University of Southern California Dissertations and Theses

Non-profit arts organizations succeeding in the recession

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Non-profit arts organizations succeeding in the recession

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NON-PROFIT ARTS ORGANIZATIONS SUCCEEDING IN THE RECESSION

by

Janai Speer

__________________________________

A Thesis Presented to the
FACULTY OF THE USC GRADUATE SCHOOL
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
MASTER OF ARTS
(STRATEGIC PUBLIC RELATIONS)

May 2010

Copyright 2010 Janai Speer

!!"

Table of Contents

Abstract iii

Chapter 1: Introduction 1

Chapter II: Literature Review 7

Chapter III: Research Method 23

Chapter IV: Results 26

Chapter V: Case Studies 39

Chapter VI: Analysis 49

Chapter VII: Recommendations 52

Chapter VIII: Conclusion 69

Bibliography 70

Appendix 75

!!!"
Abstract
The purpose of this document is to identify key factors leading to success of arts and cultural
non-profit organizations in America during the recession. Secondary research includes a literature
review and case study analysis. Eleven interviews were conducted as primary qualitative
research. The main themes from the primary research are as follows:
• Nonprofits are like for-profit businesses in many ways.
• Collaboration is necessary.
• Organizations need to build new relationships within their communities and retain
existing donor relationships.
• Think conservatively regarding fundraising and organizational growth.
• Direct your organization’s focus back to its mission.
Nine best practices are recommended for arts nonprofits during this recession.

#"
Chapter I: Introduction
Americans define themselves by their connection to cultural and artistic
experiences just as they do by their careers, hometowns and lineage. In such a young
nation, cultural norms are reinvented on a regular basis. Some Americans take piano
lessons from a young age all the way through high school. Others attend an annual
musical production with their children. Maybe some have seen Van Gogh’s Starry Night
on Google images, or mentioned on a television show. Art is a universal language that
encompasses different “dialects,” reaching various socioeconomic and demographic
categories.
Artistic and cultural expression exists all over the world, from East Asian
calligraphy to rock engravings in Australia to nineteenth century Russian poetry. The
European continent boasts a colorful art history dating from ancient times and through
many periods: Medieval, Renaissance, Neoclassicism, Realism, to today’s Post-
Modernism. Modern European art made its way to the U.S. early in the nineteenth
century, and New York City became a major cultural center. Within the past 100 years,
the arts have become integral elements of communities all over the country. To bring
artistic expression and experience to Americans, non-profit organizations emerged in the
form of theater troupes, art museums, free education programs and other types of groups.
In discussing “the arts” and “arts nonprofits,” one must differentiate between
traditional performing arts, historical and contemporary visual arts, and public arts
education programs. Performing arts include dance, opera, drama and musical theater
companies of all sizes. The visual arts category refers to paintings, drawings, sculptures,

$"
museum exhibitions and, in some cases, architecture. Finally, arts education programs
tend to be more grassroots in nature, and provide skill training to a variety of populations.
Learning about the basic facts and history of an art form can open doors to entirely new
paths in life for some Americans. At the least, education puts classical art forms in
context for new audiences. Arts education programs can target children, underserved
populations, retirees, people in a given geographic area, or any number of other publics.
Every organization has its own mission and its own purpose, but the economic
downfall in 2008 formed a common ground for all arts-oriented nonprofits.
Most all arts organizations are 501(c)3 nonprofits, established to serve a public
interest. According to the National Center for Charitable Statistics, there are over 1.5
million non-profit organizations in the United States.
1
The number of nonprofits,
including arts-based organizations, typically increases year-to-year. “While the number
of arts organizations increased rapidly over a recent 10-year span, the percentage of
people attending arts events declined,” according to a national survey by Americans for
the Arts.
2

In early 2008, the American “housing bubble” corrected itself and a subprime
mortgage crisis emerged, resulting in an economic recession. National unemployment
rates remained over ten percent for months, the government bailed out the banks and
retail businesses suffered major losses. With virtually every American dealing with
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
1
Frequently Asked Questions. FoundationCenter.org, Accessed Jan. 31, 2010.
2
Trescott, Jacqueline. The National Art Index, a new survey by Americans for the Arts, paints a troubling
picture for arts organizations. The Washington Post, Jan. 21, 2010.

