Dear Nonprofiteer,
Staying out of jail and up to technological speed while running a nonprofit
December 21, 2011Some days the Nonprofiteer is happy to serve just as a pass-through for the good work other people are doing. This is one of those days.
On January 11, look out for the publication of Good Counsel: Meeting the Legal Needs of Nonprofits, Lesley Rosenthal’s guide to every possible legal issue in nonprofits. (The Nonprofiteer urged Lesley, who is Lincoln Center’s general counsel, to call the book “How to stay out of jail while running a nonprofit,” but for some reason she demurred!) Having had a chance to review the book in manuscript, the Nonprofiteer is happy to give Good Counsel her strongest possible endorsement, and not only—not even primarily—for big agencies with their own general counsels. The lawyers on your Board who are forever being expected to know everything legal that might affect your agency (and who are secretly wetting their pants from anxiety because they don’t actually know all those things) will be particularly grateful for this brief, well-written and comprehensive guide to, well, staying out of jail. And—how moderne!–it’s also available for Kindle and I-Pad. Publisher John Wiley & Sons/Lincoln Center.
And, in other useful news, elevationweb.org announces that it’s prepared once again to provide free Web development services to nonprofits which can match Elevation Web’s contribution. Last year this “socially conscious Web design and media company” donated $400K in services to 95-plus nonprofits. So if you (like most of the Nonprofiteer’s clients) think that upgrading your Website and making it easier to use (i.e. donate from) is of critical importance in the coming year, check out the group and complete the application at http://www.elevationweb.org/one_for_one.php.
Dear Nonprofiteer, Should I face the music, or dance?
December 16, 2011Dear Nonprofiteer,
If you could stand one more letter asking about Boards of non-profit arts organizations — or even point me in the right direction — I’d be very grateful! I’ve been the school director for a small non-profit music organization for several months. The organization has two parts — there are performance choirs and then there’s the school.
But maybe it would be more accurate to say that there are two organizations, because I’ve been told that the school is “technically” for profit, meaning that only the performance choirs can receive grant money. I’m not sure why, or even if, this is so, though I understand that we make more money charging for music lessons than we do sending out the performance choirs, whose members are paid a pittance that nonetheless exceeds the amount companies and civic organizations are willing to pay for being entertained by them.
The main problem: the performance-choir conductor is also Artistic Director of the entire organization, AND is Chair of the Board of Directors. He is paid $20,000 a year for what’s supposed to be a 12-hour-a-week job, but in fact he doesn’t work nearly that much. He lives a couple of hours away, so he only comes in once a week to rehearse, and not even that during the summer (or the Christmas holidays, or the Easter holidays, or St. Swithens’ Day!). And whenever he can he schedules performances near his home rather than near the school, which means we’re not really serving our community.
Meanwhile, I work full-time (theoretically 40 hours a week but actually closer to 90, what with teaching as well as administrative work). This huge job pays me $34,000 with no benefits. The Board sees itself as my “BOSS” and reminds me of that often. In addition to the Chair, the Board members are 1.) one of the school’s teachers, who’s also the Board treasurer; 2.) a member of one of the performance choirs who writes the grant applications; 3.) the mother of a former student, who is paid to be secretary; 4.) the mother of a current student, who is paid to be DIrector of Development; 5.) another one of our teachers; and 6.) a lawyer who takes voice lessons from the treasurer. In other words, NOBODY is without connections to the school and thus a personal agenda.
The school went downhill financially during my predecessor’s tenure, to the point where we’ll probably have to give up half of our space. But when I say I need help with fundraising, I get, “Sallie Jo managed it.” I’m expected to do everything Sallie Jo did but with more “Board oversight,” which means micromanagement and no actual help. That’s not their role, apparently—their role is being my superiors, scrutinizing me, complaining to each other about me, and occasionally sending me a condescending note giving me reprimands and further orders.
As a seasoned professional who is keeping the place together single-handedly, I consider these missives insulting at best. But there is no one I can appeal to. Do you have any suggestions? Advice? Articles you could point me to? (Templates of letters of resignation?) I’m near the end of my rope. Signed,
Hanging on By a Thread
Dear Hanging:
This is like one of those children’s puzzles, “Can you spot what’s wrong with this picture?” There are so many things wrong that even the youngest child can detect some of the problems, while others are so subtle that older children will be challenged. Or, in other words: what a mess!
Once you’ve said that the Artistic Director is the chair of the Board, you’ve already described an organization in trouble. One function of an arts Board is, indeed, to support the vision of the Artistic Director, but the other is to counter-balance that vision with business acumen and an awareness of what a nonprofit arts organization owes the community. Even if every single member of the Board weren’t compromised in the way you’ve described, the organization itself would be hopelessly compromised by having a single person leading both the Board and the staff.
