Arts Organizations Get Creative for Fundraising in a Tough Economy
Often the first to feel the pain during hard economic times, America’s arts organizations have implemented drastic cuts and layoffs as a result of the recent financial crisis and recession. In fact, museums and orchestras from Hawaii to Washington have either cut back staff or declared bankruptcy, and more than one-third of executives at major arts institutions across the country reported taking pay cuts, according to The Arts Newspaper. Today, the outlook for arts organizations is increasingly bleak, as state governments will cut 7.2% of arts funding in FY2011 and some lawmakers are currently seeking to eliminate all annual funding for the National Endowment for the Arts (NEA) as part of the current political battle over the nation’s $1.5 trillion (and growing) federal budget deficit.
Simultaneously, the arts are becoming more deeply ingrained in American society and the variety and number of nonprofit arts organizations is steadily increasing. During the recession, 3,000 new arts nonprofits were created, the demand for arts education increased, and the American public increasingly turned away from traditional museum and concert going experiences in favor of interactive performance and digital media. To compound the challenges faced by artists in this increasingly crowded and unfamiliar landscape, the share of all philanthropy going to the arts has decreased from 4.9 percent to 4.0 percent over the past decade. To capitalize on the clear dichotomy between increasing (if changing) demand and decreasing funding, creative resource mobilization strategies are more relevant than ever before for the nation’s 109,000 nonprofit arts organizations and 2.2 million working artists.
A now familiar example of an arts organization that has successfully implemented just such a creative resource mobilization strategy is New York City’s Metropolitan Opera (Met), which in late 2006 began screening its operatic productions in movie theaters across the United States. While at the time, according to L.A. Opera Chief Operating Officer Christopher Koelsch, many opera houses looked upon this plan as potentially “foolhardy”, the Met has, over the lifetime of the program, netted $8 million and brought some of the world’s best opera to thousands of movie screens in 40 countries worldwide. The formula for the success of this effort is no secret, as trends show that attendance at movie theaters has actually increased during five of the seven pullbacks or recessions since 1970[i], whereas attendance at traditional performance spaces (concert halls, theaters, opera houses) has decreased a staggering 25% since 2003. Metropolitan Opera General Director Peter Gelb highlights this reality, stating:
“The model that we have established here is a combination of the way the movie industry works in terms of rolling something out first in cinemas and later on in other formats, and the way the world of sports works in terms of approach… [Since] the costs of running performing arts companies are not changing, the only way we can make financial ends meet for an institution like ours is to find an appropriate blend of revenue from ticket sales, donations, and new revenue sources.”
While the Met’s winning strategy has clearly proven successful in terms of revenue generation, only a privileged few of nation’s largest nonprofit arts organizations have this magic mix of significant resources, profile, and reach. For smaller arts nonprofits, creativity often means developing cross-sector partnerships with local private and public sector organizations and recognizing major donors with once-in-a-lifetime experiences, such as private screenings and exhibitions. Other organizations have chosen to bring on younger board members to both expand organizational reach into youthful donor demographics and bring fresh ideas for mainstream marketability to what may be traditional or outdated programming.
It seems that for many organizations, the recipe for success is rooted in reinvention and staying ahead of the curve—and this doesn’t always settle well with the purists of the arts community, who scoff at the idea of diluting artistic integrity with a nod to popular culture. But, as long-standing philanthropic conventions evolve away from the traditional value proposition of ‘art for art’s sake’ in favor of our fast-paced, trend-setting, and media-driven society, arts organizations are making hard concessions. As a director of a major arts organization interviewed for this article recently relayed, when the choice is either selling-off paintings to meet operating costs or embracing our social media, instant gratification driven culture, many employees and major donors have to ‘swallow hard’ and embrace the idea that, in the 21st century, ‘nothing is more constant than change—and if we don’t embrace it, we will lose the battle’.
Sources
[i] National Association of Theater Owners