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Please, Don’t Donate To Us

October 8, 2012

by:

Joe Patti

I got a little reminder about the need to shepherd your resources and occasionally refocus yourself on your core business last week when I did my semi-annual stint as an on air guest for the public radio stations.

I am really proud of them because not only have they raised enough money to erect transmitters in all but one major population center in the state, they have done so while reducing the number of days of their appeal from 10 to 8. I think they were inspired to shorten the fund drive by the fact they have generally reached their goals a day or so early the last few years.

Every time I go on, I usually bring some tickets to a show to give away as a thank you gift. I had suggested some appropriate shows when we were making the initial arrangements and was told it wasn’t necessary to offer tickets because they were de-emphasizing gifts in return for donations this year.

I know the stations has been using the message that the premium was the programming rather than the thank you gift for a number of years now. Actually, most public radio stations I have listened to take that approach. The idea is that you are giving so that you can continue to enjoy programming throughout the year, not so you can get a nifty t-shirt.

Thinking they had adopted a purist approach to the programming is the premium philosophy, I was eager to see how successful they might be. Turns out, they aren’t abandoning thank you gifts altogether, just scaling back a great degree.

I was told that because they have such a small staff to help with the gift fulfillment operations, they decided to stop soliciting gifts to give away because it requires so much tracking of where items have come from, if the stations have received the item or if there is a certificate to be exchanged for the item.

If you have ever tried to run an auction fundraiser yourself, you know what can be involved in this sort of activity.

Instead, they have elected to focus more on station branded shirts and tote bags and CD/DVDs associated with local and national radio shows. This way they had a standard group of items that could be processed in the same manner. The gifts provided by the local community tended to be a limited number of higher ticket items like celebrity chef dinners and spa weekends that required $500+ donations.

This new approach for the fund drive is a little new to everyone I guess. The on-air host during one of my segments asked me what goodies I had brought causing one of the coordinators to gesticulate madly indicating that I didn’t have anything. I covered by talking about the season brochures I had brought to help remind me about dates and times.

We often talk about how chasing grant money for programs and services outside your mission and capabilities can be detrimental to your organization. Sometimes you are also in a position where it is better to say no and refuse the gifts of well meaning people if doing so will strain your resources.

It can be very difficult to say no to a heart-felt offering. Many charities which help the poor and dispossessed would rather receive donations of cash rather than food and clothing because the latter requires items to be inspected, evaluated, sanitized and often discarded, all of which diverts staff time and energy.

Groups can be afraid of the ill-will they might generate by appearing ungrateful and refusing the donations and feel obligated to accept. However, there are some alternatives according to a Chronicle of Philanthropy article recently reprinted on Guide Star. Some of the options include redirecting people to groups who will take the donation, a move that can help bolster the creditability of your organization.

Of course, that probably won’t satisfy the ardent long time supporter that wants their gesture to benefit your organization. The Chronicle of Philanthropy article mentions that many charities have disaster plans which outline how they will deal with the out pouring of generosity that may result from a disaster. These plans include responses to donations they are not willing or able to accept.

It may be worthwhile to develop a similar plan to respond to the undesired generosity of a strong supporter so you are prepared for that situation as well.

Fundraising, State of the Arts

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The Board Police

October 3, 2012

by:

Joe Patti

Via Non-Profit Law blog, Kevin Monroe of X Factor Consulting made a tongue in cheek post about crimes that the non-profit Board Police special investigation unit should be looking into. Among them are:

Impersonating a board officer. In many meetings, you may have difficulty spotting the board officers. They may not actually be the one running the board meeting…There are also reports of some organizations in which the officers have not officially been notified that they are board officers. They were absent at the meeting when elections were held and consequently unable to object to their election.

[…]

Misappropriation of focus – We know you’re familiar with misappropriation of funds — which itself is a serious crime. However, misappropriation of focus is also serious, but often undetected. This occurs when boards misunderstand their duty as directors and rather than focus on policy and strategy become obsessive about the operations of the organization. If you see repeated efforts to micromanage the staff, you’re probably observing a misappropriation of focus in action.

Conspiracy – … This often occurs before or after the actual board meetings to ensure a select group of board members always get their way on how they “run” the organization. You’ll know you’re in when you get invited to the “special meeting” of the select board members.

