Even Endowments Don’t Want You to Have an Endowment
Went to a foundation’s financial conference a few years back. Before the economy went south.
The COO of the foundation said (a direct quote), “If you’re not pulling 20% of your annual budget from your endowment roll-off, then you probably shouldn’t have an endowment.”
And now, the math:
Assuming the annual payment is 5%, your endowment would have to outnumber your annual budget by a ratio of 4-1.
Endowments are not reserve funds. They are not liquid. They have little to do with an organization’s stability. Often, the endowment campaign is successful, but the organization teeters on bankruptcy in vast oceans of red ink.
Endowments do not prove an organization’s worth, nor does it assure its future. Although, I suppose, it does offer a bankrupt organization the chance to pay off its bills before closing for good. So there’s that.
Like licking honey off a thorn – Art, why we do it, who it’s for, and why it has power
Painters sing.
Actors play.
Writers choreograph.
Singers paint.
Dancers conduct.
Choreographers sculpt.
Sculptors act.
Musicians paint.
Directors sing.
Conductors write.
And in doing so, no issue, thought, or attitude can be unseen, unfelt, or unheard. It is not for the singing, the painting, etc., that art is produced. The glory of art is in its scope of power. To inspire peace or revolution. To cause great comfort or great discomfort. To provide joy or desolation.
As a populist, I believe that visual and performing arts serve great groups of people. I fear that many in power judge art as dangerous. Their battle plan continues to manipulate those same great groups of people into despising it, to consider it as foreign. As the other.
And I fear that they’ve won that battle. But not the war. Not yet.
More words and phrases that ought to be outlawed from the lexicon
“If you build it, they will come.” – Originally written by WP Kinsella in his best-selling novel, Shoeless Joe, and popularized in FIELD OF DREAMS, these six words have rationalized arts capital campaigns across the US, many of the fruits of which have predictably become money pits.
(The original quote was “If you build it, he will come,” and referred to the protagonist’s father. They had a catch.)
“Art for art’s sake” – coined in the 19th century to justify Aestheticism, in which art was thought to exist for the sake of its beauty alone, and that it need serve no other purpose. Today used to justify programming for many arts organizations.
“Community” – here’s the OED definition. Used by nonprofits in a mercurial manner to keep from describing the very people they wish to positively affect.
“I Wanna!” The Fatal Game of Power About Nonprofit Arts. Ages infantile and up.
How to play:
Players select their tokens to start play. Each token designates their role in nonprofit art.
Marionette: Performing Artists/Designers
Blob of Clay: Writers/Composers/Visual Artists
Pawn: All technical/administrative/volunteer personnel (one token represents all)
Change Purse: Audience
Louis Vuitton Pocketbook: Donor/Funder
Fake Louis Vuitton Pocketbook: Development Director
Hammer: Trustee
Bent nail: Managing/Executive Director
Telescope looking up: Artistic Director/Curator
Microscope looking down: General Manager/CFO
Bloody leech: Critic/Journalist
Sorry: designated tokens for marketing/pr directors were deleted in the last budget cycle.
All players spin the Great Glass Wheel Of Art simultaneously in all directions and yell, “I Wanna!” The Wheel comes off its bearings; breaks into millions of pieces. Players move tokens anyplace in the room that feels most advantageous, regardless of the playing board or other players.
End of game:
Chaos. All players proclaim victory. None actually win.
U-Better, U-Better, UBIT
Watching arts nonprofits seek funding in unusual ways leads to same old/new discussions on Unrelated Business Income Tax.
Taking a group of donors for a London theatre tour (even if all the finances are handled by an independent agent)…UBIT, you betcha.
The percentage of time spent in London at a lecture about your company’s particular brand of theatre…OK.
Selling t-shirts with just the logo of your natural history museum…UBIT, you betcha.
Selling t-shirts with dinosaurs on them at your natural history museum…OK.
Leasing part of your building to a separate business…UBIT, you betcha.
Items sold at a gift shop with a separate public entrance…UBIT off more than you can chew.
Items sold at a gift shop only accessible to ticket-buyers…UBIT only items not related to the tax-exempt purpose of the organization.
UBIT. Not just another 4-letter acronym.
Nag, nag, nag. So, Mr. Big Shot, how do you make a perfect nonprofit arts organization?
