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Full text of "Reassessment of support for arts organization resources : a summary report on a series of ten colloquia convened by the National Endowment for the Arts and organized by Bay Consulting Group"

Reassessment of Support 

for Arts Organization Resources 




A Summary Report on a series of ten colloquia 

convened by the National Endowment for the Arts 
and organized by Bay Consulting Group 

November 2000 



& 



NATIONAL ENDOWMENT FOR THE ARTS 



Digitized by the Internet Archive 

in 2012 with funding from 

Boston Library Consortium Member Libraries 



http://archive.org/details/reassessmentofsuOOnati 



Reassessment of Support 

for Arts Organization Resources 




A Summary Report on a series of ten colloquia 

convened by the National Endowment for the Arts 
and organized by Bay Consulting Group 

November 2000 



^ 



NATIONAL ENDOWMENT FOR THE ARTS 



Reassessment of Support for Arts Organization Resources 



n 



Table of Contents 



Introduction 1 

Colloquia and Presenters 3 

I. Entrepreneurial Strategies for Arts Organizations 7 

"...a means to a much greater end" 

• Leveraging financial assets 

• Constituencies as assets 

• Entrepreneurial readiness 

• Sidebar: The Fifteen "Cs" of Entrepreneurship 

II. Arts Organizations' Role in the Community 15 

". . .an atmosphere of risk and engagement" 

• Community engagement 

• The need for new collaborations 

• The concept of "cultural capital" 

III. The Potential of Technology for Arts Organizations 23 
"This is not just about boxes" 

• Technology opportunities and limitations 

• Building community through technology 

• Policy questions 

IV. Cultivating Human Resources in Arts Organizations 29 
"Just providing noble work wont guarantee effectiveness" 

• Developing arts entrepreneurs 

• Full utilization of boards 

• Transfer of knowledge between generations 

• Leadership development and training 



in 



Reassessment of Support for Arts Organization Resources 

V. Approaches to Organizational Development 35 

". ..keep re-inventing yourself " 

• Recognizing developmental stages 

• Developing healthy organizations across a community 

• Sidebar: Organizational Life Cycles 

• Sidebar: Supporting the Arts Ecology 

VI. The Changing Practices of Arts Philanthropy 43 

". . .to view them as investments rather than grants" 

• New money, new approaches 

• The advent of technology 

• Support for creators and producers 

• Sidebar: Assessing Organizational Health 

VII. Meeting the Resource Needs of Arts Organizations 51 

". . .no one is well served when authentic nonprofit needs are repressed" 

• The power of convening 

• Meeting authentic nonprofit needs 

• Building strong balance sheets 

Addenda 

"A Place that is Yours:" 

The Challenge of Facilities Development a-58 

"Come to Us with a Plan:" 

State Arts Agencies Find New Ways to Support the Arts a-60 

Appendix A Colloquia Presenter Biographies A-63 

Appendix B Colloquia Bibliography B-71 



IV 






NATIONAL ENDOWMENT FOR THE ARTS 



Throughout its history, the National Endowment for the Arts has been a 
leader in national efforts to promote organizational stability. Today, arts 
organizations are increasingly asked to respond to the demands of new audi- 
ences, new technology, and new sources of competition. After three decades 
of helping to build a strong arts infrastructure, the NEA is reevaluating its 
strategies for applying limited federal resources to the challenges facing artists, 
the cultural community, and arts organizations. 

To begin this process of reevaluation, and to better understand the challenges 
facing America's arts organizations, the NEA hosted a series of ten colloquia 
in 1999. Representatives from both large and small arts organizations met 
with experts from such fields as advertising, education, the entertainment 
industry, Internet services and charitable gift funds to discuss how arts insti- 
tutions can more effectively serve the citizens in their communities. 

The colloquia made several important findings: 

1. Arts institutions remain undercapitalized, understaffed, and fragile. 

2. During this decade, arts organizations will face a widespread 
leadership transition. 

3. Throughout the arts field, there exists a need for sharing knowledge 
and best practices. 

4. In the area of technology, the arts are characterized as "have-nots." 

5. Arts organizations lack resources for risk-taking. 

6. The nonprofit arts are unable to embrace change with the creativity 
and flexibility of other sectors. 

In the pages that follow, we share with you highlights from the colloquia. 
I thank the forty-one speakers for their reflections about the health and 
future wellbeing of our nation's arts infrastructure. The recommendations 



Reassessment of Support for Arts Organization Resources 



and information gleaned from the colloquia panels will help NEA develop 
grantmaking strategies for building stronger, more resilient arts organiza- 
tions in 21st Century America. 




Chairman' 



List of Colloquia & Presenters 



Organizations & the Future, May 14, 1999 

Joe Coates, President, Coates and Jarratt 
Michael Gallis, Principal, Michael Gallis Associates 

Bruce Kogut, Professor of Management, Wharton School, University of Pennsylvania 
Stefan Toepler, Research Associate, Comparative Nonprofit Sector Project, Institute for Policy 
Studies, Johns Hopkins University 

Audiences of the Future/Building Community Ownership, May 21, 1999 

Arnold April, Executive Director of the Chicago Arts Partnerships in Education 
Juana Guzman, Director of the Chicago Neighborhood Tours for the Department of 

Cultural Affairs 
David Halen, Concertmaster, St. Louis Symphony Orchestra 
Hal King, Managing Partner of King, Brown and Partners, Inc. 

Information & Technology, May 24, 1999 

Anne Green, Director of Grantmaking Programs, Benton Foundation 
Anthony Riddle, Executive Director, Manhattan Neighborhood Network 
Douglas Rushkoff, author, lecturer, and social theorist 
Fred Silverman, consultant, philanthropy and corporate community relations 

State and Local Funding Partners, June 1, 1999 

Peggy Amsterdam, Executive Director, Delaware Division of the Arts 
Shelley Cohn, Executive Director, Arizona Commission on the Arts 
Norma Kaplan, Division Chief, Cultural Affairs Division, Arlington, VA 
Jennifer Severin Clark, Executive Director, Nebraska Arts Council 
J. Mark Schuster, Professor of Urban Cultural Policy, MIT 



Reassessment of Support for Arts Organization Resources 



Innovation & Entrepreneurship, June 2, 1999 

Jerr Boschee, President and CEO, National Center for Social Entrepreneurs 

Nicolas Kanellos, Founder and Director, Arte Publico Press 

Hal Cannon, Founding Director, Western Folklife Center 

Van Romans, Director of Cultural Affairs, Walt Disney Imagineering 

Life Cycles & Critical Junctures of Organizations, June 14, 1999 

Dudley Cocke, Executive Director, Roadside Theater 

David Gockley, General Director, Houston Grand Opera 

Cora Mirikitani, Senior Program Director, James Irvine Foundation 

Susan Stevens, President, Stevens Group at Larson Allen 

Facilities Development, June 15, 1999 

Tom Borrup, Intermedia Arts 

Cora Cahan, President, The New 42nd Street 

Adrian Ellis, AEA Consulting 

Sally Jo Fifer, Executive Director, Bay Area Video Coalition 

Leadership Development & Capacity Building, June 21, 1999 

Marian Godfrey, Senior Program Director, Pew Charitable Trusts 
Allen Grossman, Senior Lecturer, Harvard Business School 
Jean Horstman, Manchester Craftmen's Guild 
Emily Todd, Houston Endowment 

Capitalization & Organization Development Strategies, June 22, 1999 

Michael Gehret, Director of Development, Chicago Symphony 
Clara Miller, President, Nonprofit Finance Fund/Cultural Facilities Study 
Nancy Sasser, President, National Arts Stabilization 
John Kreidler, Senior Program Executive for Arts and Humanities, 
San Francisco Foundation 



Changes in Philanthropy, November 22, 1999 

Jane L. Delgado, Ph.D, President and Chief Executive Officer, COSSHMO 
Cynthia Egan, President, The Fidelity Investments Charitable Gift Fund 
David Eisner, Vice President of Corporate Relations, America Online 
Peter Frumkin, Assistant Professor of Public Policy, Harvard University 



Reassessment of Support for Arts Organization Resources 



I Entrepreneurial Strategies for Arts Organizations 

"... a means to a much greater end" 

Midway through the ten colloquia, NEA Chairman Bill Ivey expressed his sense of 
two contrasting approaches to arts administration, one stressing the traditional tools 
of institutional stabilization — endowments, cash reserves, board development, and the 
like — the other, drawing on more recent economic trends, insisting that "...what's really 
important is flexibility, entrepreneurship, the ability to seize opportunity...." "These are 
very different senses of where we go," concluded Ivey, adding at a subsequent session that 
our very notion of "stability" may be in flux, too. What really matters in this regard, he 
suggested, might turn out to be the strength of an organization's ties to the community 
rather than the size of its endowment. 

The colloquia participants generally agreed that the two approaches of institutionalization 
and entrepreneurship are not mutually exclusive, that given the changing climate of the 
time, few organizations can afford to hew to a single-minded course in either direction. 
In fact, as Allen S. Grossman of the Harvard Business School observed, the only constant 
is change itself. "One thing is for sure," declared Grossman. "Change is the constant 
that we're all faced with — change in funding, change in arts audiences we serve, change 
in the programs." Urban planner Michael Gallis shared Grossman's sense of the current 
climate of change, likening the cultural sector to other aspects of American life that 
have been radically transformed in recent years. "I think we have to recognize we're in 
a different world, in a ruthless world," declared Gallis. "...If we've created a system of, 
quote, 'subsidy,' by which we talk about ourselves as a charity, we are missing the boat 
about what the twenty-first century is about. ..." Even within the realm of purely institu- 
tional concerns, we have to do some "fundamental rethinking," Gallis added, pointing 
to the shift from a focus on attracting charitable contributions to one of managing 
strategic investments. 

Leveraging financial assets 

David Gockley, general director of the Houston Grand Opera, expressed a similar 
concern, suggesting that arts organizations needed to adjust their perspective on their own 
financial assets. "I think one of the financial things we have to get away from — the field 
has to get away from and nonprofits have to get away from," observed Gockley, "is that 



Reassessment of Support for Arts Organization Resources 

the only source of being is subsidy," that a nonprofit organization ". . .can only be healthy 
if somebody's giving [it] something. Because it takes all the responsibility out of the hand 
of the organization itself, and puts it into the hand of somebody else. ..." Gockley went 
on to distinguish between different kinds of organizational assets, a distinction based not 
simply on their origin, but on what they represent to the organization as well. "I wouldn't 
make general operating support and working capital synonymous in an organization," 
Gockley explained, "even if they were meant to be the same thing, because working capital 
puts the onus back on the organization — that as an organization, I need to be financially 
healthy, I have to have a form of discretionary cash to make a difference in my operation 
or [my] financial health." 

. . The theme of "venture capital" 

Colloquw participants generally agreed that the . , ,, , „ 

1 r r ° 7 ° was raised repeatedly at the collo- 

two approaches of institutionalization and q U i 3j a reflection of the changing 

entrepreneurship are not mutually exclusive, that climate in which arts managers 

given the changing climate of the time, few toUed as the nineties drew to 

„ , , . . a close. The Chicago Symphony 

organizations can afford to hew to a single- _ , , . 

Orchestra s success in recent 

minded course in either direction. yearSj for eX ample, is rooted in 

the orchestra's having taken a 
much more entrepreneurial approach in charting its future. "The Chicago Symphony 
Orchestra made a conscious decision in the early 1990s that it needed to expand in order 
to thrive," Michael Gehret, CSO vice president for marketing and development recalled. 
". . .It was at this time that trustees and staff made the decision that the CSO needed to be a 
bigger operation — one that presented more concerts to more people, that offered a wider 
variety of programs, that reached an audience more diverse in every way than its current 
one." The transformation, as Gehret described it, was a dramatic one: 

In the early 1990s, the Chicago Symphony Orchestra was a 25-plus million- 
dollar-per-year operation, providing 112 subscription concerts and presenting a 
limited number of additional concerts during the season. Now the CSO operates a 
symphony center that includes a successful public restaurant, Rhapsody; the ECHO 
interactive music education center; and a new 2,300-square-foot symphony store, 
designed to attract destination shoppers. 

While the orchestra still performs 112 subscription concerts, the organization also 
presents more than 100 other concerts, from a sold-out jazz series and Saturday-morning 
family concerts to chamber music events at various locations around the city. It also 



continues to maintain a training orchestra and conducts dozens of educational and 
community-engagement programs. 

If all of that sounds typical of multifaceted arts institutions in the nineties, with 
museums and performing arts centers often fulfilling a variety of roles in their commu- 
nities, the financial plumbing beneath the surface of the CSO's expansion is much 
more illustrative of the new era. Through an ambitious capital campaign coupled 
with the issuance of tax-free 
bonds, the CSO's net worth 

over the past decade climbed " Risk is a condition of being alive in America 

from $98 million to $245 today" King declared. "One of the problems that a 

million. The secret of the not-for-profit organization has is that there's no one 

orchestra's dramatic growth •„ ^ organization or invohed in the organization 

owes more to Warren Buffett . 

, . , „ iU thats trained to accept and manage risk. I think 

than to either Beethoven or r ° 

Brahms, as the CSO used "arbi- one °f the things not-for-profit organizations can do 

trage," borrowing funds at an when they enter an area that is going to involve risk, 

effective rate of 4 percent and I5 t0 re jy u p m p eo pi e wno rou tine}y have risk as a 

earning investment income of r , . , , . , 

, «_, . part of their culture or their business. 

around 6.5 percent. This 

method of increasing the insti- 
tution's capital base," Gehret hastened to add, "won't work for everyone," but the 
orchestra's aggressive approach to financial management is typical of some of the more 
opportunistic strategies that nonprofits have adopted in recent years. 



Constituencies as assets 

A number of other arts organizations are starting to shoulder much more of the respon- 
sibility for developing their own financial resources, rather than relying on traditional 
sources of grant revenue. These are often the same organizations that have adopted other 
entrepreneurial strategies as well, such as shifting from traditional audience-development 
techniques to a new emphasis on customer service. Bill Ivey identified this trend as the 
other side of the entrepreneurial coin, one that stressed customer relations over earned 
income, and long-term planning over more immediate gains. "... [Tjhere are a couple 
ways of looking at entrepreneurial activity as it relates to nonprofits," Ivey observed. "One 
is to think of it as being about earning dollars by selling things and looking more like a 
commercial, for-profit business. The other way is that it's the style of operating that puts 



Reassessment of Support for Arts Organization Resources 

you in close contact with audiences, and engages you in a long-term, strategic, careful 
planning process." 

Market researcher Hal King agreed that arts organizations need to monitor more 
closely what amounts to their "customer base," both by gathering information from 
the attendees in their midst and by re-establishing contact with these individuals after 
they leave. "Far too many times we allow people to come into our venues, or in 
contact with us, and we make no record of that contact," King complained. "Part of 

our responsibility as arts organi- 
zations, or any community orga- 
"/ think that being an entrepreneur is very nizadon j$ tQ keep in comact 

much like being an artist" observed Cannon. with the people who come, to 

" 'Entrepreneur' is defined as ( a person who cause them to give their names, 

organizes, manages, and assumes the risks of a t0 re S isten }Nhm the y leave > 

. ... .... write them again. Ask them 

business enterprise. Artists take inspiration and , . . 

r r what their experience was. 

the inherent risk of inspiration, crafting it into art. Create a dialogue and an open 

Good entrepreneuring organizations do something channel of communication with 

similar. They take innovation and the risk of that ^ community served. Too 

. , . , ./- „ „ many places I've gone into have 

innovation and then manage it beautifully. , , . 

spent too much time at the front 

end, and no time at the back 
end, in creating a relationship with that community that they developed." 

Establishing such relationships proved to be especially important to the Western Folklife 
Center, whose Cowboy Poetry Gatherings, which started small, gradually developed into 
enormously popular events. "If there's a secret to any success we've had as entrepreneurs," 
explained Hal Cannon, the center's founding director, "it's really been in understanding 
who our audience is and working with them." Other arts organizations have undergone 
a similar transition in regard to their "customer relations," one that affects a wide variety 
of organizational activities, from advertising and marketing, to audience tracking and 
retention, to new forms of collaboration and partnership. 

Entrepreneurial readiness 

Viewed from another perspective, suggested Juana Guzman, director of community 
cultural development for the Chicago Department of Cultural Affairs, the distance from 
arts institution to arts enterprise is not really so considerable. "I'd have to say that I've 

10 



known some organizations that are not-for-profit that have done a phenomenal job of 
creating an earned-income component in their facilities," Guzman observed. "We have 
to remember that while many not-for-profit organizations really don't have people who 
have an entrepreneurial background or a business background, you have to consider the 
fact that they made this institution happen. They raised all this money. They trained all 
these people. So they really have the ability to sustain the facilities. I think they have the 
skills to sustain a business." 

Hal Cannon agreed that the gap between the two worlds of art and business is not 
a large one, touching on one of the hidden strengths of the cultural community. "I 
think that being an entrepre- 
neur is very much like being In tne process f following this new path, concluded 

an artist," observed Cannon. D , .., . , ., , ., . . . , 

Boschee, it s important that the organization bear 

"...'[ E] ntrepreneur' is defined 

„,. <o „<>,,. , ,u~ „„;,««. in mind its reasons for undertaking its journey 

as a person who organizes, } t> j / 

manages, and assumes the risks in the first place. "Remember the balance," he 

of a business enterprise.' Artists cautioned. "Remember that entrepreneurship is not 

take inspiration and the m ^ f|| ^ Jf$ fl mmm tQ fl M||cfc grmter md » 

inherent risk of inspiration, 

crafting it into art. Good 

entrepreneuring organizations do something similar. They take innovation and... the risk 

of that innovation and then manage it beautifully." 

For her part, Juana Guzman has seized upon a burgeoning cultural tourism industry 
to assist small, community-based arts organizations in generating new sources of 
income, using such marketing strategies as gift shops, craft marketplaces, cafes, guided 
tours, and online sales. Two programs that Guzman initiated in 1997 have been particu- 
larly successful in this regard, and they might serve as models for others seeking to 
integrate community-based organizations into larger economic-development programs. 
The Chicago Neighborhood Tours Program escorts visitors to community cultural facili- 
ties and architectural sites, to a locally owned restaurant for a meal, and to a brief artistic 
demonstration or performance by a local artist. All of the guides (more than 100) and 
artisans (more than 50) involved in the program are community residents who are paid 
for their services. Similarly, the Chicago Neighborhood Gift Shops project works with 
local community-based arts organizations, providing seed capital and intensive technical 
support that have enabled eight organizations to open gift shops and portable "arts carts." 1 



1 The Chicago Neighborhood Tours Web site (www.chgocitytours.com) includes links to the gift shops. 

11 



Reassessment of Support for Arts Organization Resources 

The inherent risk of many entrepreneurial practices poses a problem for nonprofits, 
suggested market researcher Hal King. But risk, he pointed out, is unavoidable. For that 
reason, King advises arts organizations to seek the assistance of those who regularly face 
such challenges in the course of their everyday work. "Risk is a condition of being alive in 
America today," King declared. "One of the problems that a not-for-profit organization 
has is that there's no one in the organization or involved in the organization that's trained 
to accept and manage risk. I think one of the things not-for-profit organizations can do 
when they enter an area that is going to involve risk, is to rely upon people who routinely 
have risk as a part of their culture or their business. Find an entrepreneur. Find a person 
who has started their own business. Find a person who's gotten a bank loan and paid it 
back. Get them on your board or to be of counsel." 

