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?

Join the conversation

Leaders of America’s arts organizations are exploring new opportunities and confronting new challenges every day. In the first part of a two-part series on changes in our industry, we will examine four of eight themes, or “areas of change”, that we believe affect every arts and culture organization and the way they do business. As we travel across the country to conduct research, assist in planning new endeavors, and help develop policy, we are privileged to visit with arts and community leaders and observe how the sector is responding to change. To be successful, arts leaders require professional expertise, an acute awareness of the markets in which they work, and leadership skills to manage change.

We invite you to read this brief commentary and add your comments to our blog, “A Time for Change,” using the link provided at the end of the article.

1. The changing definition of arts and culture
   Since 1982 the National Endowment for the Arts has been surveying Americans participation in the arts (http://www.nea.gov/research/NEASurvey2004.pdf), examining seven benchmark activities: jazz, classical music, opera, musicals, plays, ballet and art museums.
   In 2007, this list appears to be an obsolete and narrow definition of the arts largely based on traditional Euro-centric assumptions. Today, events from Orlando’s Fringe Festival to Spoleto in Charleston, the National Black Arts Festival in Atlanta, Def Comedy and Poetry Slams, drumming circles, book clubs and YouTube are all acknowledged as arts and cultural activities. One national arts leader recently noted, “if you look carefully, each and every American is participating in the arts each and every day.” How do we address such a broad definition of arts and culture in understanding our market(s) and providing appropriate programming?
2. Redefining the value of the Arts and Culture
   In the 1990’s, many arts and culture organizations used economic arguments to make the case for their existence and advocate for funding and support. However, as the Rand publication “The Gifts of the Muse” argues, the benefits of the arts are both instrumental (e.g., economic impact) and intrinsic (e.g., personal meaning), and maximum value is achieved by considering both. The value and impact of the arts is broad, increasing economic benefit to the community, fostering educational achievement, empowering individual expression, and enhancing communities’ competitiveness and success by enabling and encouraging creativity and ingenuity. How can the arts and cultural sector best leverage this broader-base of intrinsic benefits and positive impacts?
3. Blurring of the for-profit and non-for-profit sector
   Market driven for-profit corporations are increasingly pursuing opportunities to generate and present content that has traditionally been the purview of mission-driven non-profit arts and culture organizations. Examples include music festivals that range from Bonarroo to Burning Man. Blockbuster museum exhibitions like the recent King Tut showcase or “Bodies”, have accompanying ‘rock star’ marketing campaigns and ticket prices, and Broadway’s hybrid musical extravaganzas like Riverdance. It’s not a big leap from Amateur Night at the Apollo to American Idol. How do we take advantage of for-profits “infringement” on the arts and cultural world? Do we accept their involvement and just move one, or somehow take advantage of their contributions? How does their involvement affect our business?
4. The viability of our delivery system
   We have invested heavily in building facilities to house our arts and cultural treasures, and to accommodate our theater, dance, opera companies and symphony orchestras. In general, these types of cultural facilities support a passive connection between the art and the audience. Action within the facility is largely based on ‘sit and listen’ or stand and look’ activities. Typically, others with vast experience and expertise (e.g., curators, artistic directors, maestros, etc.) decide what is to be performed or what is displayed. Is this still appropriate given our expanded understanding of arts and culture?

Join the conversation
These themes and subsequent questions are some of the challenges we are grappling with everyday. Take a minute and join the conversation. Contribute your thoughts to this weblog. The discussion will stimulate new ideas, and encourage us all to think creatively about the challenges ahead. We will report on your contributions and complete the summary of the additional four areas of change in our next issue of Insights, where we will explore:

• The changing tastes of the consumer
• The non-profit arts organization business model
• New expectations for governance
• Our shifting population