%"
financial hardship – or at least reevaluation – non-profit organizations are struggling to
retain their donors, and their relevance.
With so many Americans unemployed, homeless and hungry, philanthropists are
conflicted, diverting dollars to address those supporting basic needs organizations, such
as shelters, food banks, health care and unemployment agencies. This focus on basic
needs has left little funding for the arts. In 2009 alone, the following NPOs all closed
and/or went bankrupt: Honolulu Symphony, Baltimore Opera, Bead Museum, Santa
Clarita Symphony, Opera Pacific and Shakespeare & Company. In fact, “Shakespeare &
Company, central to the artistic life of the Berkshires for more than three decades, is
facing a cash crunch so severe it would need to raise $2.3 million just to survive until
next March and could be unable to meet its payroll as soon as this month, according to a
report released today.”
3

While many industries are suffering due to the economy, the public sector is
simultaneously facing major budget challenges. Government agencies provide significant
support to a large proportion of non-profit organizations. With budget cuts coming from
all angles – foundations, individuals, corporations and government – nonprofits need to
readjust their business practices. A survey conducted by Nonprofit Finance Fund found
that out of 986 nonprofits, only 16 percent expect to cover their operating expenses this
year, while 52 percent anticipate the recession will have a long-term or permanent effect
on their organizations.
4

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3
Edgers, Geoff. Breaking: Shakespeare & Company crisis. Boston.com, Oct. 13, 2009.
4
Nonprofits expect permanent damage from recession. CNN, March 26, 2009.

&"
Arts nonprofits are now in a state of day-to-day change. Strategies and tactics are
shifting depending on funding and public sentiment. “In this changing environment,
transformation is not optional,” stated in a James Irvine Foundation special report.
5
No
matter what logistical business changes go into these transformations, relating to the
various publics involved will determine success, to some level. This is one reason arts
organizations may be facing a greater challenge than other nonprofits. The average
American citizen would rather relate to an organization that is providing meals to
underemployed families or free afterschool educational daycare for children in low
socioeconomic areas. In an initial assessment, it is more difficult to justify an extravagant
symphony performance than a homeless shelter. Coming out of the recession, nonprofits
want to be seen as giving back to their communities, but not spending in frivolous ways.
6

This is not to say that artistic organizations are not valid or valuable. Rather, the
worthwhile groups must communicate their legitimacy to donors, patrons and other
important publics.
There are some powerful players who continue to recognize the important role artistic
expression plays in America, even in an economic recession. The U.S. government is
contributing to the sector through the Recovery and Reinvestment Act of 2009, which is
intended to create new jobs and save existing ones, spur economic activity and invest in
long-term economic growth, and foster accountability and transparency in government
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
5
Gowdy, Heather, Hildebrand, Alex, La Piana, David and Mendes Campos, Melissa. Convergence: How
Five Trends Will Reshape the Social Sector. FOCUS, The James Irvine Foundation, November 2009.
6
Birdsell, 2009.

'"
spending.
7
The new administration made $275 billion available for federal contracts,
grants and loans with the passing of the Act. A portion of those funds will affect the arts.
According to a Philanthropy News Digest article, $50 million of the stimulus money will
fund state agencies and arts groups through the National Endowment for the Arts (NEA),
federal oversight agency.
8

Under the Interior Appropriations Bill passed in late 2009, the NEA and the National
Endowment for the Humanities received $167.5 million for the 2010 fiscal year, which is
both organizations’ highest level of funding since 1993.
9
The Bill and Melinda Gates
Foundation announced in October 2009 that it is giving $10 million to the National
Museum of African American History and Culture, according to The Washington Post.
10