There is no perfect nonprofit organization of any kind. All nonprofits are experiments in righting some crucial societal wrong.
For the arts, that wrong is ignorance. It is complacence. It is the invisibility of the big picture. The visual and performing arts bring us beauty, power, and intellect. The opposite of all those words, of course, is nothingness.
Art is never for art’s sake because it is condescending to anthropomorphize it.
When great nonprofit arts organizations look at their core ambitions and value, they view their work as an innovative tool toward the betterment of society.
Commercial arts organizations’ goals begin and end with profits. Mediocre arts nonprofits goals are measured by their art. Great arts organizations’ goals involve righting the crucial societal wrong.
Final note: Great nonprofits don’t consider self-survival a worthy mission. Mediocre ones do.
Isn’t Great Art Enough?
Doesn’t the artwork of a Van Gogh or Diego Rivera exhibit at a nonprofit museum make one seek insight into the meaning of life?
Doesn’t the performance of a nonprofit dance company’s production of Copland/DeMille’s “Rodeo” or Ailey’s “Revelations” make one try to restore the American dream?
Doesn’t the experience of a nonprofit theater’s production of “A Raisin in the Sun,” “Romeo and Juliet,” or “Angels in America” make one try to become more tolerant?
Do nonprofit arts organizations need more than those responses to justify charitable funding?
While many nonprofit arts organizations choose “art for art’s sake,” populist sentiment seeks quantifiable results to validate contributions to any portion of the nonprofit sector (social service, education, etc.).
So: shouldn’t great art be enough? Absolutely. Art can be produced for its own sake when no donations are requested.
You’re faking it. You know you are. So why would you hire someone who knows less than you do?
Deep in your soul, you understand that you have no idea what you’re doing. You’ve been faking it for years.
You have years of experience and an important-sounding title. But you know the truth.
Now that it’s time to hire someone to report to you, who do you want?
“Someone young I can mold,” said an ED acquaintance recently. What he meant was, “Someone who won’t outshine me in front of my board.” Idiot.
“Someone who has fought the fight,” said a board member I know. “Someone who can offer great perspective and can innovate intelligently.” Wise.
We are imperfect. We have weaknesses. So when you accept that you don’t know everything, the best thing you can do is hire to those weaknesses.
When you do, you’ll be a leader. Until then, you really are a fake.
Nonprofit Arts Organizations – Are you aware that the other parts of the sector believe that you’re stealing money?
In most nonprofits, a donor gives and someone else benefits. Food banks solve hunger, which promotes family stability, which stimulates re-entry into society for the impoverished. Environmental nonprofits encourage clean air and water, which promotes health, which supports longer, happier lives for everyone. Many religious organizations sponsor high morals (“Do unto others…”), which provides a sense of community, which fosters a safety net.
In the arts, the donor and the recipient are often the same person. The donor gives to a company, the company produces a performance or exhibit, and the donor/recipient enjoys the event. The arts are seen by many as elitist and unworthy of support.
We in the arts have to recognize that there is an enmity-laden relationship between arts nonprofits and all the other charities.
And then we have to do something about it.
Nonprofit hiring… Consensus…check. Fairness…check. Zombie interviewers…GRAXAGHZ.
Employees are your biggest asset as an organization. Nonprofit employees hold greater importance. Relationship-building through positive, passionate human interaction are better portents to success than technological advances.
And yet, too often the hiring process – especially in communities seeking “consensus” or “fairness” – has devolved into “Interviews in Zombieland.”
“Consensus” is not unanimity. “Fairness” is irrelevant when you’re seeking great people.
The group interview is quickly disintegrating. Every person takes turns reading pre-designed, pre-printed questions in the dullest drones imaginable. Your staff turns into a cast of Zombies in a badly-written, badly-acted play, and everyone uses the same dull inflection to every candidate.
And then, invariably, zombie staff members complain about the candidates’ dullness.
Nonprofit leaders: is your hiring process as undead as your results? And are zombie interviews the best way to show off your organization?
Flagship or Dreadnought: Regional Theaters in America
With the recent blog by Annah Feinberg currently making the circuit, it seems a good time to chronicle the regional theater “movement.”
1910-1930s: The “Little Theatre Movement.” Few paid artists, but it reflected a community need. Killed by the Depression/WWII.