If the Board were independent, the fact that you and the Artistic Director both report directly to it would provide a healthy balance: he would say “I want to do blah-blah-blah” and you would say “blah-blah-blah costs three times as much money as we’ve raised in any year in the history of the organization” and the Board would weigh these competing points of view and make a decision. In those circumstances, it would be a good thing that the Board knows it’s your boss—that would mean the Board knew that you and the Artistic Director were co-equals reporting to a common authority rather than an inferior (you) reporting to a superior (him).
But with a Board that’s essentially an extension of the Artistic Director’s personality, you have the worst of both worlds: multiple superiors and no equal colleagues. No wonder you’re feeling besieged and insulted: you were hired with the title of a director and the status of a secretary.
That’s what the salary situation means: they’ll pay you less than half (on a per-hour basis) of what the Artistic Director makes, because he has more than twice your power. The fact that you’re also earning less than the singing lawyer’s administrative assistant is just icing on the cake.
And now we get into the subtle stuff: what, exactly, is this nonsense about the school’s being “technically” for profit? It either is, or it isn’t; it either files a Form 990 informational return with the IRS, or pays taxes on its profits like any other business. It’s hardly unusual for an arts organization to run a school whose earnings help sustain the actual performances: most likely that’s the real function of the School of the American Ballet. It’s a prestige training program for the New York City Ballet, and as a result it’s also a cash cow for the company. But the Nonprofiteer strongly doubts there’s any ambiguity in the status of either the ballet company or the school, whether they’re independent or intertwined. All the hair goes up on the back of her neck when she hears the word “technically;” in the nonprofit sector it almost always means some corner is being cut that shouldn’t be.
So let’s review: you’re overworked and underpaid in an organization where your input is ignored but your grunt labor is expected and taken for granted. This may also be an organization with a dodgy relationship to the laws of your state concerning nonprofits and community benefit, and the laws of the United States concerning nonprofits and taxation. Given all this—surprise! You’re having a terrible time.
The Nonprofiteer ran a small nonprofit herself—a choir, as it happens—back before the glaciers melted. It was a complete debacle, though it did provide one of the world’s fastest educations in nonprofit management. It took her nine months to realize that she was on a dead-end path, and to quit. She urges you to be more expeditious.
It’s a terrible economy and no doubt you want to work in the music world that you love. But you’d be better off working as a temp and looking for a job with a functional school or music group than staying where you are and having your spirit ground down by fighting against impossible odds.
The Nonprofiteer’s advice: give two weeks’ notice and start the New Year off fresh. As for templates of resignation letters, the simplest are the best. Justifiably angry as you are, don’t burn any bridges. Just write, “Ladies and Gentlemen: I’m sorry that I will be unable to continue as the director of [Name] School. My last day will be [date]. Thank you for having given me the opportunity to work with you. Sincerely, [you].” If you just can’t stand the thought of writing something so polite, write a letter that expresses how you really feel—and then put it under the chestnuts and roast away.
Submit your letter today, and you’ll have yourself a merry little Christmas. You deserve no less.
Why the public should fund the arts, after all
December 6, 2011The Nonprofiteer had a fascinating conversation with Margy Waller, a special advisor to Cincinnati’s ArtsWave, which leads the nation in evidence-based approaches to advocating for arts funding. Ms. Waller had reached out to correct the Nonprofiteer’s misunderstanding (and therefore misreporting) of ArtsWave’s efforts, noting that the argument is not that the public should fund the arts to promote economic recovery but that it should fund the arts to promote neighborhood vibrancy. This nuance turns out to make all the difference.
Here’s the ArtsWave insight: people are ready enough to agree with the notion that the arts are good for the economy. But if you probe deeper, and ask what top three things we should do to improve the economy, no one answers “subsidize the arts.” So apparently the argument that the arts are an economic engine (true or false) is unpersuasive, which is what really matters.
But the ArtsWave research also uncovered the fact that if you ask people what would improve their neighborhood the most, the arts come up time and time again. Why? Because artists’ residences are known to herald an improvement in real-estate values; because arts audiences mean feet on the street and therefore greater public safety; because arts venues are known to spawn coffee shops and restaurants and other places of urban liveliness.
Therefore, the argument for public funding needs to be focused not on the art but on the public benefits of art-making. This simultaneously ends the unwinnable argument about whether x or y is valid art or a useful expenditure of public funds and reminds people of what they believe anyway, that investment in arts-related infrastructure benefits everyone—not in some airy-fairy, soul-stirring, life-improving sense but in the grossest day-to-day experience of quality of life.
