The Mission Paradox Blog

Avoid the Money Trap

When someone talks to me about starting a nonprofit arts org, the one piece of advice I give them is to never feel comfortable with money that comes from foundation or corprorate sources.

In fact, I recommend that their goal be that after 5 years of operation no more then 15% of their yearly budget come from foundations and corporations COMBINED.

Or to put it another way, if you have been running an arts organization for more then five years and you don't have a significant amount of your income coming from earned income (ticket sales, memberships) and individuals donations, then you are in trouble.

Or to put it YET another way . . . an organization with an $100,000 budget that gets $90,000 of it from earned income and individuals gifts is FAR more stable and poised for future growth then an organization that has a $300,000 a year budget that only gets $90,000 from earned income and individuals gifts.

I know that one from experience.

Like any former or current Executive Director that got a lot of money from corporations and foundations I can tell you the story about how a corporation pulled a $50,000 gift we were depending on and cause chaos within the organization.

I used to think that the ensuing chaos was the fault of the corporation.

It wasn't.

It was our fault for depending on the money and not spending enough time strengthening up our individual giving base.

Remember, your organization doesn't just need money.  It needs the right kind of money.

Proper Comparisons

I believe there is entirely too much hand wringing over how the niche arts like theatre, dance, visual, etc. can compete with the mass mediums of TV and movies.

If you are starting an arts organization, particularly a nonprofit one, then you shouldn't be comparing yourself to TV or movies . . . even if other individuals compare that with you.

The truth is that a nonprofit arts organization has much more in common with a political campaign, or a church, then it does anything in mainstream entertainment.

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Put it this way, I'll give you 15 experienced arts administrators. 

You give me one experienced arts admin, 2 people who love arts but have a background in political campaign orperations and 1 person who helped build a small church into a medium sized church.

I'd be willing to wager that I could build a stronger arts organization with those five people twice as fast as someone else could with the 15 arts admins.

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One of the greatest pieces of advice I ever got when I played a poker tournament was this:

Poker tournaments are easier to win when you stop thinking like a poker player.

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Maybe the reason we have so many lackluster arts orgs is that they are filled with people thinking like arts and admins

 

Love

To all my artists out there, I want to remind you of something.

There are people who love what you do.

There are people who aren't a fan of visual arts . . . who love your paintings.

There are people who don't like theatre . . . who love your shows.

The irony of life in the arts is that while many of us seek broad appeal, you don't need that many folks to make it real far.

A Reminder: Beware of The Game Changers

Just a reminder that while we (for valid reasons) discuss many of the challenges in the arts there are:

People

Out There

Who Are Figuring It Out

How much is enough . . .

Mick offers a question: 

I wonder about a bigger picture question connected to the idea of 'paying actors more'.

What would a 'fair' wage per year for an actor be? Or What do we feel it to be?

I know many actors working regional theater making barely $20,000.00 a year and they are considered successful in their region.

I know some actors blessed with solid positions with resident companies making $45,000.00 a year, and that is successful in their region.

However, I know a person today performing 8 shows a week on Broadway, and she can't afford her own apartment.

Should actors make as much as say... a teacher? Or should they make as much as a waitress... or a lawyer or doctor?

I wonder...

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Any thoughts?  Leave them in the comments.

Update:  To make the question more specific, how much should actors be paid JUST FOR ACTING.  Obviously if an actor is doing admin work then they will probably be making more, but I want to focus on just acting alone.

Update 2:  Fantastic comments.  Keep them coming.  I also want to draw some attention to Michael's comment below.  Here is a professional artist (drummer) who was in his artistic field for decades and decided to move away from the field.  As his comment notes, he did this because of some basic economic principles that he felt were no longer in his favor.  Personally, I love his line of thinking.  I understand that others may feel like his leaving the music world (for whatever reason) wasn't a good thing.  If any has some thoughts on this please share.

Listening

As our buddy Seth reminds us, one of the keys to successful marketing is finding consumers willing to listen to your pitch.

The Perils of Being a Big Stack Arts Organization (Updated)

I have gotten jumped on before for comparing artists to poker players, so I hesitate to jump into that stream again but it seems like most people have gained some insight from the analogy.

So in that spirit, let me introduce a new poker concept to you.  For the person that bought you Dead Money, I now present Big Stack.

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Alright, let's start with the obvious.  The objective of a poker tournament is to win all the chips available.  So if 1,000 people enter a tournament and each one is given $3,000 work of chips, that means the big winner is going to be the person who collects three milion chips.

Let's assume this tournament is going to last for five days.

By the end of the second day you'll have a few poker players with a very large share of the chips compared to everyone else.

