2011 Summer Festivals and Live Music Ticket Sales Strong

We’re barely halfway through the 2011 summer festival season, but already good news is coming from around the US. Attendance is up. Demand is strong. About time.

Festival attendance is particularly strong so far. The National Arts Festival attendance this year is up 7.45% from last; the Oregon Bach Festival had record attendance. The Country Music Festival in Nashville was a sell out. Coachella had record turn-outs. The Utah Arts Festival attendance went up by over 15% from last year. Other festivals are showing good ticket sales for dates later this month and into August. From rock to country to classical, from top name performers to town square bands, America is turning out for live music this summer.

Are we music and arts hungry? For sure. Are we longing for good and enjoyable times? Absolutely. Anyone who thinks great music of any genre or live arts of any type is an unnecessary frill is wrong: it seems we can go without for a long time, but finally, finally, we have had enough silence! People have saved up for tickets and have put off other expenses in this recession so that at last they can get their live arts fix. Music heals. Festivals celebrate. And in a dour economy, summer live arts under the stars give us something to cheer about.

Free festivals are packing us in across the country – no surprise in this economy, with this level of pent up demand. And low cost tickets, flexible pricing and ticket bargains are helping paid events post better numbers than last year. So yes, price does matter, and even the affluent are bargain shopping. Time will tell, but the growing aversion to surcharges, extra ticket fees and hidden costs seems to be growing, and if anything this factor is the one significant negative impacting ticket sales this year. Concert buyers have had it. I have to believe that sometime – sooner rather than later – the entire ticket surcharge factor will blow up, and the elimination of surcharges will be a huge incentive to a real resurgence in ticket purchases.

By the way, if you are heading to the beach or forest and want a good industry book this summer that deals with ticket surcharges and other insider stuff, grab a copy of Ticket Masters: The Rise of the Concert Industry, and How the Public got Scalped, by Dean Budnick and Josh Baron.

But don’t let it get you down. Buy a ticket to a concert. Sit under the stars. And be revived with live music this year.

The New Nonprofit World: Farewell to the Little Groups

Last Thursday the IRS finally published the list of non-compliant nonprofits. Those are the organizations that have – despite repeated requests from the IRS – not submitted their Form 990s. And presto, the nonprofit world in the US has shrunk by 275,000 organizations. You can go to the IRS site, tab to nonprofits, and download the list by state, either in PDF or Excel. Or you can go to Guidestar and for a small fee download the whole bit.

I took the time to download a cross sample of states, and the finding that has immediately leaped off the page at me is how our concept of nonprofit community groups will change, fundamentally, with this clean-up. Gone are thousands of small fraternal and veterans groups. Gone, too, are hundreds of local sports leagues, youth booster groups, on-again-off-again theater troupes, and others that have been a part of nearly every community in America. Veterans groups, gone. Women’s groups, gone. Religious-affiliated civic groups, gone. Reading the list is like reading our history, and a whole lot of America has vanished.

I know that the vast majority of these groups haven’t been functional, and I know that cleaning up the non-profit rolls has been long overdue. But I mourn at the ever-so-vivid loss of the small little groups that once really was the fabric of care, compassion, outreach, youth, and culture in towns, neighborhoods, and cities across our country. This really does show that groups can be too small to live, too small to be a nonprofit. We’ve tipped. Something fundamental has happened. Yes, it is possible for some of these groups to wake up and come back to life, but I doubt many will.

As I look ahead to what is an almost inevitable movement to lower the deductible amount allowed for charitable contributions, possibly to less than 30% of the contribution, I wonder how many more groups will be added to this list. The IRS is reportedly rolling out more and more groups onto this list every month, and when incentives for charitable giving drop for practically every American, you can bet that many more small groups that lack the fundraising expertise, the circle of donors, and the marketing clout to get their message out will find themselves on this list.

We may be heading into a next generation nonprofit world, in which small ventures – joining together with your neighbors to form a youth sports league, for example – no longer works. In which the dancer/choreographer with a unique vision and aesthetic is unlikely to form a new company from scratch. In which the after school arts program is less likely to form. In which the civic groups who raise a few hundred bucks by selling hotdogs at the high school football games to be able to give that money to local needy, will be less and less a part of our life.

I remember interviewing a state legislator a few years back in the process of doing a cultural development plan. He had one bottom line: close the gates to any new nonprofit start ups. Get rid of them, he said. They are a menace, a problem. They all come looking for money.

But here we are, with a government that needs to rid itself of services and needs a lot of services privatized – logically the ranks of what is now 275,000, and counting, fewer nonprofits. The good news for those that continue to exist is that there is a ton of work to do out there. And the good news is that there will be more room for smart entrepreneurs to license the hotdog stands and do the recycling and pick up the trash on the side of the highway and the countless other things that small nonprofits have done for decades. But I’ll miss them, that part of all of us that has made us believe in the American way of giving and helping and caring and doing in 275,000 small, unobtrusive ways. Won’t you?

A Crisis of Audience

We have an audience crisis on our hands. More grim news in the performing arts field this week comes from the New York City Opera, which is leaving Lincoln Center for someplace, somewhere, sometime. It wants a smaller hall which it hasn’t yet found, and it wants to eliminate fixed operating expenses. Why? On any given great performance evening, it can only count on what is reported to be an audience so small that it fills no more than 40% of the hall.

Sound familiar? My blog on the Philadelphia Orchestra noted that in their case, too, small audiences are at the root of the problem. In too many American cities and for too many great American live performing arts institutions, ticket sales are now making up the decided minority of overall revenue. And that’s the most serious problem in the field today. Without regular, repeat buyers – and I’ll take any kind of repeater, not just a subscriber, but anyone who cares enough to come back a couple of times a year – organizations can’t build loyalty. Without loyalty, there is no real personal identification, involvement, and investment. And without that personal identification, there is no annual gift. Without annual gifts, there are rarely major personal gifts, and even more rarely bequests and planned gifts that have long been the foundation for endowments and special programs.

So eventually, smaller and smaller audiences spell fewer and fewer donors. This is particularly critical as we move toward 2012’s Federal proposed cap on itemized deductions, including those for charitable contributions, at 28% of personal income. Not only will this have a highly negative impact on larger gifts from more affluent donors, it will place the burden on more smaller gifts from more people who will be essential to the survival of nonprofit arts organizations. That means we really have to hustle to get more repeat ticket buyers that will make a greater quantity of albeit smaller gifts.

A lot of what is keeping people away from ticket buying is cost; even a musician in the New York City Opera orchestra was noted as saying that he didn’t blame folks for not being able to afford tickets to the organization that has employed him. He’d probably just go out for a beer, he said, if he had any extra change. A beer out is about as much as many arts lovers can afford these days, and that’s flat-out tragic.

But others are fortunate enough to be able to pay the price of admission. And right now, we have to connect to them, woo them, and win them. We need an audience that can and will pay, will come back, and will stay. That means we have to find them, first; then win them.

Typically, development officers are the ones that put stock in donor research. Here at ArtsMarket, we believe in starting prospect research much earlier than in the development office: you’ve got to find likely markets that will be able to buy tickets, and begin with getting them in the door. That takes a lot of research and analysis, and prospecting that is pinpointed.

Yes, social media and mobile-marketing and advertising can do a good bit to get the last-minute buyers to your box office. Both are essential in connecting to younger buyers, and particularly to impulse buyers. But maybe institutions that budget too little for arts marketing – arts marketing has remained perennially underfunded – need to think again. We know of too many organizations that have just been kidding themselves into thinking that more and more (even all) of arts audiences can be won through low-cost social-media based marketing, alone.

This has to be the time when solid research-based prospecting and communications that can be accurately predicted and managed comes into play. We have to build a new pipeline of prospective audience loyalists. Those who take marketing seriously and do it comprehensively stand a chance of winning. And right now, we need a field-wide commitment to winning – to winning people back and into halls for great art. Before for others, like NYCO, it is too late.

Arts Marketing and a Bankrupt Orchestra

Now we know what makes the perfect storm that topples arts organizations. Yesterday in the Philadelphia Inquirer, Philadelphia Orchestra Board Chair Richard B. Worley laid it out. The story is classically cautionary.

”Today, our unrestricted endowment is nearly exhausted, our emergency fund has also been depleted, and our cash reserve has fallen to $3 million. Absent additional funding, we will run out of money soon.

“Our costs are too high, but the basic cause of our financial problem is declining revenue. The audience is the lifeblood of the orchestra, providing ticket revenue and a vital donor pool. But over the last two decades, attendance has declined from 250,000 to 150,000 annually, and half of that decline has been in the last five years. As a result, ticket revenue has declined to only a third of expenses, and donations have fallen to half the level of other major orchestras.

“For years, our costs increased as revenues declined, and our operating deficit is expected to reach $14.5 million this year. In the face of such deficits, we drew down our unrestricted endowment and, as that dwindled, raised $15 million in emergency funding from the board and a small group of donors.

“Second, the orchestra does not have $140 million in assets to meet obligations. The orchestra and the Academy of Music together have $140 million in restricted endowments. We are limited by law and donor restrictions to spending only the income from endowments, not the endowments themselves. And spending the endowments, even if allowed, would be a path to ruin, shrinking income and our ability to attract endowment gifts.”

The absolute centerpiece of this is the second paragraph. The orchestra has lost on average 10,000 ticket buyers a year for the past five years, meaning that earned income has fallen to only represent a third of all revenues. So, you ask, can’t this be the new normal? Can’t organizations survive just fine on a 33% earned-66% contributed revenue split? I’ve actually seen plenty who are attempting to say this is the new model of health.

But it isn’t, and Worley’s well chosen words say why. When audiences get too small, they don’t provide the lifeblood or pipeline to keep an organization healthy. In any given year, there is always huge audience attrition. People die, move, put their leisure money elsewhere. As a result, every organization needs enough of those casually interested ticket buyers to survive the attrition and stick around, ideally now as a more regular attender, eventually even as a subscriber. And there have to be enough of those regular attenders who stick to become new donors, to replace the donors who every year also leave through attrition. If the system has too small a base, you are mathematically out of luck. For example, draw your attender triangle on its base, then split it into four segments. Label each segment from the bottom up as follows: casual, repeat, sustained, supportive. How broad is your base? Broad enough to make sure that top section is large enough to do its job?

In the new normal, that top section of the triangle now has to churn out – inspire, win, give, cause to give –the staggering portion of the budget that now has to come from contributions. How realistic is that when the base is shrinking faster than ice cubes in July?

A lot of people will blame the marketers for not doing their job, and as the musicians’ leader John Koen correctly points out in his own letter to the Inquirer, crucial marketing and development positions at the Orchestra have long remained unfilled. No doubt, as so often happens, this was in an effort to save salary costs – but at the peril of generating essential revenue, and even more so, at generating that base of the triangle that has to be rebuilt.

Yet, there is a far, far bigger issue at stake here. Quite simply, marketing has to emerge on such a scale, with such ability to change consumer behavior as we have never seen before to save this orchestra and hundreds of other arts organizations and entertainment presenters around the country.

The issue is as much one for Hollywood and movie theatres everywhere as it is for symphony orchestras: Consumers have changed the way they spend their leisure money, and techno-apps gains have been live entertainment’s loss. Just last week, I took a look at some recent household spending trends with data available from the Bureau of Labor Statistics. I chose three variables: entertainment tickets and admissions; spending on audio-visual equipment, and a relative constant – spending on women’s apparel.

The game changer, of course, is audio visual. Our insatiable thirst for new apps, new eReaders, new tunes and tablets and a million new games has grown and grown and grown. That’s just fine as long as household resources keep growing and growing along with it. But say you only have so much money to spend – ah, the recession – and then say you spend more of it on new gadgets than ever before. Something suffers, right?

Notice how closely spending on clothing and entertainment parallel each other all along the way, until suddenly at the $200,000 + household earning level, entertainment springs loose. But really examine how vastly different spending is on apps and stuff: look at that huge chunk of household money.
This relatively fresh data (it was released in October, 2010) spells out the new normal for all live entertainment: you’ve got a far smaller slice of your consumer’s budget dedicated to you than ever before. Given this, how realistic is it to expect to build the bottom of that triangle to the level needed?

When we talk about a structural problem in the arts, it begins right here, not just on the balance sheet at the Symphony. Perhaps, if the recession vanishes, there will be more household money, more ability to blur the stark numbers above. But a blur is all it will be.

Only with herculean marketing efforts to pry dollars away from the newest cool stuff are we likely to survive. Only with equally herculean investments that insert the arts into technology to create new revenue streams will the badly needed new revenue sources really open up. The entire consumer system around entertainment has to change. And somehow, we’ve got to make that happen. Or what we see in Philadelphia will just keep playing and playing, coming sadly and soon to a city near you.

So take a good, hard look at doing marketing the right way. Just how aggressive does your institution need to be to chip away that household spending on apps and tablets and move those dollars into the fees and admissions column? Just what needs to happen to ensure that you have the audience lifeblood that Philadelphia so needs and lost?

The Grateful Dead and the Tapers: A Distribution Lesson for the Arts

I had the chance to tune into a great webinar yesterday led by Guy Kowasaki, the former chief evangelist at Apple and author of the new book Enchantment. The book is about how products and their marketers succeed in really enchanting audiences (buyers.) One of his examples was too good not to repeat. And it is a great follow-up to last week’s blog on how newly increased cable distribution will change the way we consume the arts.

Many of you may know how big the Grateful Dead community has been for all these decades. You know the ease of downloading recordings of their vintage concerts. What Kowasaki focused on was how the Dead fostered that community and all those recordings by creating and championing free seating for the tapers – the bootleggers and fans who got it all live. He noted that while everyone else works so hard to ban tapers and to control the distribution of concerts, the Dead’s free taper sections created – and continue to create – a lot of enchantment as the music and events live on and on.

I got a lot of feedback and emails on last week’s post about new distribution mechanisms in the arts, and a number of skeptics wrote me that we have to protect the live event and especially the artist’s ability to be heard and seen at the live event. (There seems to be some sentiment that too much distribution of classical arts via cable could somehow harm classical arts?) I love live events, witnessing art first hand. But maybe these guys had it right all along when they openly encouraged the free distribution of their work to make it live for everyone who couldn’t be there. What would happen to audiences if there was more of this, using today’s technology?

There’s a lesson there. Face to face interaction with content is what builds audiences far more than all the PR and marketing in the world. Face to face interaction – sure, including via digitized media – that is facilitated by people just like you and me, who think enough of the content to pass it along, is even more likely to build audiences. Too bad that 99.9% of the artists out there have contracts forbidding the very thing that, as Kowasaki puts it, is totally enchanting in the simplicity of methods to build and keep thousands of happy fans. Think of it – a taper section at the concert hall. A taper section at the theatre, the opera. YouTube content that never stops, that is fundamental to audience growth. Encourage distribution, facilitate it, champion it. And watch the line at the box office grow and grow, just as it did for the Dead.

A Way Forward? Rethinking the Distribution of the Arts.

Following so closely on the heels of the Philadelphia Orchestra’s bankruptcy, the sad news this week is that the wonderful Intiman Theatre Company in Seattle has gone dark for the rest of the season.(The hopeful news is that its board hopes to raise enough to re-open in the fall.)

