Michael Kaiser’s Arts in Crisis Symposium

Diane Smith asked Michael Kaiser to explain his 10 commandments of how to create and maintain healthy arts organizations. He replied that these are ten rules that help him run arts organizations, whether they are sick or healthy. “There’s a thin line between the two: no arts organization is that healthy, and you can’t get too sick because no one will lend you that much money!”

Rule # 1: Someone must lead. In most troubled arts organizations there are usually many different people who think they can solve the problems. Everyone has a favorite strategy, but someone must be in charge.

Rule # 2: The leader must have a plan. He commonly hears that “we’ll just work harder, raise more money, and get bigger audiences” – this is not the answer. The organization’s plan must relate to a cycle for healthy arts organizations, where they create interesting work, in terms of programming, education, or service; this work must be aggressively marketed, so that people will come and support the organization. When they get excited about the work, they’ll want to join the organization. Healthy organizations constantly welcome new people into the family; sicker ones hold onto the same small group of supporters. When the revenue increases, put it into more good programming and you’ll get more revenue, your family will grow, and the cycle continues. The trick is to get this cycle to hum – everyone feels it when it’s working.

Rule # 3: You can’t save your way into health. You cannot get healthy by cutting programming. When you cut it, you cut marketing as well and your family almost always gets smaller because it goes elsewhere. When the revenue falls, you do less work, you market it less, and the family gets smaller. When the market crashed two years ago, everyone responded by cutting programs: they had a smaller season, less ambitious art on display, etc. Michael saves every penny he can in his own budget: he “squeezes the nickel until the buffalo poops!” but he doesn’t cut the programming.

When people have less money to give to the arts, they have to make serious decisions. Organizations that do more innovative programming attract the gifts. “We are successful by doing our art well.” Arts managers get so scared about money that they’ve gotten very conservative and do only accessible work. “No, do interesting and important work!” There was only a 2.4% drop in arts funding nationally last year.

Rule #4: Focus on today and tomorrow, not yesterday. He talked about so many arts organizations who constantly fight over something historical – who started it, who’s fault is it, when did it start, etc. When he took over the Kansas City Ballet, he was the 6th CEO in 5 years, and he found them arguing about a set for Nutcracker that had been built years before. Organizations must look forward and stop the historical analysis.

Rule #5: You must extend your programming planning calendar. Everyone tends to plan their art too close to the event – 6 months or 18 months out. Organizations need to plan 3-4-5 years out. This will make the art better because you can take your time and think about it. You can do big transformational project – the big exciting projects you’ve always wanted to do, but it takes time to find the resources. Organizations don’t embark on big events because they’re afraid they won’t have the money for the next project.

“I always have 5 years of projects in my head. When I meet a donor, I listen to see what they’re interested in – what will excite that donor. I don’t make a project for a donor, but rather I pick from the 5 years of projects I’m planning. This will raise a lot more money.” The Kennedy Center recently had a festival of Arab culture, which was a huge project – they had 800 artists from 22 Arab countries. It took 5 years to put it together, they had to raise 10 million dollars, and they had to prepare the audience to see this art. It was not really accessible art, but because of the 5 years of preparation, they sold 92% of seats.

It’s particularly crucial for troubled organizations to excite their audience. When he joined the American Ballet Theater, they had done the same Romeo & Juliet ballet for 7 years, with the same set, costumes, and choreography. It was safe but probably pretty boring for the audience. Despite the ballet’s deficit, he announced a new ballet, with new sets and costumes, and announced it 3 years ahead. The best strategy for now is to talk about the projects you will do 3 or 4 years out.

Rule #6: Marketing is more than brochures, advertisements and email blasts. Marketing is crucial to earned income health. Arts organizations don’t use contemporary media and the Internet enough; but they also need to do institutional marketing, so that people think they’re exciting.

“When I was with the Alvin Ailey company in the early 1990s, we though we were really famous. Then Alex Hailey died (the author of Roots) and we got hundreds of letters of condolence; we realized we weren’t as famous as we thought we were! In December of 1992, we did the Phil Donahue show – 18 million people saw the show. But marketing is about repetition. So, as Clinton’s inauguration approached, a board member told me to call someone named Rahm Emanuel and we wormed our way into the inaugural show – 88 million saw it. Then we did an exhibition about the history of ballet theater, a free concert in Central Park in July covered by CNN, Rudy Giuliani named our street Ailey Place, and two books came out – a book of photos and a biography of Judith Jamison. Then we had a huge gala for our 35th anniversary. Given all this publicity, we doubled our fundraising that year because more people wanted to join the family, and the board got totally energized.”