This is a substantial donation to a cultural museum since the Gates Foundation usually
funds global health and poverty-related initiatives.
The National Endowment for the Arts announced to the U.S. Conference of Mayors
that it would be granting as much as $250,000 apiece for urban design projects that
promote arts.
11
Urban design projects, such as those funded by the NEA, can help
encourage economic revitalization all over the country, while also contributing to
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7
The Act. Recovery.gov, Accessed Jan. 28, 2010.
8
Farhi, Paul and Trescott, Jacqueline. Recession Slams U.S. Arts Organizations. Philanthropy News
Digest, May 6, 2009.
9
Zongker, Brett. Arts agencies to get highest funding in 16 years. Associated Press, Oct. 30, 2009.
10
Trescott, Jacqueline. Gates Foundation Announces $10 Million Donation to Smithsonian. The
Washington Post, Oct. 15, 2009.
11
Boroff, Phillip. NEA Offers $250,000 Grants for U.S. Cities That Enhance Arts. Bloomberg.com, Jan.
21, 2010.

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individual artistic communities. OpportunityKnocks.org reported, “the San Francisco-
based James Irvine Foundation announced grants totaling more than $1 million to seven
nonprofits to help them adapt to the economic downturn and build their long-term
financial health.”
12
Every artist, audience member and young student has his or her own
reasons why artistic expression is necessary during a recession. Non-profit organizations
support these key constituencies and offer entertainment, and opportunities for
innovation, to the American public.
In regards to the wealthiest people in the world – those with investible assets of over
$1 million – art is considered a stable investment. Although these individuals scaled back
their purchases of yachts, jets, cars and jewelry, the proportion of all luxury spending that
went toward art increased as investors looked for assets that would hold their value in the
longer term, The Economist reported.
13
High-end sculptures and paintings obviously fall
into a different category than grassroots music programs for children. Each organization
needs an individualized strategic plan to combat the negative impact of the economic
recession and prove its value to the community, beyond a deductible tax credit.
The purpose of this research is to identify key factors that can lead to the success –
and survival – of arts and cultural non-profit organizations in this period of recession.
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
12
Irvine Foundation Awards $1 Million to Help Nonprofits Adapt to Downturn. OpportunityKnocks.org,
Jan. 25, 2010.
13
Rocco, F. and Thornton, S. The art market has suffered from the recession, but globalization should help
it recover. The Economist, Nov. 28-Dec. 4, 2009.

)"
Chapter II: Literature Review
Based on mainstream news articles, nonprofit industry publications, relevant blogs
and other mediums, one theme identified is the change in donation patterns. This refers to
individual donors, corporations, government and foundations. The NonProfit Times
states, “giving is heavily driven by wealth, income and donors’ feelings of personal
financial security, so giving rebounds tend to lag economic recuperation.”
14

The Foundation Center, a New York-based research institution, reported foundation
assets across the country declined 22 percent in 2008. The Foundation Center projects
that foundation giving will have dropped another 9 to 13 percent in 2009 and will
continue to decline through 2010.
15
This will affect many arts organizations, since almost
all nonprofits depend on some degree of foundation support. The Foundation Center also
found that 50 percent of grant makers plan to keep their giving steady at 2009’s reduced
levels, 26 percent expect to decrease it and a mere 17 percent will increase it. The study
was conducted in September 2009 among 583 grant makers.
16
In predicting 2010
developments, Clara Miller of The NonProfit Times suggests that foundations and high-
net worth individuals will increasingly consider large growth capital investments in a
small number of promising organizations.
17

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14
Rooney, Patrick. Enough, already: So when does the giving recovery begin? The NonProfit Times, Dec.
1, 2009.
15
Ball, Andrea. Will foundation giving dive in 2010? Austin American Statesman, Aug. 30, 2009.
16
Wilhelm, Ian. Foundation Giving Faces Steeper Decline Than Expected. The Chronicle of Philanthropy,
Nov. 4, 2009.
17
Miller, Clara. This economy is every crisis rolled into one package. The NonProfit Times, Dec. 1, 2009.