Thus an appeal to provide tax breaks to bring artists to a particular area would be framed not as a subsidy to these all-important art-making beings (read: overprivileged white people who ought to get jobs) but as a way to offset (maybe even reverse) the damage to property values wrought by foreclosures. The subsidy is to the value of private property (something that can be monetized) rather than to the value of art (something that cannot).
As instrumental and cold-blooded as this approach may seem, Ms. Waller makes the powerful point that vibrancy is what people love about the arts—and that weaving the arts into the fabric of other social needs and activities enables people to appreciate the arts “not as consumers but as citizens.”
The Nonprofiteer was particularly struck by that last point. Asked what citizens should do to respond to 9/11, then-President Bush had nothing more to offer than, “Go shopping.” Anything that enables us to respond to public concerns in a public spirit; anything that combats the notion that government is the problem and privatization the solution; anything that reminds us that we’re a republic if we can keep it; anything that illustrates we don’t have to buy something to value it—any of these is a consummation devoutly to be wished.
As a wise person once noted, the important thing is not to have BEEN right, but to BE right. The Nonprofiteer has been wrong in her blanket condemnation of public funding for the arts, because she thought of it exclusively in the frame established by its opponents: as subsidies to artists to create what might or might not actually be valuable. Once the framing shifts to “vibrancy,”* and to concrete benefits to the broader society, public arts support suddenly makes sense. No one else may care, but it will be a relief to her to stop being the only left-wing theater critic in the country opposed to public funding for the arts.
She continues to think that the NEA itself is a lost cause and that energy spent defending it would be better spent squeezing support for the arts out of HUD, Fannie Mae/Freddie Mac and local housing authorities. But that’s a matter of strategy. As a matter of principle, the Nonprofiteer is grateful to have discovered a valid way to defend taxpayer support to something that matters so much to her.
—————–
*Yes, “vibrancy” can be a euphemism for “gentrification,” or at least its prodroma. But if we plan for vibrancy (instead of simply hoping that lightening strikes in this ‘hood or that), we can also plan to prevent displacement. And without displacement, “gentrification” is just another word for “safe streets, amenities and public services”—for everyone, rich or poor.
How not to handle succession in the arts
November 17, 2011There could be worse ways to handle succession planning than the one chosen by the Miami City Ballet, but it would be hard to think of one. The Board of Directors, concerned that the ballet company would collapse when its famous artistic director Edward Villella retired, decided to test its own theory by forcing him out before he was ready to leave. Some Board members blame the outcome on Mr. Villella, who apparently refused to greet several of them at the company’s gala; but it’s hard to blame him when one of them called a meeting with him for the purpose of handing him a book on succession planning.
The Times article reaches for the classic suits-versus-artists narrative, saying that Villella’s ouster reflected the Board’s determination to place business stability above artistic product; but that’s unfair. The Board is responsible for the continued health of the company, and a failure to consider new leadership when the current leader is 75 would be a dereliction of duty. But what we’ve got here is failure to communicate.
As Chicago’s Victory Gardens Theatre Board learned back in 2000, you don’t call in the company’s artistic engine and hand him his walking papers–or even the sort of broad hint contained in the gift of a book about succession planning. You’re talking to someone about his life’s work and his passion, and you can’t talk to him as if he were a CEO who had been recompensed all these years in cash and expected to be recompensed the same way in retirement. An artistic director who is compelled to retire–and yes, indeed, some of them need to be–has to be offered a form of compensation congruent with what he’s been receiving up until now, something involving artistic control–even if it’s only the control inherent in leading the search for his own successor.
And even if the artistic director’s retirement creates the opportunity for the Board to step into its proper role of leadership–say, supervising the managing director instead of having the artistic director do so–that’s an opportunity to be pursued once the new artistic director begins. From the Board’s standpoint, having the managing and artistic directors report co-equally is a way to lighten the artistic director’s load while assuring that the Board itself receives comprehensive information. But from the standpoint of the incumbent artistic director, it’s a slap in the face, and suggests that the Board wants to interpose a business person (and a businessperson’s veto) between the artist and his vision.
Of course the Board IS the boss of the company, including the artistic director. But the most effective bosses wear their power lightly, in cooperation rather than conflict with the artists they mean to be serving. By this measure, the Board of the Miami City Ballet just fell on its face.
A word to wise arts Boards everywhere.
Collaboration without the head-shaving
November 3, 2011Thanks to Thomas Cott of You’ve Cott Mail for pointing the Nonprofiteer to this article in Crain’s New York Business about the value of collaboration among small arts organizations as typified by the Lower Manhattan Arts League.