I found the Intiman news that crossed my desk yesterday to form an interesting juxtaposition with a news release I received from Fathom Events. Fathom is the HD movie distribution company that brings us the Met at movie theaters around the country. And lately, its arts product has started to expand. This spring, for example, there are New York Philharmonic and L.A. Philharmonic HD concert/
productions. And they are also presenting – in movie theaters – two great Broadway productions, Memphis, and the Importance of Being Ernest. Locked as we are in this interminable spring of miserable weather, the prospect of Saturday or Sunday afternoons at the cinema over in the mall sounds pretty nice. And the ticket prices are painless, certainly compared to Broadway.

What Fathom is offering with its slowly expanding fine arts schedule is just the beginning little stumbles, I think, toward what could and should be something much larger – something that could eventually be a revenue generator for the struggling theater companies and symphony orchestras of this country. I have problems with Fathom because it is such an insiders-and-in-the-know thing. There is no marketing outside of Fathom or the Met or other institutions’ email lists, and it is so hit or miss. Just because my local cinema airs Fathom’s Met broadcasts is no guarantee I’ll get to see anything else. For example, I would love to catch the LA Phil’s all Brahms concert the first week of June, but no luck.

Let’s imagine, though, that the marketing was much better and that the product line up was there. One week the Met, the next week LA Phil, maybe the Chicago Symphony Orchestra the week after, maybe New York City Ballet the next, and so on. Pretty great, right? And imagine, too, that you didn’t have to even go to your local theater. As of this month, you don’t.

Roku, that little black box you can buy for $59.99, now lets you have access to free and unbelievably low-cost classical arts programming via its new ClassicalTV channel.(http://www.classicaltv.com) When I say low-cost, I mean it. You can catch the opening night gala from the 2009 Salzburg Festival with the Vienna Phil for the rental cost of $1.99 for 90 hours. (I know what I’m getting my mother for Mother’s Day.)

So we are on the cusp. Imagine making Saturday night popcorn and choosing what orchestra concert you want to see. Or spending Tuesday night’s pizza dinner in front of the opera broadcast of your choice. We are right there.

What will this mean to the repertory theater companies and the symphony orchestras and the ballet companies in your city and mine? The challenge and implications, and the prospective benefits and losses are all huge. For the finest – where the artistic product can stand up to the scrutiny of the screen – the benefits are incredible. For the others, it is clearer than ever that audience development will have to focus on the social and community aspects of attendance. (Why buy a ticket to an iffy production when you can gather your friends around, and enjoy a great evening at the Royal Shakespeare for about a dime a person? Clearly, the social aspects of actually “going” will have to be stupendous to balance that five-star event at its ten-cent-per-person cost.)

If this takes off – and I bet it really will – our entire arts world will be remade in front of us. We’re going to be rethinking everything about who our audience is and why people attend. And arts organization leaders everywhere are going to wonder anew what the opportunities and implications will be for product development.

The real excitement here is the chance to rebuild the market for the arts. As ever, the old question of “What is this, a pencil or a communications device?” is fresh. We may not be going to “live” performances and our performing arts centers may have to rethink their business models. But for those arts organizations that see opportunity through a new distribution mechanism and for the audiences that love arts, this is the dawn of a golden age, not the end of an era that one might think from all the recent bankruptcy news.

If this isn’t a blip, just what is it?

The news about the bankruptcy filing that will be made in Philadelphia court tomorrow by the venerable Philadelphia Symphony Orchestra has stirred angst around the globe. But the bigger news is hidden in the comment made by the American Symphony Orchestra League’s Jesse Rosen: “This is not a blip.” No, it isn’t, and that’s the real story. So far this year, both Honolulu and Syracuse have seen their orchestras go bankrupt. The eyes of the arts world have been on Detroit for months now, waiting to see if the inevitable will happen there as anticipated. Louisville’s fine orchestra filed for bankruptcy in December, not even making it to the New Year, bailing before those critical last few weeks of the calendar year when big donors in search of tax benefits often save nonprofits. Rumors swirl that the Indianapolis Symphony Orchestra, another wonderful ensemble, may not be far from taking the big step. And there are many other cities large and small throughout the United States where business and civic leaders, board members and donors are having plenty of sotto voce conversations about just what to do when the inevitable hits their back yard.

Bankruptcies aren’t new to the performing arts. Every recession in recent history has forced a few organizations that are under-endowed and over-contracted to face the music. Theater companies, ballet companies, opera companies, orchestras and performing arts venues themselves have all been victims.
But now that we all see the world in the post-Wisconsin-public-employee-union-pension world, different questions are being asked about the long term viability of performing arts institutions.

This is an industry that is firmly union based. When they are asked to save performing arts organizations from bankruptcy, many donors know that what they are really being asked is to maintain union agreements – often agreed upon in far rosier days – and in some cases to preserve or potentially bail out union pension funds. With the Philadelphia Orchestra – as with most of the organizations that have gone to Bankruptcy court before and those that are contemplating the move today – overly generous union contracts that can’t be met in today’s economy are the central issue. Sound familiar?

If you read last week’s post to this blog – and a lot of you did – you’ll remember that we’re thinking a lot about the sea changes impacting the arts. So rather than look at the Philadelphia Orchestra bankruptcy as just another blip, we’re pretty convinced that it is potentially, tragically, better described as a “new normal.” Simply put, too many contracts have promised too much that can’t be met. Too many pensions are underfunded, and depend on the continuation of current generous contract agreements to fund past agreements. Also, endowments are restricted in purpose and can’t be drawn down to meet crises. (Though, truth be told, plenty have been borrowed against steeply enough to cause their own set of problems.) At the same time, performing arts halls that have also granted their own unions lavish contracts – such as the Kimmel, the home of the Philadelphia Orchestra – need to charge every penny possible to stave off their prospective bankruptcies. Operating costs are through the roof. For large systems of performing arts organizations and their halls, the performing arts financial model is barely working, and only for those with the very largest endowments.

At ArtsMarket we’ve been increasingly asked to examine solutions to these developments in many different markets. Business leaders who are increasingly shaking their heads and refusing to bail out individual institutions are seeking larger, systemic adjustments. We’ve heard from many – corporate leaders in particular – that they’ve had it. Many understandably worry at the signals they send to their own employees when they step in to bail out arts union jobs providing six figure wages and generous pensions for jobs that often allow for or even further additional earning opportunities at universities and conservatories. Politicians feel the same way: How can tax payer dollars go to bailing out private sector union workers when public sector unions are up against it? Donors feel it, too. When institutions as venerable as the Philadelphia Orchestra declare bankruptcy – potentially making it possible to liquidate endowments that were never to be liquidated – why would any individual of means write that seven or eight figure check for an endowment meant to keep organizations safe forever? Why not give those dollars to something more pressing, more immediate, and possibly more honest in intent?

Are there solutions to this mess? Sure. But just as the citizens of Wisconsin have learned over their season of public employee union battles, the adjustments are nasty business, no matter what side you are on. First, you have to face reality, hard and uncompromising as it is. As the old saying goes, you have to raise the dragon to slay the dragon. One of our field’s many dragons is that we want a mid-20th Century performing arts system in a 21st Century world. We don’t want the pain of recognizing that our consumer tastes, interests, budgets, and technology have so dramatically and fundamentally changed our arts consumption and behavior that we aren’t ever going back.

We’re living in a time warp of about 1975. Are we ready to live in 2011? Because if we are, and we recognize that this Philadelphia story is not a blip, we better get busy in rethinking the entire financial and operational model of the performing arts while it is still possible to restructure outside of bankruptcy court.

Privatizing Community Quality of Life: Coming Soon to a Community Near You

Imagine this scenario: by 2020 your parks, your performing arts centers, your community art gallery, your neighborhood community centers, your soccer fields, your local walking trails, your zoo, maybe even your library will be operated on contract by businesses that find ways to make a profit. Those businesses will form the nucleus of a growing new economic sector of real profitability to America. Some of them will no-doubt even trade on the NY Stock Exchange. Too strange to believe? Not any more.

Cities across America have spent decades upping the ante on investment in livability as their mechanism to up the tax revenues they have received, and it has been a profitable strategy. Build the aquatic center, the new tennis courts, the lovely performing arts hall, the zoo, the botanical gardens, the gallery complex, the fabulous library and then reap the rewards with high property values and a desirable community that in turn attracts businesses and on-going economic investment.

Don’t accept any of it as a given any more. In fact, anticipate and get out ahead of the ways where quality of life investment has been and will continue to evolve.

In the past few months there have been all sorts of interesting RFPs for private management of civic assets, and the tempo seems to be increasing, not slowing. “Private management company sought for pool complex.” “ Private management sought for community neighborhood centers.” “Private management sought for arts centers.” “ Private management sought for operation of city parks.” “Private management sought for zoo.” Not “local nonprofit” sought. Not “local partner” sought. Private management sought.

It is a sea change, and it could be coming to a neighborhood near you before you blink twice. Cities are actively soliciting and searching for profit businesses to take on many of the quality of life assets that are not producing. Basically, they are dumping responsibility for under-performing or deficit-causing assets while still seeking ways to benefit from the property tax revenues all municipalities need to earn through having a comprehensive set of quality of life offerings. And in the process, they don’t want to become once again potentially saddled with bailing out non-profit operators that would stand to become permanent arms-length extensions of government. No more “hand over the arts center to a nonprofit that you’ll end up, in turn, having to fund to operate the arts center.” Cities have had it with that shell game. Instead contract a management company to run it and let them figure out how to craft a financially viable model. And they will.

What does it mean?

First, it means a real civic fatigue with the given assumptions of subsidy is a norm. Debt is just too big to be willing to enter into partnerships that are simply going to remove direct red ink from one column only to put the red ink – in the form of operating grants, for example – into another column. Frustration with subsidy-as-norm approaches is over the top.

Governments are looking for something better. They want flourishing, brightly lit and well maintained public amenities that work for the facility operators – who, ideally, make a profit – and that aren’t a drain on public resources. They want a win-win out of a dead-end.

What are the results of this trend?

Chances are, citizens will be paying more out of pocket to use those assets. Have you had to pay for your kids’ music or sports in school lately? Steep, right? Well, expect the same thing for swimming classes at the pool this summer or for art camp for your eight year old in August. Expect the same thing for the water color class you always wanted to take through parks and rec, and anticipate paying commercially competitive rates to rent the neighborhood center for your family reunion. Your library card? How’s $25 a year for one person or $40 for a family?

Really affordable “public” amenities are going to disappear. It will be pay-as-you-go. Your first graders’ soccer team will pay to rent the soccer fields. You’ll have to pay a competitive “for profit” rate to take your pottery class. Your community band will pay more to rent the performing hall.

The businesses that contract to operate these once-public assets aren’t stupid. They know they have to find the price points for their markets and still be able to turn a profit. There will be different prices at different locations. Looking for a way to save? You may drive to the other side of town to get a better deal than your own softball fields offer. Chances are, these new service-merchants will focus only on what can sell, and sell out. Rather than broadening the offerings, they may limit the camps, sports classes, arts classes and after school programs to those that have a large enough popularity to work.

Does it have to happen? Will it be terrible? Or, will it be at least be tolerable?

It probably does have to happen, because we as a society have let it happen. We’ve just assumed and assumed that more amenities can be added every year, no matter the cost, and that somehow it will all work out fine in the end. Too much red ink and too many required subsidies later, our elected officials are drawing lines in the sand.

As for how terrible it will be depends on your perspective. Chances are there will be some real messes out there. But maybe we are in for a complete redo in the way we think about delivery of amenities, and in the process there may be an entire new industry of service providing businesses that excel and thrive and grow to become a valued economic sector. Maybe we’ll find out that a lot of the amenities we thought needed subsidy don’t, and that we’ll all pay for those amenities we value.

If we look at it through the lens of the American entrepreneurial eye, the benefits can be huge. Why not? “Zoos, Inc.” as a Fortune 1000 company. “Arts –n-Kids” as a national provider of quality arts learning in summer camps at parks in 500 cities across the country, and growing. “Community Center, Inc.” as the leading provider of facilities and program management for neighborhood centers in the northeast. You get the idea. It has happened in higher education. Our community amenities could possibly move from subsidy rolls and taxpayer responsibilities to businesses with values that attract investments and shareholders. And, possibly, there is something attractive about seeing quality of life elements that had no determinable financial value potentially transformed into businesses that could provide share-holder benefits to thousands.

Stay tuned. I have a feeling we won’t have to wait too long to find out.

More than Creative Workers: Creative Exports

There’s much more to creating a creative economy than calling your city a friendly home for creative workers. There’s more to it than offering jobs that are (potentially) sustainable, more than a convivial lifestyle for the creatively inclined. There is even more than winning new visitors who spend money locally, though this is in itself significant. A centerpiece of economic development is exports – gaining new dollars into the economy from other markets that buy what you produce. As such, an export plan, strategies, and sales force are essential to the success of a creative economy. When I think about the arts councils of tomorrow, the roles of chambers of commerce and economic development agencies in fostering the creative economy, the first thing I think of is how all of these can work together to create a climate favorable for and even facilitating the export of local creativity-based products and services to create new revenue from outside the market.

Exporting drove the growth of the American arts sector in its early post WWII decades, though it was largely focused around the major institutions from the major population centers. In the heyday of recordings and tours, performing arts organizations and museums alike realized revenue from export sales far outside their own markets. (The recording contracts of old brought in real new dollars from around the country and around the globe. And the brand and image boosts from tours brought in more than audience and donor revenue: it rubbed off on other export products, opening up markets for other products from the same cities. Mayors and business delegations used to go along on international tours with their local orchestras or ballet companies for this very reason.)

Those days are largely gone. At the same time, hundreds of smaller cities and towns now seek to realize economic gain from creativity, and the creation and maintenance of such an economic gain needs more than cultural tourism to drive it. Today’s smaller markets need to export creativity, just as our big cities did a generation ago. We need a new generation of export strategies, developed and implemented at the local levels, to open up, expand, and sustain national and international markets for local creative work that includes everything from fine art to creative innovation – and is likely delivered via technology.

To get there, new training for the field is important. How does an artist move from a local market or a regional tour market to an international market? How does an artist entrepreneur connect to and supply an international buyer market? And how does this local export industry grow and thrive, so that the attention and money that comes into the market from the first sale leads to greater opportunities as your city becomes increasingly known for its creative products? What about protecting intellectual property rights for the creator?

There’s another interesting point to thinking about the exportability of creative work. Is it of the quality and uniqueness that claims interest and purchase from other markets? The ability to succeed as exports drove a huge number of America’s arts organizations to invest heavily in excellence in the decades post WWII. Local leaders rationalized making investments to attract top artists to take up residency in their communities and spend their careers on their stages so that they could compete and win market share outside their own communities, through the unique product to entice new visitors, recordings, touring and other outlets. (I have a hunch that a great deal of what was initially thought of as short term investment to build highly competitive creative (arts) product went on to become annual grant funding. Along the way, the original rational of funding excellence that had export value was lost, to be replaced with more locally-oriented definitions of excellence, outreach, or service, which I think led to a lot of the anti-funding sentiments out there from politicians and local business leaders who once supported arts funding.)

As it was a generation ago, it is time to raise the exportability issue. Other revenue options are constrained. Funding is diminished. Local markets aren’t big enough to sustain local creative economies. Yet creative product is highly prized and valued world wide, and America’s creatives take the back seat to no one. In this global economy, our collective creative economy goals should be to win ever greater international market share and benefits back into our local economies.