*"
Foundations only comprise a portion of the funding for arts non-profit organizations –
giving patterns are interconnected, and tend to rise and fall in conjunction with one
another. “Among the possible scenarios: Corporate giving will fall as profits tumble,
foundations will cut back on grant making as returns on endowments decline, individuals
will reduce their donations as unemployment and economic insecurity rises, and local and
state governments will cut social services and spending on health and education as tax
receipts fall.”
18
Almost all of these predictions have come to fruition in 2009.
In dealing with individual donors, targeting those who feel impassioned about a cause
can yield greater long-term results. “Passive support of an issue or cause is easy to stop
the moment one’s finances are in question,” noted [The Matale Line Executive Director
Bill] Toliver. “But fanatical loyalty to a cause that’s central to one’s values and beliefs is
extremely difficult to curtail - - even when dollars get tight.”
19
Individual donors do not
necessarily give based on the ingenuity or impact of a specific fundraising campaign.
“People give because of who they are more than because of what fundraisers do,”
observed Larry May in The NonProfit Times.
20
This article also suggests that many
donors feel bad about giving less in 2008 and 2009, so they will increase donations in
upcoming years. Additionally, there is still a chance to secure wealthy donors whose
resources have gone untapped by nonprofits. Steve Gunderson, president and CEO of the
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
18
Perry, Suzanne. What a Recession Would Mean for Nonprofit Groups. The Chronicle of Philanthropy,
Jan. 23, 2008.
19
Shortliffe, Tom. Matale Line Reveals 5 Ways Nonprofits Can Recession-Proof Their Brands.
PRNewswire, April 7, 2009.
20
May,Larry. Yeah, giving is down but it’s still very good. The NonProfit Times, Dec. 1, 2009.

+"
Council on Foundations, noted, “even amidst the current economic challenges there exist
many Americans with wealth who have not yet made the decision to become
philanthropists. It is my belief that the combination of a permanent inheritance tax
combined with higher marginal rates and the simple reality of their demographic status
(age) will convince these individuals to convert their wealth into philanthropy rather than
new taxes for the government.”
21

From a nonprofit’s perspective, each organization should diversify its portfolio. A
MoreBusiness.com article claims, “the key to a steady and stable recession proof
fundraising campaign is to garner support from multiple sources.”
22
Not every source will
apply to every organization, especially through a recession. “While families and
individuals may not have extra cash in hand to make donations, larger corporations are a
key target group for recession funding.”
23

Corporate donations are beneficial for both the recipients as well as the company. For
example, donors get significant tax breaks for making in-kind donations. Some
corporations are focusing on pro bono services and policy work, partnerships and
program-related investments.
Along with foundations, individuals and corporations, the U.S. government is a major
source of funding for arts nonprofits. President Obama’s domestic policy adviser, Melody
Barnes, said the administration is committed to finding innovative ways for the federal
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
21
Gunderson, Steve. Funding challenges: Pursuing both survival and progress. The NonProfit Times, Dec.
1, 2009.
22
5 Tips for Successful Fundraising in a Recession. MoreBusiness.com, August 2009.
23
MoreBusiness.com, 2009.

#,"
government to support and promote nonprofit groups.
24
Within the White House, the
Office of Social Innovation has been created to “help non-profit groups and social
entrepreneurs expand successful approaches to tackling pressing social problems.”
25

According to a White House press release from May 5, 2009, President Obama will
request $50 million from Congress in seed capital for the Social Innovation Fund, which
will “identify the most promising, results-oriented non-profit programs and expand their
reach throughout the country.”
26
This fund may or may not positively impact arts
organizations, as it will be based on organizational efficiency and public need for
services.
Another seemingly obvious theme is that if an organization was successful before the
recession, it probably will be now. “It is how you manage yourself when things are good
that helps you get through when things are bad,” says Mr. [Michael M.] Kaiser, author of
The Art of the Turnaround: Creating and Maintaining Healthy Arts Organizations.
27
The
American Dance Festival (ADF) based in North Carolina offered fewer performances
2008-09, but saw an increase in ticket sales. Festival co-director Jodee Nimerichter
emphasized that ADF has a cash reserve and will survive these tough times. “In those
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24
Moore, Jennifer. Independent Sector Gathering Opens With Sense of Urgency. The Chronicle of
Philanthropy, Nov. 4, 2009.
25
Suzanne Perry. White House Appoints Head of Social Innovation Office. The Chronicle of Philanthropy,
April 16, 2009.
26
The White House Office of the Press Secretary. President Obama to Request $50 Million to Identify and
Expand Effective, Innovative Nonprofits. WhiteHouse.gov, Accessed Jan. 21, 2010.
27
Hoye, Sue. Recession Hits Arts Groups Especially Hard. Philanthropy.com, Jan. 2, 2009.