We call those people Big Stacks.

What most poker players will tell you is that being a Big Stack is one of the best and worst things that can happen to you in a poker tournament.

It's a great thing because you control such a large share of the resources (chips) available that you can easily impact what all the other poker players around you are doing.

But it's a very dangerous thing because having all these chips makes you a huge target.

In fact, one of the things that seperates consistently successful poker players from those that are not is there ability to both acquire and keep a big stack.

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Whenever I think about some of the large regional theatres that have come under a lot of criticism lately, my mind always goes back to the Big Stack analogy.

I mean here in Chicago, that's what the Goodman Theatre, Steppenwolf, Chicago Shakespeare and other theatres are right? 

They control a huge amount of resources in the theatre world and that makes them (fairly or unfairly) a target.

But I think part of the reason I can't muster the righteous anger against them that some others can is because I understand the flip side of being a Big Stack.

I can't imagine how challenging it is to be the artistic or business leadership of those types of institutions.  So while I truly believe that many of them should be paying their artists more, I also understand many of the reasons why they feel like they can't do that.

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So where am I going with this?

I worry that the looming battle between artists and institutions is going to be waged on a battlefield in which both sides are woefully ignorant about what life is really like on the other side of the fence.

I can imagine a team of artists storming the gates screaming "more money now!" while some Executive Director inside the theatre is looking at a budget he can barely balance and developing a healthy bit of hatred for the artists who don't have a clue about what the situation is.

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So let me offer my perspective as someone who works in regional theatre and has a pretty decent knowledge of the "inside" financial scene for a lot of regional theatres.

I would wager that 80% of those theatres agree that actors should be paid more.

The question for them is how they can manage to do that when they have tremendous fixed costs and incrediby artistic standards they have to meet.

It is not as simple as "pay the actors more".

I'm sorry.

It just isn't.

Think of this way.  When a sports fan complains that his favorite player didn't make the All Star Team in a particular year . . . the question becomes, what player should they take off the team in order to put your player on?

So if actors are being paid more, then who gets paid less?

And if your answer is "raise more money then nobody has to get paid less" then I can introduce you to 1000 fundraisers out here who would love to hear your ideas about where that extra money could come from.

If we are really going to reform the regional theatre system then it is going to be done in partnership with the theatres.  And partnerships can only be achieved through a level of mutual understanding.

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Update:  One last thought . . .

If artists want to campaign for a bigger piece of the pie, more stability, or whatever then please understand that your fight is only partially with the arts institutions.

Your bigger fight is with the donors that fund the instituions.

I would guess that 90% of the funding that instiutions get from foundations and corporations are restricted to costs NOT related to overhead (i.e. actor salaries).

Promise and Proof

A few days ago I participated in a fantastic branding workshop done for a number of arts groups on the University of Chicago campus.  It reminded me of the relationship between promise and proof.

We have talked about this before, but as a reminder, a brand is essentially a promise that you are making between your organization and the consumer.

If you make an attractive promise and consistently deliver on that promise then you will have a strong brand.

It's that simple and that complex.

What the branding workshop reminded me was the importance of being able to prove your promise.

If you are promising your patrons high quality art, then what proof do have of that quality?

So what if you're a new (or emerging) arts organization that doesn't have the sort of objective proof of quality (reviews, awards) that other arts orgs do?

Then don't promise quality. 

Maybe you can promise cutting edge work.

Maybe you can promise an interactive night of entertainment.

My point is, don't promise things you can't prove.

Final Confession . . .

My name is Adam Thurman and I am an arts administrator.

It seems like the current trend in the theatre world is to make that term "arts administrator" a dirty phrase.

To some artists we are the keepers of the wealth, gaining salaries and health benefits at their expense.

We are the people that build the bloated institutions that produce the subpar art for the masses.

There have been times that I have read theatre blogs and come to the conclusion that everything in the theatre world absolutely sucks.

I mean that's what we talk about right?  How bad things are?

And before Prof. Scott or somebody else reminds me that it is there role to point out the flaws in the regional theatre system . . . I know that already.

But it just seems like the comments skew heavily on the negative side of the equation and are sorely lacking in perspective.

Maybe that's the nature of the internet, I don't know.

To me, the relentless bashing of the regional theatre system and of arts administrators just seems like a bit much.

I admit my perspective is biased.  I know a lot of arts administrators and I have found most of them to be incredibly smart, passionate people who love arts and love artists.

We are not perfect.  The system we work in is flaws.  Some of the flaws are our fault.

But we are not the enemy and sometimes it feels like are are.

 

 

Summary

Last week's theatre brawl is nicely summarized by Ethan here (and god bless him for doing it)

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