For all of his enthusiasm for 
"There are a couple ways of looking at entrepre- entrepreneurial practices and 

neurial activity as it relates to nonprofits" Ivey for all of his belief in the 

observed. "One is to think of it as being about value of such strategies for 

earning dollars by selling things and looking more nonprofit arts organizations 

. (see sidebar, "The Fifteen 'Cs 

like a commercial, for-profit business. The other rc . , , . „, T 

J r J of Entrepreneurship y, Jerr 

way is that it's the style of operating that puts you in Boschee of the Institute for 

close contact with audiences, and engages you in a Social Entrepreneurs was also 

long-term, strategic, careful planning process." ^ uick t0 P ut entrepreneurship 

into perspective. First, he 

cautioned, only "a very small 

percentage of arts organizations are going to be ready to do this. We shouldn't fool 

ourselves. This requires substantial cultural change and there are an awful lot of obstacles 

in the path." Second, Boschee added, ".. .adopting these earned income strategies is simply 

a tactic. It's a new route to an old destination." And in the process of following this new 

path, Boschee concluded, it's important that the organization bear in mind its reasons 

for undertaking its journey in the first place. "...[Rjemember the balance," he cautioned. 

"Remember that entrepreneurship is not an end in itself. It's a means to a much greater 

end...." 



12 



The Fifteen 'Cs' of Entrepreneurship 

Jerr Boschee, of the Institute for Social Entrepreneurs, offered a cogent summary of the many challenges that face 
nonprofit organizations attempting to adopt earned-income strategies. Having worked with many organizations that 
have made the transition successfully, Boschee offered his list of the "Fifteen 'Cs'" — the "critical success factors that the 
pioneers in the field of social entrepreneurship in the nonprofit sector have unearthed during the past 10 to 15 years:" 

Candor: "Beware of yourself," warns Boschee, since a nonprofit organization needs an honest assessment of its 
resources, its competition, and its local needs — "all of the things that go into making up an earned-income venture." 

Commitment: Everyone in the organization, including the board of directors, must be equally committed to following 
through on the new undertaking. 

Culture: Success as a social entrepreneur requires a cultural change on the part of the nonprofit, taking new risks, 
making tough personnel decisions, and, as odd as it may sound, being "willing to make money." 

Core values: By defining what the organization stands for "and will not swerve from," the organization will be able to 
resist the temptations of "things you've never been tempted by before." 

Conservative: Rather than a radical process, the transformation to entrepreneurship is an essentially conservative, 
deliberative one, involving considerable planning and a willingness to seek advice and assistance from successful 
entrepreneurs. 

Clarity of purpose: The organization must have both a broad agreement on its motivation for undertaking this process, 
and a clear sense of how it will measure success, using its core values as benchmarks. 

Customer focus: By understanding both the nature of the constituents it serves and their needs and interests, an 
organization can better negotiate between the aesthetic demands of its artistic mission and the earned income require- 
ments of entrepreneurial strategies. 

Core competency: Rather than attempting to undertake money-making projects in unrelated fields, arts organizations 
should focus on their unique assets and areas of strength. 

Collaboration: The organizations should assemble a team that distinguishes among the skills of innovators (who 
develop prototypes), entrepreneurs (who bring the product to market), and professional managers (who install the 
infrastructure needed for long-term success), and make sure that all three are included. 

Concept: Rather than attempting to serve too many markets, an organization should develop a "niche mentality" based 
on a well-defined business concept. 

Critical success factors: Every enterprise is defined ultimately by a few things that determine success or failure, and 
knowing precisely what these are — and acting accordingly — is crucial to entrepreneurial endeavors. 

Competition: While nonprofit arts organizations are not accustomed to thinking about their competitors, it is essential 
to have a sense of what other direct competitors are active in the community (those who offer similar types of services) 
as well as what indirect competitors are present (those who offer different types of services but compete for the same 
discretionary dollar). 

Cost: Although the demand for some kinds of cultural services may be comparatively inelastic, pricing considerations 
are extremely important in most entrepreneurial undertakings, where competition tends to drive prices down. 

Courage: Because entrepreneurial strategies pose enormous risks, attract considerable scrutiny, and offer no guarantees 
for success, "only do this if... you've got the passion for it." 

Continuing to care: The organization's mission must remain the paramount consideration, Boschee concluded: "We 
must continue to care." 



13 



Reassessment of Support for Arts Organization Resources 



14 



II Art Organizations' Role in the Community 

". . .an atmosphere of risk and engagement" 

Despite all of the exposure it receives for the work it produces, the nonprofit arts sector 
is not always well understood by the public at large. "From the point of view of the 
community," Marian Godfrey of the Pew Charitable Trusts observed, "one thing we've 
learned is that a lot of members of the community make absolutely no distinction between 
nonprofit or for-profit organizations, and don't particularly know whether they're having 
a nonprofit or for-profit arts experience. And I think that's something really important 
to keep in mind." 

But that seeming indifference should not dissuade the nonprofit arts sector from 
remaining faithful to its important role, Nicolas Kanellos of Arte Publico Press declared, 
however challenging that role may prove to be. Even after enjoying some success 
in reaching a wider public 

through commercial distribution "jfo rea \ity is there's competition from the 

of his nonprofit organization's r n . , . . . . ' ., 

r ° for-profit sector and it is more intense than ever 

publications (primarily Hispanic 

literature), Kanellos nevertheless be f ore >" Grossman observed. "Ifs competition for 

spoke of the social, racial, even people whom we are trying to attract, for essential 

geographic barriers— not to resources, and for the employees working in these 

mention the financial complica- ^ organizationSt rhe competition is positive . ft 

tions — that tend both to keep 

a. c<. r 4 , will make nonprofit arts organizations function 

the nonprofit sector out or the r J ° ' 

commercial marketplace, and to better than ever before" 

frustrate any collaborative efforts 

to accomplish that goal. Kanellos remained convinced, however, that progress can 
be made on both fronts, once the unique contribution to American culture that the 
nonprofit sector makes is more widely acknowledged. "... [Bjasically there has to be a 
willingness to recognize that there is a large sector of nonprofit culture in the United 
States that gives a different message, and that represents a different view of the country, 
than may be captured through commercial media," Kanellos declared. "Once that is 
recognized — that there is indeed an intrinsic art and culture out there that is not being 
delivered to people, and not being made accessible to people — if we recognize that, then I 
think some of these other barriers can be circumvented...." 



15 



Reassessment of Support for Arts Organization Resources 

Allen Grossman of the Harvard Business School shared Kanellos's sense of the singularity 

of the nonprofit voice, which offers certain kinds of expression that simply cannot be 

found elsewhere. "Arts organizations. . .have a responsibility to create the kind of arts 

that the for-profit world wont support, can't support, and probably shouldn't support," 

Grossman reasoned. Nonprofit arts organizations, agreed Michael Gallis, provide a 

context in which individuals can ".. .explore ideas in the freest format, in the widest range 

of possibility. There's no other sector that provides an individual with those particular 

qualities, and gives him that particular range of experience." To be cherished as well, 

added Arnold Aprill, executive director of the Chicago Arts Partnerships in Education, is 

the "protected space" that nonprofit arts organizations provide artists. "The function of 

these organizations is not to compete in the market," noted Aprill. ". . .1 would not want to 

see an eroding of the distinction between nonprofits and profits and have the function of 

artists that have a protected space to 

«~ . . . , » i i -i i do difficult, interesting, challenging, 

Our mission is to be a catalyst that builds , , ... ° 

and cutting-edge work disappear. It 

understanding among people through art," it > s all market driven then that 

explained Borrup. "It's a very socially will happen." 

engaged mission. It comes out of a long history 

And yet the commercial marketplace 
of social engagement through the arts." cannot be ignored altogether) 

Grossman pointed out, for the 
popular-culture industry poses a competitive threat to the nonprofit arts. "The reality is 
there's competition from the for-profit sector and it is more intense than ever before," 
Grossman observed. "It's competition for people whom we are trying to attract, for essen- 
tial resources, and for the employees working in these arts organizations. The competition 
is positive. It will make nonprofit arts organizations function better than ever before." 

If entrepreneurial tactics, customer orientation, and for-profit models represent one 
approach to facing that competition, another lies in community engagement. And unlike 
their forays into the entrepreneurial arena, a number of colloquia participants pointed 
out, nonprofit organizations may actually be at a competitive advantage over their for- 
profit counterparts in carrying out activities that direcdy touch the lives of Americans. 

Community engagement 

Intermedia Arts Minnesota, according to Executive Director Tom Borrup, has built its 
entire operation around such engagement, a process that has developed over the years as 
the organization sank its roots in the community. "Our mission is to be a catalyst that 



builds understanding among people through art," Borrup explained. "It's a very socially 
engaged mission. It comes out of a long history of social engagement through the arts. We 
organize our programs around youth development, artist development, and community 
development. That's a series of education programs, of artist support and services and 
presenting community activities that bring people together, with art as the catalyst." With 
a budget of about $1.4 million, Intermedia Arts is not a large organization. But as it 
completes its third decade of operation, it has become a permanent fixture in the Twin 
Cities' cultural landscape. "Our history. . .goes back to the early 1970s as a video access 
and training center," Borrup explained. "We helped people tell their stories through, at 
the time, the new medium of videotape. ... But during the 1980s we began to explore 
other ways of helping people do the 
same kind of thing-of animating « pmm thepoint ofvkw ofthe community » 

community, of engaging people in . 

j. , , . , Godfrey observed, one thine we ve learned is 

dialogue about contemporary social ' 7 ° 

issues using a variety of forms of that a l °t of members ofthe community make 

contemporary artistic expression." absolutely no distinction between nonprofit or 

For the Western Folklife Center ^ r< ^ "*"■*■*** and don't particularly 

and its Cowboy Poetry gatherings, know whether they're having a nonprofit or 

the initial challenge was one of for-profit arts experience" 

explaining its mission to members 

of the local community in Elko, Nevada. The process turned out to be a gradual one, of 
mutual exploration, as both the organization and its surrounding community discovered 
one another. Neither party was especially well prepared for this particular task, Hal 
Cannon recalled. "It was a shortcoming in my education as an arts administrator," he 
admitted, 

not understanding how important the audience is in the process of crafting any 
arts project, and frankly, not really having to prove who my audience was in grant 
applications, even to the National Endowment for the Arts. So, in our case, we 
struggled to captivate our local audience, who weren't used to attending arts events. 
Their basic comment about the Cowboy Poetry Gathering. . .is that it creates a hell 
of a traffic jam. So, because it was a bother, because it had the reputation of being 
a sell-out event to outsiders, they often didn't come. The other important thing 
is that not everyone is interested in cowboys and our mission is much broader 
than representing the folk arts of ranching. The way that we've decided to work 
with our community, which is really many communities that live in our area — the 
miners, ranchers, the Native Americans, ethnics — is through a project called 'Voices 
of Youth,' which brings selected students into our organization to learn how to 

17 



Reassessment of Support for Arts Organization Resources 

document their family and community through radio production and photography. 
And these kids, in the last couple of years, have been producing radio shows and 
photography exhibits, and what's happening? The kids are bringing the parents out 
to our events. We're really starting to build a local audience in a way that we've 
never been able to before, and it's basically through the youth of our community. 

The need for new collaborations 

More generally, the St. Louis Symphony Orchestra's David Halen added, arts orga- 
nizations need to do more to prepare audiences for performances and exhibitions, 
creating a more comfortable context in which cultural experiences can take place. 
Particularly in light of the decline in formal arts education within school settings, 

arts organizations may have to 

"A theater that shall go unnamed, came to me add an educational component 

,.,,__, , i-iiii to an already busy schedule of 

ana said, How do you do outreach in the black ... _ ' .„ , 

activities. But they will have 

community?' " continued Aprill. "I said, 'You don't few other optionS) acC ording 

do outreach in the black community. You hire black to Halen. "One of the biggest 

artists. You hire black producers. You don't treat challenges facing symphony 

„ , v xi orchestras and arts institutions 

your collaborators as your targets. You treat them 

like orchestras in the next 100 
as your collaborators.' That's real important" years » he believed « is 

[finding] ways to help explain 
themselves, and present themselves in a context in which the music that's written or the 
art that's presented is more understandable to the person that's taking part in it." One 
solution to this puzzle, added Halen, is for arts organizations to collaborate with churches, 
schools, and universities in undertaking these educational-outreach activities. "I think 
collaboration is critical to an arts institution, like an orchestra," he reasoned. "We need to 
work together more with the other institutions in the community." 

Too often in the past, Michael Gallis pointed out, many arts institutions have resisted such 
collaborative ventures in the mistaken fear that these alliances might dilute the artistic 
message that the group is attempting to convey. The result, ironically, is a message that 
reaches far fewer recipients than it might have. ". . .1 think one of the biggest dangers that 
we face in the art world," Gallis declared, "is the insular and isolated nature by which 
we hope to preserve 'integrity,' and that opening the system and creating open networks 
represents in some means in our minds a threat to the integrity of our organizations 
and to the work that we do. And yet, it is just the opposite." Here again, the element of 

18 



risk comes into play, according to Arnold Aprill. "If your coalitions aren't built on some 
understanding that there's always a risk in building a coalition," he explained, "then it's 
not going to be a very interesting coalition. If you enter into something that has risk in 
it, you have to understand that a lot of the time it's going to fail. So you have to build 
coalitions that give you some way out." 

Such coalitions, on the other hand, should not be regarded simply as marriages of conve- 
nience, temporary alliances fashioned for their public-relations value alone. They require 
considerable effort to establish, they need professional management to be maintained, 
and above all else, according to Aprill, they demand a sharing of power that does not 
always come easily to the nonprofit sector. "... [I] f you're building coalitions," Aprill 
continued, "you can't have the 

decision-making bodies not be ^ , .. . ., . , ,, , „ , 

b One solution to this puzzle, added Halen, is 

representative of the communi- 

ties they will serve. This plays f or arts organizations to collaborate with 

out in terms of class, gender, churches, schools, and universities in undertaking 

race, geography. ... A theater that these educational-outreach activities. "I think 

shall go unnamed, came to me collaboration is critical to an arts institution, like 

and said, 'How do you do 

, . j. , , , an orchestra, he reasoned. 

outreach in the black commu- 
nity?' I said, 'You don't do 

outreach in the black community. You hire black artists. You hire black producers. You 
don't treat your collaborators as your targets. You treat them as your collaborators.' That's 
real important." 

Other collaborators, noted Juana Guzman, should include non-arts as well as arts institu- 
tions. "... [T]here are some real advantages of working with other institutions that you 
would never think to have exchanges with," Guzman observed. "For example, when I 
started the [neighborhood tours] program I knew this had to go under the Office of 
Tourism. Because they had all the dollars that were producing all the brochures and 
marketing all the city's activities. So I had to force them to make sure that not only were 
they promoting my programs, but they were promoting my coalition members and all 
their events." Building on this success, Guzman penetrated even further into the civic 
labyrinth, attracting support from government agencies and businesses alike. ". . .1 had to 
get non-arts city government agencies to help me," Guzman recalled, "like Planning and 
Economic Development, so that they would support my request for ten million dollars 
[out of the empowerment zone funds]. I had to show them that art was big business. I 
couldn't get into all that touchy- feely stuff about it — and that it does change our life. All 

19 



Reassessment of Support for Arts Organization Resources 

they wanted to know was the bottom line. So when they saw the results. . .they began to be 
very cooperative with me. Now, there's nothing they won't do to help me." 

The concept of "cultural capital" 

That focus on the bottom line, other panelists noted, can be a troublesome one for arts 

organizations, which may need to shift the focus from purely economic terms to other 

concerns more directly related to the mission of arts organizations. "...I think that the 

issue of profit and not-for-profit [organizations] is so financially based — and that's not 

what any organization is about," observed King. "I would prefer language that had to do 

with the mission of the organization and the strategy of the organization, as opposed to 

its financial make up.... I think that 

r ., . .. ., . « ,. „ . not-for-profit organizations have to 

For these organizations, their audience is ... 

begin describing themselves in light 
viewed not as ticket holders or subscribers, but of the benefits they offer tQ the 

more as partners in a variety of efforts to bring communities that they serve." 

culture to bear on community issues. 

Thus King prefers a more positive 

appellation — "for service" or "for 
society" — than the traditional "not-for-profit" label. And beyond the designation itself, 
the new identity should extend to the way nonprofit assets are measured. "Just like a 
for-profit company is responsible for the accumulation of capital, I believe there are other 
forms of capital," explained King. "There's intellectual capital. There's cultural capital. 
There's artistic capital. We need to evolve in the twenty-first century, into the creation of a 
social economy — just like we have a commercial economy. ..CPA's don't understand how 
to measure intellectual capital and social capital." 

Stefan Toepler of the Institute for Policy Studies at John Hopkins University explained 
that "What we see in the nonprofit sector at large, way beyond the arts, is a real struggle 
right now to develop impact and outcome measures." He theorized that in recent years "as 
long as impact studies could show that there are economic benefits that the community 
derives from the arts, it did not really matter what the arts do in the community." 
According to Toepler there has been little discussion of how the arts can change to 
become a more integral part of the community or, in other words, how the arts can best 
benefit communities with their traditional artistic and cultural, rather than economic, 
accomplishments. 



20 



Michael Gallis concurred, extending the concept of "cultural capital" to include the 
benchmarks that urban planners use in assessing the relative health of various communi- 
ties around the country. "When we evaluate regions," Gallis explained, 

we look at. . .three things really: connectivity patterns, form and structure of the 

region, and then systems and resources. One of those is culture and the arts. 