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years when you do make a little money, you can put that away for a rainy day,” she
said.
28

One trait that supports this theme is transparency throughout an organization. This
recession is demanding honesty and openness from all types of institutions, from General
Motors to the White House to the local theater group. If an organization is facing
enormous debt, preparing for an impending executive shift, or announcing a new exhibit
or repertoire, both donors and consumers now feel entitled to be made aware of this
information in a timely manner. Transparency is even more important in this environment
when the emergence of social media is factored in. For example, Facebook users trust
their “friends,” so if they hear something through that platform, they are likely to take it
to heart. People want authenticity, not overtly marketed messages. This includes hearing
stories from actual clients/participants and interacting with the nonprofit one-on-one.
“They want to be on the inside, co-creating the dialogue,” states a James Irvine
Foundation report.
29

Therefore, arts non-profit groups need to communicate their strengths to their
constituents, but also be straightforward about their weaknesses, since it is all going to
end up public knowledge at some point. Although nonprofits do not have as strict
reporting regulations as publicly traded corporations, their audiences expect the same
level of transparency. Attaining an open and transparent organization could mean
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28
Bellamy, Cliff. Arts nonprofits preserving mission. Herald Sun, Sept. 17, 2009.
29
Gowdy et al, 2009.

#$"
refocusing on the mission, purpose and core values, and creating strategies to support
those original, founding principles.
Proactive organizations that acted before the economic downturn will, in general,
have an edge over reactive organizations. Although spending during a recession can be
controversial, nonprofits that planned certain renovations, expansions or premieres are
able to offer continuity and thoughtful leadership, even in difficult times.
Prioritizing becomes essential for big-budget non-profits. For example, the Whitney
Museum of American Art is building a second museum in New York City, despite major
layoffs and operating budget cuts, reports Carol Vogel of The New York Times.
30
Other
expansions include the Los Angeles County Museum of Art, the Isabella Stewart Gardner
Museum in Boston, the New York State Theater, a new Michigan State University art
museum funded by Eli and Edythe Broad, and the Museum of Contemporary Art in Los
Angeles. The Chronicle of Philanthropy observes, “while many museums and other
cultural institutions face debt, shrinking donations and investment losses, one of the
nation’s top credit-rating agencies calls the sector stable and resilient.”
31
Based on the
continuation of these expensive projects, it is obvious that certain funders recognize the
importance of sustaining the arts. The Rockefeller Foundation will give $2.7 million in
grants to New York City-based arts organizations. “In today’s economy, our artists and
communities need support to continue to build an innovative creative sector that provokes
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30
Vogel, Carol. Whitney Advances Plans for Museum Near the High Line. The New York Times, Oct. 12,
2009.
31
Blum, Debra E. Credit-Rating Agency Gives Arts Groups Strong Marks. The Chronicle of Philanthropy,
Oct. 13, 2009.

#%"
us to react, question and learn,” said Judith Rodin, president of the Rockefeller
Foundation.
32

In response to these continued reconstructions and expansions, many destinations
in the U.S. are promoting regional tourism based around arts offerings. For example, Los
Angeles County Museum of Art (LACMA) reaches out to people visiting Los Angeles
and packages its exhibits as a unique Southern California experience. One can infer that
performing arts groups also take this approach, especially during the summer and winter
vacation months.
Another common thread connecting arts non-profit organizations during this
recession is the adjustment of organizational structures. With changes in funding and
prioritization, staffing has been reevaluated in a number of cases. Many arts nonprofits
have instituted hiring freezes and have had to cut positions. In the Seattle area, the
majority of cultural organizations have re-organized or consolidated responsibilities in
new job configurations, according to the Puget Sound Arts Scan.
33
This includes merging
functional areas, such as combining marketing and development. Changing
organizational structures can apply to executive positions, as well as administrative and
other functions. “Nearly three in 10 of the leaders of the nation’s biggest charities and
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32
Souccar, Miriam Kreinin. Rockefeller grants help struggling nonprofits. The Chronicle of Philanthropy,
Oct. 14, 2009.
33
Puget Sound Arts Scan, Feb. 2009.