Creating an Economy of Creativity

There is a lot of talk, writing – and even the beginnings of policy development – around the role of creatives in our 21st Century knowledge-based economy. Readers of my blog know that I’ve been on the creative-cultural bandwagon, advocating creatives as a large and encompassing economic sector with a lot more clout that our current splintered arts and cultural community. Getting there, however, requires an understanding of creatives, and out of that understanding it requires a method of expanding the economy of creativity.

We’ve fallen down on describing creatives, I believe, and revert to an and arts-crafts construct of jobs. Creatives are too often thought of as artists who work in the for profit sector while artists are those who create in the nonprofit sector, a la the Richard Florida descriptions of the creative class from a decade ago. It was great break through thinking, but is still too narrow to build a value system that, in turn, fuels the economy.

So let’s dig into this for a few moments. What are creative jobs? What is the creative workforce everyone wants? If we can appropriately create understanding around the fullness of creative occupations, we are further on our way to creating a viable economic sector.

Yes, creatives are artists and designers and related professionals trained in creative methodology. But I’ll put forward that the largest portion of the creatives field are the knowledge makers who solve problems and identify new products through creative thinking. Creative thinking is a talent and a skill that can be taught and exercised, focused and directed. It is fueled by presence of other creatives, creativity, and exposure to the creative process. This is why communities rich in creatives get progressively more exciting in their knowledge-based outputs, and why everything from learning arts in school to wandering through a museum collection to soak in the aesthetic of hundreds of creative perspectives matter in fostering innovation.

I was interested that President Obama was in Silicon Valley last week to talk about innovation, calling for more innovators to fuel our economy. I think he (and we as a society) are all using the wrong language. Instead of calling for more innovation, he should have called for more creativity. Innovation is an outcome – not the root of – of creative thinking and creative problem solving. Always, creativity is the spark, the “I see this in a different way” that leads to and shapes the capacity of innovation. Our society seems to like the word innovation because it suggests a mathematical-scientific process or formula that can be captured and transfered to others. But without the creativity that is at the heart of innovation, there is nothing. Creativity is not a formula. It is a process, a way of thought.

We are societally unlikely to immediately accept and praise creativity as the engine of innovation – especially when economic and political rhetoric alike are prone to pit the cause of science -“wise investment” – against that of creativity – “we simply can’t afford it.” But imagine if we very, very broadly marketed and lobbied and changed thinking so that over time – five years, say – the American public becomes tuned to and “gets” the creativity-innovation partnership. That parents who want their children to grow into careers as scientific researchers or in management realize their kids must be well trained in creativity as a way of thinking and problem solving. That there is a broad spectrum of “creative jobs” – and that perhaps the majority of creative jobs are those that rely upon the talents and skills of creativity to do work that fits into entirely different job types or classifications. That there is a financial, economic value placed on the proven skill of creativity (not just on innovation) so that America wants to “race to the top” as a creative economy.

Budget Cuts: A Look Forward at Arts, Culture, and Public Funding

We have two choices (not necessarily exclusive) in facing the federal and states’ budget prognosis for arts, culture, museums, heritage, humanities, historic preservation, cultural resources and allied causes that range from public broadcasting to education to job corps. 1) We can write and call our legislators and do the best job of advocacy the field has ever demonstrated. 2) We can lay the groundwork for the future infrastructure of what I call the creative-cultural sector.

We must do both. We can no longer afford to just advocate. But when we do advocate, it has to be around a much larger cause. (More on that, below.)

There are two strategies required to lay the groundwork for a new future. We need to act on both. 1) We must become a unified sector. 2) We need to propose and advocate for an entirely new, unified funding approach that advances the entire sector as fundamentally valued by our economy and society.

To be a unified sector, we have to really and truly get past the distrust and the sometime-backstabbing that has kept this from happening over and over. The for-profit creative sector has to embrace the nonprofit sector and be in, one for all and all for one, and the non-profits have to sit by side with profitable and unruly creatives whose needs and priorities may be at odds with their own. On the nonprofit site, the historic preservation and heritage folks and the arts, museums, and humanities folks all have to look each other in the eye and pledge – and demonstrate – solidarity. No end runs. No peeling off to find safe havens elsewhere.

Then, we need to put forward radical, energizing ideas on how to reshape our creative-cultural funding infrastructure. The Department of Transportation has recently put forward a streamlining of 55 different programs into 5. We’re the creative thinkers: can’t we put forward a model that re-engineers our creative-cultural sectors’ funding in a similarly bold way? Why not go to Washington with a new approach in hand?

Now, on advocacy. It made me pause when I heard this week that the White House has proposed that arts and history be joined together in something called “Effective Teaching and Learning for Well Rounded Education.” Most people in our field have an immediate and angry response to this, feeling it prospectively marginalizes both arts and history in learning and in our society’s related view of their importance. It may be a semantics thing, even a small signal. But it may also point to the alliance we must form between arts, history, culture and heritage to preserve their importance in education and to preserve their value with the public at large.

Where will the leadership come for this to happen? The creative-cultural sector’s current splinters each have their own leadership and structures. It doesn’t seem like there is a lot of trust or common cause between them. Many leaders and agencies around the country are also (perhaps wisely) sitting as far below the radar as they can, hoping to go unnoticed in the current and projected budgetary mess. Perhaps this is a time for some of America’s leading foundations and private sector leaders to join together in a pledge to build a new creative-cultural infrastructure keyed to our 21st century, and then to bring their recommendations to the White House.

Where ever you are, we need you.

Reinventing America’s Cultural Support System

Imagine for a moment that the current tumult over federal and state funding for culture led to the opportunity to pause and thoughtfully reinvent a viable public support system. A silver lining to the dark cloud, if you will.

Would it look like the support systems and amalgamation of agencies our country invented – one piece at a time, over a half century ago? Chances are, not at all.

Anyone looking for good thinking about a new type of cultural system would do well to read Culture and Creativity in the EU Structure, a report that came out last September. It studies EU investment in culture over the past decade and makes a solid case for what it calls “a focused, flexible and integrated culture-based development
strategy” throughout communities and regions of the EU.

At its foundation for examining the value of investing in culture, the analysis uses the tri-part definition that the EU Cultural System has employed since 2006:

Core Arts Areas: Performing and visual arts, cultural and architectural heritage, and literature.
Cultural Industries: Film, DVD and Video, TV and Radio, Video games, New media, music, books, and press.
Creative Industries:Those industries that use culture as input but whose outputs are mainly functional, including architecture, advertising, design, and fashion.

Both the Cultural and Creative Industries are further defined as “Those industries that have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the creation and exploitation of intellectual property.”

In a few simple lines, this glues together all the splinters across arts, heritage, history, and combines non-profits and for-profit industries. Wouldn’t it be great if our cultural system was as straightforward and inclusive as this?

By taking this holistic view, the report (an outgrowth of a policy group brought together in Brussels in 2009), was able to examine both the traditional impacts of core areas – tourism and related economic value of attending and participating in arts and culture – and contributions to a larger economic future. The report points to the “the rich and dynamic contribution” that all three of the above areas make to the knowledge economy and innovation, and to employment creation and social cohesion. In policy, the EU is unafraid to talk about supporting creative entrepreneurs at the same time as supporting traditional institutions. They have equally important roles worthy of investment, and the report notes that even in the past two to three years, the ROI on supporting culture and creativity as drivers of broad innovation has been well documented and demonstrated.

It is in this area of arguing for investment in culture as an economic driver of wide ranging knowledge-based industries that the EU has come the furthest in making a case for a comprehensive approach to culture and creativity. According to the report, “Culture-based creativity is an essential feature of a post-industrial economy. Culture drives technological and non-technological innovation, stimulates research and optimizes the application of human resources in the development of new products and services.” Basically, it makes a coherent case that the knowledge-based economic system cannot thrive without a healthy cultural-creative capacity.

How refreshing. How non-defensive. Imagine if we could restructure, reinvent, and optimize our investments in America’s cultural-creative system along similar lines. Imagine if we could go beyond the economic impact studies we rely on so heavily to make our case. (Per the report, a research institute in the UK that focuses on the nature of innovation has documented the supply chain linkages between artistic and creative activities, demonstrating positive relations to innovation and showing that creativity and culture “play an important role in the ecology of innovation.”) We could and should do the same.

Imagine, too, if like the EU we recognized that artists are important leaders in demonstrating entrepreneurship and small business development. The report writes that “The creative sector makes many of these processes evident and communicates the positive attitudes, the excitement and the vision that provide the motivation for entrepreneurs.” Rather than seeing the arts community as off to the side of entrepreneurialism and small business development, the EU is increasingly putting artist out ahead as models to others.

Now let’s be totally honest. Culture is not all rosy in the EU. A great deal of what the EU has attempted in what it calls “social cohesion” through culture has failed to live up to expectations. Some, including most recently the President of France, say it has failed completely.

That said, there is much to consider if we in the United States were to advance our system of cultural support and related advocacy for investment as has the EU in its support of the three part cultural system and the related recognition of both culture and creativity as central to innovation. We hear a lot these days about “invest in clean energy” or “invest in new technology.” Wouldn’t it be great if we could similarly talk about America’s investment in culture and creativity? We could, and should. The first step is to reinvent our cultural support systems and structures, and bring the field together around a new vision and expanded purpose.
Culture and Creativity in the EU Structure

Cultural Funding in America: All for One, or Splintered Forever?

On March 4, 2011, the federal government will shut down unless the continuing resolution to fund the balance of this current fiscal year (which started October 1) is passed by Congress. This leaves three weeks before virtually every penny of federal funding for our American culture could well end. Today a whole new round of cuts were recommended by the House Republicans as they respond to pressure from their constituencies to go far beyond their earlier cuts. Those original cut recommendations would have peeled back about $12 million, combined, from the $146 million to the NEA and NEH that haven’t yet been spent this year. Forget that modest approach.

Today’s recommendations include the following immediate agency eliminations that would be effective March 4 for the balance of this fiscal year:

Eliminate NEH to save $71 million.
Eliminate NEA to save $76 million.
Eliminate IMLS to save $147 million.
Make the public pay to get into the Smithsonian, to save $254 million.
Eliminate the Advisory Committee on Historic Preservation to save $3 million.
Eliminate the Committee on Fine Arts to save $6 million.
Eliminate the Department of State Cultural Exchange/Education Program to save $363 million.

Plus, as the House Republicans have already recommended:

Eliminate $51 million out of the National Park Service (this would end Save America’s Treasures, Preserve America and National Heritage Areas).
Eliminate the Corporation for Public Broadcasting.

And, don’t forget that other cuts – such as the proposed elimination of the Economic Development Administration, Community Development Block Grants and more – will also have impact on cultural infrastructure. And that, needless to say, without Federal matching funds few states will find it necessary to maintain their own public matching dollars for arts, heritage, history, museums, etc.

No doubt that you have and will be getting emails and calls to action about this. But probably those calls are piecemeal, asking you for you to advocate for one or another of these line items while ignoring the whole, and that’s the problem. We a splintered sector that has never to date united around the concept of our culture, and now each splinter may be too small and too isolated from its compatriots to build a coalition to save federal support for any of the splinters.

We have a few weeks to save the half century-plus of infrastructure that modest as it may be demonstrates our public commitment to the breadth and majesty of our American culture, our shared story. If we stand splintered now, we may never get a chance to regroup. If we think that saving orchestras or contemporary dance is more important or that saving library funding and museum funding matters more than poetry, or that history and heritage and historic architecture should out trump theatre…well, how will it end? And even, let’s pray, that some of the splinters retain a bit for the balance of this year. How will we keep the whole of culture alive in federal funding next year?

Is Landesman Right? Is 2011 the Crossroads for the Arts Economy?

What if NEA head Roco Landesman is right? What if we have reached the zenith of demand for theater (you can insert live performing arts in general), meaning that supply should tighten? Landesman has been extensively blogged and re-blogged around the country since the New York Times quoted his comments Thursday. According to the Times’ Robin Pegrebin, Landesman spoke at a symposium on new play development at Arena Stage in Washington. He responded to a question about the financially struggling world of theater saying “you can either increase demand or decrease supply. Demand is not going to increase, so it is time to think about decreasing supply.”

Needless to say, he’s gotten most of the arts field good and hot under the collar: How can he even suggest less product? You’ll read that Landesman’s incendiary remarks have already led to loud calls for the NEA to start building audience demand. “Isn’t it the NEA’s job to build demand?” they cry. You’ll also read that indignant artists and arts administrators are jumping onto this with calls that every other funder – in addition to the NEA – should be back at the task of building demand – a task most funders have largely left.

So what is wrong?

Call it the upside down economic pyramid. The not-so-good outcome of too much supply.

1. We live in a market economy that shapes every thought and every purchase we make. We know full well that when there is plenty of supply, we can be last minute buyers and can get cheap tix. We can expect bargains. We can act toward the live performing arts like we act toward buying clothes: there’s plenty (too much?) to choose from and we don’t need to be motivated to lock in advance tickets.

2. As consumers in a recession economy, we live in the real world of diminished disposable income, adding the factor I refer to as “it better be really, really special or forget it.” I’m not even talking about the terrible impacts of unemployment and layoffs on people all around us, either, just plain old every day less disposable income. Looking at the impact of the strife in Egypt on the cost of fuel, I calculated out a hypothetical $1 more per gallon of gas at 30 gallons a week, and that comes in at $1,560 per year in less spending money. I don’t even want to think about what the additional cost of home heating will be. So at an average of $120 tickets per household for live events, that is 13 lost nights at the theater in the coming year.

3. But at the same time as we have less money to spend, there is more product available. Face it: the arts have been on supply overload for years. Today there is ton of supply – more to choose from, longer seasons, hundreds of events every year. There are thousands of arts companies presenting their work. And over the years performing arts halls have evolved to offer more seats than ever before, offering more performances per week.

4. Then, there is the cost of labor. One of the greatest successes in the arts field as a profession over the past few decades is that most of the artists in the field are compensated, largely, at a professional wage. At the same time, those fixed costs have led to an attempt to recover the expenses through more performances, to sell more units, if you will, to cover the costs, and that has led to … a need to sell more and seats. Rather than three performances of the ballet, you now can choose from six or seven, simply because the ballet company needs to sell that many tickets to cover the “earned” portion of ticket costs.

5. All these events and related audience development savvy have indeed led to greater audiences. But the audience growth is no more monolithic than the audiences for network television in the face of the couple hundred on-demand channels that exist. As audiences grow, they splinter. As we diversify culturally, we are much less likely to go to a few main stream events and more likely to pick out that which reflects our own unique interests and culture. As audiences splinter, the largest of the entities – those that built for ever larger crowds and sadly that have the largest fixed costs and very little elasticity – suffer more.

This upside-down pyramid means that things don’t look good for the most fixed-expense, least elastic performing arts organizations out there, unless they find ways to self-subsidize to meet the expenses by inventing new product lines (think of the long term prognosis for simulcasts) or by raising ever more in endowment. The likely outcome of this is that there will be fewer fixed expense performing arts organizations. The most vulnerable, those without endowments or new revenue prospects will either face mergers or folding unless there is a major adjustment in the overall amount of product and demand.

Those most likely to succeed – as always – will be the flexible, the adventurous, the small, and the experimental who are making art more to make art than to build audiences. They always have been the soul of the field, the reason that great artistic breakthroughs happen in any lifetime. They don’t live in the constraints of a market economy, never have and hopefully never will.