What have you got, what are your strengths and weaknesses, and how does that 

participate in the competitive structure of an urban region? It is, in our minds, 

a measure. While we may not use the term cultural capital, we most definitely 

evaluate it just along with economic development, transportation, medical facilities, 

and every other thing that sustains the life of a community. It is one of the 'systems' 

of settlement that humans 

have.... [The arts] are as UT ,., r r . „, e 

. , , Just like a for-profit company is responsible for 

vital to a region as the ' r J r ; r j 

transportation the accumulation of capital, I believe there are 

network. ... The social other forms of capital" explained King. "There's 

dynamic of a region „ , . , _~ , , , . , _, , 

, , , r\ intellectual capital. There s cultural capital. There s 

doesn t work without r r 

culture and the arts. It's artistic capital. We need to evolve in the twenty-first 

a vehicle for achieving century, into the creation of a social economy — just 

like we have a commercial economy." 

As an example of the arts' 

important role in this regard, Gallis cited the "Gateway to the City" in Rock Hill, South 
Carolina, a public art project in which he had been involved. A one-time textile center 
twenty miles south of Charlotte, the city's fortunes had declined sharply in recent years, 
the result of global competition that closed most of the factories and drove the city's 
unemployment rate up to 25 percent. Among the various solutions (including the usual 
package of welfare measures and economic incentives) the single-most effective invest- 
ment — and it was viewed as an investment, Gallis made clear — was for the commissioning 
of a gateway arch that designated the entrance to a new business and industrial park, and 
that signaled the economic rebirth of the city. 

The key to insinuating culture into Rock Hill's civic-rebuilding effort, Gallis noted, was 
the explanation of "a cultural initiative in non-cultural terms, by linking it to other 
initiatives, by demonstrating its roles in the larger development of the city." As a result, 
"the city not only came up with money. . ., but the investment had a very direct payoff. 
Land prices doubled within the park, unemployment went down, the tax base went up. . ., 
and the city ended up with an enormous cultural future." 



21 



Reassessment of Support for Arts Organization Resources 

Despite the success of the Gateway project, and despite his optimism concerning the role 
that culture can play in addressing civic issues, Gallis also acknowledged that the arts 
community is often excluded from participation in this arena. "[W]hen you sit down 
to talk about the strategy of urban regions," Gallis noted, "you don't have people from 
culture and the arts at the table. They're not invited. Not on purpose, [they're] just not 
seen as relevant to anything important. . .. This frames for me the most important issue 
that we face." 

Many arts organizations, on the other hand, have undertaken civic and community 
projects of their own design. Rather than waiting for official invitations that may never 
come, they have taken matters into their own hands, with projects that engage the 
community in explorations of topics of mutual interest. For these organizations, their 
"audience" is viewed not as ticket holders or subscribers, but more as partners in a variety 
of efforts to bring culture to bear on community issues. As the Chicago Arts Partnerships 
in Education's Arnold Aprill observed, "For me, the most important thing is that we need 
to think about our support for arts initiatives opening up multiple avenues of problem 
solving between audiences and artists, for artists, for communities. We have to create an 
atmosphere of risk and engagement." 



22 



Ill The Potential of Technology for Arts Organizations 

"This is not just about boxes" 

"Right now, our society has fastened upon technology as a means towards extending 
the marketplace," complained media critic Douglas Rushkoff at a colloquium devoted 
to information and technology. "We are attempting to automate marketing techniques, 
consumption, and expansionist economic principles. If those are the only things we 
choose to accelerate through automation, we will succeed in reducing the diversity of 
cultural influences, and there will be some severe moral and ethical repercussions. If no 
other values besides the bottom line are augmented by technology, then the true nonprofit 
sector may very well disappear." 



Technology opportunities and limitations 

Sounding a more optimistic note, AOL Vice President for Corporate Relations David 
Eisner explained that his company 

had spent a long time talking about the democratizing potential of the [online] 
medium, and how the medium was going to help turn information into a 
commodity that would bridge the divide between the haves and the have-nots by 
helping people who didn't have traditional access to political voice, or to capital, 
or to otherwise be able to participate in society, that somehow this new medium 
was going to help give them those things, that it would reinvigorate excitement in 
the political process, help spur more people to feel like they want to give back, [to] 
contribute to society. 

But such optimism has to be tempered, Eisner warned, by the recognition that the tech- 
nology itself will not solve social inequities, and may actually exacerbate such problems 
if care is not taken in the deployment of the new networks. "The medium in and of 
itself isn't inherently democratizing. . .," Eisner explained. "[I]t could just as easily be an 
alienating influence, ...[and] take political discourse to a lowest common denominator, 
focused on rumor and innuendo, . . . [and] in fact turn information and technology into 
another resource that people who have traditionally been disenfranchised and under- 
served now don't have access to. . ., and the gap becomes even wider." 

AOL's effort to bridge this gap, through the AOL Foundation, targets five areas, 
supporting projects that are designed to expand citizen participation in philanthropy, 

23 



Reassessment of Support for Arts Organization Resources 

improve civic discourse, enhance health-care information and services, increase educa- 
tional opportunities for both children and adults, and address the digital divide. 
"Helping.org 2 is probably the strongest tool that we have developed out of that 
mission..." Eisner noted, referring to the foundation's Web site. "We have been dabbling 
with a lot of tools and utilities that help improve civic discourse, that focus on public 
access to technology. Helping.org is really the first thing that we've done that gives 
everybody on the Internet [the means] to use the medium in a way that benefits society." 

Despite AOL's efforts in this area, both the relationship between real-world communities 
and their virtual counterparts, and the ways in which various sectors of American society 
will migrate to the online environment, remain vital topics of concern. How will the 
issue of community engagement, for example, which for most arts organizations involves 

assembling warm bodies 

. within a physical space, be 

We are attempting to automate marketing techniques, rr , , 

r ° 01 affected by a new definition 

consumption, and expansionist economic principles," f virtual community? Will 

complained Rushkoff. "If those are the only things these loose-knit confedera- 

te choose to accelerate through automation, we will tlons of individuals (who 

, . , . , ,. . r 1 1 • n ma y not even De aware 

succeed in reducing the diversity of cultural influences, ' , , . x 

of one another s existence) 

and there will he some severe moral and ethical replace communities in the 

repercussions. If no other values besides the bottom line traditional sense? Or might 

are augmented by technology, then the true nonprofit the new technology, as the 

„ ,. „ Manhattan Neighborhood 

sector may very well disappear. , , D 

Network s Anthony Riddle 

believes, actually enhance 

arts organizations' community-building efforts. "I wonder if we can't figure out how 

to use the technologies to cause more physical interactions between people," Riddle 

suggested, "so that the virtual world is something that encourages people to actually 

be places and do different things. Because that is sort of a problem when we become 

disembodied. And that in some ways we need to be able to use this technology to draw 

people back into a deeper connection as opposed to causing a greater disembodiment." 

Rushkoff strongly concurred, pointing out that it was actually the television set, rather 
than the computer, that first served to isolate young people from the world around them. 



Helping.org was launched by AOL to connect volunteers and donors with nonprofit organizations via 
the Web. 

24 



The computer, in fact, might turn out to be the means by which they will re-connect 
with the world. "I think the television screen was actually the screen that isolated and 
disempowered young people," observed Rushkoff. "It kept them all in their separate 
homes in a passive role. I think the computer screen if anything represents the first baby 
steps, ...remedial help for a society that's lost its ability to communicate with itself." 

Building community through technology 

As the executive director of a community-access cable-television station (which airs some 

90,000 tapes annually on four channels that reach 500,000 cable households in New 

York), Riddle spends much of his time facilitating that communications process, using 

both new technology and old. 

Linking the two worlds of televi- « T , . r ,. £ , , , ., 

° I wonder if we can t figure out now to use the 
sion and computers for Riddle 

are the distinct qualities of technologies to cause more physical interactions 

"noncommercial" and "partici- between people" Riddle suggested, "so that the 

patory," found all-too-rarely in virtual world is something that encourages people 

the current media marketplace. ~ flcft|fl ^ bg p]aus flmJ do ^^ ^ * 

"I represent the public-access 

community," explained Riddle. 

"It's a community where all these questions that we're dealing with [in the colloquia], 

we have to grapple with on a daily basis. We've had to invent from about twenty years 

ago, ways in which to use technology to help communities become more community-like, 

to help people interact with new technologies, to use new technologies in ways that will 

improve their own lives." 

Riddle's field has changed a lot in recent years, and it is about to change even more 
dramatically as the television industry makes the federally mandated transition to digital 
broadcast by 2006. In the process, the TV set itself, already having traded its tubes for 
transistors, will now swap analog broadcast signals for streams of digital data, bringing 
the vast resources of the Internet to millions of Americans. It is a fundamental transition 
that has affected everyone in the industry, including public-access operations like the 
Manhattan Neighborhood Network. "We used to view ourselves as television studios," 
Riddle recalled. "I think what's happening now is that we're viewing ourselves as commu- 
nity communications centers. We are community centers which use telecommunications 
as a means of bringing communities together." 



25 



Reassessment of Support for Arts Organization Resources 

Far from weakening the bonds of community, then, the new technologies hold the 
potential to strengthen those ties (or at the very least to make it a little easier, as many 
arts organizations have already discovered, to build new audiences through online promo- 
tion). But the communities themselves, based either on geographical proximity or shared 
tastes, won't change. "I'm not a techno-determinist," declared Rushkoff. "Technology will 
not change our definition or experience of community. What it will do perhaps is give us 
new opportunities to forge community. But it's the same basic drive." 

David Eisner expressed the concern that too many nonprofits had overlooked the 
community-building potential of the Internet in favor of its alleged fundraising 

potential, an approach that he 

"We used to view ourselves as television studios," thou 8 ht was unsound - " To the 

. „ , . . extent that nonprofits have been 

Riddle recalled. I think what s happening now ,, c , , „ 

rr ° able to focus on technology, 

is that we're viewing ourselves as community Eisner noted, "what's happened 

communications centers. We are community is someone on the board has 

centers which use telecommunications as a means basically said, your revenue 

.., . . . , „ streams, your income, [are] 

of bringing communities together. , ' ., , 

threatened it you re not on the 

Web. You've got to figure out 
how to do fundraising on the Web.' From my point of view, it's a threat to the medium. 
Because it means that the medium, the Internet, which has all these incredible possibilities 
to be building communities around passions and causes, becomes another kind of direct- 
mail tool." 

Douglas Rushkoff is even less sanguine about the World Wide Web in this regard, finding 
its dominant mode of one-way-traffic to be ill-suited to the kind of mutual exchange 
that true communities need in order to be sustained. "But the other thing you have to 
remember too is that the World Wide Web is not the Internet," Rushkoff pointed out. 
"The World Wide Web is one piece of software that's been overlaid on the Internet, and 
it's probably the least effective and least communicative — the least 'network-like' piece of 
software that's being used. ... I mean, it's better at showing the Mona Lisa than a chat 
room would be, but it's not a two-way medium. You can't really talk to a page. ... There 
aren't pages that you could draw on, pages where you can affect what's there. Nor can 
you conduct conversations there. For the most part, it's an access-only medium. This is 
why institutions and companies and businesses have gravitated towards the Web, because 
it feels safer and the content can be much more controlled than in the open exchange 
of the real Internet." 

26 



Policy questions 

Connected to the particular uses of technology, other participants noted, are larger policy 
and regulatory issues, relating especially to noncommercial, public-interest applications. 
"[T]his is not just about boxes," declared consultant Fred Silverman. "In the earlier 
days of technology, it was like, 'get me the box, give me word processing, call it a day, 
thanks a lot.' Now we are dealing increasingly with all these surrounding issues around 
technology: organizational structure, community, policy, much, much more than just the 
application." These are issues that the supporters of arts organizations need to bear in 
mind, too, added Silverman, "...so you can help guide grantees in exploring those ques- 
tions. Not to give them the answers, but to 

help them through their own exploration. Both factors-understanding not only 

Because unless they explore it themselves 

., , . , ., re + - the actual use of technology but also 

they re not going to make the effective use J b/ 

of this technology that's possible. It cannot the broader social and cultural 

be imposed." implications of that use — are critical 

_ .. ,. ri to the future of the nonprofit sector. 

Anne Green, former director of the ' ' r J 

capacity building program for the Benton 

Foundation, agreed that both factors — understanding not only the actual use of tech- 
nology but also the broader social and cultural implications of that use — are critical to the 
future of the nonprofit sector. 3 "We need to get involved in these policy issues regarding 
technology and access," she urged, "and to get the arts community involved. . .they need 
to understand how to use the tools. Especially as this medium moves very quickly. So 
arts organizations really need the capacity to use these tools in a holistic way so they 
understand what the ramifications are." 

Among those ramifications, the issue of access to technology seemed uppermost in the 
minds of a number of colloquia participants, who recognized that existing inequities will 
affect arts organizations and their audiences alike. "Right now I think it's fair to say 
that the nonprofit sector is a have-not sector," observed David Eisner, "and it's going to 



3 The Benton Foundation's joint venture with the NEA, Open Studio (www.openstudio.org), has been 
an important force in developing a critical mass of nonprofit arts resources online. The Benton 
Foundation's "Best Practices Toolkit" (www.benton.org/Practice/Toolkit) is a perfect example of what 
nonprofit arts organizations need, according to Fred Silverman. "First of all they just need exposure to 
good models," he declared. "There are lots of fantastic things happening out there and there's no reason 
for any non-profit working in any area to have to start from scratch or reinvent the wheel. But there 
needs to be ways that they can be exposed to these models so that they can pick up on where they've 
gone, or [what] others have done, or collaborate on expanding those. ..." 

27 



Reassessment of Support for Arts Organization Resources 

require positive attention to bring the sector up to parity with the rest of the community." 
Other colloquia participants echoed Eisner's concern, including Hal King, who spoke of 
the unequal access to technology in the U.S. today. "I'm concerned that there will be 
a Balkanization [in] access [to] the technology," declared King, "and for deliberate or 
inadvertent reasons, people who should have access to it will not have access to it. It is 
only due to that pervasive basic access, like it was to books and like it is to the telephone 
and all the other tools that we've got, that we're able to mediate and mitigate and control 
those things so that they respond to our needs." 

At the same time, the panelists recognized that technology itself offers no magic bullets, 
and competition for the attention of the American public will become even greater in 
an era in which they will enjoy vastly more access to multimedia entertainment. Overall, 
suggested Arnold Aprill, the new technology may prove to be something of a mixed 
blessing. "... [T]here will be some losses and some gains," he observed. "We don't know 
what they are yet. I think we have to not see ourselves as the passive receptors of these 
changes, but rather make some heavy choices. Some beauties are going to emerge that we 
had not anticipated. I think it has more to do with our political organization of social 
justice — about who gets access — than it has to do with the technology." 



28 



IV Cultivating Human Resources in Arts Organizations 

"Just providing noble work won t guarantee effectiveness" 

Jerr Boschee of the Institute for Social Entrepreneurs identified a certain tension between 
entrepreneurial strategy and organizational mission, a subset of the more fundamental 
dichotomy that has long constrained organized cultural practice — between the artist's 
vision and a project's budget, between any given aesthetic endeavor, in fact, and the 
need to marshal additional resources in order to share the fruits of that endeavor with 
others. Ironically, the search for financial resources often demands an increasing share of 
organizational resources itself, an equation that has come to define the nonprofit sector. 
"There's a joke that exists among nonprofit leaders that's not so funny when you think 
about it," observed Harvard Business School's Allen Grossman. "It's that the better I do, 
the more I'm going to be punished. And the harder I work and more successful I am, 
the more time I have to spend raising money. ... [Mjost CEOs spend fifty, sixty, seventy 
percent of their time raising money." 

Viewed from the perspective of "There's a joke that exists among nonprofit 

overall organizational health, on Wm ^^ mt so funny ^ yQU Mnk ahmt 

the other hand, the chief execu- 

. , , . re r j it, observed Grossman. It s that the better I 

tive s heroic effort to raise funds 

may be more than a little ^°> the more Ym going to be punished. And the 

shortsighted, according to Jean harder I work and more successful I am, the more 

Horstman, at the time of the time j have to spmd mhing money » 

colloquia the director of organi- 
zational development services for 

the Manchester Craftsman's Guild: "[Mjost of us, regretfully, are still hiring the top posi- 
tions because they're good at raising money, rather than they're good at raising people." 
That notion of "raising people" — changing the culture of nonprofit arts organizations 
by training the staff therein — and building organizational capacity and grooming new 
leadership in the process, was the topic of much conversation at several of the colloquia. 

Developing arts entrepreneurs 

On the question of whether organizations themselves, or individuals within organizations, 
need to be trained to adopt entrepreneurial practices, for example, several panelists 

29 



Reassessment of Support for Arts Organization Resources 

suggested that the two processes are inextricably linked. Organizations need to change, if 
they are to become sufficiently flexible to maneuver through entrepreneurial waters, but it 
is individuals within those organizations who will have to chart that course. "... [T]his is 
not an either/or kind of a formulation," concluded Marian Godfrey of the Pew Charitable 
Trusts. "It's really about the interactions between individuals and institutions." 

However, according to Jerr Boschee, we have to "learn how to build entrepreneurial 
organizations, as opposed to training individuals to become entrepreneurial. Because 
the individuals tend to move on, and if we want to have stability and capacity 

increases over time, that means we have 

"[M]ost of us, regretfully, are still hiring t0 work at the board level > the senior 

., . „ fc ... i ,, , j . management level, the staff level, the 

the top positions because they re good at b 

stakeholder level." This kind of organiza- 
raising money, rather than they're good tiond change requires considerable time 

at raising people," said Horstman. and effort, Boschee added. " . . . [ W] e have 

to take them through a cultural change. 
That is something that is not easy to do; it's not going to happen quickly. But it's the 
kind of thing that foundations and federal agencies could support more of. It has to be 
done on a demonstration-basis level with a few selected organizations, but it needs to 
be done." 

For Jean Horstman, an advocate of coaching organizational managers, the issue is rather 
one of training individuals and then working with them to overcome the institutional 
"blockages" that often frustrate their efforts to change organizations. "All organizational 
change is based on change with individuals. . .," Horstman insisted. "The concept of 
coaching is as appropriate for adults as mentoring is for our kids at MCG.... Coaching 
provides a sounding board and guidance from outside the organization that's not based 
on expertise, but rather on supporting internal problem-solving. Coaches don't advise. 
They create a framework of questions that allow the 'coachees' to problem-solve for 
themselves...." In MCG's coaching program, Horstman explained, "What we went back 
to was the blockage. . .. [U]ntil we could get an individual to learn, and to conceptualize, 
and to have the courage to take on often very large and entrenched procedures, and bring 
about new procedures that were going to be effective. . .for the goals of building an effec- 
tive arts program, they were being stopped." Thus Horstman viewed individual coaching 
and organizational "training" as complementary rather than dichotomous — "that for an 
organization to become effective in terms of systems, it. . .has to pay attention to the fact 
that those systems are created and delivered by individuals — and [to] what will enable the 
individual to have the ability to do so." 