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foundations have taken pay cuts in the past year as the recession causes donations to drop
and batters endowments, a Chronicle of Philanthropy survey has found.”
34

One might view all of this restructuring and rearranging taking place in the public
sector as an obstacle impossible to overcome; however, help is coming from various
areas. The James Irvine Foundation recently awarded more than $1 million to a group of
nonprofits that are “pursuing strategic alliances or mergers, reexamining revenue streams
to diversify funding sources, and/or changing operational structures to adapt to economic
pressures.”
35
“With revenue down and needs increasing for so many nonprofits, we want
to support grantees that are ready to develop new business models that better align
revenues and expenditures,” said Irvine Foundation president and CEO Jim Canales. “We
believe this fund can both help the grantees directly, as well as uncover best practices that
can be shared with other nonprofits.”
36
By recruiting new board members with diverse
skills or changing the job descriptions of the administrative staff, an arts organization will
operate smoothly and effectively,” Molly Matlock, executive director at North Carolina’s
ChathamArts, concisely verbalizes the results: “Now the organization is better
organized.”
37

The recession has forced non-profit organizations to assess employees’ true value,
and adjust accordingly. With so many qualified Americans seeking employment at this
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34
Barton, Noelle and Gose, Ben. Nearly 30% of Nonprofit Leaders Took a Pay Cut This Year; Pay in 2008
Grew Quickly, The Chronicle of Philanthropy, Sept. 1, 2009.
35
OpportunityKnocks.org, Jan. 25, 2010.
36
OpportunityKnocks.org, Jan. 25, 2010.
37
Bellamy, 2009.

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time, companies – including arts nonprofits – are able to hire highly skilled people to fill
any openings. The recession has not only led to unemployment, but also to
underemployment, meaning an educated, experienced person may be unwillingly
working a part-time job or a job severely below their skill level. This allows nonprofits to
replace staff members as they see fit, and upgrade to more qualified workers.
Some organizations are also cutting their operating hours to save money and
resources.
38
In New York City, 80 percent of arts organizations are reducing their
budgets, and more than half are reducing staff and postponing or cancelling programs,
according to an Alliance for the Arts report.
39
As noted earlier, the Whitney Museum of
American Art is continuing with plans to build a second museum in New York City
despite laying off four percent of its workforce, freezing the salaries of senior staff
members and cutting the operating budget by 10 percent.
40
This move, and others, could
reflect a notion that real estate is the best investment for nonprofits in this phase of the
recession, as mentioned in the Washington Business Journal.
41
Real estate values in
certain markets have shown signs of increasing, so one can predict that if an organization
builds new offices, museums or performing arts centers now, the property will become
more valuable in the future. Of course, the feasibility of expanding and purchasing new
real estate during this period depends on existing budgets, reserves and funding.
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38
Hoye, 2009.
39
The Recession & The Arts. Alliance for the Arts, Jan. 2009.
40
Vogel, 2009.
41
Plumb, Tierney. Survey: More nonprofits view real estate as revenue. Washington Business Journal,
Nov. 2, 2009.

#("
In dealing with personnel issues, diversity in lifestyle, socioeconomic background,
race, gender and other categories is important to keep in mind as boards evaluate the
effectiveness of fulfilling the organization’s mission and/or serving the community. With
many non-profit organizations serving very eclectic populations, it may be time for the
internal staff makeup to more closely mirror the client base. The James Irvine Foundation
finds, “few nonprofits have progressed beyond engaging diverse populations as clients to
reflect the same diversity among management level staff or in the board room.”
42
This
issue is sensitive, emotional and contentious for some, so it may have been purposely
avoided to an extent.
Complementing the idea of considering diversity as a core value is the proposition of
changing the nonprofit model and letting communities engage directly with causes and
people in need. Although the traditional theatergoer or modern art connoisseur typically
fits into a fairly narrow demographic subset, now is a better time than ever to reach out to
new audiences. It may be time to ask what local community members want from your
organization – can you provide free kids’ programs? Can you offer discounted exhibits or
performances? Do you have scholarships for your training programs? Neighborhood
councils comprised of volunteers and experts could determine local need and how to
distribute sources accordingly, as suggested by Paul Lamb in the Christian Science
Monitor.
43

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42
Gowdy et al, 2009.
43
Lamb, Paul. Are there too many charities in America? Christian Science Monitor, Sept. 24, 2009.

