Tag Archives: arts

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.

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.

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.

A Modest Jobs Proposal to Congress and the President: Arts, Culture, History and Heritage

Viewed through any side’s political lens, the unemployment numbers continue to be grim, and the outcomes of the last stimulus package leave Americans unconvinced. So it was interesting last night in the State of the Union as the President asked Congress for a new jobs bill to be readied for his signature as soon as possible. Just what should this new bill fund? The TV commentators couldn’t say, but said Congress will be looking for good ideas from an American public wary of a new stimulus package.

Here’s a modest proposal.

Emphatically, a jobs bill should fund all those nonprofits that create, illuminate, preserve, and share the arts, culture, history and heritage. It should fund that most essential fabric of our communities: our shared cultural heart and soul, that which creates community, celebrates shared experience, builds beauty, and provides a lifetime of education not taught in schools.

What would this include?

How about your community art association? It had to lay off its education and outreach coordinator, its after-school program director, and its curator, and had to ask its executive director – one of those arts-committed leaders who has worked 70 hour weeks for decades – to go half time. As a result, it can no longer offer the free partnership program it had created for the low income housing residents down the street. It stopped its Sunday afternoon family fests. It had to tell the City it could no longer manage the annual Main Street art show. Jobs lost that could be regained: 3. Lives affected by the loss, that could once again be served: 7,000.

How about your local museum, which had to cut so many staff that it can no longer offer interpretive programs or be open for those free Tuesday mornings that used to serve so many seniors and moms with small children. Jobs lost that could be regained: 6. Seniors, moms & tots that could once again thrive on those Tuesday morning programs: 200 a week.

How about your local orchestra, which had gained excellence after the long slow climb to be able to pay professional musicians a decent wage, and through that excellence had built a solid local audience. After years of building many of these orchestras had no choice but to cut those musicians by cutting back rehearsals, cutting weeks, cutting performances. Those musicians: their role in their communities used to go far beyond playing in the orchestra, as most are the people who teach children music lessons and whose (free or very low cost) coaching builds community ensembles, youth programs, and the increasingly important senior music programs. But after wage cuts by their orchestras, many could no longer afford to remain professional musicians, so in the last few years they went to work doing something else. Both they and their communities feel the loss in ripples far beyond the concert hall. Jobs that shrank to ten weeks of part time pay that could expand to 20 weeks of nearly full time pay, providing enough stability so each musician could again offer those lessons and coaching sessions, the summer camps and annual music competitions? 20+, not to mention the regained music librarian job, the custodial job regained because of the regained rehearsals and concerts. Total lives of students and community members served through the reclaimed orchestra: 10,000.

What about your theatre company, the one that closed down completely last year, leaving a staff of everyone from seamstresses and carpenters to bookkeepers, electricians, educators, marketers, and actors relying on unemployment. It was the one that couldn’t raise ticket prices because it knew its community couldn’t afford to pay the real costs of professional theatre, and the bank couldn’t provide loans to make up for the shortfall in annual payouts from its meager endowment after the market crashed. It left scores unemployed within its walls, and left a huge black hole of an unlit marquee in the middle of your once booming theatre district. That once lively street now is scary at night. All those restaurants and cool shops up and down that street? They ended up laying off half their waiters, or closing their shop doors. That meant that the local produce company lost half of its downtown restaurant business, and the local liquor store lost five six of its regular weekly deliveries – a third of its restaurant business. They each laid off a few workers, too. And the motel where all the visiting artists stayed? It lost all that multi-week business and had to lay off 6 housekeepers and front desk workers. Total jobs lost up and down one street and related businesses when the theatre closed, that could be regained: 185. Total lives touched through the theatre, lives that once again could be moved, sometimes even transformed, through the shared experience of live performance: 45,000 a year.

How about that interpretive site in your county or state park, the one that your community members paid for over years of hard fundraising out of pride in local history – or the local science story, the local immigration story, or exploration story, or Civil War battles fought, lost, and won. Those same community members agreed long ago to take on the staffing of those centers, through the “heritage site foundation” they set up so that local government wouldn’t have to carry the bill. The last Federal stimulus bill explicitly said that no government funding would go to museums or parks, so these sites were splat in the middle of absolutely no hope. (Unless, that is, they had a shovel ready trail need, or needed a weatherization team.) But the curator and those two part time carpenters and maintenance guys who built the exhibits and kept them operating, who somehow kept the boiler working and washed the floors and set up the tables and chairs for the community festivals, the fairs, the 4th of July celebration? They lost their jobs last year. The curator now works 10 hours a week, and sweeps, fixes the boiler, and sets up chairs in her unpaid “free” time. They had to tell the County they couldn’t take on the annual multicultural festival this year, the senior and high school art shows had to be cancelled, and there is question about the 4th of July celebration because they can’t afford the wear and tear on the building. Jobs lost that could be regained: 2.8. Lives impacted that could once again celebrate their heritage, teach their children about local history, and come together to share American Independence Day: 15,000 a year.

How about the teen media and film center, where film makers and digital media artists spent every afternoon, every weekend, and every summer day working with teens, training them and turning kids lives around as those teens found their own brilliance in creativity – and went on to top universities and to become the digital and creative entrepreneurs of the future. One by one the artists had to quit to find jobs making digital commercials or working in ad agencies because there was no longer any public or private grant money to pay them. The four hundred kids who called the teen media/film center their creative home have lost it, and with it they lost their ability to receive the training they need to grab entry slots in those top collegiate programs. Jobs lost that could be regained: 5. Teens who could become the creativity entrepreneurs – the Silicon Valley inventors of the future – who could once again be impacted: 400 a year.

I know every one of these organizations, and for every one I’ve written about here I could write about 20 more who had to hand out pink slips over the past two years. The actor who moved to a small town, rebuilt the boarded up Grange Hall and turned it into a theater: now unemployed. The dancer whose modest nonprofit dance company led to the annual community Nutcracker, who had to close the dance company. The Mariachi violinist who had been making a full time living through an arts council program that put violins in the hands and homes of hundreds of low income Latino children? He’s unemployed, looking for a job as a line cook.

There’s been a lot of talk of shovel ready construction jobs as providing infrastructure and as basic and fundamental to community life – employment for the local construction companies. I’d propose that the jobs described here are every bit as fundamental to community infrastructure – our heritage, our history, our creative expression,our families, youth, and seniors. These are jobs fundamental to our collective pride, sense of place, and, yes, our optimism in the future and even our communities’ perceived property values. These are jobs that impact the desirability of our communities as places to live, our economic future, and the ripple impacts of stronger local tax base.

Most funders have historically shied away from funding these jobs. Government has shut most of these jobs out of grant funding, and foundations have said they have to put their reduced resources toward other “fundamentals.” I’d say, put these jobs in a jobs bill, and ask the foundations of this country to match the government support, and magic will happen. Rebuild America? Rebuild our pride and celebration in our communities when they are so shaken? These jobs will do it.

All it takes to regain our shared American pride and celebration is a modest investment in the people who make it possible.

Please, ask your Representative and Senator to put this proposal in the jobs bill, and tell them why.