr. Taylor noted, it also allayed some concerns I have had.

In an earlier entry, I discussed my fears that foundation funding criteria might not recognize the evolving arts environment quickly enough to sustain the organizations they support. The Independent Sector statement urges foundations to move away from short term project support to long term core support of organizations. It also strives to make foundations aware that in many cases, though they may not be aware of it, their support is crucial to the survival of the organization.

“Funders should be responsive to the capitalization needs of organizations, and to the forms of funding necessary to sustain them. Funders should not assume that an organization will become self-sustaining or that others will fund it after they have ceased supporting it….Where possible, a funder planning to exit a high-performing organization should assist the organization in obtaining funding following its exit.”

This concept seems to reflect portions of the “Leverage Lost..” paper oft cited in my entries. Among the things the author wrote were:

“While these gifts were often significant in the life of a given institution, they were rarely associated with a formally constructed plan for that institution’s progression, and even less often with a grand scheme for systemic advancement of the entire arts field.”

“In addition to the already noted strategic goals of the Ford, it is highly significant that the Foundation viewed itself as a catalyst for these major developments, but not as the perpetual funder. ”

“The most obvious, though rarely acknowledged, reason that it could not last indefinitely was that the institutional money supply could not continue to grow. An early assumption of many arts funders, including Ford, was that high leverage funding would stimulate other sources of contributed income for the arts, most notably from government, that would provide a steady and expanding flow of revenues: the so-called “pump priming” or “seed funding” strategy. Meanwhile, government was using the same logic to justify its arts funding.”

In short, the problem seemed to be that everyone was following the Ford model. Everyone was giving short term money with the idea that it would lead to long term support. The problem was, no one was giving long term support.

The IS paper says that “Reliable, predictable, and flexible support is the lifeblood of nonprofit organizations. ” It goes on to suggest that long term support will enable more intelligent institutional growth that is not diverted by the need to constantly reinvent themselves to look appealing to grantors.

“Because project grants, which are often favored by funders, usually have a completion date, it is not surprising that there may not be many renewals. The focus on project grants encourages grantees to continually propose new ideas to funders that possibly might fit narrow grant guidelines instead of focusing on building institutional capacity.”

In another entry last October, Andrew Taylor also touched upon the destructive effects of this funding model:

‘Grow, Grow, Grow’ – The bulk of foundations, throughout history, have funded projects rather than operations, with an additional bias toward NEW projects. To get funding, arts organizations had to add new projects and increase the scope and size of their activities (and their staff, and their budget, etc.). As a result, many nonprofit arts organizations find themselves bigger and more complex than they need to be.

The IS article also suggests that funders of specific institutions cooperate with each other to develop an unified set of reporting criteria with which to evaluate and perform due diligence. The idea, of course, is to relieve organizations of the burden of producing myriad reports for all their funders so they can focus on institutional development.

The paper also mentions a number of barriers that might prevent foundations from shifting to this model. Among them are lack of confidence that their goals will be met via core support rather than project support, mistrust in an organization’s ability to wisely manage the money and lack of interest or approval of all institutional activities.

Naturally, in return, the non-profits are expected to exhibit excellence of product and strategic planning. Long term support does not imply eternal funding at a constant level.

Other Viewpoints

I was reading an article on Artsjournal.com that mentioned quite a few Broadway shows originated elsewhere (in fact Prymate is opening this week directly from Florida State University which is rather uncommon.) I was wondering if anyone had collated the names of the shows which originated away from Broadway before moving there. I didn’t find any (if anyone knows of an article, I would be grateful for the info) but I did come across a couple interesting sites.

The Door Swings Both Ways

I often talk about how the arts need to watch current business trends and assess how they can be applied to the arts world. I came across a Fast Company article from 1999 that spoke of a class at Duke that examined what the arts have to teach the business world.

“Leadership and the Arts” is taught by Bruce Payne. He brings his class to NYC from NC for four months. The class spends the time going to see theatre, dance, opera, orchestra concerts and art museums and discusses the lessons that can be derived from the experiences.

“In the new world of corporate America, everybody is worried about how to achieve excellence in smaller and flatter organizations,” says Payne. “That means finding styles of leadership that work well with smart, self-respecting professionals. Since everybody knows that hierarchy never worked well — and these days, it works less well than ever — what styles of leadership really make the most sense? The people who succeed in the arts these days are people who have solved that problem. They know how to coach, they know how to encourage, they know how to praise, they know how to love. And they know how to express a vision that excites rather than intimidates.”

The romantic view of leadership sees it as a kind of ectoplasmic magnetism, in which followers in variously sized groups — from teams to cults to companies to countries — are drawn mystically and irrevocably toward a central source of inspiration. A more practical view of leadership suggests that real leaders have identified and mastered a secret tool: emotional observation. If you can watch people — and, by watching them, figure out what makes them do what they do — you might be able to get them to do something else, something better. That leadership principle, Payne believes, makes the theater a perfect laboratory for anyone who wants to brush up on what makes people tick.