In between will be the paid-per-session orchestra in most smaller and mid-sized cities, or the community theater company that has become less and less volunteer, moving closer to that fixed cost model. It will be the ballet school that reaches beyond its annual Nutcracker to put on a Coppelia so that it has a “season,” but that can no longer afford to balance the cost of a union tech crew with the fact that the Coppelia audience is one twentieth the size of the Nutcracker crowd. In between will be necklace of performing art presenters in every suburb, each a fifteen minute drive from the others, all competing for a share of the splintered market between them.

It begs the question of what is to be done.

One side would dramatically scale up subsidies from the government so that things can at least be status quo; the other side would let the market run its course. Some would see mergers as the only path for the decade ahead: others would fight to the end against any loss of arts-related jobs. One side would seek to protect consumers from the costs of real art; the other side would let consumers confront the real costs of art. One side would look to limit fixed expenses: the other side would look to protect existing models. One side would put all funding into deficit subsidy: the other side would invest everything in new product and distribution.

There is no single, correct answer to any of these, no single side that is right. We are unmistakably at a crossroads in the economy of the arts of a scale and ripple magnitude we haven’t seen before. I for one am thrilled that Landesman put the reality of market, demand and supply out there. I doubt there has been a NEA chair that has done us a greater service. He’s made us look deeply at the economic realities and is challenging us toward what may be a new future for the consumption-based industry that is the majority of the arts field today. It is time to ask the questions of supply and demand, and time to – hopefully – shape a new economy for the arts.

Trend # 11: Serving Others in the Spirit of Dr. King

Today is the Martin Luther King Day of Service. Yes, it is also Martin Luther King, Jr. Day, but back in 1994, President Clinton added the National Day of Service component to this holiday, when he signed into law the King Holiday and Service Act. The Act’s goal was to stimulate community service to honor the legacy of Dr. King.

So today is the perfect day to post our final trend projection for the year, in a series we started back on December 27, 2010. This trend is one we hope we see develop as this year moves forward. It is something we celebrate whenever we do see it in action, which is for our sector of arts, culture and creativity to strive, continuously, to do more in true service to our communities. If we believe in the healing power of the arts, the value of cultural dialogue and sharing, and the vision of a creativity-based economy, reaching out and serving our communities is nothing less than mission-fundamental. But look around you, and you’ll rarely find anyone that mentions an arts, cultural, or creative sector nonprofit in the same breath as “serving community.”

Why is that? Nonprofit arts and cultural organizations have for years offered free days and free events; reached out to neighborhoods and offered amazing arts education opportunities. Hundreds of thousands – if not millions – of Americans each year are the beneficiaries of the outreach and education programs offered free of charge by arts and cultural organizations.

The disconnect between how society views community service and the arts – even in the incredibly important area of arts education – is real, and seems sadly to never go away. In recessionary times the disconnect grows proportionately as the ability of arts organizations to offer outreach shrinks. And as a result, recessionary times often make our sector seem – and act – more removed, more remote, and less connected than ever. There are hundreds of viable reasons given for this: it is outside the mission, beyond the budget, staff are overworked, there is no time, there are already free days, there are already ticket give-aways, outreach is supposed to be done for the sake of audience development, the constituency doesn’t respond, no one cares. Essentially, serving community typically comes after serving art, and therein is the problem.

Maybe a key is in creating nonprofit organizational cultures where entire staffs and artistic teams commit to serving their communities in excellent, not just to serving their art or cultural disciplines in excellence. Remarkable things happen when organizations agree internally to commit to specific service projects, when it becomes part of organizational pride to be proud of doing for others.

Maybe a key is in the way young actors, musicians, dancers, film makers and all creatives are taught. The discipline of the art is always front and center, but perhaps a bit of teaching the discipline of service through art deserves some time.

Maybe a key lies in considering the implicit in mission statements and organizational goals. Where is community in the mission statement, and how is that magnified every day? Where is service to community, and how is that exhibited in every goal?

Maybe it is asking every year what one thing the organization can do that can make a true and lasting difference in the life and well-being of its community.

The answers and options are as different as our wide realm of arts, culture and creativity. But it seems that as creators and re-creators, our field has a special calling to create greater and stronger communities than wouldn’t otherwise exist.

As a creative field, let’s respond to this National Day of Service with reflections on how creativity and culture, arts and heritage, new and old all should and can serve in building healthy communities. Let this be a year of improving and showing the real value of creativity in service of America.

Trend # 10. Create Jobs to Sustain the Creative Economy

Tenth in our series of Eleven Trends for 2011 is a prediction that this year we will come to realize that job creation and retention in the creative industries – is a major contributor to how to create, save, and sustain creative cities, and, as a result, to our economic recovery.

There are roadblocks. And they need to be addressed if we can fulfill this vision.

One problem is that a large portion of the creative sector hasn’t been holding onto jobs. Nonprofit cultural institutions have cut their payrolls to the bone. Despite the job-retention intentions of the Federal stimulus funds passed along to nonprofits through Federal appropriations to state arts agencies, the nonprofit creative sector is not adding extra staff. Even foundations that fund creativity through their grants don’t ask grantees how many jobs they have created in their organizations.

At the same time, those foundations have also been investing less in the arts. As I have discussed in previous blog posts, working capital is at what could be an all time low.

So when we talk about the ability of the creative sector to rebuild and sustain our cities, are we simply talking about the so-called ripple impact of the arts onto other sectors – the waiter jobs created when people eat out before going to a performance?

This is the point: the creative sector has been limping and hasn’t been sustained through any systemic approach. No one has provided realistic growth goals for the creation of jobs in the creative sector.

But at the same time, the creative sector has real potential to create jobs, lots of them. Not jobs based on ripple effect spending that supports, for example, x number of jobs in hotels or restaurants that are near performing arts centers, but true creative industry jobs. (Of note, these are not predominantly nonprofit, educational, or public sector jobs.) The true creative jobs are commercial musicians playing gigs and making recordings, tattoo artists and chefs, game designers and film screen writers, commercial and industrial designers, photographers and animators. They are custom furniture makers and stone fabricators. They are clothing designers and the creatives sketching out newly aerodynamic running shoes. They are videographers, website designers, the writers of sitcoms and documentaries, the entertainers at the ever-expanding number of casinos, the comedy club owners. They are the architects and designers who have hung on through the tough times, the landscapers who have introduced beauty back into urban neighborhoods. They are the novelists and ghost writers, the technical writers and the designers of tomorrows apps. Even the precious few music and theater critics left.

It has been a long time since Richard Florida started talking about them (us) all as a sector, but our industry still is just as fragmented and splintered a sector as it was a decade ago. We all need to work to make this happen.

Who represents this commercial sector so capable of growing in response to society’s quest for the new, cool, and aesthetically next thing? Who gathers them together as an industry to lobby and win economic incentives? Who represents them in seeking their start-up and business building capital? Who creates industrial parks for their start-ups?

And, if we figure that out, how does the sector go about growing jobs in all these fields and careers?

Here are some ideas.

Who:

Our industry should champion for economic development councils, redevelopment agencies, job corps and workforce development entities to take this on. We should build a case for them to stake their own economic development goals on it. We should challenge and support them if they pledged to grow the creative sector jobs in their town by x% a year for 10 years. We need to build this partnership.

How:

As an industry, we have to develop and sell a portfolio of investment strategies. For example: the start-up funds for those musicians needing pre-major label recordings, or the business growth funds to capitalize the potter whose new lines could go commercial. We need to show our partners in economic development the advantages of investment pools for backing local film makers on their next fund, and backing the next playwright on the next play. We need to demonstrate to individuals that investments in the future of artists can have viable returns. We need to push for annual creative industry job fairs, standing industry round tables, and industry promotions. We need to promote the use of government programs like AmeriCorps to provide on-the-job training and career growth in creative industries, and job bank resources.

We need to work to update the funding and grant paradigm of the last decade that placed audience growth as a top priority and job reduction as the top necessity, moving now to favor a job growth and capital growth as the dual top priorities so that nonprofit cultural and creative institutions can do their part in building the industry. We need strong metrics, however, to make sure that both the jobs and the capital do what they should to develop new excellent product that in turn garners additional earned and contributed income. And we need to change the all-too-common mindset that still thinks healthy cultural nonprofits are those that just manage to scrape by.

We need to broaden our concepts of commissions and the use of funding streams such as percent for public art, to provide start-up opportunities and portfolio development for every type of creative. Decades ago, it was not uncommon for cities to commission symphonies or plays. Governments have long commissioned sculpture and other public visual art. Let’s look at commissioning the full range of creative work, and let’s also create the comprehensive rosters of creatives so they can advertise and promote their own excellence.

In many states and more than a few communities, government arts agencies have already become a part of economic development departments. Some have begun moving into this more comprehensive direction. But it is still viewed as a sidebar to the core task of traditional grants to nonprofit cultural organizations. But rather than ad hoc movement in this direction, let’s now go for the logic-path of realignment to the creative industry of today. Let’s focus on jobs, backed by working capital. Let’s treat the creative sector as what it can be, a true engine of economic development.

Trend # 9: 2011, The Lesson of the Nook. How to e-Build Audiences for the Arts

2011 is going to be the tipping point in rebuilding and building new audiences for the performing arts – or not. And whether or not the rebuild happens will depend a lot on how well everyone in the arts learns the Lesson of the Nook.

Barnes and Noble just announced that its December 2010 sales were up 80% – EIGHTY PERCENT – over the December 2009 sales. And almost every bit of that, it says, is due to e-books. Reading (like going to performing arts events) has been going downhill for quite a while. The NEA even launched national events to get more of us to read. But what really changed everything was when we could wander through on-line stores of thousands of titles, and download books we no longer had to lug with us. It turned out that reading hadn’t disappeared as an interest, but technology needed to make it easy, fun, accessible, relaxing, and overall a better experience than we’d come to associate with the “real thing.” (For a voracious reader like me, who is a frequent traveler, lugging around a couple thousand pages of books and also knowing what that does to trees has not been fun.) E-reading is fun and easy. And did I mention it is a less than the cost of the same thing printed on paper?

Think of the applications to the performing arts. We all know that we attend live events less frequently, and the younger we are the less interested we seem to be. That goes for all the performing arts, but is most pronounced for classical music. Greg Sandow, who writes one of my favorite (albeit somewhat depressing) blogs on the fate of classical music, talks a lot about the true aging of the audience and loss of accessible product – such as what used to be extensive classical music programming on the radio. We know that even the best of classical music (and all performing arts) continue to have problems putting seats in seats. As Sandow noted in his blog yesterday, “Since the population of the US has increased, the classical audience, measured in absolute numbers, is only a little smaller than it was in 1982. But it’s a much smaller percentage of the population. Classical music is losing ground….If classical music is losing ground, appealing to fewer people, and to a much more limited demographic, then of course it has less presence in our culture. And that’s easy to see.”

Trend # 8: 2011 as the Year of Outsourcing in Culture and the Arts

Have you ever tried to get a group of arts or cultural organizations to seriously agree on outsourcing their back offices? Herding cats is too mild a term to describe it.

But here’s the interesting thing: it is rarely, if ever, the artists, writers, historians or humanists who stand in the way of finding new business models and efficiencies.

It is typically boards, administrators (understandably striving to keep their own jobs), and sometimes – in smaller organizations, especially – individual donors or founders, and even audiences who thwart back office consolidation and outsourcing. There’s a lot of turf in culture, and a lot of fear that by handing over some portion of operations to another group, that group will get more attention, money, and success while their own will be left with an eroding base of support.

This year, though, the cry from funders for new business models and new efficiencies has never been stronger. As we hear the new Congress tell it, budget cuts will be very real this year at the Federal level. State budgets are already pared and will be further cut. Local governments are cutting the arts, culture, history, and heritage. Cultural nonprofits in the United States have cut their budgets by an average of 15% a year for the past two years, and this year may have to cut even more. (If combined state and Federal funding equals about 8-9% of cultural organization budgets, and that goes away, while insurance and other costs go up…something has to give.)

Does this mean culture will close up shop? Only those nonprofits that are too invested in operating the same way they’ve operated in the past are really, deeply, at risk.

Back in May, NPR ran a great story about the performing arts in Columbus Ohio, where nearly all the major organizations have turned to a nonprofit that used to be in the theater facility operations business – CAPA – to handle all their back office administration. The move saved the Columbus Symphony, which otherwise would have gone out of business. Opera, ballet – you name it – are alive today in Columbus because of back office consolidation.

Outsourcing has been a vital business strategy for decades, but cultural nonprofits have put up barriers: loss of relationship with donors, loss of confidential data, loss of identity, loss of customers, etc. With today’s vast resources of customer relationship and service technology, none of those barriers should even matter.

Outsourcing could keep many local cultural/arts councils alive, too. Think of the similarity of services and efforts among them, and how much each could save and do with smart outsourcing. Heck, if the Republicans are as serious as they say they are about cutting arts, humanities, museums and library services out of the Federal budget, maybe even these Federal agencies should outsource just to stay alive!

Whenever I get into a conversation with savvy business executives who ask “Why do we have all these cultural groups competing with each other?” it is clear that they don’t decry having orchestras, theaters, museums, dance, etc. that compete in programming. In fact, they love the diverse programs in their communities. What they can’t grasp is many groups’ desire for falsely competitive walls between them and other cultural groups that leads to fear of outsourcing and other cost-efficiencies. They can’t understand it when groups won’t take steps that allow more of the very limited resources that still exist to go into product, because they themselves have learned to shave every dime they can out of their own operating overheads so they can invest in product.

So in 2011, what started in Columbus shouldn’t stay in Columbus. Scores, if not hundreds of communities around the country can adopt similar outsourcing strategies for their cultural nonprofits.

Trend # 7: Arts, Culture and the Invested Donor

2011 will be the year of the invested, entrepreneurial, make-things-happen, kick-the-tires donors to culture, arts, history and heritage nonprofits. These donors are everywhere but haven’t quite put themselves front and center into the cultural field. This year they will, because more and more of them see the linkages between vibrant, healthy communities and a creative sector that stimulates everything from quality education to economic development. Post recession, they are intent on building their communities for the future and they want fresh, relevant, young, exciting, and easily accessible culture to be a major player.

You know them and see them around town. They are the visionaries who have perhaps questioned the status quo of the existing cultural institutions, the ones who have gotten frustrated with various nonprofits and have been searching for a cause with impact they can support. They are passionately cause oriented, whether it is transforming a run-down stretch of Main Street or providing medical supplies to remote villages in Asia. They are the donors who don’t give to their United Way. They love creativity but that doesn’t automatically translate into writing checks to local arts groups. They even resist giving to local annual campaigns for worthy organizations supported by their friends and neighbors if they question the impacts and value their gift has in getting real results.

They see themselves as investors in getting things done, not as part of a pool of hundreds of donors who are valued simply because they balance nonprofits’ annual budgets. Even if their gifts are small, their ideas are many, and they want a chance to offer input that is respected and acted upon. (They don’t just want a chance to comment: they want their opinions to lead to improvement. If not, many simply walk away.) In many cases, until now, they haven’t been arts supporters, and the only way they will get involved in museums, the arts or historical groups is if the organizations are going to make something significant happen that will have measurable impact on lives, economies, education and civic well-being.