Obstruction of governance – any act or action that distracts the board from having substantive discussions or decisions about important issues or policies to move the organization forward in a strategic manner. This could include rehashing the past, or debating what color to paint the lobby, but they are all ploys to prevent real governance from occurring.

Take a look at the whole post, framing the problem as something to be handled by the Board Police brings a humor to a somewhat serious subject.

Except, the Board Police are pretty much a real organization according to one of Monroe’s commenters.

This past Monday, Australian Charities and Not for Profit Commission (ACNC) started operations.

One of their purposes is to provide advice and assistance to non-profit organizations, including ”

Reforms to remove duplication and streamline reporting and other regulatory obligations will make it easier for NFPs to go about their core business. They will allow donors and the general community greater access to information about charities, the type of work they do and the effect of their work.”

But the ACNC will also have enforcement powers to ensure compliance:

These powers aim to protect the reputation of charities doing the right thing so they are not tainted by the minority who are trying to avoid their obligations. Sanctions will only be used in the rare circumstances where charities deliberately do the wrong thing, do not respond to education or fail to take the opportunity to fix the problem.

In this case the ACNC will have the ability to take action like issue warnings or, in more extreme cases, issue directions or revoke a charity’s ACNC registration. Without the ability to issue serious sanctions if needed, the ACNC can’t effectively protect the vast majority of the sector or the general community.

According to the ACNC website, as of late August Parliament hadn’t decided on those powers. The commenter, Melaine, on the X Factor Consulting blog wrote, “NFP voluntary Directors will have duties and face penalties that exceed those of the biggest commercial boards. (Bad) Makes it even harder to recruit.”

Perhaps some of my Australian readers can provide more comment and context? (I’m looking your way Sydney Arts Management Advisory Group)

Would an organization like this be useful in the United States? Four years ago during the presidential election, people were calling for the creation of a cabinet level Culture Czar position. Presumably such a position would not only given arts and culture a higher profile and advocacy within the government, it would have likely resulted in some form of increased oversight and regulation. I wonder if everyone clamoring for the position considered the potential downside.

Given the increased scrutiny non profit charities are under across the country, it isn’t outside the realm of possibility that the U.S. will get its own version of the board police.

Boards, Government Relations

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Yes Virgina, There Is A Cost Disease

October 2, 2012

by:

Joe Patti

Over on the Marginal Revolution blog, Tyler Cowen opines that the arts are not impacted by Baumol’s cost disease.

2. I do not see the arts as subject to the cost disease very much at all. As for the “live performing arts,” the disease seems to afflict the older and less innovative sectors, such as opera and the symphony. There is plenty of live music these days, it is offered in innovative ways, and much of it is free.

I was a little confused by this point since all it really proves is that people aren’t charging for live music and doesn’t really address that there are costs involved with the performance.

Admittedly, he does seem to imply that innovation in the way the artistic product is offered makes all the difference. Back in June, I noted that Jon Silpayamanant made the point that there are alternative ways to make money when offering an experience.

Cowen goes on to say, (my emphasis)

“4. In many sectors of the arts, especially music, consumers demand constant turnover of product. Old music becomes “obsolete” — for whatever sociological reasons — and in this sense the sector is creating lots of new value every year. From an “objectivist” point of view they are still strumming guitars with the same speed, but from a subjectivist point of view — the relevant one for the economist – they are remarkably innovative all the time in the battle against obsolescence. A lot of the cost disease argument is actually an aesthetic objection that the art forms which have already peaked — such as Mozart — sometimes have a hard time holding their ground in terms of cost and innovation.”

I will grant him that some of the cost disease problems can be attributed to an adherence to aesthetic ideals rooted in the past and a resistance to innovation.

But I am not sure if consumers are truly demanding a constant turnover in product. There is reluctance to sample anything new and unfamiliar among consumers. This isn’t necessarily confined to symphony and opera where you might argue the new material is being presented to the wrong audiences (i.e. older existing audiences whose tastes are already set).

There is as much a sense of risk aversion among audience as among content creators. Broadway shows are often revivals or derivative of works that have already proven their success. Playwrights bemoan the fact that regardless of their proximity to Broadway, few theatres are producing new works.