There were a couple parts of the story that made me wonder if I should open a consultancy business. There are topics it identifies as important that most arts people know far too much about.

“According to Payne, arts organizations, especially small repertory companies and dance troupes, serve as useful models for a world that reveres the startup. “The performing arts have always had to do more with less,” says Payne. “All arts are essentially entrepreneurial.”

Business books and seminars have picked clean any number of occupational metaphors to teach management and leadership skills — sports, the military, wilderness survival, religion. Yet, perhaps more than people in any of these other fields, people in the arts have learned to deal effectively with impossible deadlines, tight budgets, temperamental employees, and the perpetual challenge of selling a product with a short shelf life to a fickle, demanding consumer base.

For inspiration on creative ways to lead a company — or to chart a meaningful career — there’s no business like show business”

All Around the World

I also came across a website with the results of a world wide survey comparing the social norms of a number of countries on topics like Social Welfare, Sports, Religion, Politics to picayune details like whether a period or comma is used as a decimal point. Another website breaks the responses down by subject area.

It is all very interesting reading and the questions seemed to have been set up so that answers were reflecting the same criteria. For example, being late for a meeting was measured in increments of when you mutter excuses, when you apologize profusely, and when the lateness was intolerable. Many cultures it was 5 min, 10 min and 30 minutes, respectively. In some cases though it was 30 minutes and 1 hour, respectively.

I did wonder about the validity of the survey or at least about the age of those answering the questions when it came to the arts section because everyone almost uniformly answered “You think of opera and ballet as rather elite entertainments. It’s likely you don’t see that many plays, either,” or a near equivalent. It made me wonder if the reputed esteem that Europeans bestow upon the arts was a myth they liked to reinforce so they could feel superior to the U.S. or if it is just likely that the type of people who spend enough time on the web to answer lengthy cultural surveys aren’t inclined to go see shows.

Nonetheless, it is all very intriguing.

More Power of Blogging Thoughts

Last month I did an entry on Bloggers as the New Arts Critics. This past weekend, Terry Teachout touched upon the same subject in an interview on Studio 360. (The whole interview is very interesting, but for the portion pertinent to this entry, click the forward button on your media player twice to the third segment and move the progress button to about 5:15)

During the interview, Mr. Teachout mentions that he writes so prolifically for his blog in addition to providing reviews and commentary for print journals and authoring books (a fact noted in a recent Washington Post article) because contributing to a new medium and interacting with his readers is so exciting and engaging. He goes on to talk about how he sees serious arts coverage naturally migrating to the web as less time is devoted to coverage in papers and television. He is confident that good bloggers will gain credibility and influence. He says of blogs, “They empower the amateur. Anybody can write one. And whether you have any credentials or not, if it is any good, believe me, it will get noticed.”

He was then asked if more amateurs blogging necessarily meant there would be more talented people in the world rather than just a lot of people churning out a lot of mediocre stuff. Teachout mentioned he now interacts with many very talented people who he had never heard of prior to coming across their blogs. These people don’t have access to the traditional media channels through which to make their reputation but are doing so on the web.

The interviewer also brought up the point that the ease of self-publishing on the web circumvents the reflection and review process that one goes through before submitting work for print publication and removes the outside point of view of an editor. Teachout responds by pointing out that it is also easy (and widely lauded by the online community) to go back and insert an update or retraction in an entry saying you were wrong in your initial assessment.

He did feel that the way Amazon has set up their review process was not conducive to the rendering of honest, quality reviews. He does mention that he can find some really excellent writing among the other reviews, mostly from people who are amateur experts with a passion for the subject matter.

I find this whole conversation on the future of blogging very exciting and intriguing. I had a brief email discussion on this matter with Adaptistration writer, Drew McManus. He pointed out that another article I linked to about publishers sending free books to top Amazon reviewers didn’t address the issue of payola for a favorable reviews. I had mentioned this as a possible dark side of blogging reviewers in my blogger as new reviewer entry. As I said then, how do you guard against it? If you are getting paid nothing and working hard to produce quality work, it is easy to favor those who provide you with even modest considerations.

The obvious answer is for today’s noted bloggers to come up with a policy of behavior that will establish a precedent while blogging with the intent to influence is still young. The problem is that there is no recognized source of authority (and isn’t lack of a dictating force part of blogging’s allure?) for people to organize around. Drew McManus’ opinion is that it will be another decade before companies find a way to make the process profitable for the writers. What happens in the interim? He points to the fact people choose news channels most closely aligned with their own views as a harbinger of the end to an effort of objective reporting.

While the idea that one may soon be able to go through life without having their world view challenged is rather frightening, the silver lining would be more writers would find employment satisfying the demand for niche writing. (I can even imagine someone becoming fabulously wealthy providing material that reinforced opposing views.)

As Terry Teachout said–interesting times and technology to be contributing to and taking part in. Of course there is a reason why the sentiment “May you live in interesting times” is considered a curse by the Chinese.