They are an exciting resource, but for the cultural field – where there can be institutional norms around “this is the way things are done” – these new donors can be a little scary. They typically question if there shouldn’t be back-office consolidation between groups to lower overhead;examine organizational programming costs per audience size reached; question the amount spent on fund-raising; wonder about better ways to get children involved. They are Guidestar readers and recession-toughened civic leaders open to new business models, new ways of balancing public and private sector responsibilities, new ways of maximizing results while lowering costs.

There have been times in the past when donors just like them built our national infrastructure of symphony orchestras, resident theater, ballet, and opera companies, when museums and arts centers they helped create transformed down towns. In some cities around the country, we’re beginning to again see this “once in a generation” type of personal commitment and investment. We’re seeing donors like these lead the charge for tomorrow’s cultural institutions, art forms, and education.

They are the challenge for 2011. Get these passionate, opinionated, new-era, post-recession, ready-for-change donors invested in the vision your arts or cultural organization has for the future; the lives you will change, the tangible and intangible impacts of the work you will do. Build their enthusiasm for that future, help them shape a vision that may even be dramatically different from the arts and culture infrastructure around you today. With them, consider that culture and the arts aren’t a “mature industry” that is built out as much as possible. Listen to them and work with them to renew this into a newly “young industry,” and embark on a new era of cultural growth. They are ready. Are you?

Trend # 6: Should Cultural Institutions Pay Property Taxes in 2011?

Happy New Year everyone! May your year be creative and exciting as you lead the way in the world of arts, culture, and creativity.

Today is the first business day of 2011, and today’s trend in our Eleven Trends for 2011 sets the tone for thinking about the relationships between local governments and nonprofit cultural organizations this year.

Does your organization expect to pay taxes on your building this year? NGO watchers expect municipalities to look increasingly at various forms of tax on land-owning nonprofit institutions that have traditionally remained exempt. While the early targets of this have been entities such as nonprofit senior living centers and educational institutions, along with some churches, it will be increasingly hard for governments that are starting to tax these types of nonprofits to leave museums, cultural centers, and nonprofit cultural facilities off the municipal tax rolls. Some of the taxes will come in the form of user fees – sewer, water, street maintenance, snow removal, security – but others will be a straight property tax. Expect this to come up for discussion as budget season starts everywhere and local government face shortfalls. Be ready to advocate, and organize to develop win-win solutions.

And win-win scenarios can happen. Economic development specialists and many others recognize the importance of nonprofit cultural institutions and related districts to economic vitality. Cultural districts that work can literally save urban areas, which economic leaders well know.

Performing arts centers or museums that need a subsidy to keep their programming alive, at the same time create the restaurant scene that keeps downtowns lit, exciting, safe at night, and create business for nearby parking facilities, retail, and more. The net positive economic impact is usually much greater than any subsidy, but this equation may need to be stated and documented with more clarity than ever before.

When good documentation of this net positive benefit is offered, look to economic development and planning specialists to be strong advocates and important allies in finding equitable solutions that keep tax/fee costs down while stressing -and building – the value of nonprofit cultural institutions as drivers of business and property values. Cultural organizations that have never met their colleagues in local economic development agencies need to start building good partnerships now for this to happen.

A tested and viable approach is service in lieu of taxes (or fees) that can be win-wins for the public sector and NGO cultural organizations. These approaches have typically included options such as free admission days to the public for museums, or free performances for civic celebrations. While not always easy to arrange – i.e. the contractual issues of professional musicians or actors doing free events – the public willl see tremendous benefits and the in-kind arrangements are almost universally more favorable than the tax or service fees would be.

Among other scenarios: look to more currently unaffiliated groups of nonprofits in a downtown or other part of the city to define themselves as a group and establish BIDs or similar districts, with strength to market themselves as a group and create an advocacy base that establishes favorable contracts with municipal departments and works toward building the excellent reputations that attract developers to a neighborhood. While this, too, has been a tested practice, count on seeing it more widely used with the goal of creating economic value for the municipal government by boosting the overall property values in what could be multiple small cultural and creative districts. (Sometimes smaller districts, each with a unique identity and niche, can be more effective in notching up investment a few blocks at a time.)

Look, too, at the marketing and fundraising opportunities that may come about as groups see strength in banding together. Even donors that aren’t particularly interested in, say, a historical society or community arts center may get behind “The Cultural Centers of City X” based on what the group of institutions make possible in economic growth.

Consider this to be a newly focused type of united fund concept, in which savvy organizations work in small and symbiotic coalitions – perhaps subsets of larger cultural funds, or groups coming together for the first time – to attract attention from today’s cause-oriented donors. Look to coalitions like this to develop joint case statements about their combined contributions to the six or eight block areas they anchor, demonstrating their value in social and economic stories that compel more financial support – even in the face of municipal fees – because of their combined net value. When groups can show that “in our six blocks, our four organizations make X economic difference” and when they can show that the net positive difference far outpaces the cost of public services for their few blocks of geography, they can develop quite a case for support.

At the end of the year, expect there to be some impressive new models in place, where marketing, advocacy, and excellent working partnerships with municipal governments and economic developers pave the way for actual boosts in overall local support for cultural institutions.

Trend # 5: Creating Cultural Images for Cities and Places

In 2011, America’s cities will develop and launch strong, unique cultural images that describe their blend of culture, arts, creative, heritage, and historic assets.

That’s our fifth trend projection for 2011, in our Eleven Trends for 2011 Series.

The concept of place “branding” has recently been considered to have negative connotations, though it shouldn’t. A real brand is based on a depth of assets and the identification of the unique strength that links together the entire “brand portfolio” and makes it stand out from the competition. The very exercise of place-branding around culture, arts, creativity, heritage, and historic assets should help any city or region that goes through the process to understand and value its unique cultural assets.

Has your community gone through an asset inventory and analysis like this? Are you ready to build an internal and external image based on the best of your community’s assets? You may be surprised by what they are.

It always surprises me there are only two International Cities of Culture (a UNESCO designation) in the United States: Iowa City, IA for literature, and Santa Fe, NM for craft and traditional arts. Why not more? Why not identify the cultural strength of each community, of every size, and build a pride of place and celebration of excellence? And cities that have so much cultural vitality to show the world – and be proud of – make 2011 the year to create and celebrate an image that tells the world.

Trend # 4: Technology and Arts Education

Trend Four for the arts and culture world is that by the end of 2011 leading and innovative arts and cultural organizations everywhere will develop and implement highly effective technology-based arts learning.

We’ll finally come to terms with the reality that school systems cannot offer a dynamic, full range of arts education and creativity-based science, math, or language learning (among other subjects) without the partnership of specialists outside the district faculty, and that neither field trips, afterschool programs or even residencies will fill the bill when so many better options exist.

With the boom in personalized virtual learning opportunities now available, we’re only a short time away from the day when savvy creative, arts, and cultural organizations and entrepreneurs will develop contractual partnerships that enable them to deliver customized creative learning curricula in every facet of arts and culture. Want weekly masterclasses for a high school string quartet? Private lessons with a musician in London? Visual art technique classes from master artists? Perhaps staging a musical or refining a production with counsel from a virtual panel of world-famous directors?

That’s just the beginning. How about studying creativity in process through examination of the original draft of a Beethoven manuscript made available through digitization and on-line access? Or signing on as an apprentice and following the work-day of a master architect? Or developing an entirely new creative work that draws its roots from ancient traditional arts, with the daily input and reflection of a master teacher?

Virtual technology has just started its potential impacts on the arts and creative learning. Imagine performing on the virtual stage of Carnegie Hall, or singing on the virtual stage at the Met. See how a virtual work of public art looks in one of the great public art parks of the world, next to the work of top installation artists. Or, develop collaborative work with students in Africa, partnering together daily on a joint composition. How about pairing up a high school jazz band in the United States with one in China? Or meld an international chorus together for rehearsals and virtual performances, or partner your student rock guitarists with drummers and singers from Moscow.

It is all out there waiting to happen. Isn’t it time we move into the technology and learning options already available for the most creative learning of all? It will happen in 2011. It will change the delivery system for arts and creative learning and make it more rich and accessible than ever imagined. More students than ever will have meaningful creative learning options. And, just possibly, it will make the delivery of arts and creative learning financially viable, even financially profitable.

Trend # 3 for 2011: Culture privatization

Los Angeles is in the midst of reviewing proposals for the privatization of its many neighborhood cultural centers. Chicago is reviewing proposals for the private operations of its major arts and cultural festivals, long managed by the City. News is rolling in from other cities and counties of similar interests and possibilities.

As governments around the country and around the world face record deficits and intense voter pressure to identify savings, 2011 may see the operations of publicly funded culture up for sale to the highest bidder. We may be looking ahead to a year where cultural facilities long operated by government agencies are privatized or partially so, where festivals may go back to their promoter roots, and even where the work of grant making agencies – at least in part – is privatized. So, is this projected trend a bad or a good thing?

I’m going to believe that it is an opportunity for the kind of new management and operations models, partnerships, and collaborations that the field has sought. Inefficiencies will likely be reduced, and competitive private sector nature may mean new revenue opportunities for the smart nonprofits and for profits out there with the best business plans and capacity.

Here’s what is probably a very limited list of what we may see up for privatization in the coming year:

– Festivals. A no brainer, with privatization already underway as cities curb payrolls.
— Neighborhood cultural centers. These, too, are already under examination for privatization. Truly strong centers may emerge, and there will be more specialization as individual entrepreneurs both for profit and non-profit take on the job.
— Major arts and cultural centers and museums. There will be a trend toward joint operating agreements that partially privatize more of these. It is anyone’s guess how this will play out in programming and access.
— Cultural districts. Many of the best of these already operate as BIDs, and more will follow this route.
— Local arts councils/cultural councils. As cities shed commissions and councils, the job will fall to the private sector. But look to different “parent” entities. The cultural council of the future may be a division of already existing strong public/private partnerships, such as economic development or redevelopment organizations that are proven in the business of cause and effect.
— Public art maintenance. With growing public art collections comes growing maintenance and conservation responsibilities and the need for specialists that may create successful businesses.
— Grants management financial and data services. Once panels have decided on grants, the business of grants administration could be privatized to specialists who blend accounting, data management, and review systems together.

There is more, of course. The efficiency of entities such as the Denver Scientific and Cultural Facilities District, in which a staff of only four administer one of the largest regional funding systems for culture in the US, prove that low-cost/high impact models DO exist.

So, let’s consider all the silver lining opportunities that may be ahead. 2011 can be the year when all the talk of new savings and lower overhead approaches will turn to reality.

Trend # 2 for 2011: Capital versus Stability. Which would you choose? Eleven Trends, Predictions, and Hopes for the New Year

For any nonprofit arts or cultural organization that has weathered the past few years, stability sounds good, right? But stability alone isn’t my hope or predicted trend for the new year. Stability on its own really shouldn’t be a goal at all. Long, long ago a client once quipped that one is never more stable than in a coffin. Ouch. I bet you can spot some of those highly stable nonprofits.

The real need is more dynamic and has been a focus of excellent study and analysis by entities such as Charity Navigator, the National Center for Charitable Statistics, Center on Nonprofits and Philanthropy at the Urban Institute, and United Way Worldwide.

Simply put, cultural and arts nonprofits in the US and internationally need to recapitalize, but not in traditional – i.e. endowment – fashion. Instead, cultural nonprofits need working capital – unrestricted capital – if there is to be new creativity, new capacity to build audiences and market share, and ability to be vibrant.

Can any corporate leader out there imagine a healthy company without working capital? Any that would consider lack of cash reserves a viable condition for healthy operations and the ability to respond to both opportunities and crises? Who out there would think that an enterprise that has no ability to take a well-considered risk is healthy?

A while ago I was asked to assess the impact of a large foundation’s grants program designed to stimulate new creativity commissions and productions of new and untested work, development of new series and seasons, and the like. What arts organizations reported was that the grants were great, but they couldn’t justify to their boards even applying because they had no margin for risk – no working capital. How could they develop new work that could result in a loss when they had no liquidity?

Like many of you I have also reviewed many grants and observed panels turn down organizations that had working capital because they were “too healthy,” with the mind-set that funds would better serve those without reserves or capital. Do you think organizations without capital can take on a new program or do justice to a major project? Would you invest in a corporation that said it planned to launch a new product but had no working capital?

Philanthropy hasn’t known how to address the need for working capital. Should a foundation grant money for unrestricted capital, not even for operations, not for programs, not for buildings, not for endowment? It isn’t a part of the funding mindset.

Things are changing, though. The work of the Nonprofit Operating Reserves Initiative Workgroup – assembled by a number of the entities named above – has brought national philanthropic attention to the need. As the workgroup points out, it may not be a funder’s job to create working capital, it IS the job of philanthropy to invest in organizations that have the capacity to undertake important work that may be inherently financially risky, and so it IS the job of a nonprofit to ensure that it builds its unrestricted reserves, bit by bit, to leverage its future capacity. Many boards wrongly have thought that nonprofit means non-savings, non-capital. The Workgroup/s excellent Operating Reserve Policy Tool Kit points out that this is truly old-think and flat-out wrong.

So 2011 has the ability to be a year of real transformation for nonprofits in general and specifically for the arts and cultural sector that is so dependent on the ability to take risk and be creative. I predict that smart boards and funders alike will take up the cry and recognize that the future of nonprofit cultural institutions need recapitalization. Funders will recommend working capital policies and start looking for plans to build working reserves. They’ll start investing in those organizations that can leverage the funder investment with their own capital. For nonprofits that pay attention, this could be one of the best and most important outcomes of the recession.

America’s Treasures Need You, Now!

Interest in America’s historic buildings, places, streets and landmarks has dwindled for years. Many say that after the Bicentennial high point of national pride in Revolutionary War-period America, it has been one long downhill for American history.

Nothing could more unfortunately symbolize our nation’s declining value for America’s heritage and historic sites than the President’s proposed Federal Budget for 2011. As a part of the President’s cost savings for the domestic budget, he has proposed completely eliminating funding for Save America’s Treasures and its related educational and outreach program, Preserve America. He stated in so doing that the programs “weren’t working well.” The White House officially said that the programs lack performance metrics so their outcomes are not clear.

The last time America’s history and historic preservation was so threatened at the Federal level was in the early 1980s.

Why should you care?

How about the American Flag, the one tattered and torn that flew through the night and inspired our National Anthem? It was saved by Save America’s Treasures.

How about Ellis Island? Saved, after long dismal years of neglect, by Save America’s Treasures.

How about Valley Forge? The lessons in courage in the founding of America. Saved, by Save America’s Treasures.

How about Cannery Row of John Steinbeck’s vivid telling? Saved, by Save America’s Treasures.

How about those Main Street projects that have transformed small town America? Saved, by Save America’s Treasures.

How about the list of the most threatened sites in America?

The unique and nearly lost ironwork of Galveston Island. Frank Lloyd Wright’s masterpiece Unity Temple, falling apart from decay and lack of funding. They’re just a few of the most threatened of 2009. A few more years’ decay and they will truly be history. Knocked out of a chance for Federal funding to spur a match, their chances for survival are vastly diminished, and will no doubt cost a great deal more to restore in future decades.