#)"
The arts depend on local communities, and local communities depend on the arts.
National Endowment for the Arts Chairman Rocco Landesman said, “Artists are
entrepreneurs, small businessmen [sic], great place-makers and community builders.
Bring artists into the center of the town and that town will change profoundly.”
44

The idea of collaboration appeared in numerous articles about nonprofits in this
recession. Speakers at the Independent Sector’s annual meeting encouraged nonprofits to
work together far more than ever before, “uniting around precise goals and then clearly
dividing up tasks,” said Jennifer Moore in The Chronicle of Philanthropy.
45
This can
mean anything from organizations partnering on a project-by-project basis to sharing
skills and knowledge with other executives. “Nonprofits need to be more flexible about
partnerships. We need to change the old mindset that says nonprofits do the good deeds
while businesses write the checks.”
46
Margeurite Kondracke of The NonProfit Times
suggested that a nonprofit’s flexibility allows a business partner to support the mission
[of the nonprofit] even if it requires the organization to design parts of its programs to
benefit from non-cash contributions.
Brian Gallagher, head of United Way Worldwide, said that while many nonprofit
leaders talk about collaboration today, few embrace it at the level required. Moore claims,
“true integration is when you let someone else spend your money.”
47
There is also a risk
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44
Boroff, 2010.
45
Moore, 2009.
46
Kondracke, Marguerite. Take new steps for a better nonprofit-business partnership. The NonProfit Times,
Dec. 1, 2009.
47
Moore, 2009.

#*"
of arts nonprofits falling into “collaboration silos” and partnering only with similar types
of organizations.
By considering these untapped relationships, arts organizations may be able to
discover a new opportunity for success. The James Irvine Foundation published an
example recently of one such successful partnering of Cornerstone Theater Company and
pharmaceutical company Gilead Sciences, Inc. Cornerstone, a multi-ethnic theater group,
works with marginalized communities to put underrepresented stories on the stage. The
unlikely collaboration between Cornerstone and Gilead was “born out of a common
concern about the disproportionate impact of HIV/AIDS on the African American
community.”
48

New technologies also are leading to collaboration between people previously kept
separate due to geographical constraints. “The technological barriers to collaboration
have nearly been erased,” said Holly Ross in a December 2009 NonProfit Times article,
“No more flip charts; we have wikis. No more data lock-in; we have mash-ups and
software integrations. Where there’s a will to collaborate, there is now a way – and
there’s a lot of will to collaborate.”
49

For example, a modern dance group could “tweet” the dates, times and locations of
upcoming performances. A grassroots arts education organization could unite employees
and supporters on Facebook to create a community based on a common interest. Also
very pertinent for nonprofits is the ability to use social networks as online donation
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
48
Gowdy, 2009.
49
Ross, Holly. Focus on usage trends, not tools. The NonProfit Times, Dec. 1, 2009.

#+"
forums. This was illustrated on a large scale recently when JPMorgan Chase offered $5
million in prize money to charities based on “crowdsourcing,” with all voting done via
Facebook.
50

In non-profit organizations, there is a difference between having manpower resources
and having monetary resources. Although volunteering is a righteous way to contribute to
society, certain organizations would be better served with cash donations. Even as some
Americans have changed from donating money and assets to donating time and expertise.
“Between September, 2008, and March, 2009, more than a third (37 percent) of
nonprofits reported an increase in the number of volunteers, and almost half expect an
increase in the coming year,” according to Barry VanderKelen on SanLuisObispo.com.
51

