Adjust Your Back For Bach

by:

Joe Patti

Via The Art Law Blog, is a story about physicians in upstate New York who have come together to barter health care for art and artists’ services. This is a topic I wrote on in the early days of this blog. In fact the program at Woodhull Medical Center which I discussed in that early post is cited in this article. It would depress me somewhat if I were to learn that Woodhull was included in the piece because it has been the only successful program of this type started in the last five years.

But that may not be the case to much longer, according to the story, the organizers of the O+ Festival (O positive) in upstate New York are looking to incorporate as a non-profit to continue these activities. “Chandler and other organizers are incorporating O+ as a nonprofit and want to put on art-for-health-care festivals in other cities next year. Like-minded artists, musicians, and physicians from Philadelphia, Minneapolis, Nashville, Berkeley, and Lowell, Mass., have contacted O+ looking to replicate the organization.”

People interviewed for the story concede this is only a stop gap solution that won’t solve the larger problem of artists not having access to affordable health care. Still the “232 hours of service, valued at more than $38,000” the health care professionals donated is nothing to scoff at. Though as The Art Law Blog reminds us, you have to declare bartered goods and services on your tax return.

**By the way, if anyone has any clever suggestions for this program a la my title, I would enjoy hearing them. Especially bad puns are welcome. Among the others I had thought of were Tosca to Set A Tibia and Cesareans for Cezzanes. There were some unformed idea about scapula and sculpture as well as some icky thoughts about colonoscopies and hernias I would prefer not to mention.

Innovation In Practice

by:

Joe Patti

A colleague recommended a piece on innovation that appeared in the Fall issue of Grantmakers in the Arts by Richard Evans called, Entering upon Novelty. Evans starts by talking about how the current state of things is based on the expectations created by the Ford Foundation when it was the preeminent arts granter starting in the later 1950s. He quickly moves to his vision of an alternative approach that he feels is more appropriate to the new environment within which arts organizations must operate. He presents a chart comparing the two which I have recreated here- Old Structure on the Left,  Emerging Structure on the Right

His commentary on the chart had some resonance with me.

“The emerging features are clearly those of a very different kind of organization, built on different assumptions. For example, in the third comparison, there is an underlying shift in assumptions about the nature of the artistic experience. From ”The quality of the artistic experience we can offer is dependent upon high levels of technical execution that are otherwise rarely experienced” to “The quality of the artistic experience we can offer is dependent upon the connection we make between our own and our participants’ creative aspirations.”

And, in the last comparison, there is a shift in assumptions about financial management. From “Permanent capital funds and buildings will stabilize our organization and protect us from annual upsets” to “Liquidity and fungible assets will support our ability to adapt rapidly to meet new conditions.”

Evans goes on to talk about how the arts have hobbled themselves by not engaging in a “genuine integration of artists into our organizations — not to represent a programmatic perspective, but as full members of the team, divergent thinkers and creative strategists.” It occurred to me that this approach helped to institutionalize the idea that artists must focus on their Art and can’t be distracted with the picayune details of business. Now we are engaged in attempt to get artists to think about the practical details of their careers and perhaps it is time to examine if the businesses have the artist’s creativity to be nimble and innovative in their operations.

Evans discusses how changes might manifest and the need for business models to change–and foundations’ funding criteria to make a corresponding shift in acknowledgment. What really interested me was his assertion that innovation could be institutionalized. He mentions a year long process that EmcArts, of which he is president, conducts to facilitate the move toward an institutional practice of innovation.

“The work is structured in three facilitated phases. The first phase concentrates on building an innovation team (not from the usual suspects!), researching possible new strategies, and focusing the team’s efforts on its most promising discoveries. The second phase is a midproject intensive retreat — five solid days locked away in the woods that telescope months of meetings and increase project momentum — serving as an Innovation Accelerator as decisions begin to be made. The third phase focuses on trying out the innovation through repeated prototyping and evaluation, in relatively low-stakes environments, as each organization decides whether, and how, to move forward with fuller implementation.”

It is the last stage that interested me most because as Evans says, arts organizations don’t have the resources in time/money/personnel, etc to test out new things. According to Evans, those who have participated in learning the process find that failure of an implemented plan has been productive for them and they are eager to try again.