The same is true with movies. The most well attended movies this summer were based on comic books. Even the plots of those stories had been revamped numerous times in the comics format. The plan for the adaptation of J.R.R. Tolkien’s The Hobbit went from two movies to three leaving fans to wonder, if the three books of the Lord of the Rings took three movies to tell, (albeit with much left out), how is the one book of The Hobbit going to be stretched to three?

A fair bit of emotion and nostalgia is responsible for perpetuating the conditions which contribute to Baumol’s cost disease. One of the points Cowen makes reinforces this:

“Live music” may seem like it doesn’t change much, but lifting the embargo on Cuba would boost the quantity and quality of my consumption of spectacular concert experiences, as would a non-stop flight to Haiti.

Opportunity rather than innovation is the only thing having any bearing on the quantity and quality of his consumption. It isn’t necessary for Cuban musicians to made any changes whatsoever since 1962 when the embargo began, they just need to be available.

There is an element of his aforementioned “aesthetic objection that the art forms…have already peaked” in this point as well. It is difficult to take an entirely objective view of a product or service possessing an artistic element.

If quality of product could be maintained by paring down performers and replacing them with technology, The White Stripes would have been a model everyone emulated. As interesting as the band’s work might have been, there wasn’t a rush to form duo performance groups.

It may be a difficult to define Platonic ideal, but there is a minimum one can offer before the perception of the experience suffers. Ultimately, because it is his area of expertise, I might find myself having to concede Cowen’s point in the face of a more detailed argument. But I think given that the resources necessary to provide the central experience remain generally constant, Baumol’s cost disease does indeed impact the arts significantly.

As for the solution, at this point I keep coming back to Jon Silpayamanant’s idea that ancillary elements surrounding the experience need to be developed in order to support it.

Business Models, State of the Arts, Terms and Ideas

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This Ritual Will Be Tweeted

October 1, 2012

by:

Joe Patti

If people can tweet at religious services for Jewish high holy days, can tweet seats at all your performances be far behind?

Well, obviously the reality is much more complicated than that. Synagogues aren’t at the forefront of using social media to engage their religious communities. Not yet at least.

But a recent article in the New York Times recounting a Rosh Hashanah service at the Jewish Museum of Florida contained some sentiments familiar to those in the performing and visual arts; including high cost of accessing the event, the need to “re-engage and energize young professionals” and a desire to make the experience accessible to that demographic.

“We can no longer assume that young people will join the Jewish community,” said Rabbi Gary A. Glickstein, Temple Beth Sholom’s spiritual leader. “They need to be helped on that journey.”

Substitute “participate/attend arts and culture events” for “join the Jewish community” and you have an oft repeated phrase of the arts community. (Albeit incorrectly attributed to Rabbi Glickstein.)

As part of the experiment, the organizers changed the formatting slightly and used technology to achieve the same intent as the conventional religious practice. They termed it an experience rather than a service.

The article seems to attribute willing participation in rituals people often avoid contributing to at regular services to the anonymity provided by the technology. What people texted about their own fears and failings appeared anonymously on a screen. The technology allowed people to share and bond as a community without necessarily making any individual feel vulnerable. Thus the organizers were able to serve the spiritual needs of the attendees.

The fact that the organizers felt it was necessary to change the formatting of a traditional religious practice signaled to me that it may take more than just allowing people to tweet at a performance to engage younger audiences. In many ways, tweet seats feels like an overlaid concession to younger audience members telling them they will be allowed to watch and text about the experience as long as they don’t disturb anyone else or have any expectations that the content will change.

Yes, I know there are plenty of people doing interesting and innovative programming that will inspire people to tweet without any prompting. My main thrust is to suggest both that it may be necessary to change the format of the experience to be more complementary to tweeting activity at an arts event and that it may be possible to do so without sacrificing the intent and significance of the experience.

I was encouraged to see that this was organized at a museum. I took it as a sign that the museum was responsive to the community it served and recognized as a viable resource to meet its needs.

Though those attending the Rosh Hashana services in Miami described their experience as “refreshing and fun,” the changes to the service didn’t seem to have a frivolous result. People described the sense of community and engagement they had and their feeling that the experience was honest and thought provoking, all of which I assume are typically the goals of most Rosh Hashana services regardless of where they occur.

Of course, there will always be occasions where live tweeting is not really appropriate…like a bris.

Arts in an Age of Technology, Audience Relations

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