As for the idea that Save America’s Treasures and Preserve America are not “working well?” Every Save America’s Treasures project requires a FULL match in non-Federal dollars. The Preserve America communities that get a nod of recognition usually go on to build a vibrant new economic base through their realized historic revivals. By any measure, it would be beyond comprehension to say that these don’t work well.

Did the two programs actually do enough to count, some might ask? To date, they have been directly responsible for saving 1200 of America’s treasures in all 50 states.

Do these programs hurt America’s tax payers? Never have. They were to be funded in perpetuity by a percent of the revenues of offshore oil and gas leases on the Outer Continental Shelf. But this is to be robbed by the proposed White House budget bill, to be used for other purposes other than the intended and federally mandated “preservation of ecosystems, buildings, collections and objects” that have national significance.

The proposed cuts will also dramatically impact our country’s National Heritage Area funding: the President has proposed a 50% cut. What are National Heritage Areas? A program of the National Park Service, National Heritage Areas are those that tell the vital stories of America, places like Buffalo’s Erie Canal National Heritage Corridor, or the Yuma Crossing of the Colorado River, a gathering place for over 500 years, (and now, an important wetlands restoration project. The Hudson River Heritage Corridor, the historic whaling port of New Bedford, and the Northern Rio Grande were all vitally helped toward restoration and preservation through the NHA funds.

America has long been described a country that doesn’t value its art. Now, it appears we have come one step closer to being a country that also doesn’t value our history and the heritage of our land.

Can we afford to let this happen?

Arts Marketing for Success 2009. Part 1.

There are three things that can happen to an arts organization (or any nonprofit) during a recession.
1) You can close your doors and basically go dormant. 2) You can scrape by, maybe in worse shape, but making it. 3) Or you can thrive.

Sounds crazy, doesn’t it – THRIVE. Yet it is happening. People are lined up in the rain outside the Chicago Arts Institute for the Edvard Munch show. Movies are selling out hours before show time. Symphony concerts, popular artists, lecture series – shows in venues coast to coast are selling all tickets. People are responding to arts and culture.

How can you ensure this kind of good news? Follow these rules and tips as a start, and come back next week for more in the tool kit.

ArtsMarket’s Rules to Live By

1. Plan to thrive. That’s right. Plan for success. Even now.
2. Budget to thrive. Invest resources where you can see results.
3. Program to thrive. Do what will stand out, be noticed, and program what will “demand” an audience.
4. Market to thrive. Create a compelling story. Share it. Prospect. Link.
5. Brand to thrive and image to thrive.
6. Govern and lead to thrive. This is exactly not the time for fear. Careful stewardship, for sure. But thinking for long term success now will let you open the box of your thinking (see my logo, above), explore new opportunities, edit back that which will go nowhere, and focus on the goal.

Over the next few weeks, I will be translating these into tools for the month. We’ll start with marketing, because April is the start of prospecting season for most performing arts organizations. It is when major budget allocation decisions are being made for next year’s marketing budget. Next month, we’ll focus on governing and leading to thrive, so you can move forward with those plans in May in June.

Using the ArtsMarket Rules to Live By in Your Next Season Marketing.

Your marketing effort for next year isn’t going to work if it is only about survival. You have a brilliant chance, right now, to emerge from the shadows and be the answer to consumer needs and wants for great art, great entertainment, great food for the soul. THINK AT 40,000 Feet. Plan for increased participation, and increased revenue. I challenge you to NOT set low expectations.

When you plan and budget to thrive, there are 10 things not to do in the current economy. Address each of these, and you will succeed.

1. DO NOT cut direct marketing. There is so much less clutter out there right now that every piece of mail is noticed, and if written write, provokes a response.

2.DO NOT stop prospecting. Everything is about prospecting. Remember that the #1 rule of business is to get a new customer who WILL COME BACK. So first you get them in the door, then you provide a great experience, and they return. You must prospect. People who don’t keep your organization top of mind are probably – like all of us – a little too numb to pay attention to what play is on stage where next Saturday night. Remember, your house list faces bigger churn in a recession so you constantly need to find newcomers.

3. DO NOT stop PR. There are more PR opportunities out there now than ever, more keyed to age groups than ever. For your networking savvy folks, you have the cocktail party atmosphere of Twitter where you can drop a hint, ask a provoking question, start a dialogue. You’ve got the Starbucksian atmosphere of Facebook, and the ever so professional conference of Linked In groups. You can Flicker, YouTube (and I challenge anyone to take on Carnegie Hall to an even higher level of community building), and so much more. At the snail level, there is a plethora of new micro newspapers emerging with the demise and cuts of metro dailies – ever so accessible. The web sites of existing media, the newsletters and the links….we’ve never seen such ability to use so many PR channels. And let’s not forget the real essence of PR – doing good for the community. Any time you can get out there to help others, right now, you WILL be seen. A number of you have read my blog and Twitter notes on the organization that has been giving tickets to the local food bank so that families can attend performances. The tickets are on the shelf next to the canned soup, and anyone can take them. No one in the audience knows who used those particular tickets.

4.DO NOT sell extravagance. This isn’t the time to market to the luxury-for-me crowd. But it is time to market wonderful experiences that create lasting memories you can enjoy and replay in your mind for months to come.

5. DO NOT cut your back office investment in database excellence. If the fire alarm goes off what is the most important investment you must save that probably isn’t covered by insurance. You got it: your database. And it isn’t just the data, it is how the data is organized and how much it allows you to customize the offers you make. Well structured data lets you personalize your prospecting.

6. DO NOT think that e-marketing, alone, will save you. It will save you a lot, but every arts audience out there has a sizable proportion of older individuals who will not follow you via email and an equal portion of all ages that has opted out of the e-marketing grid for financial or philosophical reasons. They want to see if you care enough about them to get your info to them. Do you?

7.Do not disappear between events. This is particularly important for organizations that have only a few major events a year but are there all year. I know many museums in this boat – especially as special exhibitions have decreased. Find ways to be visible every week, and to create curiosity so that people have to follow what you are doing and thinking. It might be your blog. Or it might be that you start offering salsa classes in the galleries on Friday evenings.

8. DO NOT stop leading. Your organization signals hope, confidence, and meaning to your community. Be out there living the message. Help other organizations. Facilitate civic plans. Be visible, and be confident.

9. DO NOT cut advertising. Okay, you very well might cut advertising dollars, but you’ll do better if you rearrange your advertising dollars. To all of you who have cut back your major entertainment page spending: with so many fewer competing ads, yours will be more visible. To those of you who have wondered where to advertise: you have terrific options now between on-line news media (banner ads), civic calendar/ticketing sites, local cable (incredible deals), and even traditional media. It is turning into a buyer’s market, so take advantage of your opportunities.

10. DO NOT stop saying thank you. In fact, thank your audience and attendees more than you ever have in the past.

I want to come back to point 4, and really every other point about image, atmosphere, communications… I read a recent analysis of Allstate Insurance’s most recent round of TV ads. They are a brand and image marketing giant –i.e. “Like a Good Neighbor We’ll Be There”, “You’re in Good Hands,” etc… Do you remember this winter’s NFL ads, using the Frank Sinatra/Nancy Sinatra “Feeling Kind of Sunday..” tune? It would be hard to find something that did a better job, this difficult year, of creating a happy kind of glow…that tune and sensibility sticking with you until you felt hey, it was Sunday, and time to kick back….so you might as well be there with Allstate…

I challenge you to come up with your own “Feeling Kind of Sunday” imaging for upcoming season. Feeling kind of museum…feeling kind of theatre… Send your ideas and you may see them on the next tips and tools!

And, last but not least, I want to come back to prospecting. What you don’t want to do now is waste money. But you do want to get a call for action/great offer out there to people who will respond. We regularly put together prospect mailing lists like this to target people who wouldn’t be likely to know about a performing arts series through the web. It can be a real challenge, but we see how incredibly well it works. When your returns zoom up there, this is the kind of prospecting to use. For example:

These criteria for everyone on the prospect list (Sample criteria for a given geographic area)

Over 60 (figuring this is still the age group less likely to contain high level web searchers)
Self identified interest in performing arts
Self identified interest in gourmet food
Self identified interest in reading books
Take music/arts classes
Responsive to mail offers

It works.
Remember, PLAN TO THRIVE.

A new way of looking at market segments

Grab a copy of this month’s Harvard Business Review. The lead article, How to Market in a Downturn
by John A. Quelch and Katherine E. Jocz, both at Harvard Business School, takes a look at consumer behavior in downturns since the 1970s. And as they point out, consumers never totally stop buying. They become more careful, more selective. But they still consume. They still come to the arts, but they consider their choices carefully.

And, in a recession, market segmentation takes on a whole new meaning. Quelch and Jocz have taken all the demographic and lifestyle clusters that exist out there and condensed them down into four segments:

The Slam on the Breaks segment. This group includes the hard hit, the unemployed – everyone whose world is upside down.
The Pained by Patient segment. The authors call this the largest consumer group in the US right now. Economizing, cutting back, but still doing and going. Carefully investing in whatever they purchase. Probably really looking for bargains.
The Comfortably Well Off cohort. Sure, this includes the upper 5%. But more importantly for the arts, this includes the carefully invested retirees who continue to have the resources to go to the arts.
The Live for Today group. Hey, they never had any savings anyway, so why change?

The authors point out that all four groups spend. Each spends on essentials that “are necessary for survival or perceived as central to well being.” For many, arts, cultural activity, and a way of weaving joy into life is central to well being. That’s a powerful offering that the arts have always had, and it is the message that people will best respond to right now. Anything that is an ‘indulgence’ is probably not going to be purchased right now. Anything that is the same old-same old can be put off for another season. Anything that is unjustifyable – an over the top ticket price, for example – may be looked at as expendable.

The authors point out that all four segments will be responsive to strong brands and good loyalty marketing, so that marketing can be extremely important right now. As they note, companies with excellent brands, like Johnson & Johnson, maintain high stock values through recessions based on continued brand-responsive consumer purchases. So, if arts-lovers can only spend on one event, or on one organization – make sure its yours they trust to offer them outstanding art experience.

Be sure your organization has the resources to market your best strengths. The authors recommend dropping programs/products that just can’t make it no matter what in favor of putting more resources into your core that will attract the most loyalty and new attenders. Focus on strength.

I also think there is great power in responding to the absolute need of the Slam on the Breaks folks. Put any resources you can into opening doors for those who can’t afford art any more. Last week, I was in Canada working with a group that noted the power of offering blocks of tickets at the local food bank. No one needs to know who gets the tickets there, or how large a share of the audience comes through that door.

The Real Power of a Cultural Plan is Who Uses It

One of the biggest problems in cultural planning is figuring out who is supposed to use the completed plan. Who is the steward who moves it forward? Who leads the charge? Who monitors its accomplishment? Who keeps all the competing interests aligned?

We’d all like to believe that a cultural plan is implemented by all those organizations and interest groups that care about arts and cultural development in their communities. An arts council takes one role, a foundation another, a government entity yet another, and so on. Sometimes this indeed happens, and the outcomes can be fabulous. More often, it doesn’t happen. The steering committee members go back to their own organizations and priorities, and all those good ideas become a wish list rather than an action plan.

A great way to make sure this doesn’t happen is to call the document “a plan for cultural development” and note from the get-go that the plan is a policy document to guide a particular agency or funder in achieving key outcomes. There has to be an entity that fully implements the plan, that takes it and runs with it, and that has the full support of the power-brokers (funder/s) in making the plan happen.

As a policy document, the plan has to guide the actions of the implementing agency. I believe that internal agency planning has to be an integral component, to fully align the arts council or economic development agency or foundation – whatever entity is going to do the plan – to get the plan done. That agency plan, in turn, has to be supported in full by the agency hierarchy – the mayor, the county executive, the economic development agency – all those whose support is essential to turn policy into action. There has to be an infrastructure behind it.

Within the plan, there have to be policy priorities. Basically, what will the lead implementing agency focus on for the next two or three years that will have a specific outcome, responding to specific findings from the cultural development planning work? As a client once told me, if there are so many goals that you can’t remember them all, the plan will not get done. If yours is the lead agency, you want a plan with outcomes you can deliver. Keep your eyes on the priorities and know that you can accomplish the most important developmental work.

More on the creative economy…

Randy Cohen, the research director at Americans for the Arts, noted in response to my post yesterday that they actually do include musical instruments manufacture! Thanks for the clarification, Randy. He’s also been great to send along the links to the reports they offer at the congressional district level and the state district level – incredible advocacy tools.   My hope is that AFTA will offer their reports at the MSA level, and/or the county level, to correspond with the way that a lot of planning work happens on the ground.   Those of us in the field using IMPLAN to give accurate pictures of economic activity at the micro level could really benefit.  And, I’d love to continue the dialogue to include many, many more industries in the “creative economy” definition.

So just what is the creative economy?

One of my goals whenever I work on a cultural plan is to establish a baseline of the area creative economy, and then to identify ways to grow that economy.  Too often the creative economy – at least in the US – is  narrowly defined.  (Americans for the Arts has done a fabulous job with the conservatively defined arts-centric part of the creative industries, but I think their creative industries data under-represents reality.) (See blogroll for their 2008 update.)  On the other hand, some define the creative economy as anything based on intellectual property, which might be too broad.  ( My geologist friends develop a great deal of intellectual property, but does that make the mining industry a part of the creative economy?  Doubts.) 

So just how do we get to a viable baseline?  Americans for the Arts uses Dunn & Bradstreet as their data source.  In my own searches, I begin with the North American Industrial Classification System, or NAICS codes.  NAICS codes are assigned to every enterprise in North America, and from this we can assess the enterprise impacts, the jobs, the value added, and their total economic value.  As such NAICS can be the key to assessing the bgroadly defined creative economy.  But there are many judgement calls to be made, and this offers an interesting discussion for the arts/cultural development field.  Wouldn’t it be great if we had a standardized way of defining what codes belong to the creative industries and which codes don’t? Something bigger than what we see now from AFTA, but realistic extractions out of NAICS?

Each creativity-based element of NAICS has three components: education and training, jobs and the creation of economic value, and impact – audiences, buyers, users, and those touched economically and socially.  Think about the case we could make if we would work toward a true definition of the worth of our industries.

The first three sets of NAICS codes – ag, mining, utilities – don’t have any sub codes that really seem a part of the creative economy.  The forth, construction, might have a few.  By the fifth, manufacturing, you get into some interesting judgement calls.  For example, I would include the Manufacture of Fine China, Earthenware, and other Pottery; and the manufacture of Pressed, Blown glass, and Glassware in my creative industry profile of a community.  (AFTA includes individual artisan work, but not manufacture.  But many artists and artisans are employed in the manufacturing process, so I’d opt for the larger definition.) But should the manufacture of other glass containeers be included?  Book printing, yes, but should Quick Printing be included?  How about clothing manufacturing?  Do we include it all, or just sub-parts – for example, manufacturing of Schiffli lace?  Or what about food manufacturing?  I guess you would include specialty cheese manufacturing – my neighbor who makes artisan cheeses would argue for that – but what about fruit and vegiatable canning?  Include piano and musical instrument manufacturing – yes.  But what about photographic equipment? (AFTA includes photographic equipment, but excludes musical instruments.)   

 I’d be likely to include all of the economic activity of NAICS code 51 – Information – which in addition to  sound recording and movies includes telecommunications.  