30 



Full utilization of boards 

Boards also play an important role in the operation of arts organizations, but they are 
an often underutilized and poorly understood resource, according to Harvard's Allen 
Grossman. "One of the areas that doesn't have a lot of understanding is the optimum 
role of boards," Grossman declared. "Boards in the nonprofit world are very unique. ... 
Understanding the responsibilities of serving on a board, and the relationship that boards 
have with the staff and leadership of a nonprofit, is important to the welfare of the 
organization. A great deal of what a nonprofit arts organization needs to accomplish is 
heavily dependent on the collaboration and resources of a governing board." 

Other participants, including According to Boschee, we have to "learn how to 

Marian Godfrey, Culture . ... . , . ,. , 

' build entrepreneurial organizations, as opposed 

Program director of the Pew 

Charitable Trusts, acknowledged t0 trainin 8 individuals to become entrepreneurial 

that boards, much like the insti- Because the individuals tend to move on, and if we 

tutions they represent, can prove want to have stability and capacity increases over 

remarkably resistant to change. ^ ^ mmns m ^ %Q WQrk Qf ^ hoard 

"We try to build board devel- 

,, j. • . level, the senior management level, the staff level, 

opment and board issues into ' * ' " n 

our capacity-building program," the stakeholder level" 

Godfrey explained. "And we've 

had a series of barriers that have kept us from doing that to our satisfaction. . .. But. . .a 

lot of it has to do with the lack of readiness of the boards of many of the cultural 

organizations in Philadelphia, and I suspect other cities as well, to go through this kind 

of self- reflective process that you have to go through to get at some of the issues we've 

been talking about. And this is a place where we just feel that we have no leverage. And 

to try to be heavy-handed about demanding certain kinds of interventions with boards is 

going to be worse than useless. And yet there seems to be very little appetite on the part 

of the nonprofit cultural boards to engage in this work." The real problem, added market 

researcher Hal King, is the tendency of many boards to lose sight of the critical governance 

function in their eagerness to manage instead — "because they believe that once they write 

the checks, they get to run the organization." 

Despite these reservations about the performance of boards, most panelists would 
probably agree with Emily Todd's assessment of the importance of an active board to 
the success of an arts organization. Having viewed nonprofit arts governance as both 
a grantor (with the Warhol Foundation and now the Houston Endowment) and as a 

31 



Reassessment of Support for Arts Organization Resources 

grantee (as executive director of Houston's DiverseWorks Artspace for three years), Todd 
was unequivocal in her declaration that "the long-term success of an organization rests 
with a visionary, committed, generous, and well-trained board. ... They are only as good 
as their training. They need to feel comfortable in their role as emissaries and fundraisers." 

Transfer of knowledge between generations 

An experienced, active board can prove especially valuable during those inevitable 

periods of transition, particularly when the first generation of leadership moves on. 

Many arts organizations bear the unmistakable — and often irreplaceable — stamp of 

their founders, and passing the baton from one generation to the next in this context 

proves especially difficult. "Cultural not- 

for-profits are. . .often very personality- 
"The real problem," added King, "is the dnven; > observed N£A chairman m 

tendency of many boards to lose sight of Ivey. "There is frequently a strong 

the critical governance function in their director or a founding director, which 

eagerness to manage instead." makes issues of transition vei 7 important 

and somewhat complex, and there also 

tends frequently to be a great deal of ego 
involved on the part of top management in maintaining the character of a not-for- 
profit — and in fact committing that not-for-profit to a kind of for-profit model of endless 
growth as the defining characteristic of quality or of excellence." 

A related issue, Dudley Cocke pointed out, concerns the need to find ways to tap the 
expertise of founders once they leave their original organizations. Citing his "compadres" 
Pedro Rodriguez of the Guadalupe Cultural Arts Center, Jerry Yoshitomi of the Japanese 
American Cultural and Community Center, and Marta Vega of the Caribbean Cultural 
Center, who've left these organizations, Cocke expressed the fear that these leaders and 
others like them will not have a formal means of sharing their expertise with others. "I'm 
afraid we're going to lose a lot of knowledge," warned Cocke. 

More consideration should also be given to arts administrators before they leave their 
organizations, added Allen Grossman, by creating more humane and rewarding work 
environments than is currently the norm in the nonprofit arts. Referring to the "unwritten 
contract" that binds many arts professionals to long hours and low wages, Grossman 
warned that the hidden costs of such false economies can be catastrophic. "The tacit 
contract goes something like, 'you're serving a noble cause and we are without adequate 
resources, therefore we don't have to create interesting and rewarding work environ- 

32 



ments,'" explained Grossman. '"We're going to just work you until you burn out. As 
soon as you burn out, there'll be someone else,' and that is true because it's a sexy 
field to go into. The reality is, the cost to the sector is enormous. The lost talent is 
incalculable. Turnover and demoralization is a source of significant inefficiency in many 
arts organizations, and for that matter many nonprofits. Just providing noble work won't 
guarantee effectiveness." 

Leadership development and training 

Even if such noble work were enough, other participants noted, the arts community would 

still not be relieved of the responsibility to find ways to do that work more efficiently and 

effectively, and to ensure that a new generation will both be prepared to enter the field, 

and will be able to obtain help 

from others once they arrive. nr . . ,, « ... . .„., ,,. , 

1 Referring to the unwritten contract that binds 

Bruce Kogut, professor of many arts professionals to long hours and low 

Management at the Wharton wages, Grossman warned that the hidden costs of 

School, spoke of the "impor- ^ ^ economks can he catast rophic. 

tance of understanding the 
power that has gone to the indi- 
vidual, and to the small organization." Technological resources that were once available 
to only a handful of institutions are now available to all. Kogut continued, "It remains 
to be seen whether or not there will be a corollary in the arts to the kind of shared 
research and development that has been facilitated by the 'open-source' movement in the 
technology sector. The wider availability of both hardware and software applications will 
certainly make such joint creative enterprises among artists or small arts organizations 
more feasible." 

The National Arts Stabilization's Nancy Sasser stressed the importance of professional 
development, of investing some of the arts' admittedly scarce resources in staff training 
and skills development. Emily Todd suggested that one approach to this problem, with 
the added benefit of answering Dudley Cocke's plea for sharing the expertise of arts 
management veterans, is the establishment of mentorship programs. One such effort in 
this regard, the National Arts Administration Mentorship Program, is being undertaken 
by Todd's former organization, Diverse Works, in conjunction with other members of the 
National Performance Network. 



33 



Reassessment of Support for Arts Organization Resources 

Some types of leadership, much like certain types of organizational performance, are 

easier to define than others, Marian Godfrey pointed out. "I think it's easier for us to 

grasp the role of managerial leadership and board leadership," she suggested, "than it 

is to grasp the role of artistic leadership and a high organizational performance." And 

so will the various means of developing such leadership and performance skills differ, 

with one set of techniques (e.g., grants and fellowships) used for artistic performance, 

while other approaches (e.g., technical assistance and executive-training programs) used 

for management skills. "What we're seeing," according to Godfrey, is a "...completely 

different mechanism in Philadelphia for developing artistic leadership than we [have] for 

developing managerial leadership. 

ut *i • i u> • £ 4. . *i i r And I think one of our tasks for 

I think it s easier for us to grasp the role of 

the future is to try to find a way of 
managerial leadership and board leadership," drawing ^ ^ tacdcs tog£ther 

Godfrey suggested, "than it is to grasp the and making them a more coherent 

role of artistic leadership and a high part of our overall strategy." 

organizational performance." , r ,.«. . , 

o r j A tar different approach, but one 

that is equally valid as a model for 
shoring up the arts' managerial resources, is AOL's Executive-Matching program. David 
Eisner, AOL's vice president for corporate relations, described this pilot project, under- 
taken in conjunction with a nonprofit organization called D.C. Cares, as one that meets 
the needs of nonprofit organizations and corporate executives alike. "[W]e take twenty 
relatively senior AOL executives, and twenty nonprofits that would like to add new blood 
to their board of directors, and put them together," Eisner explained. "And we train the 
executives about how to be appropriate members of the board of directors, and we train 
the nonprofit on how to take best advantage of someone who really doesn't have the 
nonprofit experience, but has really good corporate experience." 

Many of these corporate representatives, in their commitment to shoring up an arts 
organization's human resources, will bring entrepreneurial expertise to the nonprofit 
arts. But there are also other knowledge resources within the arts community itself that 
need to be shared more widely, several panelists pointed out. These resources include 
basic information and experience in the several disciplines, best practices in nonprofit 
administration more generally, and the "collective wisdom of the elders" — those leaders 
and visionaries, that is, who were responsible for founding many of the arts organizations 
that have become fixtures in their communities over the years. 



34 



V Approaches to Organizational Development 

". . . keep re-inventing yourself" 

Organizations, like individuals, change over time, and there was much discussion at the 
colloquia of such institutional evolution (see sidebar, "Organizational Life Cycles"). David 
Gockley, who has been through any number of evolutionary stages and critical junctures 
in the course of his 27-year tenure with the Houston Grand Opera, offered his own 
first-person account of six critical junctures in an organization's life: 

Number one is the identifying of that first visionary professional leader. Sometimes 
that person could be the founder, like John Crosby of the Santa Fe Opera, who 
founded and has remained. But I think most often it is a post-founder who can 
separate the organization from himself and his own very proprietary impulses. 
Number two is working with the governing body, a board, to establish a specific 
artistic identity that is denned by break-out activities, programs or production. 
Number three is the engaging of critical division-of-labor staffers, like my develop- 
ment director, without whom we could not have made the steps that we did. 
Number four is formalizing relationships with primary artist and technical units. 
Number five is to build, adapt, or adopt a facility that is identified with your 
organization and which optimally serves the art form. And a sixth, perhaps, . . .is to 
keep breaking out and keep re-inventing yourself. 

Even knowing in advance the pitfalls that lie ahead is no guarantee of success. But neither 

should failure be regarded as something to be avoided at all costs. "What about failures?" 

Gockley asked. "We've had a lot of them, but we haven't failed as an institution. I 

guess a good institution and failures 

go together." 

"What about failures?" Gockley asked. "We've 

On the other hand, neither does had a lot of them, but we haven't failed as 

success come with any guarantees m institution , / guess a good institution and 

that it can be sustained, other panel- . ., , „ 

i i «t i • i , i i • failures go together. 

ists observed. I think that the thing J * * 

I would worry about is that we're all 

expanding on top of a business cycle," cautioned Clara Miller, founder and president 

of the Nonprofit Finance Fund (previously the Nonprofit Facilities Fund). That's one of 

the reasons that Miller warned against giving too much credit to any single approach to 

sustaining arts organizations, when the key to that sustenance may actually lie somewhere 

35 



Reassessment of Support for Arts Organization Resources 

else entirely. "While we could all sit here and take credit for all this managerial training 
that we're dishing out," Miller declared, "I actually think that it's the environment that's 

had the biggest impact." 

That environment, with its leading economic indicators all pointing in the right direction, 

won't always be so favorable, Miller added, which is why her organization counsels its 

clients to take precautionary measures now, even in the midst of plenty. "One of the 

reasons we made the decision to diversify into asset building ourselves was that we felt 

our clients shouldn't really be taking on debt out of context to expand their facilities 

or programs, even if they saw 

„_, - .. T , , i j, r-/- . • i income in the future. They 

The first thine I had to do, titer explained, , , , , , r 

need to bolster themselves tor 

was evaluate the strengths and weaknesses of our a rougher sea , to equip them- 

organization to see how to move forward. And I was selves better for the journey 

surprised to find out that what I thought were all the ahead - And the journey isn't 

strengths of BAVC were actually kind of weaknesses ^ ° ° ' 

of a cycle. Miller put it even 
in a capital campaign [and] the facility move." more succinctly in response 

to NEA Chairman Bill Ivey's 
rhetorical question — "What's going to happen to nonprofits when the economy goes 
south?" Answered Miller: "Start whistling 'Dixie.'" 

Recognizing developmental stages 

Regardless of such environmental factors, organizations also need to be aware of their own 
developmental status, in order both to adapt to changing conditions (internal as well as 
external) and to manage the various "turnarounds" along the way. At times, change in one 
aspect in an organization's circumstances — even favorable developments — can produce 
unexpected changes elsewhere. That was the case for the Bay Area Video Coalition 
(BAVC), according to Executive Director Sally Jo Fifer, who successfully oversaw her 
organization's move into spacious new quarters, only to discover that the organization 
itself had to change, too, with both new staffing needs, and a new, more "professional- 
ized" organizational outlook, that seemed to be an unwritten part of the new building 
lease. Fifer also recalled how her organizations changing conditions affected its efforts to 
proceed through another one of those "critical junctures" that pose challenges for so many 
organizations — the capital campaign. Aptly describing the effort as rather like "running 
as fast and [as] hard as you can toward a brick wall and knowing you're going to pass 



36 



through it," Fifer recalled some of the unforeseen challenges that arose in the course 
of the capital campaign. "The first thing I had to do," she explained, "was evaluate the 
strengths and weaknesses of our organization to see how to move forward. And I was 
surprised to find out that what I thought were all the strengths of BAVC were actually 
kind of weaknesses in a capital campaign [and] the facility move. That is to say, we 
had strong earned income. We were earning around, over 75 percent, 78 percent a 
year actually — which was a great thing in our old facility, but as we moved into a 
capital campaign it meant that we really had a pretty small base of funders. ... We 
had a community board, which had been a real asset as we built our facility because 
these were the users of our organi- 
zation. But again, it wasn't a fund- „,, . .,, ., . j. 

b That environment, with its leading economic 

raising board, which is the critical 
shift that we had to make. ... The indicators all pointing in the right direction, 

other thing. . . is that we were a real won't always be so favorable, Miller added, 

workhorse organization, and that's which is why her organization counsels its 

something we were very proud of. rf . g|lfe fo fake precautiomry measures now> 

We didn't do exhibitions, we weren't 

„ .,<-.!• i even in the midst of plenty. 

really on the front lines, but we were J r ' 

[at] the back end. That meant that we 

had a really low profile, which is just a death knell in a capital campaign, when you've got 

to really drum up all the support to raise the money." 

Roadside Theater Director Dudley Cocke described a similar juncture for his organiza- 
tion, when it had to re-examine its relationships with audiences and the communities 
it served. Long recognized for its strong community ties, both in its Appalachian home 
of Whitesburg, Kentucky, and through its touring program, the theater eventually found 
itself with more work than it could reasonably handle. "By 1989," Cocke recalled, "the 
theater company had more engagements. . .than we could fulfill. But we saw that we were 
rapidly approaching a wide fork in the road. Either we would spin off another company 
to meet the market's demand, or we could make a commitment to buck the market and 
insist on deepening the work in each community that we visited, and to insist on the goal 
of diversifying audiences. This was a big moment for us. . . [and] . . .we chose the latter." 
The decision was not immediately accepted by all members of the company, Cocke added, 
but it turned out to be the right one. "The big pay-off in making this choice for Roadside 
would be in artistic vitality," he explained. "Our work would re-connect to the rural 
and working-class sensibility from which it sprang, and we would remain an ensemble. 
Eventually, too, we were able to make the economics work." 



37 



Reassessment of Support for Arts Organization Resources 

The kinds of critical junctures that BAVC, Roadside, and many other organizations have 
had to confront are all processes of negotiation, in effect, rather than steady states. They 
will inevitably vary for different groups, but the skill with which they are handled will in 
large measure determine whether a particular organization flourishes or languishes. But 
there is no single standard by which a growing, changing arts organization can be assessed, 
other participants pointed out. "...[Wjhen we look at organizational capacity," Harvard's 
Allen Grossman observed, ". . .it means a different thing for organizations at each stage 
of their growth. What does capacity mean to a two-person arts group that's a part of a 
community-development organization? Their capacity needs are very different from the 
Metropolitan Museum of Art." 

Developing healthy organizations across a community 

There is also a need, according to Arnold Aprill, to assess the larger arts "ecosystem" 
within which these organizations operate, to determine both where individual groups fit 

into that scheme, and in what 
ways they might be encour- 
"But we saw that we were rapidly approaching a aged t0 work toge ther. "What 

wide fork in the road," said Cocke. Either we would I think we need to do," Aprill 

spin off another company to meet the market's suggested, "is collectively [to] 

, , j j i -. 11 develop a taxonomy of the 

demand, or we could make a commitment to buck \ . 

strengths and functions of 

the market and insist on deepening the work in different sorts of institutions . 

each community that we visited, and to insist on Some of the larger ones are 

the goal of diversifying audiences. This was a hig more bureaucratic, less 

.r j i *l i ** » flexible, more territorial 

moment for us and we chose the latter. 

between departments. Some of 
the smaller ones don't have 
departments. We need to start collectively being better at analyzing the functions of 
different institutions. Then we can figure out some way of stimulating better negotiation 
between those different functions." 

An overriding question in promoting organizational health, added Allen Grossman, is 
"what is the knowledge that we need to capture on an institutional level so that we can 
learn and manage our organizations better in the future. How does an organization codify 
that knowledge, spread it systematically within the organization and use it effectively 
without overly restricting creative leadership?" But some organizations, a number of 

38 



panelists noted, neither want, nor need, to be stable. These include, "small, particularly 
young, artist-founded, artist-driven" groups, Marian Godfrey suggested. Norma Kaplan, 
chief of the Cultural Affairs Division of Arlington County, VA, expressed a similar view- 
point in regard to local funding recipients: "Not every arts organization that gets funded 
by a local [arts agency] needs to be a 501(c)(3). Not every arts organization needs a strong 
board of directors. Not every one needs to be artistically excellent to do a viable, commu- 
nity arts program. And not every 

"In the Bay Area," Kreidler added, "my 
experience is that many of these 800 smaller 
organizations that haven't moved up remain very 
productive even if they're on the edge of solvency. 
They continue to produce significant art, they 
continue to attract reasonable-sized audiences 
and they continue to create." 



arts organization needs to be 
around in twenty years to be 
funded for what they do today. 

John Kreidler, formerly the 
senior program officer for arts 
and humanities at the San 
Francisco Foundation, agreed: 



My sense is that many 
arts organizations do not 

regard themselves as permanent institutions and therefore have little need for 
planning and institutional advancement strategies. At the same time, organizational 
advancement strategies have been at the heart of many private and governmental 
arts funding programs. Given the incentive of funding, it is undoubtedly the case 
that many arts organizations have formed themselves as formal nonprofit organiza- 
tions and then pursued organizational development when their natural inclination 
is simply to produce artistic work by the most expedient means possible. 



