Nonprofit Follies: When You Can’t Afford to be Bored with Your Board

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Funding for arts nonprofits is not going to rise substantially any time soon. This is not a great insight. But it is a fact that seems reinforced each day as the Great Recession yields to the Great Uncertainty.

That does not mean some arts nonprofits will not thrive. Some groups will land grants they hadn’t landed before, or come into local, state or federal funding they hadn’t come into before, or lure board members of sufficient wealth and mission devotion they hadn’t lured before. But in the main, the arts nonprofit business model fashioned over the last 60 years remains decaying, occasionally perked up by the smelling salts of stimulus but unlikely to look healthy soon.

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Perhaps this is why a powerful four-paragraph blog post by James Undercofler, professor of arts administration in Drexel University’s Westphal College of Media Arts and Design, has been on my desk for weeks, demanding some commentary. The piece is provocative — starting with its title: “Is the Not-for-Profit Structure Destructive?”

Undercofler, the former President and CEO of the Philadelphia Orchestra and former dean of the Eastman School of Music, is clearly better situated than many, certainly myself, to ask and answer the question — to place the structural issues hobbling in the arts nonprofit business model on the table and offer recommendations for ameliorating them.

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Undercofler’s essay frankly surprised me. My instinct, judging by the title, was that the piece would address funding models — perpetuating the myth, still hewed to by too many arts leaders, that the arts nonprofit business model would still be viable if only government would increase its largesse, individuals would redirect their giving and the markets would rise enough to restore the assets of foundations to their pre-recession levels, thus enabling pre-recession levels of giving. The amnesia is awful: none of those three conditions were in such great shape at the top of the last economic cycle. But the continuing staunch belief in the viability of the arts nonprofit business model resembles the loyalty of monarchists at the dawn of World War I. Terrified of new forms of government,the old guard clung to the past. History never looks kindly, in the long run, upon those wedded to the ways of yesteryear.

Yet Undercofler wasn’t preoccupied with funding streams. His issue is the internal dysfunctional within arts nonprofits themselves. He notes that the cumbersome, costly and bureaucratic processes around creating arts nonprofits “often overshadow the creation and presentation of artwork.” And when that is the case, he writes, the whole exercise is thus self-defeating. Undercofler tiptoes right up the edge of suggesting that what we need are not more arts nonprofits being formed, but more individual artists and groups of artists examining alternative ways of receiving what funding may be available to them in the future. When nonprofit arts groups mature, “flexibility is lost,” he writes, and they can “quickly move into decline, as they cannot address the changes presented to them in their communities, from their audiences, and external factors.” Some flowers simultaneously die as they bloom, but are those the hardiest ones in the garden?

Undercofler doesn’t state it explicitly, but many of the 23 comments (thus far) on his piece do: sponsorship groups are probably the way to go for artists. Call them “umbrella” organizations if you prefer. Either way, they remove corporate responsibility from artists to do their work.

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After all, he writes, one real problem is that most boards “rarely universally possess knowledge of or passion for the mission itself. At the very least they may understand a small portion of the mission’s program activity.” So even if an artist or group of artists form a company, incorporate and receive tax-exempt nonprofit status, and even if they are able to square the endless circle of structural bureaucracy, what is the point if board members understand “a small portion” of what the organization is all about.

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But more than that, neither Undercofler nor the many excellent commenters go one step further: How do ill-fitting or ineffective board members end up on boards in the first place? Who must take responsibility for putting them there? Is it possible that the arts nonprofit business model is so dysfunctional, so outmoded that what really happens is that arts leaders become intoxicated by the idea of board members’ wealth, inviting them to join so as to gain access to funding but failing to sufficiently gauge a board member’s interest, investment in, and knowledge of the group’s mission?

If that is ever the case, then it isn’t a matter of just educating artistic and managing directors about proper board governance — or educating board members themselves about proper behavioral standards. It is a matter of what drives those board members to join, and what persuades pre-existing members to admit them — and how much is being driven by pure desperation for revenue streams that are increasingly drying up elsewhere.

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One of the better comments on Undercofler’s post reads, in part:

…the greatest challenge is that the professionals (artists and administrators) are at the mercy of board members who don’t have a clue about the institution’s mission or the requirements of the art form. Knowledge and passion (as you point out) are in short supply, which is not the case with ignorance and arrogance: “If I can run a department store, certainly I can run an orchestra.” “If you were really any good, you’d be a banker, not an arts administrator.” They may not say it to your face, but they’re thinking it!

If this is true, isn’t it a symptom of a wider economic problem?

Is the Not-for-Profit Structure Destructive?

Is the Not-for-Profit Structure Destructive?

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