The AMS Blog: A Time for Change

In the first part of this two-part article, we took a look at some of the opportunities and challenges confronting leaders of America’s arts organizations each and every day by discussing four areas of change that we believe affect every arts and culture organization and the way they do business.

These were:

1. The changing definition of arts and culture

2. Redefining the value of the Arts and Culture

3. Blurring of the for-profit and non-profit sector

4. Is our delivery system still viable?

In the second installment of this discussion we explore four more areas:

5. The changing tastes of the consumer

6. The business model – is “zero to zero” an effective management goal?

7. The changing expectations of governance

8. Our shifting population

We encourage you to join the vibrant conversation about these issues by reading through the summaries below and then contributing to our blog “A Time for Change” by clicking the link provided at the end of the article.

5. The changing tastes of the consumer

Predicting what consumers are buying has become more difficult in all sectors. How do we respond to dynamic shifts in taste and interest, increased ease of access, and ‘on-demand’ content? Do we compete by enabling deeper personal connections to the arts, providing more educational opportunities, or offering more “popular” content?? Was Faith Popcorn right that we are all turning into “homebodies” who prefer to stay at home and watch “American Masters” or ”Dancing with Stars” rather than going out to a live performance? Is new and better technology, like big screen plasma TVs, satellite radio, DVDs, contrary to our success?

6. The business model – is “zero to zero” an effective management goal?

Section 501(c) 3 of the tax code has enabled an entire sector to moderate the forces of the marketplace. But something was lost along the way. Nowhere in the tax code does it say that non-profit organizations cannot generate operating surpluses. It seems that each year we draw together just enough earned and contributed revenue to deliver a vast range of programming in our communities, but end the year with no more capital than we started with. As a result, notoriously undercapitalized arts and cultural organizations find themselves with insufficient resources (leadership, human and capital) to manage successfully in times of turbulent change. Many organizations don’t seem to have access to the tools and skills they need to adapt to new market forces and don’t have the resources to invest in research and development activities to respond to change creatively. What are the changes we should consider in the most fundamental way we do business?

7. The changing expectations of governance

There was a time in the non-profit arts sector when Board members’ roles were clearly and simply defined: champion the organization, provide financial support, and attend events. But the fallout of for-profit corporate governance issues and trickle down effects of the Sarbanes-Oxley Act[1] are changing non-profit governance; creating new expectations for Board leadership and placing additional demands on staff. Venture philanthropy, founder succession and other trends are also emerging as present challenges. Boardsource, the national service organization for non-profit Boards, notes that today’s Board members now have three jobs: 1) help support the organization; 2) advocate for the organization; and 3) take responsibility to evaluate the organization. Do we think that our Board members are prepared to successfully accomplish all of these charges? Do they have the knowledge, tools, and insights to constructively and effectively take on these responsibilities? Are we able to support them in their job?

8. Our shifting population?

With growing ethnic and racial diversity, the aging baby-boomer population, and Gen-X’ers’ and Millennials’ impact on the marketplace, the changing composition of our communities and the marketplace is happening at a staggering pace. In tri-ethnic communities like Miami, FL or newly-booming cities, like Austin, TX, where and how do the arts fit in? How are major institutions in urban centers responding to suburban growth and potential customers who would rather stay closer to home for the arts even if the standard is different? How do new institutions emerging to serve contemporary populations – multi-ethnic, mobile, with too many choices - develop the resources to be successful?

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