Kreidler has been looking at these 
larger "ecological" issues for years, 
having annually reviewed the full 
range of arts organizations within 
the San Francisco Bay Area (see 
sidebar, "Supporting the Arts 
Ecology"). The dimensions of that 



"We need to start collectively being better 
at analyzing the functions of different 
institutions," Aprill suggested. "Then we can 
figure out some way of stimulating better 
negotiation between those different functions." 



community may vary from those of 

other areas, but its ratio of large organizations (just 25 in number) to small (around 
800) is probably typical. A small handful of all arts organizations (3 percent) account for 
some 84 percent of the Bay Area nonprofit arts economy ($300 million out of a $350 
million total). 



39 



Reassessment of Support for Arts Organization Resources 

But financial figures alone, noted Kreidler, do not capture "the essential resource dynamic 

of these smaller organizations," which is based much more on human capital than 

on other kinds of assets. "Virtually all of the small arts organizations employ artists, 

administrators and technicians at vastly discounted wages," Kreidler explained, a work 

force that endures ". . .very low incomes considering the levels of education." Nor is it 

reasonable to expect that the vast majority of these organizations will ever be anything but 

what they are now. "It's been my experience over the last decade," Kreidler observed, "that 

very few of the small organizations have been able to move up the institutional ladder 

and aspire to be stable in the sense of those large twenty-five." But this should not be 

regarded as a failure, Kreidler added, either for the organizations themselves or for those 

funders who have supported 

a . T , /• i i . them. "In the Bav Area, my 

Not every arts organization that vets funded by a . , 

experience is that many or 

local [arts agency] needs to be a 501 (c)(3)," Kaplan these 800 smaller organiza . 

expressed. "Not every arts organization needs a strong tions that haven't moved up 

board of directors. Not every one needs to be artistically remain very productive even 

excellent to do a viable, community arts program. And if they're on the edge of 

not every arts organization needs to be around in solvency. 1 hey continue to 
twenty years to be funded for what they do today." . ' 



continue to attract reason- 
able-sized audiences and 



thev continue to create." 



Speaking of the nonprofit arts more generally, Kreidler concluded that this symbiotic 
relationship — between committed individuals who are willing to accept sub-standard 
wages, and organizations that operate perpetually "on the edge" — may be the key to 
understanding the majority of nonprofit arts organizations: "Most cultural organizations 
have started because there have been artists or other people strongly attracted to the arts 
who have been willing to commit themselves to the production of particular productions 
or exhibitions or books." For Kreidler, then, the key to the future of the nonprofit arts lies 
not so much in efforts to stabilize these smaller organizations, as it does in attempts to 
stabilize the environment in which they operate. It would be a "great mistake," Kreidler 
believed, to attempt to transform all of these smaller organizations into full-fledged 
institutions. The emphasis should rather be on strengthening the sector as a whole. That 
sector "grew very dramatically in the 60s, 70s and into the early 80s," Kreidler noted, 
"largely as a result of a massive generation of artists coming out of colleges at that time. 
If nothing is done, that large wave that came in may simply recede and we will lose a lot 
of that vitality that has taken place." 

40 



Organizational Life Cycles 



Veteran arts consultant Susan Kenny Stevens shared the theory of organizational develop- 
ment, based on discrete stages of evolutionary growth, that she had developed after years 
of working with organizations. "I began to think about the fact that the challenges that are 
faced by organizations are not... one-size-fits-all... in the nonprofit world," Stevens explained, 
"and in fact cut across budget size, age, artistic versus human services, and all disciplines. 
I'd say they boil down to the varying stages of evolutionary life that an organization finds 
itself in." Even within a given arts organization, its several "vital sectors" — administrative 
systems, financial resources, board, management, and programs — may respond differently as 
the organization passes through the following seven stages: 

Idea: Often associated with a founder, or a group of founders, this initial stage marks the 
beginning of the transition of a particular concept, skill, or vision into organizational form, 
however rudimentary. 

Start-up: This stage represents a more formal organizational structure, with incorpora- 
tion, by-laws, and a board of directors, but with little institutional baggage — "probably 
when an organization is closest... to its mission," according to Stevens. 

Growth: One of the most difficult and challenging stages, when demand for services begins 
to outstrip an organization's capacity to deliver, and when difficult resource-allocation and 
seat-of-authority decisions have to be made. 

Established: Once the growing pains have subsided and the requisite systems are in place, 
an organization moves into the "established" phase when its reputation in the community 
is secure, and its aesthetic and administrative imperatives are in balance. 

Decline: Unable to sustain the established phase and seemingly powerless to cycle back 
to the growth stage, an organization begins to decline once it starts resting on its 
laurels — longing for the past, in effect, rather than planning for the future. 

Terminal: Since a period of decline can last only so long, an organization is deemed to 
be "terminal" once it loses sight of its original mission and focuses almost exclusively 
on its own internal problems, which, under the circumstances, it has very little chance 
of improving. 

Stevens also discussed five critical junctures that affect an organization's passage through 
these stages, a journey that may include cycling through several of them repeatedly as these 
junctures are reached: 

• Founder transition: when the artist who launched an organization leaves 

• Professional management: when administrators are brought in to manage a successful 
start-up operation 

• Shared ownership: when the artist/founder, the management team, and the board 
attempt to arrive at a balance of power 

• Understanding the economic model: when an organization solves the resource- 
allocation and -acquisition puzzle, and can thus answer the question, "What is it 
that makes [us] tick financially?" 

• Balancing the economic model with artistic integrity: when an organization is able to 
solve both sides of the artistic-mission and institutional-support equation. 



41 



Reassessment of Support for Arts Organization Resources 



Supporting the Arts Ecology 



During his long tenure at the San Francisco Foundation, John Kreidler developed 
a variety of approaches to assisting the larger cultural community in which arts 
organizations operate: 

• Supporting intermediary organizations that "connect the output of 
artists and small arts organizations to the public," including presenting 
organizations, performing arts facilities, small presses, book distributors, 
and media centers. 

• Developing the capacity of amateur cultural groups, many of which 
sponsor numerous public celebrations and events, and which in the 
process provide employment to local artists. 

• Building the capacity of fiscal sponsors, organizations that handle grants 
and contributions for individual artists and arts organizations that lack 
official nonprofit status. (On fiscal sponsorship, Kreidler recommends 
Greg Colvin, Fiscal Sponsorship: Seven Ways to Do it Right). 

• Assisting in the establishment of centralized financial-management 

organizations, which provide accounting and other business services to 
nonprofit organizations. 

• Enhancing pathways from higher education into the nonprofit arts 
sector, using such techniques as career counseling, student loans, and the 
promotion of careers in the arts, as a means of ensuring that one of the 
arts community's primary sources of labor will be replenished. 

• Recognizing the work of distinguished veteran artists and adrninistra- 
tors, as a way of compensating them, at least symbolically, for long years 
of work for which they were poorly paid. 

• Collecting more complete data on the career paths of those in the 
nonprofit cultural sector, focusing especially on smaller organizations, in 
order to enhance our understanding of this sector. 



42 



VI The Changing Practices of Arts Philanthropy 

". . . to view them as investments rather than grants" 

Speaking of the philanthropic sector in general, Harvard's Peter Frumkin expressed the 
belief that ". . .the future is very bright, but that clouds are lurking on the horizon. 
Some recent estimates have predicted a $40 trillion — not billion — a $40 trillion intergen- 
erational transfer of wealth that is due to occur in the coming decades. This means that 
a large number of very wealthy individuals will soon be facing important decisions about 
their estates. Many are surely going to turn to foundations; I don't doubt that. But others, 
a large number, I think, will turn to new channels, look for new ideas, and demand 
change." The subject of change within the philanthropic sector was the focus of one entire 
colloquium, and the general theme of philanthropy's impact on the arts was one that ran 
through many of the conversations at the colloquia. 

Many foundations, Frumkin ^ ^ & fl ^ reaUzation that sho rt-term 

pointed out, have turned to project 

c j philanthropic interventions may not achieve 

support as a means or reducing r r / 

the tendency of organizations to their goals" Frumkin pointed out. "They may 

become overly dependent on any not achieve the goal of building independence, 

one source of funding. But " . . .by and they may actua u y un dermine the ability 

only making short-term grants for . . . . . ,. . f f . , ■. 

'_,.„. of recipient organizations to build the kinds of 

well-denned projects, he 

explained, "huge problems have capacity to deliver quality programs." 

arisen. ... There is a growing real- 
ization that short-term philanthropic interventions may not achieve their goals. They 
may not achieve the goal of building independence, and they may actually undermine 
the ability of recipient organizations to build the kinds of capacity to deliver quality 
programs." It was this concern for organizational capacity, for the overall health of 
nonprofit institutions, coupled with a sense that the old ways of philanthropy simply 
aren't working, that has led many in the field to consider new funding models. 

New money, new approaches 

"... [T]he donor side of the field is changing," Frumkin declared. "The donor side of 
philanthropy is on the move." This is especially the case with those philanthropists who 
have recently entered the field. "... [Tjhere is a great deal of interest," he observed, 

43 



Reassessment of Support for Arts Organization Resources 

". . .brewing out there in this new generation of donors, to reinvent the grant-making 
process, to look at this venture-capital model, and to [ask], how can donors and 
recipient organizations interact in constructive ways that both build capacity and 
quality on the nonprofit side, while giving the giver a sense of satisfaction, engagement 
and involvement?" 

"Venture philanthropy," in fact, has become something of a hot topic in philanthropic 
circles, although the ultimate impact of the new movement — if that's what it 
is — remains to be seen. To a certain extent, such philanthropy simply reflects the 
background of the givers, many of whom come from the technology sector, in which 

venture capital — a combination 

"They are beginning to realize that they have to of investment and hands-on 

assistance and advice — has 

fashion longer-term relationships with their grant , , ,, a „. 

J *> r a proved so valuable. Since many 

recipients" Boschee noted. "They have to view f these donors are high-tech 

them as investments rather than grants. And they entrepreneurs and business 

have to provide the technical assistance in the P eo P le who have made fort unes 

, . .. , , , on the information-technology 

same way that venture capitalists do when they , . _ _ , . . . , 

revolution, Frumkin explained, 

invest in ten companies and go on the boards of « an idea has emerged lately that 

directors and roll up their shirt sleeves and have at donors should act more like 

it for a period of time" hi 8 hl y engaged, deeply 

connected venture capitalists. 

"According to this logic, a critical part of giving includes more than just handing money 
away. Real venture capitalists in the business world provide ongoing technical assistance, 
consulting, advice, support, to those who receive their money." Wharton Professor Bruce 
Kogut agreed that this combination of financial and technical assistance is a potent one. "I 
think it's quite useful for this group," he explained, "because you're not just giving money, 
but you're also giving advice. ... One of the big changes is this move towards smaller 
projects, or venture-capital-oriented [support], coupled with the consulting aspect...." 

Another facet of the new philanthropy, according to AOL Foundation Vice President 
David Eisner, is the demand for measurable results. "It's not enough just to say, we've 
done some good," he insisted. "You have to find a way to measure how much good 
has been done, and how do you weigh it versus the amount of dollars that I've given 
you." And in that connection, some of the older foundations that are also interested 
in more quantitative assessments are also investigating new funding relationships (see 

44 



sidebar, "Assessing Organizational Health"). "The Kellogg Foundation, the Pew Charitable 
Trusts, Ford Foundation, and others," noted Jerr Boschee of the Institute for Social 
Entrepreneurs, "are beginning to think in this vein. What it means is they are beginning 
to realize that they have to fashion longer-term relationships with their grant recipients. 
They have to view them as investments rather than grants. And they have to provide the 
technical assistance in the same way that venture capitalists do when they invest in ten 
companies and go on the boards of directors and roll up their shirt sleeves and have at 
it for a period of time." 

Peter Frumkin, on the other hand, referring to research that he has conducted at 

Harvard's Kennedy School of Government, expressed doubts concerning the amount of 

venture philanthropy that is actually being carried out. "There is a lot of talk about 

this venture capital, [about] 

high engagement...," noted aml , • .. „ _ , . _ , 

, . « T t iL There is a great deal of interest, Frumkin observed, 

Frumkin. In reality, there ° J 

is very little practice right "brewing out there in this new generation of donors, 

now that. . .tells us what it to reinvent the grant-making process, to look at this 

is. We actually have done venture-capital model, and to ask, how can donors 

a number of case studies , . . . . . , 

...,,., and recipient organizations interact in constructive 
of the more visible high- 
engagement grant making, w <9* that both build capacity and quality on the 
and there is just not that nonprofit side, while giving the giver a sense of 

much of it actually going satisfaction, engagement and involvement?" 

on." The results thus far 
have been mixed, according 

to Frumkin, with some tangible benefits, but also with reports of "micro-auditing 
and nagging" on the part of those new philanthropists who are ostensibly rolling up 
their sleeves and bringing for-profit expertise to the nonprofit sector. Ironically, for an 
approach that places so much emphasis on measurable results, venture philanthropy itself 
is in need of its own set of metrics, Frumkin added, if we're ever going to be able to 
assess its effectiveness. ". . .1 think it's very early," he observed, "and. . .it's a lot more 
conversation than practice. There is no accepted body of practice related to this kind or 
form of grant making. It is working itself out. But the biggest obstacle to its ever going to 
its full completion is that you need to have some kind of performance metrics to make this 
model meaningful, . . .some kind of metric for measuring return. And that is just totally in 
the Stone Age, at least in the practice of these sorts of philanthropy." 



45 







Reassessment of Support for Arts Organization Resources 

The advent of technology 

To the extent that it's simply too early to determine precisely where the new philanthropy 
may ultimately be headed, AOL's David Eisner agreed with Frumkin's assessment. "If you 
look at where philanthropy is going as a result of the new wealth, the new business cycles 
in entrepreneurialism, the new technology, and the new models that are being developed," 
Eisner observed, "we're below Cro-Magnon man, we're below chimpanzees, we're really at 
single-cell organisms, or amoebas — amoebas.com." 

But the Internet, he was convinced, will also play a role in shaping the new philanthropy, 
although here, too, it is too early to determine its ultimate impact. "... [T]he question 
is," according to Eisner, "to what extent do nonprofits use [the Internet] to supplement 

their personal interface with 
"You need to have some kind of performance metrics donors? To what extent does 

for it to make this model meaningful," Frumkin il become J ust another direct ' 

, (( t . j £ . • r • mail marketing vehicle that 

continued, some kind of metric for measuring ° 

people are taking a cut off 

return. And that is just totally in the Stone Age, at c , . , . . . , 

J ' b or, and to what extent does 

least in the practice of these sorts of philanthropy." it become more of a commu- 

nity-based thing?" But that 
the new communications revolution will profoundly affect charitable giving, just as it has 
affected so many other aspects of American life, he had no doubt. "I think you're going to 
see basically the same revolution in this space that we saw with e-commerce, where there 
was a lot of window shopping, a lot of complaints around privacy, a lot of system-integrity 
problems, but over the period of a year to a year-and-a-half, that all gets sorted out, and 
I think what you're left with is a very efficient, good information system that is incredibly 
easy for consumers to use and manipulate to find out what they're interested in." 

Cynthia Egan, whose donor-driven Fidelity Investment Charitable Gift Fund is a prime 
example of another aspect of the new philanthropy, agreed. "I look at the tool that 
the Web is putting in place for us and enabling us, and I think. . .that the world of 
philanthropy is going to change very dramatically just like the world of investing has, just 
like the world of retirement has, philanthropy is on its way." For all the emphasis on 
change, on finding new models of support, however, some patterns of philanthropy have 
proved remarkably persistent. Even the highly touted Charitable Gift Fund, whose powers 
of aggregation have been impressive in harnessing the charitable instincts of thousands 
of individuals — with more than $2.2 billion raised, and over $1 billion disbursed — has 
generally adhered to traditional patterns of support. "Our granting patterns are very 

46 



similar to the patterns that you all are familiar with [in] Giving USA? explained Egan, 
referring to the survey conducted annually by the American Association of Fund Raising 
Counsel. "In 1998, . . .32 percent of the grant making went to education, 28 percent went 
to religion, 23 percent went to public and community service, 9 percent went to the arts 
and culture, 6 percent to health and research, and 2 percent to the environment." 

Support for creators and producers 

The colloquia produced no shortage of other recommendations for things that arts 
hinders should and should not do, from the off-repeated pleas for support for technology 
training, to the need to create separate funds specifically for new ideas and for experimen- 
tation, to Emily Todd's plaintive reminder that the health of our culture tomorrow 
depends largely on the support we provide to individual artists today. "They're at the very, 
very center of this," insisted Todd. "So my plea is that we value their work, and their 
process, value the intellectual capital and creativity. Support these artists. Feed the artists 
everywhere, including those working quietly in their studios. Support the organizations 
that support the artists." 

"The question is," according to Eisner, "to 

Those "organizations that 

support the artists," noted Norma what extent do nonprofits use the Internet to 

Kaplan, chief of Arlington supplement their personal interface with donors? 

County's Cultural Affairs Jo what extent does it become just another 

Division, provide a wide variety direct-mail marketing vehicle that people are 
of services, achieving economies «•/■»« . 

r 1 ., ir , .' , taking a cut off of, and to what extent does it 

or scale that tar outstrip what ° JJ * 

multiple grants to multiple artists become more of a community-based thing?" 

and arts organizations might 

accomplish on their own. Arlington County's Arts Incubator, for example, recipient of an 
Innovations in American Government Award from the Ford Foundation and Harvard's 
John F. Kennedy School of Government, offers a varied menu of assistance to individual 
artists and arts organizations alike: 

• Facilities to create and present work, including artists' studios, theaters, rehearsal 
rooms, galleries, a 10,000-piece costume collection and construction shop, dance 
studios, and a truck. 

• Professional staff with expertise in theater design and production, master craftsmen, 
guest curators; training to enhance program development and community outreach; 
and facilitation for international exchanges. 

47 



Reassessment of Support for Arts Organization Resources 

• Mechanisms to increase earned income, including retail venues, paid-performance 
opportunities, commissions for new projects, and grants. 

• Management assistance, including support for consultants and assistance with 
organizational development, audience development, fundraising, media relations, 
and publicity. 