“The board members had been embarrassed by our financial health and weren’t discussing the organization with their friends. Board members may keep quiet because they think their friends won’t like the art, or the thank-you letter had a typo or whatever. You have to make the board not embarrassed. I worked for a small ballet company that couldn’t make payroll, so we got a local TV celebrity to join our board in exchange for putting us on his show 4 times a year; we did an early morning TV show that business people watched while getting ready for work, we did a Balanchine dance that hadn’t been done in years, we performed in New York City – all these things enabled us to pay off the entire deficit in 10 months.”

Rule #7: Especially for a troubled organization, there must be only one spokesperson and the message must be positive. “Don’t talk to the press about your problems; vent at home – that’s what home is for! Talk about how you serve the community; funders want to support good things, not solve problems.” When he joined the Royal Opera House, the media would camp outside to get quotes from the staff going inside and print it all. They gave the impression that the staff was full of incompetents. Michael insisted that no one could speak to the press but him.

Rule #8: Again for troubled organizations, when you’re about to go bankrupt, you cannot focus on the $50 donor. But don’t expect a mammoth gift to drop out of heaven. “When I joined Alvin Ailey, everyone kept saying, “Ask Bill Cosby for $1 million!” Why on earth would Bill Cosby give us a million dollars?”

Rule #9: For all arts organization, the board must be willing to restructure itself. The arts go through life cycles, and the boards must also. At Alvin Ailey, half of the board had been there since the beginning – for 35 years. They were still passionate but they were not the right people for the governance needs of the organization 35 years later. You should keep them in the family but you might need to make a change.

Rule #10: You must have the discipline to do the first nine rules. You have to keep doing it and create a new institutional culture. Then you’ll start to see your organization getting healthy.

Diane Smith then posed a series of questions/topics to Michael.

Question about an organization closing: Diane brought up the CT Opera (the 6th oldest opera company in the US), which folded very suddenly in February 2009. The other arts organizations in town offered to honor the remaining tickets of opera subscribers, which was a great coming together of the Hartford arts organizations saying “We’re still here.” She asked Michael how do we counterattack the impact of the closing of an organization such as CT Opera.

Answer: There will be a ripple for a few days. The other arts organizations must talk about how they’re not in trouble – don’t make people fearful. Talk about how you’re organizing yourselves to be different. The bigger impact is on the board members – they get very scared. The Executive Director must be clear about the things you’re doing to ensure your physical health. There’s a fear of “catching a disease” and the first thing many people want to do is cut programming.

Question about restructuring boards: “When you come into an organization as a short term manager, you have a separateness. It may be difficult or awkward for a manager who’s been around for a long time to restructure the board, as they have long-standing connections with some board members.”

Answer: “You have to turn some people off – I’m not afraid to do this. It must be done for the future of the organization. I often have a conversation with a board member, closing with ‘and I hope you would make room for someone else.’ Usually the persona says, ‘Thank you!’

It’s far more important to consider who you invite to join the board. And don’t bring them on one member at a time – you don’t want them to come to a board meeting that is dysfunctional. Bring 3 or 4 new board members together at private meetings, get them excited about your plans for the future, and then bring them all into the full board meeting. The rest of the board will ask, ‘Who are these people and why are they so happy?’” Boards are too vital not to restructure them – they’re vital for their ability to reach out to their friends and colleagues.

Question about communicating with the board: “Communication is so important. Perhaps managers should call once a month just to say hello?”

Answer: We tend to think of the board as monolithic: “the board.” Different board members have different passions. Find that part of what you do that interests individual members, let them become a part of that, and they become the champion for that. They are then tied to you as part of your mission, and not just about raising money. You’ll end up talking to them abut the project that they’re involved in – Michael talks to every board member once a month about their project.

Question about dreaming bigger and doing more: How do you give an organization the confidence to do plan big?

Answer: Take time to think about the project you always wanted to do, and work on it for 5 years. Big projects are happening out there even in this recession. Grand Rapids MI put on ArtPrize where they invited any visual artist in the world to participate. They got every public space in the city donated, and 1500 artists came and showed their work. They then created a simple computer program and enabled people to vote for their favorite art work; tens of thousands of people voted. All the hotels and restaurants in Grand Rapids were full for 2 weeks, and it really didn’t cost much to put it together.

Question about the recession: It has been a long and deep recession, with lagging recovery for arts. People are holding on to their money, for a variety of reasons.

Answer: The recovery is starting for some arts organizations – for the vital ones in the community. The arts do lag behind the rest of the economy, and how much depends upon whether you are serving a grass roots population or a wealthy population. We are not yet turned around as economy. “I’m counting on two more hard years – a little less challenging than the last two years, but still challenging. When people finally get a job, they first buy the car and put some money in savings; they don’t necessarily give to the arts.”

Question: “What trends do you see over and over as you travel?”

Answer: “I get the same three questions: How did I energize the board? Where do I cut my budget? I’m so nervous that I don’t know how I can plan 3-5 years out.” Fundraising should be the third or fourth question, not the first.