1947: Dallas – Margo Jones founded Theatre ’47.
1950: Washington, D.C. – Zelda Fichandler founded Arena Stage.
1959: Tyrone Guthrie placed an ad in The New York Times. Asked if any communities wanted to sponsor a resident theatre. 1963 – Guthrie Theatre opens in Minneapolis.
But this did not become a “movement” until the late ’60s when some plays moved from regionals to Broadway, turning many regional theater companies into minor-league baseball clubs.
People outside New York want to experience great plays relevant to their lives.
Unwieldy regionals often gauge success in the form of plays transferring to Broadway.
Irony or disconnect?
Neither artists nor nonprofit arts organizations are entitled, they just act that way sometimes
Every kid wins trophies.
There are two possible takeaways from this fact:
a) Trophies don’t mean much; or
b) Every kid deserves trophies.
Or both.
If a), then the result is that external recognition must be useless. Which means:
1) We reward mediocrity.
2) We foster cynicism to greatness.
If b), then the result is that external recognition must be unrelenting. Which means:
3) We reward everything.
4) We foster entitlement to greatness.
I have rarely seen folks as entitled as those in the performing arts today, at least here in Seattle, the epicenter of externally-based self-esteem. I’ve known dozens of actors who have insisted that they’re too talented to audition. Dozens more of nonprofit arts organizations feeling too holy to follow a mission.
Consider: Oscar Isaac had to audition for the role of Llewyn Davis. It wasn’t handed to him.
This. Happened.
Years ago, I dined with a board member/lawyer who’d given $100,000 of unrestricted funding for four consecutive years. Ninety miles from home. Nice restaurant. Just us two.
Asked for this year’s gift.
Silence.
Then, he said, “Now, why do you do all these plays for the n**g**s? They’re uneducated, unsophisticated, they don’t like us, and you’re just rubbing our noses in it?”
I wanted simultaneously to vomit, slug, and flee, none of which are socially acceptable responses.
Dad once said that using the bathroom is the most socially acceptable way to buy ten minutes. I bought ten minutes.
“It’s not my money. It’s not my money,” I chanted to myself for about ten minutes. “It’s for the company. It’s unrestricted. We can spend it any way we see fit.”
Came back.
What would you say and do?
“That Happened to Me!” – Can nonprofit arts organizations figure out a way to quantify personal meaning?
I wrote a strange and pretty bad play.
One scene took place at the World Trade Center in the wee hours of September 11, 2001. A financial analyst for Cantor Fitzgerald berates a brown-skinned file clerk. The scene was meant to be darkly humorous and uncomfortable.
After one public reading, a woman screamed about that scene.
Tearfully, she raged, “That happened to me! The World Trade Center happened to me!”
I asked, “Oh, were you in New York?”
“No. Baltimore.”
While social impact nonprofits exhibit myriad ways to show purpose beyond basic human needs, arts organizations struggle to show any measurable societal value. However, if we can quantify personal meaning with specific results and stories of value, then we can become successful charitable organizations.
For in every “That happened to me,” the impact is genuinely meaningful.
Positive Signs in the Nonprofit Arts Community
Some nonprofit arts organizations are making new, better choices – and it’s working.
One theater company, eschewing the managing director template (part operations director, part fundraiser, part CPA), has chosen to split the duties. They’ve brought on a strategy director to handle outside duties (fundraising, speaking, lobbying) and strategic plan piloting. The operations and financial duties lie with the general manager.
One children’s arts company, eschewing the arts-revenue template (part production house, part arts education academy), produces in the same facility as several social service agencies. They incorporate the other nonprofits into everything they do, produce a specific style of performance art that speaks to the values of their ethnically, linguistically diverse neighborhood, and gauge success by how well all the nonprofits are bettering the lives of their constituents.
New prototypes. New measurements. New realizations. Excellent work.
“Here we go, Rembrandt, here we go!” – Fans (who cheer) or audiences (who hear)?
“HOLD THAT NOTE! HOLD THAT NOTE!”
“PUSH ‘EM BACK! PUSH ‘EM BACK! NOW STEP, TOUCH, JETÉ AND HOLD!”
“S-C-E-N-E, SCEE-EEENE, SCEE-EEENE!”