The league — which includes small groups like Access Theater and larger organizations such as Dance New Amsterdam and the Children’s Museum of the Arts — has monthly meetings where constituents help each other with everything from fundraising to legal advice. The groups have created a downtown cultural festival, which they produce in the fall and spring. The members even apply for some grants as one entity and lobby the city government as a pack. Individually, some members with budgets as small as $100,000 are barely on funders’ radar, but as a group the members generate around $14 million in economic activity per year and employ roughly 1,200 people full- and part-time. After years when none of the groups were able to score a grant from American Express, for example, the consortium applied together in 2009 and was awarded $100,000. They divvied up the money according to the size of each budget.
While the cheery tone of the article elides some of the serious difficulties arts organizations face in aligning their missions and needs with one another, the point is nonetheless well-taken: organizations too small to get attention on their own may be big enough when combined with others to secure foundation funding and government cooperation.
Such collaborations also serve as living ripostes to the chronic funder complaint that the supply of arts organizations exceeds the demand for them: if these disparate groups can work together without cannibalizing their audiences or funding, they must not be duplicating each other’s work. Or, as it is written: the whole [collaborative network] is greater than the sum of its parts.
Dear Nonprofiteer, How many roles does it take to screw up an organization?
October 21, 2010Dear Nonprofiteer,
Several friends and I have started a new musical arts ensemble and are seeking to incorporate as a non-profit. There are 8 artists in the ensemble, so we are a very small organization. Since starting the ensemble was my idea, I have been serving as “Artistic Director,” choosing music, organizing rehearsals and performances, etc., as well as being an Artist in the ensemble.
We are currently working on our Bylaws and so have been thinking about how to structure our Board. We have decided to have all the usual positions (President, VP, Secy, Treas) plus an Artist Representative, and a variable number of at-large Board members (no more than 5). We have a provision in our (in-process-of-being-written) Bylaws where the Board can only select or remove the Artistic Director with a 2/3 consensus of the Artists.
At this point, all of our Artists will serve on the Board in some capacity (either as Officers or as at-large members), though we want to allow for a future time when the Artists get to be just Artists and let other people run the business side of things. The other Artists want me to have a say-so in the running of the organization since the group was formed by my “vision”.
So my question is this: Is it legal, ethical, practical, etc., for me to serve as both President AND Artistic Director (and an Artist in the ensemble)? Or should one of the other Artists serve as President and I (as Art Dir) be only ex-officio with no vote?
I should also mention that my husband is also an Artist in the Ensemble, and so would also sit on the Board (for now).
Thank you very much for any advice you can give. Signed,
Wearing Many Hats
Dear Hats:
Last issue first: it is never a good idea to have a married couple on the Board of a nonprofit, nor is it a good idea for one-half of the couple to serve on the Board while the other is employed by the agency. (I gather you’re not getting paid as Artistic Director, but if you can be selected or fired by the Board, you’re an employee.) A husband and wife on the Board stacks the voting since more often than not they will vote together, and the more important the issue the more likely they will march in lockstep. Majority or not, they constitute a bloc, and blocs or factions create trouble on any Board.
And if your husband’s on the Board and you’re the Artistic Director, you’ve stacked the deck in your own favor on every issue while at the same time guaranteeing the maximum damage to the Board (your husband’s resignation) in case of any disagreement. Don’t start out your nonprofit life with a built-in conflict of interest.
Further, as you seem to realize, no staff member (including the Artistic Director) should serve on the Board at all (whether President or not) except in an ex officio, non-voting capacity.
But let me suggest that you pause here to consider why you want to create a nonprofit structure at all. Don’t become a nonprofit because “all arts groups are nonprofit;” the Nonprofiteer did that for a client once and it was a disaster. As soon as there’s any money involved, you’ll find yourself fighting with the Board over whether those dollars should go directly to you, as Artistic Director; to the artists, in some proportionate way; or back into the institution. So imagine yourself confronting that question now, and build the structure that will get you the answer that you want.
It’s fine to fill your Board with ensemble members and thus guarantee complete artistic and financial control of the agency by its artists. But if you do, an “ensemble representative” would be redundant and should be omitted from your bylaws.
You might further consider that if you’re entirely ensemble-governed, you’re missing the opportunity to use the Board for its central purpose, which is to connect the group to the wider community (and, yes, raise money from that wider community to support the work you do). You do your art for people; perhaps some of them should be represented on the Board—not just to do “the business stuff” but to help you maintain perspective about the relationship of your work to its audience.
In other words, as the Nonprofiteer has said in other contexts: nonprofit and 501c3 status are not mere legal trivialities to permit you to collect donations tax-free. They’re statements about the kind of organization you are, namely, one answerable to the community through its Board. You’re trading a certain amount of freedom for a certain amount of stability. If you’re not ready to do that, skip nonprofit status and live hand-to-mouth til you’re ready to be a full-blown community institution–or until you figure out how to support your art entirely at the box office.
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