The real fundraisers are your artists/educators/curators – the people that are creating your product. Then the marketers are second – they get people to know about you. “My staff hates it when I say this, but the fundraisers are the bureaucrats who collect the checks. The flowers on the table at the gala or the pretty invitations don’t bring in the money – it’s the belief in the community that this organization is vital.” Michael then quickly stated his respect for the development department professionals and all that they do.

Question about arts education: “The CT Opera was doing a great job in arts education – they even had a camp with inner city kids signing opera, but they still folded.”

Answer: Children get introduced to the arts very young and they participate until their teens. Then for 30-40 years, people stop participating in arts as they get involved in sports, college, marriage and kids. Then they come back when they’re 45-50, with the kids older and a little extra disposable income. That’s the tradition. We’re constantly refilling the audience with older people. But we now have a generation of people who didn’t have arts in the schools. “This scares me much more than the current recession. Will they become the donors and audiences of the future?”

Less than 17% of our GDP comes from manufacturing – corporations need us to train our children to be creative problem solvers. Arts education is being done in a very haphazard fashion – in many school districts participation is left up to the individual teacher. A third-grade teacher may take the class on field trips to the museum, symphony, etc. but the fourth-grade teacher may do none of this. “We don’t teach any other subject that way. Can you imagine your child coming home and saying, ‘We’re not doing math this year because the teacher doesn’t like math.’”

We need a new approach where all the arts organizations in a community can do arts education in an organized fashion and link it to the school curriculum. This can create some sort of passion but it doesn’t require more money. And many arts organizations are not putting a spotlight on their education activities because there’s no earned income involved. Institutional marketing is important here – there are more funders for education programs.

Question about resources: What’s available for arts managers on your website?

Answer: The website is www.artsmanagers.org where we share information with other staff or board members. There’s a free book on strategic planning, there are many videos and a discussion group. Arts management is a young field; we’re starting to create a body of material and get the conversation going.

The last half-hour was a Q/A session with the audience. Pertinent comments from Michael:

Free marketing resources: Internet, viral marketing and email lists. To create a database of email addresses, have a raffle at every performance.

Grant writing: Different donors give for different reasons; understand why they give and what they give for. Get a meeting with a foundation before you go through the process of writing the grant. Don’t be afraid to say, “I don’t have a relevant project at this time.” Corporations are not necessarily owned locally; most now give for visibility for their products and services, and consider a funding request based on how it will help their business. Send proposals to fewer donors but tailor them more. Diane added that there are a lot of unemployed grant writers who will work for arts organizations on a free-lance basis.

Planning: Take it very seriously and you must put the elephants in the room. You must take a hard look at the problems you’re facing and then fix them. “I don’t believe in board retreats – they’re the devil’s spawn.” You cannot do a strategic plan at a board retreat. You need creative solutions, so you need time to collect data and think about it. You can evaluate a plan at a board retreat but you can’t create it there. But also don’t make a routine board meeting be all negative – present solutions as well. You must make the case internally that there’s a lot of good stuff happening.

Political context of the arts: “It’s true that the US has the lowest per capita funding of the arts, but we’re also the only country founded by the Puritans, who thought music and dance were evil! I’ve seen the other side, working in England and South Africa. I do believe in lobbying – I was very involved in getting the stimulus money for the arts in DC, but we need to get our communities excited about us rather than trying to push the government into funding us. The state and local levels have much more money in play, but this has been decimated recently and won’t be replaced easily. But there are so many people out there from whom you can raise money. There’s an unlimited number of people interested in participating in our arts – we sell more tickets to the arts than to sporting events. We’ve not done a good job with institutional marketing – bringing people into our family and getting donations from them.”

Joint ventures: “That’s my 11th rule: it makes art more interesting and you share costs (i.e., back office or programmatic costs). The Hubbard Street Theater now does a joint venture with the Chicago Symphony Orchestra, where they feature dance music. It gives the theater more exposure at less cost. The Kennedy Center did a Shakespeare Festival with all the local arts organizations – plays, operas, ballets, modern dance, visual arts, jazz, etc. We had 65 local arts organizations participating. The local press paid so much more attention to the arts than usual – the marketing was done by the size of the festival. Opened the festival on December 12 with a reading on stage of Twelfth Night and worried about a very small house – 7200 people showed up!”

Diversity: “We have no diversity in arts managers – look around this room! The first generation of people of color who went to college were not encouraged to go into arts management. We still have a ways to go. And the sources of funding are so different: primarily white organizations get 60% of their funding from individuals while organizations of color get only 6% from individuals. We need to think about how we start to train people of color to run arts organizations.”

For-profit managers: For-profit people are not better than non-profit people. We’ve spent millions of dollars training the artists and almost nothing training the managers. We have an undertrained cadre of arts managers. Boards, in their nervousness, mistakenly think that hiring a financial person from the corporate world will bring financial health. They know how to measure financial problems, not how to solve them. They can bring fiscal discipline but not fiscal health.