The results of the program, based on a before-and-after comparison over its ten-year 

existence, have been impressive. In 1990, for example, Arlington County hosted 198 arts 

events by eleven arts organizations, with audiences totaling 98,000. In 1999, more than 

thirty groups presented over 1,400 arts events to a total audience of over 300,000. In 1990, 

similarly, cultural affairs staff assisted thirty individual artists, while 175 artists received 

such assistance in 1999, and the county's arts industry in that period grew from $1 

million to $6 million. These 

accomplishments came at a 
Emily Todd [gave a] plaintive reminder that the tim£ moreover> « when the 

health of our culture tomorrow depends largely on nea was experiencing cuts," 

the support we provide to individual artists today. Kaplan pointed out, "when 

"They're at the very, very center of this," insisted Todd. our state Ending level had 

"So my plea is that we value their work, and their y p ' 

an economic slump in the 

process, value the intellectual capital and creativity. ,., ,. . 

r ' r 7 Washington region was 

Support these artists. Feed the artists everywhere, causing a lot of local arts 

including those working quietly in their studios. agencies and local govern- 

Support the organizations that support the artists" ments to have cuts to xhe 

arts." The key, she believes, 

in addition to the synergy of 
shared resources, is the parallel focus on developing self-sufficiency among the partici- 
pating groups, "so that we could be working with new groups as they were coming into 
the incubator program." 

The formula, according to Kaplan, is really quite simple, and it is one with implications 
for all arts organizations facing the competitive funding environment of today. "I... listen 
to a lot of the presentations that talk about raising more money for the arts," Kaplan 
explained. "At the local level, we thought about trying to lessen the cost of producing art 
for artists and arts organizations, which in the end has the same effect." 



48 



Assessing Organizational Health 

Two funding organizations that took part in the colloquia, San Francisco's James Irvine 
Foundation and Philadelphia's Pew Charitable Trusts, have been working on developing ways of 
measuring the performance of the arts organizations they support, focusing on several keys to 
institutional health. It's a topic that has reached "near-obsessive status for most hinders," noted 
Cora Mirikitani, who was then Senior Program Director at the James Irvine Foundation, "and for 
a fairly obvious reason. I think we recognize that we have no better way, and this really is true 
for the Irvine Foundation and for many foundations, to support art — that elusive thing called 
art and those elusive creatures called artists — outside of [the] institutional context. So it's very 
much in our interest to try to understand this idea of what arts organizations' lives are like and 
how we can indeed intervene critically." In putting together Irvine's Cornerstone Arts Program, 
Mirikitani has identified five "Categories of Wellness": 

Identity and purpose: Does the organization have a clear sense of who it is, why it exists, 
and what it hopes to accomplish; and do its programming and other activities reflect this 
self-awareness? 

Leadership: Is there a leadership vision for the organization, and does this vision manifest 
itself in the organization's programming? Has the institution positioned itself as a leader 
within its community? 

Programming: Does the organization have a clarity of vision about the art it presents, and do 
these presentations achieve high standards of excellence? 

Management of resources: Is the organization well run, and has it secured the needed 
resources to realize its mission? 

Audience and community ownership: Whom does the organization serve, and what is the 
strength of its relationship to these constituents? 

Another effort to assess arts organizations along quantitative lines is Pew's "Index of 
Organizational Health," part of a larger effort, noted Marian Godfrey, Culture Program director 
of the Pew Charitable Trusts, "aimed at strengthening not just individual arts and cultural 
organizations in the Philadelphia area, but the cultural system as a whole." At the center of 
Pew's three-pronged attack (which also includes fellowship and project support for artists and 
arts programming, along with research and advocacy initiatives) is the Philadelphia Cultural 
Leadership Project (PCLP), designed to "stimulate leadership and best practices within the 
cultural community by providing multi-year operating support to organizations that meet 
high standards of programmatic, fiscal and management performance." Coupled with that 
grant program is a capacity-building effort that provides management technical assistance to 
strengthen cultural organizations. The foundation's assessment is directed not simply at the 
grantees — " [did] . . .the PCLP grantees become artistically and managerially stronger and more 
nimble? Did they become high-performance organizations as a result of our grants and capacity- 
building resources? And did they increase or improve their services to their constituencies?" — but 
also at the foundation itself. "We also wanted to measure the outcomes for our own work," 
Godfrey explained. "Did our strategies strengthen the individual organizations and the cultural 
community as a whole?" 



49 



Reassessment of Support for Arts Organization Resources 



50 



VII Meeting the Resource Needs of Arts Organizations 

". . . no one is well served when authentic nonprofit needs are repressed" 

The ultimate purpose of convening the Colloquia by NEA was to stimulate discussion 
about the changing resource needs of arts organizations and the various ways in which 
these needs can be met. All who participated in the Colloquia shared a common belief 
in the multiple important roles that arts organizations play in their communities and 
in the important societal benefits of sustaining the arts sector in top form. Continued 
discussion of these matters, along with efforts such as the Colloquia to focus attention 
on the legitimate needs of the sector, should result in progress towards positive changes 
in practice among arts organizations and their supporters, resulting in a vibrant and 
contributing arts sector. 



The power of convening 

Such is the "power of convening" that was cited by a number of Colloquia participants 

as among the most effective tools at the arts community's disposal. It is also 

one that is not employed often enough. "Sometimes we don't even look beyond 

our own backyard to see 

what's happening, ...what's 

going on with other orea- Consultant Adrian Ellis, on the other hand, 

nizations," observed Chicago suggested "that most organizations are not very 

Department of Cultural g 00a > at snar i n g jj es t practice, at talking to one 

, another honestly. We're all out there hyping things, 

"Because there's no inter- 7 /r * 6 

exchange between one not- and putting the best possible face on things. Sitting 

for-profit to another in the down and honestly saying, "This is new territory, 

same city. So I rarely see and I'm not sure I know what the hell I'm doing,' is 

that exchange happening, gfim ^ ^^ „ 

even within our own city." 
Consultant Adrian Ellis, on 

the other hand, suggested "that most organizations. . .are not very good at sharing best 
practice, at talking to one another honestly. We're all out there hyping things, and putting 
the best possible face on things. Sitting down and honestly saying, 'This is new territory, 
and I'm not sure I know what the hell I'm doing,' is often quite difficult." 

51 



Reassessment of Support for Arts Organization Resources 

Nor, cautioned Michael Gallis, will merely "talking to ourselves" be sufficient, a reference 
to the "insular and isolated nature" that he feared had come to characterize the arts 
community. "I feel we have fallen [into a trap] in searching for answers to our questions," 
he explained, "that we have become so introspective, that we talk to ourselves so much, 
that we have lost the dialogue of the world around us." Another part of this detachment, 
Gallis suggested, may be a product of traditional philanthropy — ". . .that by subsidizing 
art we have disconnected ourselves, ...[becoming] a hat-in-hand culture, and that has 
become a barrier to direct engagement in the enormous social and economic change we're 
in the middle of." 



Meeting authentic nonprofit needs 

And yet the other party in that equation, the philanthropic hand that places money 

in the cultural hat, must also bear a measure of responsibility, Peter Frumkin 

pointed out. Having left the foundation world for an academic position at Harvard, 

Frumkin has had a rare opportunity to solicit the candid opinions of his erstwhile 

beneficiaries, conducting a survey 

„ ,. . , axT . .. of former grant applicants that 

Frumkin continued, Nonprofit organizations ° ,: ., 

produced unsettling, if not alto- 

have a broad set of requirements that may or gether surprising> results « Most 

may not fit within existing donor guidelines. pronounced was a sense of fatigue 

Donors need to understand that no one is and bitterness over having to 

well served when authentic nonprofit needs constantly reinvent, recast and 

reposition nonprofit activity just to 
™ ' ensure financial survival," Frumkin 

recalled. "This process ultimately 

produced fund-raising appeals that have increasingly little connection to the lived reality 

of nonprofit organizations." 

Elaborating further on the issue of hinder- grantee relations, Frumkin described a basic 
breakdown of "the candor and quality of communication between grant maker and 
recipient organizations": 

I think it comes down to one main problem, and that is that the language of 
needs, be it for general operating support, capital construction, capacity building, or 
anything else you want to term it, has been replaced by a language of opportunities, 
designed to appeal to the interests of donors.. . . As the sheer number of nonprofit 
organizations continues to escalate, there is a sense that there will always be a 

52 



nonprofit organization out there willing to do whatever it takes to get a grant, 
even if it means accepting onerous terms.... Foundation guidelines often appear 
immutable and definitive to many nonprofits, and the best response is often simply 
to craft proposals that represent funding opportunities fitting these parameters. As 
a result, I think, a tremendous amount of energy is wasted on grant writing and 
positioning rather than on serious program planning and delivery. 

Finding our way out of this a predicament won't be easy, Frumkin conceded, but he 
remained convinced that foundations will have to take the lead. "I believe that founda- 
tions, and all donors for that matter, need to constantly remind themselves that nonprofit 
organizations have a broad set of requirements that may or may not fit within existing 
donor guidelines. Donors need to understand that no one is well served when authentic 
nonprofit needs are repressed." 

Among those "authentic "Most pronounced was a sense of fatigue and 

needs," other participants bitterness over having to constantly reinvent, recast 

noted, surely the most basic is , ... <.. .. .. . . . 

1 and reposition nonprofit activity just to ensure 

tnP tippH 1"o (~rp?it"P ?it*1" Thus 

efforts to improve the ways financial survival;' Frumkin recalled. "This 

arts organizations manage process ultimately produced fund-raising appeals 

their affairs may be useful, the that have increasingly little connection to the lived 

Chicago Symphony ndUty ofnmprofit organizations." 

Orchestra's Michael Gehret 
believed, "As long as no one 

forgets that being a well-managed arts organization isn't the goal. The goal is to produce 
art." And that goal often supersedes purely financial considerations, insisted Nicolas 
Kanellos, founding publisher of Arte Publico Press. "If it's your mission to do something, 
and you can't figure out a way to earn money from it, you do it anyway." In that 
connection, Jerr Boschee spoke of the "double bottom line," of "the artist simultaneously 
pursuing both a financial and [a] social return." "... [A] t the end of every year when you're 
doing the financial audit, you've got to do a social audit as well, . . .treating the social 
return on an equal basis with the financial return." 

Complicating the issue of social return still further, however, is the determination of 
whose interests are really being served by the arts. "Arts organizations are being called 
upon more and more to be agents of change and development in different urban commu- 
nities," observed Intermedia Arts' Tom Borrup. 



53 



Reassessment of Support for Arts Organization Resources 

I think that's a potentially dangerous position to be in. You have to ask whose 
interests are you serving?. . . Are you serving the interests of people in a community? 
Or are you serving the interests of real-estate developers and other people. . .who 
are more interested in making safe places in urban areas for suburbanites to move 
back into the cities, and thereby dislocating those who are there? As opposed to 
nurturing communities from within, and building and strengthening the fabric of 
the existing communities. 

Building strong balance sheets 

Adding to the complexity, finally, is the nagging sense that the fate of arts organizations 
may ultimately rest in other hands entirely, beyond foundation guidelines, mission state- 
ments, good intentions, and hard work. The larger economic environment itself may be 
the determining factor, and embarking on new ventures, regardless of how potentially 
rewarding they may appear, can be especially daunting. "It's a question that we hear 
frequently all over the country," explained Nancy Sasser, recent president of National Arts 

Stabilization (NAS), referring to the fear 

that arts organizations often have that 

Sasser concluded that the distinction ,__. . . . , x , 

a new undertaking might prove to be 

between the "haves" and the "have-nots," me ir financial undoing. "I don't have 

in other words, already a source of concern any margins for error" is the complaint 

both inside and outside of the arts, may Aat Sasser hears most often - " If l ^^ 

. . . . . in a new program, if I take a risk and it 

loom even larger in the future. . , , T , , 

doesn t return tor me, I m on the edge. 

I'm done. I can't do that." The answer, 
according to Sasser, is to build in some room for maneuvering, by maintaining sufficient 
cash reserves to insulate the organization from external pressures and internal mishaps 
alike. "...[Pjroper capitalization provides that cushion," she explained. "I've had organi- 
zations call it 'courage money.' So they can take those risks." For the Houston Grand 
Opera's David Gockley, it isn't so much a matter of courage as it is of confidence, the 
indescribable sense of well-being that sufficient cash on hand engenders. Recalling a Ford 
Foundation program of the late 70's that encouraged arts institutions to maintain 20 to 
25 percent of their budgets in cash reserves, Gockley observed that "there's no feeling to 
describe the kind of peace of mind that that engenders within [an] organization." 

National Arts Stabilization has worked out its own formula for such assets, Sasser 
explained, recommending the maintenance of working capital levels at about 10 to 30 
percent of an organization's operating budget, while its endowment should total anywhere 

54 



Boschee noted, "At the end of every year when 
you're doing the financial audit, you've got to do 
a social audit as well, treating the social return 
on an equal basis with the financial return." 



between 200 and 500 percent of annual expenses. But those levels represent ideals 
that may prove more relevant to major museums and orchestras than to smaller organiza- 
tions, she conceded, noting that a 1998 survey revealed that only four theaters in the 
entire country met NAS's recommended standards. Organizational size can also affect a 
group's access to capital, as well as its ability to attract charitable contributions, Sasser 
added. She cited a 1988 study in 
New York City, which found that 
smaller institutions spend five to 
ten times as much as major insti- 
tutions for each dollar raised. 
Thus even in the midst of a 
booming economy, many small 
and mid-sized organizations may 

find themselves at a comparative disadvantage. The distinction between the "haves" and 
the "have-nots," in other words, already a source of concern both inside and outside 
of the arts, may loom even larger in the future. "I think when we end this period of 
wonderful growth in the capital markets," Sasser concluded, "we're going to see a much 
bigger dichotomy...." 

In the past, the arts world has relied on government funding, particularly at the federal 

level, to help close the gap between rich organization and poor. Dudley Cocke, whose 

Roadside Theater traces its origins back to the era of the Department of Labor's 

CETA funding, spoke passionately of both the importance of public support — "I 

believe that the NEA's first 

obligation is to stand for a 

level playing field. . ." — and 

of the dire consequences of 

cutbacks at the federal level. 

"In '95 Roadside received 

[NEA] support from three 

discipline programs — 

Expansion Arts, Theater, 

Opera-Musical Theater," 

Cocke recalled. "The total was $123,000. In '98 Roadside received $15,000, an 88 percent 

reduction, as our slice of our parent organization's grant. So that cut meant, of course, 

reduced creation, reduced presentation, reduced time for research and planning, and for 

participation in policy discussions, such as this one." 



Build in some room for maneuvering, by maintaining 
sufficient cash reserves to insulate the organization 
from external pressures and internal mishaps alike. 
"Proper capitalization provides that cushion," Sasser 
explained. "I've had organizations call it 'courage 
money.' So they can take those risks." 



55 



Reassessment of Support for Arts Organization Resources 

While the effects of federal cutbacks have been reduced somewhat by modest increases 
at the state and local levels (which annually contribute around $400 million and $800 
million, respectively), it is rather to the private sector that most arts organizations 
have turned in recent years. And little wonder. Private support accounts for somewhere 
between $10 billion and $11 billion in arts funding every year, and the booming economy 

invariably holds out the promise 

that there is even more where that 

Mtller observed, we re still talking about the r_ 

a came from. 

50 to 100 that we all know as the usual 

suspects. There are the 39,900 others who are J° hn Kreidler, on the other hand, 

, , ., , „ expressed the concern that the arts' 

registered as philanthropies... , r „ , . , . . . . , 

share of all charitable giving had 

in fact declined in recent years, 
although Clara Miller remained convinced that a collaborative appeal on the part of the 
nonprofit arts could attract new supporters from among the many new foundations that 
have been established in the 90s. Too often when we talk about arts hinders, Miller 
observed, "we're still talking about the 50 or 100 that we all know as the usual suspects. 
There are the 39,900 others who are registered as philanthropies, and we might put 
something out there for them to consider." 



56 



Addenda 



57 



"A Place that is Yours": 
The Challenge of Facilities Development 

"If you have a place that is yours," observed Cora Cahan, president of the New 42nd Street 
project, at a colloquium devoted to facilities development, "funders and other artists will 
know that you're going to be around... for a long time. It's so solidifying. It gives roots, 
and those roots deepen with every year that you're in a place." That, at least, is the positive 
side of an arts organization owning the building in which it operates. But the process of 
acquiring such properly, as consultant Adrian Ellis made clear, can be a daunting one. 

Cautioning that a building is a means to an end, rather than an end in itself, Ellis described 
the building boom in the arts both here and abroad. "There is an unprecedented level 
of investment in America and in Europe in cultural infrastructure or, for want of a 
better term, arts buildings, theaters, galleries, museums," Ellis observed. "...It's of historic 
proportions, probably without parallel, and as a result of this the boards and senior 
management of many, many arts organizations are completely preoccupied with issues 
which are supplementary to the basic mission of the organization. . . ." Ellis cited four 
factors that have played a role in stimulating this heightened interest in cultural facilities: 
(1) the "rising expectations" of both artists and audiences, who demand better surround- 
ings for the arts, and of arts organizations themselves, who face an ever-more-competitive 
environment; (2) the success of arts organizations (citing the New 42nd Street project as a 
prime example) in placing their activities in the larger civic agenda of their communities; 
(3) the "conventional wisdom" that "part of growing up as an organization means getting 
a building"; and (4) the sheer challenge of undertaking a capital construction project, 
which "...is more fun and exciting than the other things that may be immediately around 
and pressing at your agenda." 

Against this rationale, which Ellis admitted can be all but irresistible for many groups, 
are an equal number of reasons "that arts organizations can get into such terrible tangles 
when attacking buildings": (1) the inherent complexity of facilities projects in general, 
and of meeting the specialized needs of the arts in particular; (2) the tension that exists 
between the realism of planning for a project and the hyperbole of raising funds for it; 
(3) the high profile of many arts organizations in their communities, which subjects their 

a-58 



Reassessment of Support for Arts Organization Resources — Addenda 

project to more scrutiny than similar undertakings in the commercial sector; and (4) the 
"...mismatch between the legal and organizational structures of a nonprofit organization, 
and the sorts of risks that are inherent in property development." 

Ellis and his colleagues on the panel who had undertaken facilities projects in recent years 
(including Ton Borrup of Intermedia Arts Minnesota and Sally Jo Fifer of the Bay Area 
Video Coalition) agreed that the singular nature of such endeavors — most organizations 
only go through the process once — makes them a particularly imposing challenge. Many 
organizations, Ellis noted, "underestimate the organizational toll that a serious capital 
project will take on them." 