Years ago, I sat in the third-to-top row of an NFL stadium with an artistic director friend. First game of the season. Even people behind us were screaming their heads off and waving their foam fingers. And the experience was more personally meaningful to them than many arts experiences I’ve loved.
Sports fans no more control the action of a game than arts fans do a play or concert. But they’re encouraged to be blitheringly engaged. And all too often, arts fans are encouraged to sit back and relax. Or shut up and listen. Like a lecture at school.
We wondered, can arts organizations find ways to encourage blithering? Or are we too clubby for that?
Cue the heavenly chorus…your nonprofit arts organization will never be hungry again!
Acting is not about performing; nor is painting about artistry; nor is music is about musicianship; nor is dancing about prowess.
Similarly, nonprofit arts organizations cannot be about exhibitions/performances.
The impact of the arts can be quantified. There are myriad studies. But the impact of any individual arts organization is not an equivalent discussion. Each organization must provide specific impact, or better, impact2.
Impact2 is the impact’s impact. As a food bank provides positive impact to a concrete number of families, its impact2 may be the number of households that escaped poverty from having had the gift of food in its worst times.
Many nonprofit arts organizations often define themselves by the quality of production. No surprise, then, that so many struggle to reach new donors. Quantify the impact2 of your nonprofit, and you’ll find your Grail.
Nonprofit Arts Lingo Ready for Expunging…and Words to Use Instead
Subscription Season Tickets, Packages [“Subscription” = “Newspaper” = “Dying Industry”]
Audience Fans, Partners [Audiences hear, fans root, partners invest]
Watch Participate, Enjoy, Love [See “Audience”]
Us, we It, the [“We” requires “They”]
“Play a part” [Any non-cutesy non-cliche]
Spectacular, incredible, fabulous, gifted, talented, great, wonderful, delightful, fantastic, poignant, moving [Overused and does not describe the event – unless literally (big 3-ring circuses, for example, are spectacular); it also insults readers by dictating how they should feel]
Witty Funny, hilarious [“Witty” makes some feel as though the work is above their intellectual pay grade]
“Lost Ticket Insurance” [No one cares]
Engage, enlighten, educate Brighten, connect, involve [see “Witty”]
“Something for Everyone” [Never use this phrase. What your organization does is NOT for everyone; therefore, it’s a lie. It also implies that your organization is profit-seeking. Who would donate to McDonald’s?]
Where’s a good Medici when you need one? Oh, right. They’re still here.
Art for art’s sake? Not so much. Want to be paid? Then there had better be a good story behind it. Or you’re famous. Or you’re dead.
Artistry is everywhere we look… in everything we touch. Look at your desk right now. Find something with no art.
You can’t. Even paper clips have shape, color, and light.
But is a paper clip for its own sake? No. It clips paper. But it is no less artistic.
In 2014, art for art’s sake is aesthetic dogma meant to encourage artists to focus on their own thoughts, as though purity of thought is equivalent to purity of meaning – and, therefore, audiences are irrelevant to art.
Quasi-utopian Codswallop.
Whether commissions are contracted or in the open market, successful art requires patronage in the form of a sponsor, buyer, or audience.
Hiring 101: Post. Respond. Inform. Interview. Inform. Interview. Inform. Hire. Inform. (PS: No Taleo necessary)
From O’Reilly/Pfeffer’s “Hidden Value:”
Hiring based solely on job skills can be short-sighted and expensive.
If someone doesn’t fit the culture, either the culture will change or the person will leave.
If your company’s hiring practices are “industry standard” (by definition, middling), then its values are equally unimportant, no matter what greatness your company ostensibly performs. “One chance at a first impression” and all that.
- Post job.
- IMMEDIATELY upon receipt, respond to email applicants with receipt; (mail or in-person applicants with postcard).
- Managers: Compile three categories (Yes/No/Maybe).
Move “Maybe” into “No.”
Inform “Nos” of status. - Interview “Yeses.”
Inform “Nos” of status. - Final interviews.
Hire.
Inform “Nos” of status. - Hire qualified (better: overqualified) and creative, not skillful and capable.
Look for values, not education.
Hire to fit, not proficiency.
And whenever possible: hire someone better than you.
2014. A year of art awaits you. Predictions for the year to come…
A company you’ve never heard of will produce something special.
A famous company everyone knows will close down.
A play will shake your long-held beliefs.
