Monday, August 24, 2009

If you're not for profit, then what are you for?

Minneapolis, Minnesota

"Nonprofits are not founded to meet a need," says Michael Kaiser, "but to pursue a mission. If you are not pursuing a mission successfully, then you either have the wrong mission or the wrong strategy."

A thin line separates health and sickness in the arts, he says, and when executives run out of solutions it is easy for board members of unhealthy organizations to revert to their more familiar, for profit missions. When that happens, missions become about raising money, with a negative spill-over effect to the community.

"People come to [the arts] for solace and refuge," Kaiser asserts, "but we talk to them about how bad things are. I don't believe in talking publicly about my problems. That's what my family is for. Too many organizations are talking to the press and to their constituencies about problems."

"Executives have to provide fiscal stability so boards will believe the mission is good. It is the executive's job to have the solutions – and to ask for help."

Kaiser serves as president of the John F. Kennedy Center for the Performing Arts where h
e has created an online forum for arts administrators, and “Arts In Crisis: A Kennedy Center Initiative” which provides management consultation throughout the United States. He graduated in economics and music from Brandeis University and earned a Masters in management from the Massachusetts Institute of Technology. Kaiser has been dubbed “the Turnaround King” for his work at the Royal Opera House, American Ballet Theatre, Alvin Ailey American Dance Theater, and the Kansas City Ballet.

He spoke to about 200 people at the Ordway Center for the Performing Arts in St. Paul this morning, in a two-hour session moderated by Alison Young of Minnesota Public Radio. His visit
is part of a 50-state tour started in Boston, March 18, designed to help arts organizations respond to the recession.

I last heard Kaiser speak at a Dance/USA convening years ago, prior to his gig with the Royal Opera House in London. Then, as now, his defining credo was "great art, well marketed."

To his eye, the arts face two economic facts of life: productivity cannot be improved (e.g., "Hamlet" needs the same cast it first had and Beethoven cannot be played faster) and, once a venue has been built, its earned income potential has been set in stone. The response of arts organizations for 30 years has been to raise ticket prices when faced with fixed earned income and rapidly expanding costs.

"The arts are still relevant," Kaiser says, "but they are too expensive." As evidence, he cites the Kennedy Center's free performance days when the symphony – that "irrelevant art form" – is the most well attended by people across all demographics.

The solution? I have long argued, possibly in reaction to Kaiser's earlier speech, that no arts organization ever cost-cut its way to success.

Cutting expenses, Kaiser says, runs counter to mission and does not work. When he arrived at the Royal Opera House with its $30 million deficit, he had to contend with a board that had decided to cut all artistic programming for 18 months. He never favors cuts for exciting, artistic programming and aggressive marketing. "I believe in cutting everything else."

The arts have to be exciting, he argues, in order to get people talking and to compete harder for the money. Make that exciting and risky. One place to start is the mission statement. "Often," Kaiser says, "we gather people in rooms and keep them there until the language becomes blander and blander and you offend no one and stand for nothing. Someone should leave the organization by the time you end a mission discussion."

Kaiser also believes that planned programming, four and five years ahead, makes for better art and provides more talking points. "Maybe you aren't doing the most exciting thing this year, but if you know the great things coming up, you have something for people to buy into and adopt." For organizations large and small, with and without their own facilities, advanced planning also allows for joint ventures. Kaiser is bullish on joint ventures, both for the current environment and for more normal times.

He also thinks a bit of tension between artistic and executive directors can be a good thing when it makes long term program planning happen. "You can't do marketing and fundraising until you do the programming. The three are very linked. You will get a better result if you start now than if you wait two years to see what happens."

With programming in-hand, organizations have two marketing challenges, institutional and programmatic.

"Institutional marketing is central to organizational health. It is the responsbility of the CEO and not the marketing department. It is what we do to get people excited about the organization. It is not expensive, but it does take time. It has to happen again and again. Programmatic marketing depends on many variables, and its cost should be falling with the adoption of technology and online communication."

Boards of directors are a key cross-roads in marketing efforts.

"A board is not a monolithic whole," Kaiser says. "Each member must be treated as an individual. Communicate with them at least once a month and not just at meetings. A healthy organization keeps reaching out and bringing in new people." To change a board culture, "Never ever add one member at a time. Have three or four new people become acquainted with each other and then bring them onto the board together."

Kaiser also favors involving artists and the rest of the staff in an organization's ongoing discussions.

From his book, "The Art of the Turnaround: Creating and Maintaining Healthy Arts Organizations," Kaiser outlined 10 rules that organizations ignore at their peril:

1. There has to be a/one leader who, at the end of the day says "This is what we are doing, where we are going, and how we are going to get there."

2. The leader must have a plan, a strategy, for getting from here to there.

3. You can't save your way to health. It makes you look irrelevant and you don't compete well.

4. Focus on the present and the future, not the past.

5. Extend your planning calendar. It costs nothing to do so.

6. There has to be one spokesperson, and there can be only one – positive – message.

7. Marketing is more than just brochures.

8. Don't aim fundraising gift solicitations too high or too low.

9. The board has to be willing to re-structure itself.

10. You have to have the discipline to do the first nine rules.

The man does have his detractors, many of whom expressed their views in comment replies to his July article on the Huffington Post,
"Why The Arts Don't Pay for Themselves".

Ultimately, Kaiser says, there is no end of private funding available. "There is money in every community – 65% of arts money comes from individuals – we have to improve our marketing. There is no magic. It is just common sense."

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