As you know, we here at Butts in the Seats are interested in practical solutions.The desire to try again was the part that convinced me this approach might be worth serious consideration. There are a plethora of management and leadership techniques and theories that emerge all the time, many of which get discarded after a short time or when the next fad emerges. Just as when a business is recommended by a friend who says they will patronize it again, the fact someone is eager to employ an approach again says a lot for it.

Must Read: For-Profit Arm No Panacea For Non-Profit Funding Woes

by:

Joe Patti

If you have ever thought that starting a for-profit arm for your non-profit to help support the latter’s mission, you must read The Nonprofiteer’s post on the subject. I have been hearing it suggested that non-profits embrace these types of arrangements as grants and donations have become increasingly difficult to secure. A study linked to by The Nonprofiteer requires one to pause in such considerations.

Writes the Nonprofiteer of the study:

“nonprofit agencies which choose to support themselves with for-profit businesses end up serving their clients less and worse. Moreover, when the businesses thrive the profits go back into the business, while when the businesses falter the losses are taken out of the hide of the agencies. “

I took a look at the study, “Social Enterprise: Innovation or Mission Distraction,” in which author Rebecca Tekula analyzes the 990 filings of Human Service organizations in New York County from 2000 to 2005. The number of organizations this encompasses is not cited though Tekula writes that the data “represents 700 organizational years” which averages to 116.67 organizations for each of those six years.

What Tekula says she found is that enterprises that yield non-business related income undermine the value provided through the non-profit program-

“As hypothesized, the internal capital markets of nonprofit firms seem to follow that of for-profit firms in that diversification leads to value loss as proxied by programmatic expenditure. What can be inferred from my findings is that this particular type of external enterprising behavior is associated with less value in the programmatic output of human service nonprofits.”

And, no surprise, ineffective programs can be a drain on the resources that should be directed to the effective ones-

“My findings are in accordance with cross-subsidy theories of diversification in which internal budgeting allocates funds to divisions with few investment opportunities (ailing enterprises of nonprofits) while failing to channel funds to those with ample investment opportunities (effective, efficient programs). While this research is a first step toward identifying the factors associated with earned income behavior in nonprofit organizations, there is much work to be done in this area.”

Tekula is careful not to say this will be true for all sectors of the non-profit world and encourages similar study of the arts, healthcare and education. But does caution, (my emphasis)

“Clearly more thought and research must be invested in this area and caution must be given in popularizing and glorifying the unproven benefits of unrelated or external enterprising activities on the very organizations that have become important service providers for society’s neediest individuals.”

Little More About Politics and Art

by:

Joe Patti

I finally got around to reading an interview I bookmarked where Barry Hessenius conducted with Adam Huttler, Executive Director of Fractured Atlas. There was a lot of interesting things said, but I thought I would focus in on some sections related to some recent posts I made.

At one point Huttler touches on the topic I discussed yesterday. The NEA doesn’t get much funding and what it does get is subject to contentious scrutiny. Huttler points out however there are other areas in which people can advocate which can greatly impact the arts.

“Meanwhile, policymakers – on both a local and national level – have countless other levers for impacting cultural vitality. Zoning laws can determine whether urban cultural enclaves remain dynamic hubs of creativity or gentrify into sterile swaths of Starbucks and bank branches. Immigration rules can facilitate or inhibit international cultural exchange…We need to take a more holistic view in which the arts play a role in projects funded by the Department of Housing and Urban Development, the Department of Transportation, or the Department of Homeland Security.”

Hessenius points out that the NEA is not the only source of funding for the arts and in addition to those departments Huttler mentioned, there is also the National Endowment for the Humanities and the Smithsonian. The conversation moves toward the idea that the arts need to exercise their political clout a lot more if they expect better results. There is a discussion of 501 (c) (4)s and political action committees as a tool and some of the complications relative to those structures.

As conversation in this area continues, Hessnius talks about an option I had mentioned as a possible consequence of people turning their back on NEA funding and perhaps 501 c 3 status–performance to benefit political ends. I actually didn’t know that it was permitted under current status as apparently many don’t.

“Some have argued (me included) that the nonprofit arts sector (by taking advantage of its ability to do performance benefits to fund its political activities) ought to be one of the most powerful special interest groups on the playing field – with real political clout that might not only help us to obtain more funding, but pass diverse legislation on all the levels as you suggest – from tax laws to zoning regulations. Yet we do not.”

Huttler notes that laws governing political lobbying and activity make things a little more involved than that, but still an under utilized option that Fractured Atlas will be exploring.