Thus Ellis counseled an essentially bifurcated approach to cultural construction projects, 
one that marries the analytical powers of an experienced project manager with the 
"untrammeled enthusiasm" of the artist gone mad. "When I look at projects," Ellis 
declared, "I'm always looking for two things. I'm looking for a combination of a maniac 
and some analysis to answer that maniac. If you have the maniac without the analysis, it 
may make you go right off the rails. And if you have the analysis without the maniac, [the 
project] never goes anywhere. It just sits where it is. You genuinely need both the analysis 
and the maniac, and some sort of rapport between the two." 



a-59 



"Come to us with a Plan": 

State Arts Agencies Find New Ways 

to Support the Arts 

Representatives of three state arts agencies — Arizona, Delaware, and Nebraska — were 
on hand at one of the colloquia to share their experiences with alternative funding 
mechanisms in the public sector. Two approaches in particular, involving trust funds and 
entertainment taxes, have never attracted sufficient political support to be implemented 
at the federal level, although variations on both themes are certain to be explored in 
Congress in the coming years. 

"The elements that contributed to the development of the cultural trust were first the 
controversy surrounding the National Endowment for the Arts," explained Jennifer Clark, 
executive director of the Nebraska Arts Council, referring to the so-called culture wars 
of the late 1980s and early 1990s. ". . .And secondly, just a need for stable arts funding. 
We saw in the state of Nebraska sort of up and down arts funding from our state 
appropriations over the course of the ten years preceding my employment there. . .." Clark 
cited a number of factors that contributed to the establishment of the Nebraska Cultural 
Preservation Endowment in 1998, including a well-connected steering committee, a 
sizable state budget surplus, and "a champion in the state legislature." With a $5 million 
appropriation and matching support from the private sector, the endowment generates 
revenues that support three separate funding programs in the arts and humanities. 

In both Delaware and Arizona, the driving force behind the creation of cultural trust 
funds was a financial crisis in the arts community. "[A]s in Delaware," reported Shelley 
Cohn, executive director of the Arizona Commission on the Arts, "some of our arts 
organizations came to us and said, 'We are threatened with bankruptcy. What are you 
going to do to help us?' And we strategized with the leadership and the legislature. The 
Speaker of the House is now our current governor, and she said, 'We don't want any more 
negative headlines. Come to us with a plan, and we'll see what we can do.'" The plan put 
forth led ultimately to the creation of the Arizona Arts Trust Fund, which addresses not 



a-60 



Reassessment of Support for Arts Organization Resources — Addenda 

only issues of financial stability, but also of cultural diversity and community representa- 
tion, equally important components of long-term institutional health. 

Peggy Amsterdam, executive director of the Delaware Division of the Arts, stressed 
the element of planning — both before and after the development of the Delaware Arts 
Stabilization Fund — that proved to be crucial to the success of her state's program. 
Persuading the corporate community not simply to re-allocate its existing arts support to 
the new program was important, for example, as were the subsequent efforts to get arts 
organizations in the state to collaborate in joint promotional and planned-giving projects. 

Finding the means to seed trust funds with the requisite capital needed to generate 
sufficient income to fund arts programs remains a major challenge. Both the Arizona 
Arts Trust Fund, and a more recent program called Arizona Art Share, have used public 
means to tap private resources, an approach that has always been more popular in Europe 
than in the U.S. For the trust fund, revenues derived from a $15 annual filing fee for 
for-profit corporations generate over $1 million annually. Arizona Art Share draws on the 
state's commercial entertainment tax (a sales tax on movie theaters and sporting events) 
to support its institutional-development efforts. 

Such programs as these, effectively calling on the for-profit Peter to pay the nonprofit 
Paul, may not find a place at the federal level, where corporate lobbyists wield so much 
power. But plans are already afoot for a similar revenue stream, resulting from the auction 
of the publicly owned electromagnetic spectrum (estimated by the Congressional Budget 
Office to be worth some $18 billion over the next few years) to commercial broadcasters 
and wireless entities. As a twenty-first-century corollary to the Morrill Act of 1862 (which 
sold public lands to create over 100 land-grant colleges), the sale of the "virtual" real estate 
that the broadcast spectrum represents could prove no less important to the promotion 
of American culture. 



a-61 



Reassessment of Support for Arts Organization Resources 



A-62 



APPENDIX A 
Presenter Biographies 

Peggy Amsterdam was appointed director of the Delaware Division of the Arts in 1993 after 
having served as a staff member at the DDOA since 1984. As one of fifty state arts agencies in the 
United States, the DDOA oversees the distribution of federal and state funding to nonprofit arts 
organizations and artists. Amsterdam was a founding member of the Delaware Arts Stabilization 
Fund, which now serves as a national model for private, public and corporate collaboration for 
sustaining arts organizations. 

Arnold April is executive director of the Chicago Arts Partnerships in Education, a network of 
23 Chicago Public Schools, 35 professional arts organizations, and seven community organizations 
dedicated to co-planning whole school improvement through the arts. Mr. Aprill has taught at the 
School of the Art Institute of Chicago, the University of Chicago, and Columbia College. He is the 
former artistic director of National Jewish Theater and of the City Lit Theater. 

Tom Borrup is executive director of Intermedia Arts Minnesota, a multidisciplinary community- 
based arts center, founded in 1973 and dedicated to building understanding among people through 
art. Intermedia Arts provides grants, fellowships, commissions and other services to artists in the 
Upper Midwest Region, and presents regional and national artists in performance, media, installa- 
tion and interdisciplinary forms. Borrup also serves as chair of the board of directors of the Jerome 
Foundation, and is past co-chair of the National Alliance for Media Arts and Culture. 

Jerr Boschee helped start the National Center for Social Entrepreneurs in 1984 and served as its 
president and chief executive officer from 1990 until the spring of 1999. He remains of counsel to 
the Center and a member of its board of directors and is in the process of launching an international 
organization to foster social entrepreneurship around the world. Boschee created the National 
Center's primary decision-making tool for nonprofits, the Mission/Money Matrix®, in 1989; and 
is the author of a monograph entitled Merging Mission and Money: A Board Members Guide to 
Social Entrepreneurship. 

After a career as a modern dancer, Cora Cahan became an arts administrator, co-founding and 
serving as executive director of the Feld Ballet, developing the Lawrence A. Wein Center for 
Dance and Theater, and acquiring and transforming the Elgin Cinema into the award-winning 
Joyce Theater, New York's pre-eminent theater for dance. In 1990, Cora Cahan was named 
president of The New 42nd Street Inc., a not-for-profit organization dedicated to restoring and 
recreating seven ancient legitimate theaters on the historic block between Broadway and Eighth 
Avenue. Cahan serves on the boards of the NY Convention and Visitor's Bureau, the Governor's 
Commission Honoring the Achievements of Women in New York State, the New York Foundation 
for Architecture, and is founder and trustee emeritus of the Joyce Theater. 



A-63 



Reassessment of Support for Arts Organization Resources 



Hal Cannon explores the culture and folk arts of the American West through "The Open Road," 
a regular feature on Public Radio International's weekly program, The Savvy Traveler. Cannon is 
the founding director of the Western Folklife Center and the Cowboy Poetry Gathering, now in 
its 16th year in Elko, Nevada. He has compiled over a dozen books and recordings on the folk 
arts of the American West. His band, variously known as the Bunkhouse Orchestra and the Desert 
String Band, has been together for twenty- five years and has performed the authentic music of the 
American West all over the world. 

Jennifer Severin Clark is executive director of the Nebraska Arts Council (NAC). Under her leader- 
ship, the NAC played a key role in passing Nebraska's Cultural Endowment legislation in 1998. 
Clark has served as a board member, as well as on the executive committee of the National Assembly 
of State Arts Agencies and has been a panelist for the NEA. Prior to her current appointment, she 
served as executive director of the Arts Council of San Mateo County in California. 

Joe Coates is a thinker, writer, and speaker on the future. He is president and founder of Coates 
and Jarratt, a firm which has produced research studies of the future of technology, business, and 
government since 1979. Coates is the author of over 300 articles and currently writes columns for 
Technological Forecasting and Social Change, Research and Technology Management, and Personnel 
Management. He is co-author of 2025: Scenarios of US and Global Society Reshaped by Science and 
Technology, Future Work, and What Futurists Believe. 

Dudley Cocke, director of Roadside Theater, is a producer, stage director, and writer. He recently 
directed New Ground Revival, and Corn Mountain/Pine Mountain, a bilingual collaboration between 
traditional Native American Zuni artists and the Roadside Ensemble. He has taught theater at 
Cornell University and the College of William and Mary, and often speaks and writes about rural 
culture, including the book he co-edited/authored, From the Ground Up, Grassroots Theater in 
Historical and Contemporary Perspective (Cornell University, 1993), and his contribution to Voices 
From the Battlefront: Achieving Cultural Equity (Africa World Press, 1993). 

Shelley Cohn is executive director of the Arizona Commission on the Arts, having served in that 
capacity since 1984. She has been involved in seeing the appropriation of the Arts Commission grow 
considerably and in developing special funding initiatives including the Arizona Arts Trust Fund 
and Arizona ArtShare, the Arizona arts endowment fund. 

Jane L. Delgado, Ph.D. is president and chief executive officer of COSSMHO, an organization 
dedicated to improving the health and well-being of Hispanics through its representation often 
million Hispanic consumers. Dr. Delgado serves as a trustee of the Kresge Foundation, on the 
board of the National Assembly, on EPA's Clean Air Act Advisory Council and is a member of 
Mrs. Rosalyn Carter's Task Force on Mental Health. She also serves on the board of Hispanics in 
Philanthropy and writes a column for the LA Times Syndicate. Dr. Delgado came to her position 
at COSSMHO after serving under the secretary of the U.S. Department of Health and Human 
Services where she developed the landmark "Report of the Secretary's Task Force on Black and 
Minority Health." 



A-64 



Presenter Biographies 



Cynthia Egan is president of The Fidelity Investments Charitable Gift Fund, a donor advised fund 
launched in 1992. Egan has served in executive leadership positions at Fidelity Investments since 
1989. As executive vice president of Fidelity Management Trust and the Institutional Retirement 
Services Group, she was responsible for trust fund client management as well as the client services 
and operations management for the retirement plans of multiple for-profit and nonprofit institu- 
tions nationwide. Before joining Fidelity, Ms. Egan lived in New York and Washington where she 
was employed by Bankers Trust Company, KPMG Peat Marwick and the Federal Reserve. Ms. Egan 
graduated from Boston College with a BA in English. 

David Eisner is vice president of Corporate Relations at America Online. He has helped manage 
the company's corporate communications since 1995, first as a consultant and since May, 1997, in 
his current position. Eisner is also vice president of the AOL Foundation. He served as senior vice 
president at Fleishman-Hillard International Communications where he led the telecommunica- 
tions practice until joining the AOL team in 1997. From 1990 to 1993, Eisner worked as director 
of communications for the Legal Service Corporation, a quasi-federal, Congressionally supported 
agency, and one of the largest public nonprofit institutions in the United States. Eisner began his 
career on Capitol Hill as press secretary for several Members of Congress from 1985-1990. He 
graduated from Stanford University with a BA in creative writing. 

Adrian Ellis is the CEO of AEA Consulting, a company which specializes in strategic planning in 
the cultural sector. AEA has offices in London and, since 1998, in New York. Ellis has assisted 
clients on facilities development projects ranging from the very large scale (the'National Gallery, 
the British Museum, the Hermitage, the Deutches Theater) to smaller community-based theaters 
and workshops. He has also advised a number of funding bodies, including the UK Department of 
Culture, on policy with respect to facilities development, most recently for the UK National Lottery. 

Sally Jo Fifer is executive director of the Bay Area Video Coalition (BAVC), a media arts center 
specializing in access and training on the latest communication technologies for artists and 
nonprofits. Fifer has worked in the media arts field for the last fifteen years. She has been executive 
director of BAVC since 1992, and is responsible for the organization's growth, relocating the 
organization in the heart of the SF Mission District, and opening up new opportunities for the 
organization as a leader in economic development workforce initiatives and training for technology 
industries. She has emerged as a nationally recognized authority on high technology and digital 
media as they impact and support the non-commercial missions of nonprofit organizations and 
artists. Fifer co-edited Illuminating Video: An Essential Guide to Video Art, which remains the 
definitive text used in universities and schools in media studies. 

Peter Frumkin is assistant professor of Public Policy at Harvard University's John F. Kennedy 
School of Government. His research and teaching interests include public and nonprofit manage- 
ment, philanthropy, and organization theory. He is currently studying public policies affecting 
the nonprofit sector, the interaction of public and nonprofit managers, and the performance of 
private philanthropic foundations. Recent publications have included articles on the governance of 
community foundations, competition between nonprofit and for-profit social service providers, and 



A-65 



Reassessment of Support for Arts Organization Resources 



professionalization in the nonprofit sector. Frumkin has served as a program officer of the Lloyd 
A. Fry Foundation, consultant to the MacArthur Foundation and the Council on Foundations, 
ombudsman of the University of Chicago, and site evaluator for Arizona's statewide School-to- 
Work initiative. He received his Ph.D. in sociology from the University of Chicago. 

Michael Gallis is principal of Michael Gallis Associates, a strategic planning and design firm; the 
Gallis Information Group, and GWI Property Resource Group. He was formerly a professor of 
architecture and planning in the College of Architecture, University of North Carolina, and was 
named the first Institute Fellow at the Institute of Urban Studies in 1991. Gallis is currently involved 
in planning projects with various groups including the Cincinnati Metro Region, the Connecticut 
Institute for the 21st Century, the Rhode Island Economic Policy Council, the Detroit Chamber, the 
Memphis Area Chamber of Commerce, and the Charleston Metro Chamber of Commerce. 

G. Michael Gehret has served as vice president for marketing and development for the Chicago 
Symphony Orchestra (CSO) since 1993. In that role, Gehret is responsible for annual fundraising, 
special underwriting, endowment development, planned giving, government grants, and volunteer 
activities. Under his direction, the CSO recently completed a capital campaign for the renovation of 
Orchestra Hall and construction of Symphony Center, which opened in 1997. Gehret also supervises 
the Orchestra's marketing, communications, and ticket sales programs. Prior to joining the CSO, 
Gehret was development director for the San Francisco Symphony (1981-93). 

David Gockley has been general director of Houston Grand Opera since 1972. By producing operas 
such as Nixon in China, Harvey Milk, Florencia en el Amazonas, Porgy and Bess, Treemonisha, and 
Resurrection, HGO under Gockley 's direction has earned a reputation for reaching out to new audi- 
ences. Gockley served two terms as president of OPERA America and was chairman of Houston's 
Theater District for four years. 

Marian Godfrey is senior program director at Pew Charitable Trusts, having worked in the theatre 
arts field before joining the Trusts in 1989. Godfrey has taught theater management at New York 
University, has written articles on arts management and arts philanthropy for publications including 
Theatre Times and the Grantmakers in the Arts Newsletter, and has served on numerous national 
advisory committees and panels. 

Anne Green was director of grantmaking programs at the Benton Foundation's <www.benton.org>, 
which works to realize the social benefits made possible by the public interest use of communi- 
cations. Through its grantmaking, Benton equips nonprofit organizations with the technology 
tools and training they need to solve social problems and share lessons as they tap into the 
power of communications tools to advance their missions. Anne joined the Benton Foundation in 
1996, as project manager of Open Studio: the Arts Online <www.openstudio.org>, a partnership 
with the National Endowment for the Arts to train the nonprofit arts community with the 
necessary skills to effectively use the World Wide Web for online communication, publication, and 
creative expression. 



A-66 



Presenter Biographies 



Allen S. Grossman is a senior lecturer of Business Administration at the Harvard Business School's 
Initiative on Social Enterprise and a visiting scholar at the Harvard Graduate School of Education. 
He served as president and chief executive officer of Outward Bound USA for six years before 
stepping down in 1 997 to work exclusively on the challenges of creating high performing nonprofit 
organizations and the relationship between a nonprofit's management and its social impact. Mr. 
Grossman is co-author with Christine Letts and William Ryan of High Performance Nonprofit 
Organizations: Managing Upstream for Greater Impact, to be published this fall by John Wiley & 
Sons, Inc. 

Juana Guzman is director of the Chicago Neighborhood Tours for the Department of Cultural 
Affairs where she has developed successful partnerships and innovative entrepreneurial models. 
Guzman rallied and received over $8.1 million as part of the City of Chicago's Empowerment Zone's 
Cultural Diversity Program. The program provided crucial capital development dollars for the 
creation and expansion of community based arts centers and museums. Her most recent efforts with 
Chicago Neighborhood Tours involve creating awareness and enhanced economic opportunities for 
Chicago's diverse communities. 

David Halen has been acclaimed by audiences and critics in the United States and Europe for his 
performances both as soloist and as concertmaster of the St. Louis Symphony Orchestra. Halen 
was named concertmaster in 1995, and prior to his appointment was a member of the Houston 
Symphony Orchestra, where he played from 1984 until 1991, serving as assistant concertmaster for 
five of those years. 

J. Jean Horstman directed MCG Organizational Development Services, a program at Manchester 
Craftsmen's Guild that seeks to partner with nonprofit funders to increase the organizational 
capacity and effectiveness of their grantees. Horstman managed the Community Development 
Corporation/Arts Resource Initiative (CDC/ARI) for Manchester Craftsmen's Guild. She is a 
member of the Society for Organizational Learning, the American Society for Training and 
Development and the Organizational Development Network. 

Nicolas Kanellos has been professor at the University of Houston since 1980. He is founding 
publisher of The Americas Review (formerly Revista Chicano-Riquena) and the nation's oldest 
Hispanic publishing house, and the largest nonprofit publisher of literature, Arte Publico Press. 
His monograph, A History of Hispanic Theater in the United States: Origins to 1940 (1990), was the 
recipient of three book awards. In 1994, Kanellos was appointed to the National Council on the 
Humanities. In 1996, he became the first Brown Foundation Professor of Spanish at the University 
of Houston. 

Norma Kaplan, chief of Arlington (Virginia) Cultural Affairs Division, has over twenty years experi- 
ence in arts administration. The Division provides a comprehensive program of services to local 
artists as well as numerous arts programs serving the general population of Arlington County. Ms. 
Kaplan was instrumental in the creation of the national award-winning "Arts Incubator" program 
in Arlington County. Prior to beginning her work as chief of the Cultural Affairs Division in 1986, 
she spent ten years in New York as both an arts administrator and theatre director. 

A-67 



Reassessment of Support for Arts Organization Resources 



Hal King is managing partner of King, Brown and Partners, Inc., a full service market research 
firm based in San Francisco. KB&P provides strategic marketing research to many of America's 
most respected Fortune 100 companies, including such business leaders as Bank of America, 
Hewlett Packard, Levi Strauss & Co., Sun Microsystems, the Discover}- Channel, and the Walt 
Disney Company. 