Code grouping 54 codes professional and scientific enterprises.  From these, the normal picks include graphic design, interior design, photographic studios and the like along with the standard inclusion of advertising agencies.  But how about custom computer programming? (That’s where some computer game enterprises can be found, and these are largely considered a part of the creative industries.)  Most defitions already include architectrual and landscape architectural enterprise, but how about mapping? 

The codes (71) for arts, entertainment and recreation are particularly frustrating for those of us in the arts field.  For example, how are we to break out the enterprises/occupations from the grouping “promoters of arts, entertainment and sporting events?”  Does that mean a local NFL franchise and Symphony are in the same code?  (Yes.  AFTA has broken these out using D&B data.)   How about food services codes?  Do we include chefs/fine dining, but not the coffee shops offering up custom lattes? 

The point is, creativity, innovation and foundational arts thinking can be found to shape and influence hundreds of industry classifications, and thousands of job types.  The arts field is even broader than  represented by AFTA’s ground breaking analysis.  And, if as a field we had a broader definition of what is in and out of the “creative industries” of NAICS – which opens the door for many detailed economic profiles at the local level – we’d be better positioned to make the case for what the arts really mean to our economy and our communities.  We’d be able to work toward a far more holistic approach to educating for the creative sector.   And we’d come even closer to assessing the real value of the economy driven by creativity.

Thoughts on Developing a Cultural Plan

I am starting a new cultural planning process for Mercer County, NJ, and thought it would be interesting to use this as an opportunity to go back and pull out a copy of the Community Cultural Planning Work Kit, which I wrote on commission from the NEA back in 1990.   I thought I’d return to it and see if it still holds true as a guidebook to the process.  (Good news, it does.) 

Here are some thoughts from it that ring true:

1) A community cultural plan should become the blueprint for building livability into an area. 

2) It should mesh with all other community masterplans, and in its pages detail how culture plays an integral role in shaping the community’s look, feel, spirit, and design.  Other civic plans, in turn, should reference the cultural plan’s role and responsibilities.

3) The planning process iteself should allow each community to define those aspects of cultural development that are most appropriate and essential to its own way of life and future growth. 

4) A classic planning error is to develop a good solution to the wrong problem.  Before a plan is developed, problems, opportunities, and needs must be identified, and perferred solutions or scenarios identified.

5) Don’t confuse planning with a needs assessment process.  The assessment is the process of investigating the community’s cultural needsd, priorities, strengths, weaknesses, and potential within the context of the community’s general economic and social conditions.  The assessment is conducted to provide a frame of reference for decision making – planning. 

6) A plan is more than recommendations.  It is the outcome of a public process that develops vision, goals, and workable strategies, and that identifies how those strategies will be accomplished.  Open meetings that allow the community to hear proposed goals and respond with their own views are important. 

7) The key to turning a plan into reality is the buy-in of all those involved in implementingt goals, objectives, and strategies.  If there are goals or strategies that require the support of groups or decision makers not represented in the planning process, it will be necessary to take the rough draft of ideas to them and to seek their involvement.  Before you begin a plan, meet with all the community agencies, civic leaders, and government agencies likely to be touched by a cultural plan.  Let them know how important their input is to the development of a realistic and workabple plan.  Incorporate them into the planning process.

8) You will need to provide your community with a framework of expectations as to the outcome and value of the plan.  

9) You will need to determine the resources required to implement a cultural plan.  But, a cultural plan isn’t just a plan or a new strategy for funding the arts.  A real cultural plan specifically addresses how your community can and will be transformed and improved through vital arts and culture.   

10) Cultural planning isn’t a one time deal.  Every five years is a good rule of thumb. 

11) The agency plans of implementing organizations – local arts councils, community foundations, civic arts commissions as well as school districts and municipal offices – should continuously respond to cultural plans, taking their cue on priorities and timelines from the overall plan.

Heads Up Arts Marketers: New Postal Regs Start Nov. 23rd

In the past couple of weeks, I have received many questions from arts marketers about the new postal regulations going into effect on November 23rd.  Here are the essentials you need to know. 

 

1) If you are sending any mailings out after November 23rd, you will need to make sure you have completed a NCOA (National Change of Address, CASS Certification) on these in the past 95 days.  This new 95 day rule was passed by the US Postal Service on September 23, 2007 to address the huge issue of UAA mail.  (UAA = Undeliverable as Addressed Mail.)  An estimated $2 billion of mail a year is undeliverable due to out of date or incorrect addresses.

 

 

2) This replaces the former 185 day NOCA/CASS Certification rule for automation rates, and it expands the NCOA requirement ot all automation, pre-sort, and presorted 1st class mail.

 

 

3) Starting on November 23rd, the Post Office will refuse to receive any presorted or bulk rate mail, including 1st class bulk mailings, unless it receives the certificate of update from within the prior 95 days.  This means that if you plan to send out a mailing on December 1, you will need to provide a certificate that shows your mailing list was updated no earlier than August 28th.

 

 

4) This is an on-going requirement for every mailing.  Starting November 23rd you will need NCOA certification that is up to date within 95 days prior to every mailing.

 

 

If your organization has not had us do a NCOA update of your house list as a part of your database research or list purchases, we can provide this service to you now in advance of your next planned mailing.  Having us do NCOA costs a fraction of a penney per record.

 

As an integrated service, ArtsMarket provides our clients with a list of all your customers that NCOA cannot match or that show as havingmoved outside your market.  We match these for you by your customer I.D. so you can update and clean your database to maintain accurate audience data.  you can decide to change addresses and keep the customers in your database, or eliminate names that are no longer deliverable or that have moved outside your market area.  We estimate about a 4-5% churn on any list per year based on the many lists we regularly NCOA for our clients.  We just did one metro area NCOA for a client and found close to a 10% churn!  Imagine how much your organization can save on printing, alone, by maintaining an accurately updated database.

 

 

Q.  If our volunteers process our mailings and bring them to the post office for first class bulk rate, do we need NCOA?  We never did in the past!

 

 

A.  Yes, you will need to NCOA any mailing you do starting November 23rd, 2008, even if your volunteers do the work.  The Post Office won’t accept your mailing for processing without the certificate.

 

 

Q.  Our mail house can do NCOA.  Why should we have ArtsMarket do it?

 

 

A.  We charge the same per address NCOA that is standard in the industry, based on a minimum order.  If your list is smaller than the minimum we can batch it with others and save you a bit, something your mail house is not likely to do.  But the real advantage is that we provide an additional service of giving you back the changed addresses so that you can update your in-house database.  Why does this matter?  Let’s say you plan on sending an end of the year first class mailing for donations – just standard delivery.  What if 10 addresses out of a hundred have changed and you don’t know it.  You stand to lose!  Our goal is for you to succedd with all your direct marketing and fundraising, whether you are doing a bulk mailing or sending ten targeted fundrasing letters!

 

 

Q.  What if we are moving more and more to email for our direct marketing.  Should we still do NCOA?  Why worry about physical street addresses?

 

A.  Our industry is evolving more and more to email marketing.  As you go forward, chances are your organization will want email appends on all your database households.  Accurate permission-based appends such as we recommend require accurate household addresses as a basis for append/match accuracy.

 

If you have more questions, contact us at staff@artsmarket.com   

   

 

A New Hope for Arts Education

While in Monterey County, CA, last week working with the wonderful Arts Council there, we focused on the fervor missing over the past eight years for quality arts education among educators, school districts and senior education administrators.  Even administrators who today say they “want a great band program”  too often seem to stop at that.  They have given up striving for the quality of learning that is gained by school wide opportunites to both learn in and through the arts.   This comes at the same time as they espouse the creative economy and what it can mean for their students.  Why the disconnect, and why is it once again so severe? 

We’ve lost a generation of trained arts-oriented educators, and educators have lost the freedom to teach creatively.  All that public dialogue about the value of learning in and through the arts, all that advocacy that was done in the 80s and the 90s – it needs to start all over again.  

Perhaps now, with a new administration coming to Washington, No Child Left Behind will become history, to be replaced by more positive proactive measures that allow teachers to educate to multiple intelligences.  And hopefully, before it is too late, there will be room once again for sutstantive arts learning in our schools.  

During the past ten years, an entire generation of teachers and arts education specialists has changed.  So many outstanding arts education advocates and advocacy groups have retired.   Dozens of educator institutes and professional development programs in the arts have vanished.  And we are, in many ways, starting back where we were.  In 1991, when the National Endowment for the Arts commissioned me to evaluate their Arts is Basic in Education Grants program (AISBEG), I wrote of the work that had to be done then to transform schools:

“Change at the school level is a complex issue.  Today (1991) even after significant strides made through collaboration, often furthered by AISBEG, the actual transformation in schools is far more superficial and limited than any in the field would like.    The nagging concern is how to go beyond a few model schools to make the arts basic in all schools, to keep the momentum going, even as economic downturn whittles away the resources that communities put towards the arts.” 

That was 17 years ago.

How indeeed do we renew a zeal for arts learning?  We do have more assets to work with than in the past.  Today we know that a whole host of careers, jobs, and industries require arts learning and the skill sets gained through what the arts bring to education in every subject.   We need to use this in renewed advocacy for learning in and through the arts.   Go, for a moment, to O*NET online – there is a link in the blogroll to the right of this post. (ONET is a service of the US Department of Labor, and is the nation’s primary source of occupational information.)  There, you can quiz your capacity on a matrix of knowledge, skills, tasks, work context, and technology and learn the type of job right for you.  I went through it and entered everything that a student could expect to gain by learning in and through the arts – abilities such as deductive and inductive reasoning, problem solving and sensitivity, fluency of ideas, critical thinking, social perceptiveness, communication, and more.  The job that popped up as right for my hypothetical student who had learned in and through the arts was a nuclear engineer(!)  I slightly altered the mix of capacities, and jobs such as human resource managers, software developers and applications engineers, teachers, account executives and police detectives popped up.  All the skills and knowledges gained from the arts are what ONET recognizes as high level, preparing individuals for wide ranging high income careers.  

Scholars outside the arts education field have also paved the way for a new level of advocacy and dialogue.  If you haven’t read Innovation – The Missing Dimension  by Richard K. Lester and Michael J. Piore – both MIT professors – get it.  As their title suggests, they find that analytic capacity isn’t enough to move the economy forward.  As they write, “an important component of innovation involves a different process, one that is not (just) directed toward the solution of well-defined problems.  The activity out of which something innovated emerges – new insights…new ideas…new approaches…is intepretation.  Above all, the intepretive perspective points to the importance of cultivating a tolerance for ambiguity – the critical resource from which true innovation derives, while preserving the skills required for efficient analytical decision-making.” 

This is what education in and through the arts imparts.  We have a lot of rebuilding to do, to get there once again.  A lot of advocacy.  But this is the time for a new hope for arts education.

Rethinking Arts Facilities

As noted in one of our earlier October blogs, a recession economy is exactly the right time to plan. And it may just be a terrific time to rationally rethink community goals and needs for new arts facilities. Feasibility studies done now may actually lead to smarter and more viable arts facilities than those done in the heady days of a flush financial market. Why? A recessionary economy brings new need for partnerships, creative problem solving, and right-sizing for civic construction ventures.

There are a myriad of wonderful performing arts centers, theater complexes, and museum facilities out there to use as models of wise budgeting and solid operations.

Trends we see and like:

1) A new interest in performing arts centers “attached” to high schools. Not every city and town has the population to afford a major stand alone PAC. But they can build outstanding halls that provide their students incredible opportunities and that also provide residents with buildings that otherwise couldn’t be afforded in capital or operations. Some of these halls are free standing. Most have distinctive and professional-quality entrances and box offices. Many include black box theaters. Some are even multi-theatrical complexes. The truly great ones are every bit as workable for professional performances as for student events, and as a result are booked almost every day of the year. We’re thrilled by all that we see happening in the wonderful and affordable ($5 million) Bothell (WA) North Shore Performing Arts Center, which has been a joint venture between the Bothell School District and a private sector group. And for magnificence, the new Lake Zurich High School (IL) Performing Arts Center couldn’t be topped.

2) Facilities on community campuses. These are particularly workable in mid sized and smaller communities, but have applicability to larger cities as well. Bloomington, Minnesota’s modest but absolutely lovely performing arts facility shares a building entrance with the city council chambers. Rooms used by community arts groups for rehearsals in the evening can be used by the fire department or planning office for meeting space during the day.

3) Multi-jurisdictional and entity partnerships in making facilities happen. Today’s projects require creative partnerships, sometimes involving all or most of the following even before private giving or bond financing come into play. municiipal and or county goverment, school districts, colleges, and developers. In operations, it is fabulous to see models ranging from THEARC in Washington DC all the way to the proposed Pinedale Community Center, in Wyoming. Put together by multiple nonprofit, education, and civic groups, these are models where the arts – including state of the art performing arts halls – live side by side with afterschool education programs and diverse community service agencies. They put the arts in the heart of every day community life.

We still love the major arts facilities that are community architectural icons and centerpieces. But we are drawn to the above trends as wonderful solutions that are also financially much easier to capitalize and operate. They are the type of solutions that are worthy of consideration, not only due to the present economy, but because they really work! The books balance, users are delighted, and quality arts are at the heart of community life.

Keeping Boomers Buying Tix Even When They Hurt

Forbes just ran an on-line interview with its publisher, Rich Karlgaard, talking about why this recession has created so much fear. The fear, he says, comes from the ranks of the 77 million Boomers in the US who are inching to retirement (they hope) and have no memories of this kind of financial chaos. He points out that the last big recession was in the 70s, during the Carter years, when few Boomers had anything to lose anyway, and so sailed through it largely untouched. Back then, the inflation rate was 11%, unemployment was pushing 8%, recession hung over everyone like a fog that wouldn’t go away, and our parents were seriously hurting. Their world is one we don’t really remember.

They were going to the arts.

Today the Boomers have the same household financial worries our parents faced in the 70s. So it stands to reason that Boomer arts participation patterns should be like theirs.

In the arts, we should be checking up on the models from the 70s in marketing to today’s Boomer arts audiences. And we should be asking, “How did our parents afford the arts?”

Tickets and events were carefully planned and selected. Ticket purchases were budgeted into the monthly and year-long household budget – they were rarely spur of the moment impulse purchases, unless they were priced so inexpensively that they could be a guilt free treat. (The $3 movie packed theaters in the 70s.)

Arts going also involved checking out lots of free events – and free events generally did quite well as a result. Packed choral concerts. SRO chamber music on college campuses. Adventurous contemporary music, experimental theater. A lot of it was free, or close to free, and they sought it out.

Our parents were very discount responsive – the original coupon clippers! And they were very willing to save up for the big event in lieu of going for the sake of going, unless the deal was too good to pass up.

These are old concepts, but there are plenty of new applications from this to use right now.

Then, subscriptions were what saved you significant money and let you carefully plan in advance. Today, flex subscriptions need to save us with discounts just as deep, and with perks formerly provided only to full season subscribers. Series offering flex subs at the same time as full subs are finding happy customers. Boomers know full well that ‘tradition’ has dictated only giving full subscribers the best choice on tickets and the best treatment. Now, when organizations give them the same benefits and attention – and an understanding that their work schedules demand incredible flexibility – Boomers are more willing to make a plan and buy that multi-event flex subscription.

