The State of the Arts

These are challenging times for nonprofit arts organizations - and not just because of the economy:

• Since 1998, the number of nonprofit arts groups - all competing for audience and participants and grant funding - has increased by 42%. At the same time, attendance and ticket sales at most mainstream arts organizations have been in a steady decline.

• People are increasingly staying at home, choosing to participate in the arts through television or the internet - where you can find almost anything you want to see, for free - or through do-it-yourself arts projects.

• For-profit businesses - bookstores, cafes, restaurants, retail stores - have become very proactive in promoting and presenting lectures, concerts, and events. For the most part, there is no admission charged because the payoff is increased business, foot traffic, and name recognition. Often these events are benefits for local nonprofits, increasing goodwill for the business while blurring the lines between the for-profit and nonprofit worlds.

• The cell phone culture, in which anyone can be reached and plans made at any moment, has resulted in a casual and last-minute approach to life. This has lead to reduced advance ticket sales and subscription series sales.

• As America's population grows in diversity, people are seeking out arts experiences through ethnically and/or culturally specific organizations rather than standard arts venues.

• At museums, concerts, and theater performances, the majority of folks attending are gray-haired and Caucasian. Nonprofits are struggling to find ways to engage new and ethnically diverse audiences, especially those who are under 40.

• In the competition for government and foundation dollars, arts agencies rarely win when pitted against agencies that feed the poor and house the homeless. For the past decade, arts and cultural groups have been steadily losing their share of philanthropic dollars to international, environmental, disaster relief, and social services agencies.

What does this mean for the future? There are some innovative success stories to consider: the Metropolitan Opera's simulcasts in movie theaters, ArtsMemphis' Iphone app that allows people to directly access their calendar, the new wave of (not quiet anymore) libraries with cafe-like atmospheres and lots of computer access, lively singles' nights at theaters and classical music venues. Arts organizations are going to have to work harder, be more creative and business-savvy, stay up on current trends in social media, experiment with programs designed to reach people of all ages and cultures, and actively seek out collaborative efforts with both for-profit and nonprofit partners that draw new participants.

The Lifecycle of Nonprofit Organizations

Is your organization just starting up, and full of excitement about its mission? Or does your agency have a long track record, assets to manage, and a big staff? Nonprofits - like people - travel through different stages of development over time, and each of these stages poses specific challenges. Identifying your organizational stage will aid in your ability to effectively analyze agency issues as well as plan for the future.

• Stage One: Your agency is just starting up. There is tremendous passion about your mission and what you want to accomplish. What you don't know about nonprofit management is more than compensated for by your boundless enthusiasm and willingness to work. Your focus is on services; policy-making and fundraising happen on an as-needed basis. Your strengths: excitement, commitment to mission, lots of volunteers. Your challenges: lack of expertise, funding, and a track record.

• Stage Two: The work you want to do to serve your mission begins to crystallize. Your organization hires paid staff to do the nitty gritty work, but board members run ongoing operations. Board and/or staff are beginning to see a need to formalize systems for management and oversight, but there is a deep reluctance to giving up the fun and informality of the early years. Your strengths: ability to provide services on a shoestring budget, creativity, friendly and casual atmosphere, a highly committed board and staff. Your challenges: lack of consistent funding, long-range planning.

• Stage Three: Staff begins to oversee programs and services, while the board tries to figure out its changing role. Much of the board's time focuses on governance and financial management. Fundraising becomes absolutely central to the board's role, often in face of great resistance. Your strengths: growing relationships with donors who believe in your cause, the development of systems to sustain your organization over time. Your challenges: board/staff struggles over who is in charge, increased expenses, the board's reluctance to fundraise.

• Stage Four: Your annual budget is significant in size, as is your staff; you have assets to manage. Staff and board must formally establish their distinct responsibilities. These roles will be different than before, requiring everyone to be thoughtful, communicative, and open to change. This can be a challenging and contentious process, but if handled properly will strengthen the organization. Your strengths: established relationships with donors, successful programs. Your challenges: more board/staff struggles, resistance to change, keeping your commitment to your mission vital.

• Stage Five: Your agency is big, well-known, and well-funded. Your strengths: name recognition, established procedures, consistent resources. Your challenges: avoiding complacency, maintaining oversight of complex operations.
  

Numerous books and websites about nonprofits will outline all the procedures you should be following and all the policies that need to be in place. These are important to know, but be sure to exercise judgment about appropriate structures and solutions based on your developmental stage. Understanding the challenges of each stage is key to defining board/staff roles and responsibilities that match the organization's needs and further its mission.

Database 101

Now that you've made it through the holidays and have a moment to take a breath, it's a good time to do some nonprofit housekeeping to prepare for your 2010 fundraising and program planning. And the key to all your efforts is your database.

Ask yourself: can you use your database to do these essential functions?

Provide basic demographic and organizational information:

• Quickly find mailing addresses, 9-digit zip codes, email address, phone numbers (including cell phones), and appropriate salutations for all of your clients, donors, and volunteers
• Tell what age people are, and whether they have children (and if so, how old)
• Track program participation and ticket purchases by year and specific event/program area
• Identify folks who do not want their names/addresses exchanged or shared
• Look up all past board members, find out when they served, and on which committees

Let you know about your donors and donations:

• See and date every donation made over at least the past ten years
• Track specific interests of individual donors i.e. specific program interests, community affiliations, level of involvement in your organization
• Look up donors who have given to special appeals and/or like to give for specific programs or purposes (such as scholarships)
• Find out who has been the contact person/solicitor for each donor
• Differentiate between donations of cash, stocks, materials, and volunteer time
• See which fundraising events your donors have attended
• Provide detailed information about donors who have committed to multi-year donations, monthly contributions, and/or planned gifts
• Find lapsed donors
• Identify which donors want to remain anonymous and/or prefer not to receive phone solicitations
• Track all foundation, corporation, and government donations over the history of your organization including contact person's name and phone number

Document the work of your volunteers:

• Track the number of volunteer hours by month and year
• Find volunteers who like to help out with specific tasks and/or events
• Look up volunteers with specific skills i.e. carpentry, hauling, fundraising, finance, etc.
  
• Identify the volunteers who have given the most hours per year

Create and print reports, letters and labels including:

• Customized solicitation and thank you letters
• Donor lists by fiscal year, amount given, and zip code
• Reports tracking in-kind donations
• Volunteer lists by year, month, and task
• Mailing labels and name tags for specific purposes.

This may sound like a daunting task (and may require a re-evaluation of your chosen software), but the work you do now to put your database in order will benefit your organization for years to come.