A concert will move you to tears.
You’ll stop short and get lost in a painting.
You’ll attend an amazing performance that can’t be pigeonholed as theatre, dance, comedy, or music.
Another new study will come out proving that kids with in-school arts education will enjoy great test scores, not join gangs, and will have a tendency to be drug-free. Their community participation will be more extensive, and they’ll be likelier to enter college.
Despite that, in-school arts education will disappear.
Great arts nonprofits will find universally-accepted ways to quantify impact and will receive all the funding they require.
I wish you love, luck, and success in 2014. Oh yes, and art.
‘Twas the week before Christmas and all o’er the glade, the galleries, ballets, and playhouse got paid… And the board chair exclaimed, ere he took his tax break, “Merry Christmas to all, and to all a good take.”
Ebenezer Scrooge and George Bailey…
Langston Hughes and the Four Plaids…
Handel and the Mormon Tabernacle Choir…
Christmas in Wales and Christmas in Macy*s…
The Mouse King and the Sugar Plum Fairy…
Your local carolers, buskers, jazz artists, ornament craft-makers, and pageant participants know what it’s about. Joy, family, charity, peace, and goodwill toward mankind.
And a boatload of cash. The Holiday-Cash-Cow sings, “Moo-moo-moo, moo-moo-moo, moo-moo-moo-moo-moo.”
“But we pay for the stuff no one wants to see all year with this one production of ‘A Christmas Carol!” said a board president pal of mine.
And as one managing director famously said, “We do the mission all year long. Except Christmas. That’s where we try to make money.”
Last I checked, one of the morals of “A Christmas Carol” had something to do with, what was it again…?
If I ignore you, then you don’t exist! Hey! Why are you still there, existing???
Recent impressions from an interview for a development director position at a well-known theatre.
Managing director picks me up at airport. Interviews me in car. First impression… he drives, in more ways than one.
Dinner for eight. Laughs, rowdiness, and Malbec. Second impression…an uninhibited group.
The play. Well-performed one-man show. Third impression…no money.
The interview marathon. 6½ hours, no breaks. Fourth impression: disorganized thinkers.
Complete silence. For over two months, despite leaving message for managing director on his cell. Fifth impression: brutal place to work.
Sent email taking myself out of the search. Direct quote from board president: “I don’t know the protocol in the nonprofit world. In the engineering world, where [we] are both from, you don’t hear anything unless you are hired.” Final impression: they’re horrible at human relations…must be why they have no money.
How to raise first time gifts (or any meaningful donations)
Step One: be a good person.
Gather information.
Discuss prospects.
Research history.
Decide who.
Decide whose.
Get introduction.
Meet prospect.
Discuss organization.
Change perspective.
Make friend.
Seek advice.
Send news.
Continue contact.
Explore potential.
Seek advice.
Send news.
Continue contact.
Select target.
Add 20%
Seek advice.
Discover favorites.
Send news.
Continue contact.
Select when.
Select who.
Select where.
Select why.
Schedule meeting.
Inform purpose.
Rehearse meeting.
Rehearse ask.
Refine ask.
Attend meeting.
Renew relationships.
Discuss challenges.
Embrace confidence.
Ask.
Hush.
Wait.
Listen.
Respect decision.
Accept donation.
Accept non-donation.
Thank donor.
Close meeting.
Conduct postmortem.
Discuss ramifications.
Contact donor.
Seek advice.
Send news.
Continue friendship.
Thank again.
Get referrals.
Repeat often.
People give to people – not buildings, causes, or database programs. First time gifts require relationship development. For best results on how to develop relationships, see Step One.
Which core is the real core?
Nonprofits are all experiments of arrogance. None are finished products, nor should they be.
Championing a cause is an onion-peeling exercise of conceit, intended to solve hard problems.
Conceits share a common trait. When closely-held, personally-motivated core values are involved, arrogances can serve as both driver and hindrance. And they can save or kill your nonprofit.
Let’s say that you have a colleague who believes that the intention of a program speaks to the heart of the mission. But the program is costly, inefficient, and glorifies the colleague more than the nonprofit.
Your colleague’s investment is in a program that isn’t serving the mission. But your colleague is a charismatic leader who believes that the program just needs more of the organization’s limited resources to work.
Attack the program (and your colleague’s values) or let it be?