Bruce Kogut is Dr. Felix Zandman Professor of Management at the Wharton School, University 
of Pennsylvania, and co-director of the Reginald H. Jones Center on Strategy, Organization, and 
Management. Kogut has published widely on such topics as labor markets for ideas and the 
effects on organizations, the expansion of U.S. and Japanese firms internationally, strategic alliances 
and networks, technology transfer and diffusion, privatization, international strategy, and the 
competitiveness of countries. His current research focuses on the virtual location of software and 
intellectual labor activities in the global economy. 

John Kreidler served as senior program executive for Arts and Humanities at the San Francisco 
Foundation since 1979. In that position, he administered a grant program that supports the 
advancement of more than 100 cultural organizations with emphasis on direct citizen participation 
in cultural activities, advancement of nonprofit cultural organizations, cultural diversity and expe- 
riential forms of arts education. Early in his career, Kreidler worked for the U.S. Office of 
Management and Budget where he was responsible for a portfolio of Federal programs involving 
vouth employment and occupational health. After a year at UCLA's Arts Administration program, 
he became director of the Alameda County Neighborhood Arts Program, and was active in a 
national movement to employ artists using Federal CETA funds. 

Clara Miller is founder and president of the Nonprofit Finance Fund, a leading national community 
development financial institution. Nonprofit Finance Fund (NFF) provides financial and advisory 
services to nonprofit organizations, and since 1980 has made approximately S23 million in 
loans for more than SI 00 million in projects. NFF focuses on hard-to-fmance needs such as 
leasehold improvements, capital campaign receivables, construction loans and working capital. 
Borrowers and advisory service clients include organizations in health services, child care, educa- 
tion, arts, culture, recreation, religion and community development. Miller chairs the board of the 
National Community Capital Association and is a board member of the Local Initiatives Managed 
Assets Corporation. 

Cora Mirikitani was senior program director at the James Irvine Foundation, and director of the 
Arts program. She came to that position from the Pew Charitable Trusts where, from 1991 through 
1996, she served as program officer for Culture in charge of national grantmaking activities. Before 
becoming a grantmaker, Mirikitani worked for fifteen years in the nonprofit arts as the director of 
performing arts and film at the Japan Society in New York, managing director for programs at the 
Japanese American Cultural and Community Center in Los Angeles, and executive director of the 
Greater Philadelphia Cultural Alliance. 



A- 6 8 



Presenter Biographies 



Anthony Riddle is executive director of the Manhattan Neighborhood Network. For over twenty 
years, Riddle has worked in the many forms of media for the purpose of effecting positive social 
change. He served as executive director of Minneapolis Television Network from 1989 to 1995. In 
this capacity, he became a regular contact for USAID/State Department tours, explaining commu- 
nity media to public information officers and filmmakers from nearly three dozen countries. 
Riddle has attended important conferences in Eastern Europe, North Africa and throughout North 
America for the purpose of sharing information about community media. 

Van Romans is director of cultural affairs for Walt Disney Imagineering. At Disney he has devel- 
oped the international exhibition program for Epcot Center, the Disney Gallery program, Art in 
Embassies and other arts related public programming. Before coming to Disney, Romans taught at 
the University of Southern California and the University of California, Irvine where he received full 
professorships in Studio Art. He is a member of the American Association of Museums, and serves 
on the Board of the California Arts Alliance. 

Douglas Rushkoff is an author, lecturer, and social theorist, whose books have been translated 
into 16 languages. His first novel, Ecstasy Club, was published by HarperCollins last summer, and 
has been optioned by Miramax Films. His most recent non-fiction book, Children of Chaos (called 
Playing the Future in the U.S.) explores the internet, video-game, comic-book, sci-fi culture of the 
"screenagers" for their insights on thriving in an increasingly chaotic age. He is probably best known 
for his book Media Virus! Hidden Agendas in Popular Culture (Ballantine, 1994), a controversial 
analysis of today's datasphere and media obsessions. Rushkoff regularly contributes features about 
pop-culture, media, and technology to magazines including Time, Esquire, Details, The Modern 
Review, Paper, and online publications from The Site to Nerve. He gives workshops and lectures 
around the world on technology and culture, and has taught at the Esalen Institute and Banff 
Center for the Arts. 

Nancy Sasser was president of National Arts Stabilization (NAS), a nonprofit organization which 
partners with communities to strengthen arts organizations. NAS programs develop the managerial 
and financial skills required to adapt and thrive in a changing environment. She became president 
of NAS in 1995; two years later, she launched NAS executive education for arts leaders, the 
organization's first programmatic departure from stabilization, and a $2 million evaluation research 
program to develop an assessment tool to measure the impact of stabilization and capacity building 
programs nationally and internationally. 

J. Mark Schuster is professor of Urban Cultural Policy in the Department of Urban Studies and 
Planning at the Massachusetts Institute of Technology. Schuster is a public policy analyst who 
specializes in the analysis of government policies and programs with respect to the arts, culture and 
environmental design. He is the author of numerous books, articles and reports including Patrons 
Despite Themselves: Taxpayers and Arts Policy, Supporting the Arts: an International Comparative 
Study, and The International Search for Models of Arts Support. Schuster is joint editor of the Journal 
of Cultural Economics and a member of the editorial boards of the Journal of Planning Education and 
Research and the International Journal of Cultural Policy. 



A-69 



Reassessment of Support for Arts Organization Resources 



Fred Silverman is a consultant in the area of philanthropy and corporate community relations. 
He was the lead consultant to the National Strategy for Nonprofit Technology, an initiative by 
foundations, corporations, and nonprofits to develop a blueprint for how nonprofit groups can 
access and use high technology more effectively. Other clients include Hispanics in Philanthropy, 
Tides Foundation, Open Society Institute, and Community Foundation Silicon Valley. Until 1997, 
Silverman was senior manager of Apple Computer's Worldwide Community Affairs department, 
which planned and implemented the company's global community involvement activities. 

Susan Kenny Stevens is president and founder of The Stevens Group, a firm specializing in 
strategic, financial and management advice to foundations and nonprofits throughout the country 
since 1982. A recent merger with Larson, Allen, Weishair and Co. expanded The Stevens Group's 
consulting, training and program/loan fund management services to include nonprofit audit and 
accounting. Stevens is a frequent lecturer, public speaker and trainer on organizational, manage- 
ment and motivational topics and has written extensively on financial and management issues 
pertaining to the nonprofit sector. 

Emily Todd currently serves as a grant officer at Houston Endowment Inc., a philanthropy endowed 
by Mr. and Mrs. Jesse H. Jones. Previously, Todd was Executive Director of Diverse Works Artspace 
in Houston, a nonprofit art center dedicated to presenting new visual, performing, and literary 
art (1995-99), program director for the Andy Warhol Foundation for the Visual Arts, Inc. in New 
York (1988-95), and worked in various curatorial positions on the staff of the Contemporary Arts 
Museum in Houston (1980-86). 

Stefan Toepler is research associate, Comparative Nonprofit Sector Project at the Institute for 
Policy Studies, Johns Hopkins University, where he coordinates research efforts focusing on Eastern 
and Central Europe. Before joining the Center, Dr. Toepler was a research scholar at the Free 
University of Berlin's John F Kennedy Institute for North American Studies, where he earned his 
doctorate. Previously, he was an International Philanthropy fellow at the Johns Hopkins Institute 

for Policy Studies. 



A- 70 



APPENDIX B 
Bibliography 



Books and Articles 



Anheier, Helmut K. and Toepler, Stefan. "Commerce and the muse: Are art museums becoming 
commercial?" from To Profit or Not to Profit: The Commercial Transformation of the Nonprofit 
Sector, Edited by Burton A. Weisbrod, Cambridge University Press. (1998): 233-248. 

"AOL Foundation Launches Helping.org to Make Philanthropy Easy and Convenient." AOL 
Foundation Press Release, October 20, 1999. 

"The Arts and the Public Purpose." Final Report of the Ninety-Second American Assembly. Harriman, 
New York: Columbia University, May, 1997. 

Baumol, William. "Symphony Orchestra Economics: The Fundamental Challenge." Harmony, forum 
of the Symphony Orchestra Institute, Number 2. (April, 1996): 52-54. 

Beene, Melanie. "No Slow Fix, Either." Grantmakers in the Arts Newsletter. (Spring, 1996). 

Billitteri, Thomas J. "Moving Giving off the Dime: Can White House increase share of U.S. income 
that goes to charity?" from Chronicle of Philanthropy, Vol. XII, No. 1 (October 21, 1999): 1. 

A Blueprint for Infusing Technology into the Nonprofit Sector. Preliminary report of the National 
Strategy for Nonprofit Technology. (April 1999). http://www.nsnt.org. 

Boschee, Jerr. Merging Mission and Money: A Board Member's Guide to Social Entrepreneurship 
(monograph). National Center for Nonprofit Boards. (March, 1998). 

Brown, Alan S. and Sankey, Laura. "Learning about Audiences." Dance/USA Journal. (Winter 1998): 
16-20. 

Buki, Charles, Pyatok, Michael and Robbins, Ed. "On the Limits and Arrogance of Design." Panel 
discussion at the Congress of the New Urbanism VII - The Wealth of Cities. Milwaukee, WI. 
(June 4, 1999). 

Carver, John. Boards that Make a Difference: A Design for Leadership in Nonprofit and Public 
Organizations. San Francisco: Jossey-Bass, 1990. 

Chouinard, Claudia. Measuring Stabilization. Prepared by Results Group and funded by the Ford 
Foundation and the Andrew W Mellon Foundation. (August, 1996). 

Cocke, Dudley. "Theater of Place." Grantmakers in the Arts Newsletter Vol. 10, Number 1. (Spring 
1999): 1-6. 

Curtis, Jody. "The Future of Philanthropy." Foundation News & Commentary. (March/April 1999): 
18-19. 

De Monchaux, John and Schuster, J. Mark. "Five Things to Do." Preserving the Built Heritage: Tools 
for Implementation. Hanover, New Hampshire: University Press of New England, 1997. 

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DiMaggio, Paul J. "Decentralization of Funding from the Federal Government to the States." Public 
Money and the Muse. Stephen Benedict, ed. New York: WW Norton, 1991. 

Dove, Kent E. "Trends Affecting the Future of Capital Campaigns." Conducting a Successful Capital 
Campaign. San Francisco: Jossey-Bass (1998): 160-172. 

Drucker, Peter. "The Discipline of Innovation." adapted from Innovation and Entrepreneurship: 
Practice and Principles. Harper & Row, 1985. 

"Management's New Paradigms." Forbes. (October 1998): 152-176. 

"The New Commandments of Change." Inc. Magazine Online. (June 1999). 

http://www.inc.com/incmagazine/archives/0699064 1 .html 

Eisenberg, Pablo. "Academic Centers Don't Develop Charity Leaders." The Chronicle of Philanthropy. 
(March 25, 1999). 

Eisenberg, Pablo. "The Courage to Profit From Failure." The Chronicle of Philanthropy. (May 20, 
1999): 41-42. 

Evans, Richard and Jones, Laurel. Beyond Stabilization: Arts Funding and Organizational Develop- 
ment. Prepared by Bay Consulting Group for the Pew Charitable Trusts. (October 1996). 

Frumkin, Peter. "Evaluating for Success." Philanthropy (September/October, 1999): 9-12. 

"Failure in Philanthropy: Toward a New Appreciation." Philanthropy (July/ August 

1998): 7-12. 

'Fidelity in Philanthropy: Two Challenges to Community Foundations." Nonprofit 



Management & Leadership, Jossey-Bass Publishers, Vol. 9, No. 1 ( Fall 1997): 65-76 

. "He Who's Got It Gets to Give It." The Washington Post, OUTLOOK (Sunday, 



October 3, 1999): Bl & B4. 

'Private Foundations as Public Institutions: Regulation, Professionalization, and 



the Redefinition of Organized Philanthropy." Philanthropic Foundations New Scholarship, New 
Possibilities. Edited by Ellen Condliffe Lagemann. Indiana University Press. 69-98. 

Gallegos, E. Herman and O'Neill, Michael. Hispanics and the Nonprofit Sector. The Foundation 
Center, April 1991. 

"Giving Back, the Silicon Valley Way," a report by the Community Foundation of Silicon Valley, 
November 1998. 

"Growing Up Nonprofit: An Essay on Nonprofit Life Cycle Development." The Stevens Group. 
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Handy, Charles. "Unimagined Futures." The Organization of the Future. Editors Frances Hesselbein, 
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Light, Paul. Sustaining Innovation: Creating Nonprofit and Government Organizations that Innovate 
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"Local Arts Agency Facts 1998." Americans for the Arts Monograph, Vol. 2, No. 3. (1998). 

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Bibliography 

NEA Case Studies 



All of the following Case Studies have relevance to the issues discussed at the Colloquia, 
and can be found on the NEA's website at the "Lessons Learned Planning Toolsite ," 
http://arts.endow.gov/pub/Lessons. 

Allen, Davis. An Accelerated Strategic Planning Process. 

Borrup, Tom. Intermedia Arts: A Multicultural Home Away From Home. 

DeNobriga, Kathie. Movin On Up: One Theatre's Struggle to Change the Face of Its Audience. 

Deussing, Ryan. MOMA.org: The Evolution of a Museum Web Site. 

Edward, Deborah. Evaluation: Patching It Together. 

Farrell, Anne. Abrazando La Diversidad/Embracing Diversity: Museum of Contemporary Art, 
San Diego. 

Finger, Ellis. Programming Challenges for the Campus-Based Music Presenter. 

Greensfelder, Sara. Organizing Traditional Artists. 

Hebard, Midge. The Three by 3 Consortium - INTAR, New Federal Theatre and Pan Asian Rep: From 
Marketing to Individuals to Building Multicultural Constituencies. 

Hirschfield, Laura. Richard Hugo House: A Study in Social Entrepreneur ship. 

Hoover, Joanne. The Very Special Arts New Mexico Facility: Oasis in the Desert. 

Jiminez, Lillian. Third World Newsreel. 

Kaiser, Michael. American Ballet Theatre: A Classic Turnaround. 

Kanellos, Nick. The Launch ofPinata Books: A Study in Diversification. 

Matterson, Melissa. Heartland Arts Fund: Breaking through Bureaucracy. 

Moore, Colin. Jim Hirsch and the Old Town School of Folk Music: A Study in Leadership. 

Peeler, Heather. Mission-based Planning: The Bricks and Mortar of a Successful Facility Project. 

Porterfield, Donna. Mountaineers, Farmers, and Cowfolk Create Two Plays about Place. 

Pritikin, Renny. New Wine in an Old Bottle, Old Wine in a New Bottle: A Collaboration between 
Two Contrasting Museums. 

Sapadin, Larry. How the Delaware Cultural Community Organized an Arts Stabilization Fund. 

Seeman, Charlie. The Cowboy Poetry Gathering: Rounding Up the Dollars to Grow a Home on 
the Range. 

Teitelman, Judith. Risky Business: PEN Center USA West's Planning Process That Led to a Greater 
Commitment to Risk-Taking. 

Underwood, Consuelo. Workplace Giving: A Source for Arts Support. 



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Websites 

National Endowment for the Arts 

www.arts.endow.gov 



Arizona Commission on the Arts 

http://az.arts.asu.edu/artscomm 

Arlington Cultural Affairs Division 

www.arlingtonarts.org 

Arte Publico Press 

http://www. uh.edu/~artepub 

Arts Business Council of Chicago's Arts Marketing Center Library 

http://www.artsbiz-chicago.org/marketing.html 

American Assembly 

http://www.columbia.edu/cu/amassembly/ 

Americans for the Arts 

http://www.artsusa.org 

AOL Foundation 

www.corp.aol.com/foundation.html 

Bay Area Video Coalition 

http://www.bavc.org 

Benton Foundation's "Best Practices Toolkit" 
www.benton.org/Practice/Toolkit 

Community Foundation Silicon Valley's Giving Center 

www.siliconvalleygives.org 

Cowboy Poetry Gathering and Western Folklife Center 

http://www.westfolk.org 

DiverseWorks Artspace 

http://www.diverseworks.org/home.html 

Delaware Division of the Arts 
http://www.artsdel.org 

The Fidelity Investments Charitable Gift Fund 

www.giftstothefuture.gov/ 

Hauser Center for Nonprofit Organizations at the Kennedy School of Government 

www.ksghauser.harvard.edu 

Helping.Org 

www.helping.org 

Houston Grand Opera 



http://www.hgo.com 



B-76 



Bibliography 



Intermedia Arts 

http://www.intermediaarts.org 

Internet2 

www.internet2.org 

James Irvine Foundation 

www.irvine.org 

Journal of Cultural Economics 

http://www.wkap.nl/journalhome.htm 

Manchester Craftsmen's Guild 

http://artsnet.org/mcg 

National Assembly of State Arts Agencies 

Legislative Appropriations Annual Survey: FY98-99 
http://nasaa-arts.org 

National Center for Social Entrepreneurs 

http://www.socialentrepreneurs.org/ 

National Center for Nonprofit Boards 

http://www.ncnb.org 

Nebraska Arts Council 

http://www.gps.kl2.ne.us/nac_web_site/nac.htm 

New Victory Theater 

http://www.newvictory.com 

The Pew Charitable Trusts 

http://www.pewtrusts.com 

Roadside Theater 

http://www.appalshop.org/rst 

Douglas Rushkoff 

www.rushkoff.com 

Social Venture Partners 

www.svpseattle.org 



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78 



CREDITS 



Colloquia organization and publication 




55 San Fernando Way 

San Francisco, CA 94127-1503 

415-681-9450 

415-661-5307 

laureljones@bayconsulting.com 

www.bayconsulting.com 

www.i-context.com 



BCG Project team 

Laurel Jones, Project Director 

Richard Evans 

Helen Graves 

Gary O. Larsen 

John McCann 

Morrie Warshawski 



NEA Project team 

Lee Dennison 
Anne Jarboe 
John Morgan 
A.B. Spellman 



Graphics 

Cover design: Alison S. Salter, eBluegoose and Associates, Sausalito, CA 
Book design: Rhonda J. Boothe, nothing spectacular graphics, Bremerton, WA 

© 2000. All rights reserved. 



l j 



Mission Statement 

The National Endowment for the Arts, an investment in America's living 
cultural heritage, serves the public good by nurturing human creativity, 
supporting community spirit, and fostering appreciation of the excellence and 
diversity of our nation's artistic accomplishments. 

For information about programs of the National Endowment for the Arts, visit 
the NEA website at: www.arts.gov 



w 



National Endowment for the Arts 

The Nancy Hanks Center 
1 100 Pennsylvania Avenue, NW 
Washington, DC 20506-0001 
Phone: 202-682-5400 
www.arts.gov