Special offers to these flex folks are winners, too. Quite a few organizations have found that it is better business to offer repeat customers 50% off (or more) event tickets to fill the house (and build loyalty) rather than perks such as restaurant discounts that had been in vogue in past years. When budgets are tight, Boomer arts goers want incentives to go to the arts! Focus on what they really want! This is particularly important for presenters and series that have product that just doesn’t stand out and grab Boomers. Presenters around the country report that this year these “nice” but not “wow” events aren’t selling. Boomers are saving up for the big event of the season, just like their parents did back in the 70s. So give them a break: let them get huge discounts on those nice events when they also buy the wow events. You’ll get them coming back.

So remember the 70s! As you plan, imagine Boomers who – like their parents a generation ago – are suddenly more frugal than frivolous, and more willing to clip a coupon than to overspend spur of the moment. And, like those folks in the 70s, they may not come as often, but they will be first in line for the tickets to the truly special performance. Treat them right, and they’ll become fans.

The 5th P of Arts Marketing

All good marketers know the 4 classic Ps of Marking: product, price, place, and promotion. Today there is a very important 5th P that absolutely has to be added to the classic 4. What is it? Participation. And I don’t mean participation by buying a ticket, being in the audience, or entering the museum. I don’t mean participation as attending a talk-back after a play or a pre-concert lecture about today’s concert choices.

I’m talking about the P of participating pre-ticket purchase, and post-event dialogue. It is a marketing P that you have the power to control and use to boost revenues, increase audience size, and retain interest and loyalty. You can use it across all age groups, and it works just as well with first time single ticket buyers as with long time fans. And, it is a marketing P that you can utilize with no budget!

In this political season, who out there is immune from the adrenaline rush of on-line instant surveying, checking out blog posts, and responding fast and furiously to someone else who just logged in a comment? Harness these same tools for your arts marketing success. The more opportunities you provide for participation in advance of ticket purchase, and then after the event, the more you will keep the interest and loyalty loop working to your advantage.

There are three essential ways to stimulate pre-purchase and post-event participation.

1) Learning.
2) Dialogue.
3) Opinion.

Learning participation is what happens when curiosity is stimulated. Take the dynamic web content of the San Francisco Symphony’s Keeping Score. (www.keepingscore.org) Here, a series of separate web sites – each devoted to a single work of music or composer – all link to or flow from the Symphony’s main web site. Part of the Symphony’s larger multi-year project, inclusive of video documentaries, radio, and guides for teachers, it is a powerful demonstration of how effective it can be to immediately engage someone in learning. Even a first time visitor to the SFO web site can excursion into a great learning experience that leads back to a ticket purchase.

Web sites, email blasts about upcoming events, e-zines, and direct mail can all work toward the same goal of stimulating advance learning participation.

In addition to the multiple web sites option employed by the SFO, we like E-zines – a regularly scheduled “magazine” of content – that can be a powerful step up from simple email postcard reminders. Try alternating email and e-zines, or getting email patrons to click over to an e-zine. E-zine buyers will get more drawn in by participating in learning, and will be more motivated to buy tickets. Keep your e-zine-ing manageable. Don’t set an impossible schedule. Monitor your box office around e-zine release dates to find out what content, length, and style works best for your audience.

Dialogue participation is what your organization can gain through blogs, social networks, and community sites. A blog linked to an arts organization web site can create dialogue participation opportunities on a daily or weekly basis, with virtually no cost to your organization. Suddenly, you aren’t constrained by a static web site. Use your e-mailings and snail mailings, along with your website prompts and hyperlinks to move your audience/prospective audience right over to your blog. Use your blog, in turn, to stimulate dialogue. Ask questions. Facilitate discussion. Not everyone will go to the blog, and fewer will join the dialogue. But for those who are passionate, opinionated, or just want to weigh in, dialogue creates community, belonging, and ownership. Major corporations world-wide are using dialogue communities the way they used to use focus groups, gathering perceptions and advice they put to use in future brand, image, message, and even product development. Your organization can use the same technique for continuous research as well as a powerful affiliation-building method.

Opinion participation is the easiest and fastest way to stimulate ownership and investment. If your organization sends out emails or snail mails about upcoming events, you can – and should – be inserting questions on a regular basis. Post-event follow up is important, too. Keep the questions short and to the point. Don’t be afraid to ask “why?” Don’t go for a 15 page survey. Stick to a single topic, and a couple of questions – for example, focus on box office/admissions one time, on the event experience another. Remember that the goal is to gain the interest and involvement of people who are responsive because they’ve given their opinion. Thank them. Let them know you really use their input.

The outcome of these three approaches is an involved, more educated, opinionated, and caring audience member. It is increased ticket sales, increased frequency of attendance. It is word of mouth that translates into box office success.

Remember, build participation in advance of ticket purchase, and again after the event, to reap the rewards of the 5th P of arts marketing.

Recession, Loyalty and Frequent Attender Perks

With the back-drop of huge financial instability that is being felt by non-profits everhwhere, we just finished off an audience analysis study for a highly respected university presenter. They’d asked us to sift through data about ticket purchase patterns over the past four years to see what trends could be used to shape expectations of things to come. They know the economy is having real and dramatic impact on their revenues, but just how is the impact of a scary economy playing itself out? They wanted to know what to expect in the next six months or year of financial turmoil. What does it mean for marketing the arts?

We found some amazing trend data on what is happening right now, this season, that could be important to many presenters:

1) For this presenter, subscribers had always been able to pick the number of events they went to each year – a pick your own subscription package. We found that over the past two and a half years, the average subscriber had cut back the number of events they came to by 18%. That trend started last fall, and really can be seen with renewals from this summer.

2) The average size of the subsription party (household, friends going to the shows together, etc.) has shrunk by 8% from two years ago.

3) The single ticket audience has stayed more stable. The average number of events attended by STBs we examined has shunk by 6%, but the average size of the single ticket party, while down from a peak in 2007, has actually increased since 2005.

Subscribers who planned their season of entertainment while sitting at their desks and looking ahead to their finances basically have cut back their spending pretty dramatically, by shrinking the number of events they attend. They have also reduced the number of people in their party: someone has dropped out of the group of friends who always subscribed together, or a family member who used to come along stays home instead.

Meanwhile, single ticket buyers are still splurging, just a little bit less often. Their purchases are less planned, more spontaneous, and they reward themselves.

A lot of the volatility in the profile of lost/reduced subscriptions comes from households hardest hit by the economy. Those with the most limited discretionary spending – that includes households that have committed high levels of their budgets to mortgages and transportaion as well as middle and lower income households – are those that have basically dropped from subscription ranks or have cut back the most on frequency. But there is still good and consistent growth in single ticket sales among households not as badly hit, including renters and younger singles and couples.

One of the many take-aways from this is the importance of creating and rewarding loyalty, for subscribers and single ticket buyers alike. The secret lies in finding ways to get the single ticket buyers to come a little more often – just one more event – and keep their party size stable, while encouraging subscribers not to drop four events: give them back an event (or the equivalent) and then reward them again so they can add back yet another event.

Retail and the travel and hospitality industries are all racing to bolster their revenues through stepped up loyalty reward programs. They are forming cross-marketing strategic alliances that put real benefits in their consumers’ pockets. Holiday Inn just sent me a $50 spending card for Home Depot as an extra reward for staying five nights at various HIs last month, on top of the points I already get from them. You can bet I’ll keep booking rooms with them with tangible extra rewards like that! (They’re a terrific model. They have the highest ranked customer loyalty program in the hospitality industry.)

Imagine sending every one of your ticket buyers a loyalty card. (Or better yet, send them a post card to get them to sign up on line to get more of their email addresses.) Make it enticing and easy to get to the next perk level. Focus on getting them back for another event, and on making it easy for them to bring along another person. Then reward them, again, with another perk or benefit, maybe through a strategic partnership with a sponsor. (Let them choose between three or four different rewards/partner benefits. They get to choose what matters most to them, and you get valuable information on what motivates different households on your database.) Keep them enthused about your venue, so they don’t decide to spend less and just go to a movie at the mall. Give them better customer service as much as you can. And be sure to let them know what their loyalty means to you.

Do the math. It takes a lot less money to keep loyal customers and slightly enhance their current attendance than it does to get a brand new attender through the door. And everything you do to reward loyalty now will pay back over and over in the tough months ahead. Those rewarded and loyal attenders will tell their friends to go to your holiday events. They’ll use their reward points toward a pair of main floor center seats for a show in February. They’ll apply those points to bringing the kids for a family show in May. Suddenly, you have sold a lot more tickets. And when we pull a little out of the recession, your added bonus is that these newly rewarded and loyal buyers will be those who are the most willing to write a contribution check.

Putting Audience in your Mission

Where is the audience in your mission statement?

It is the question I ask every time I’m engaged to develop a marketing and audience development plan.

If the mission is all about your organization and what it does, you will – guaranteed – have difficulty setting actionable, measurable audience development goals.

If the mission includes your audience – your community – it gives a depth of meaning to everything you do. You will be able to write one dynamite strategic plan, and your marketing plan will be able to directly support your mission and your goals. You will be able to measure your progress and demonstrate clearly to your donors and sponsors exactly how you are making a difference.

Here’s a simple exercise to test your mission statement.

If yours was a company that, say, made women’s fashion, which mission statement would better motivate your staff and give you long term direction as well as opportunity?

“To make beautiful women’s clothing…”
or
“To make women feel beautiful and well dressed…”

Is mission about what your organization does, or is the real essence of mission in the impact of what your organziation does? I opt for impact. See what it does for your mission.

Finding Feasibility: Feasibility Studies, Economic Impact, and the Arts Market

Doing a feasibility study for a new cultural center is one of the most important policy tasks any arts community takes on, and it is especially important when the economy is tight and funders need to stretch their dollars.

My take on it is that the task is not to say if a venture is feasible or not, but to determine what will make a project the most feasible, the most viable, in even the tightest economy. (Anything is feasible if your pockets are deep enough.) I’m interested in finding a model or approach that will be beneficial to all involved. A great home for the arts needs to be both a wonderful arts center and financially beneficial: A) to the community, that wants/needs a facility/icon/cultural anchor; B) to the user groups, that need/want viable facilities that truly work for them: C) to the economic system that supports it, to right size the building so the economic impact is positive over time; D) to building the arts audience, so that the seats are sold out rather than half sold.

One of the very first consulting projects I took on some 26 years ago was a performing arts facility, recently opened. The board chair called saying “we built the thing, and now we are facing having to lock the doors and throw away the key. We had no idea it would cost so much to operate. What can we do?” Figuring out the solution for them and ensuring they kept the doors open was the foundation for a lot of my thinking about arts facilities. It taught me that the real trick is thinking beyond the capital goal. The real job of feasibiltiy testing is planning for long term sustainability. Be careful about what you build: you are creating an economic ecosystem, and all the arts and arts supporters around you will be impacted. Your arts groups will have to pay the rent. Your audiences will pay the operating costs. Your donors will pay the balance, and their other grantees will feel the impact if emergency resources have to go to the facility.

On the plus side, everyone will benefit when the facility draws thousands into town every weekend, parking, eating out, staying over, shopping, spreading new dollars through the economy. Everyone will benefit when property values in the contiguous blocks increase. Everyone will benefit when education quality increases through stronger arts education. Your task in determining the feasible model is to capitalize on those benefits, and ensure the benefits are greater than the costs.

When you take on the task of determining feasibility, there are some key questions you should be pondering.

Who do you want to benefit from the facility, and for what? If your top goal is to have your local resident organizations benefit from a terrific home base, then the facility has to really be about them – affordable, designed primarily to showcase them and to their audiences. If the local symphony averages an audience of 800 a performance, be careful about the impact of a 1700 seat venue! Don’t build a hall they can’t afford and can’t grow into. (Sometimes, smaller is better for everyone.) If the total annual rent now paid by a local group is $2000, a new hall that will cost them $40,000 in rent a year is likely to have a real impact on the local funding community. Make sure the funding community is prepared.

What partnerships or joint ventures could fill the hall, every week, every day? Real economic benefit comes when arts hubs are alive and filled every day. That’s when the surrounding businesses are buzzing, when property values increase. More and more, the way to make this happen is through community partnerships between the nonprofits, area school districts, and higher education. Suburban halls often require the extra guaranteed tenancy of urban groups that will confirm to a second home relationship. The task is to find the right combination that will open the doors every day. We favor adding ample educational “wings” and facilities to ensure that the facilities are educational hubs, and adding various sized black box studio theaters and/or simple recital halls.

What will be the source of the operating subsidy? Going in, know how the budget gap will be met, year in and year out. Create the funding strategy, and include it in your initial public dialogue. If you can model out the increase in property values, you may be able to make the case for related public funding. If the school district is a 50% tenant, you can make a case for school district support. If other municipal offices are a 30% user of all the meeting and educational rooms, you can make a case for their partnership. Bascially, answering this question means going back to that partnership question over and over until you have the user mix that ensures the operating funding mix.

What is the audience of the future, and how can the facility please them/win them as regulars? Imagine your community five to ten years from now. Will it be substantially more diverse? Will it be younger? Will people drive less distance for entertainment? Build for your arts market of the future, not today.

These are just a few of the important questions that deserve real thought, real dialogue. Make sure your project asks them, and involves your entire community in dialogue to find the right answers. If you do, you’ll find the most feasible approach to building for the arts, even in tight economic times.

The Culture in Cultural Development

Culture is everywhere in the news. The culture of Wall Street investment banks. The culture of American political views. The culture of change. The Gen X culture versus the Baby Boom culture. The culture of greed versus the culture of giving. The very polarized high art versus real life culture that author Lee Seigel described in the Wall Street Journal last Saturday (September13) talking about a new round of culture wars in America. (Heaven help us!)

So what kind of culture do I focus on when talking about community cultural development? How do communities actually go about planning for culture? If you are doing cultural planning, how can you steer clear of culture wars and instead focus on doing good civic planning via culture?

There is plenty of “culture” included in cultural development planning. A few of the keys…

- The culture of place
– The culture of community identity(ies) and values
– The culture of the arts and artistic/creative expression
– The culture of heritage, history, and tradition
– The culture of the natural and built environment
– The culture of aesthetics
– The culture of education

Can you plan to facilitate the expansion, strength, and utilization of these cultures as a part of community planning? Yes.
In furthering these, can you develop strategies for the resulting “culture” to play an increased role in economic development? Yes.
Can you develop a democratic community consensus on cultural priorities within these? Yes.
Can you budget for cultural development, and determine a return on investment scenario? Yes.

Coming into a new town, I’ll often te told, “we don’t have much culture here.” Ah, but you do. It is who you are, where you are from, your hometown pride or lack thereof. It is what you value and what you teach. It is how you celebrate your creativity and how you recreate. It is how you keep reinventing your communities to keep pace with tomorrow’s generations – or how your communities stagnate and disappear. It is the choices you make for community investment. It is your world view, the way you view your neighbors, and how you want the world to view you.

This is what makes cultural development planning so challenging to do. It is why cultural development planning requires lots of diaglogue, lots of community input, a many divergent views. And it is why the goals and desired outcomes from cultural planning deserve a place in overall civic master plans. The cultural goals that we as communities can agree upon are too important not to be right up there in master plan documents. Coming to demographic agreement on civic cultural development priorities should be an essential task for every community, everywhere. Healthy culture isn’t someone else’s culture – the Gen X culture or the Western culture or the New York culture, etc. Heatlhy culture is about us, who we are as people and communities. Our own back yard.