Individual donors are offering what they can in this circumstance, which is time, rather
than money.
Arts organizations need to consider what resources they have at their disposal.
“Instead of thinking what more dollars could provide, think of what more people could
produce,” said Benny Merle in Nonprofit Success 2009 – Be Frugal and Effective.”
52
An
assessment is up to the executive and administrative staffs of nonprofits. Such an
allocation of certain resources during a recessionary period can make a major difference
in the future success of arts organizations. “It is the decision-making of boards and staffs
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
50
Kuhn, Erik. Charities fight for Piece of $5 million prize on Facebook. CNN.com, Jan. 21, 2010.
51
VanderKelen, Barry. Value of Volunteers is Remarkable. SanLuisObispo.com, Sept. 2, 2009.
52
Benny, Merle. Nonprofit Success 2009 – Be Frugal and Effective. 2009.

$,"
in response to economic challenges that has much greater long-term implications for the
health of our arts ecology,” arts guru Michael Kaiser said.
53

All nonprofits – from basic needs providers to classical opera companies – depend on
volunteers in some way or another. There are more volunteers now because of President
Obama’s push, as well as rising unemployment, underemployment and an available
professional pool that is growing. “Last year’s presidential election spurred interest in
volunteerism, but nonprofit groups need to keep in mind that people have many different
reasons for volunteering and ought to tailor their opportunities to individuals’ interests,”
according to The Chronicle of Philanthropy.
54

With such an increase in the volunteer growth rate, there is danger in saturating the
existing volunteer management structure. Michelle Nunn of The NonProfit Times writes,
“our challenge is to ensure that nonprofit organizations quickly “right size” their
volunteer business model and management infrastructure to ensure this wave of service
translates into real results.”
55

This volunteerism trend is not limited to basic labor. It is also encompassing
professional workers applying their skills to various aspects of organizations, including
serving on boards or consulting teams. The Associated Press reported in October, 2009,
that scores of recent law school graduates are spending their first year on the job working
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
53
Kaiser, Michael. Arts in Crisis. Huffington Post, June 29, 2009.
54
Five Trends Help Create “Nonprofits of the Future,” Report Says. The Chronicle of Philanthropy, Nov.
9, 2009.
55
Nunn, Michelle. It’s time to fundamentally change the volunteer engagement system. The NonProfit
Times, Dec. 1, 2009.

$#"
largely with nonprofit organizations and government legal-aid offices for reduced pay.
56

Basically, due to the recession, nonprofits are enjoying the expertise of skilled
professionals from all fields pro bono or at a reduced cost. Whether or not this trend will
outlast the economic downturn remains to be seen.
It is generally accepted that all organizations should focus their strategies long-
term, but forward thinking becomes even more valuable in a recession. While cutting
costs and scraping by with as little funding as possible, nonprofits may overlook the
importance of the “big picture.” This can mean, for example, that instead of letting part of
the marketing staff go to trim the budget, non-profit leaders should meet and discuss how
the communication function can be carried out more efficiently than it is currently. By
making major adjustments because of the recession, organizations may be harming their
own futures. “For the nonprofit sector to survive and thrive, everyone – nonprofits,
funders and capacity builders alike – must become futurists,” reports the James Irvine
Foundation.
57
This requires being attentive to and understanding the continual shifts in
the environment, and experimenting with new responses and approaches. “Being a
futurist requires both individual and institutional curiosity, and a willingness to take
risks.”
58
Forward thinking also means planning for national changes taking place across
all industries.
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
56
Strapped Law Firms Steering New Hires Toward Public-Interest Work. The Chronicle of Philanthropy,
Oct. 23, 2009.
57
Gowdy, Heather, Hildebrand, Alex, La Piana, David and Mendes Campos, Melissa. Convergence: How
Five Trends Will Reshape the Social Sector. FOCUS, The James Irvine Foundation, November 2009.
58
Gowdy, et al, 2009.

$$"
The United States is becoming more diverse day by day, in reference to
ethnicities, ideologies, and other factors. “Census figures show that by 2042, the U.S. will
be a minority-majority society, and ongoing and shifting immigration patterns are
changing the face of countless communities around the country, with profound
implications for nonprofits.”
59
As discussed earlier in the literature review, arts
organizations of all types should consider the audiences they are serving, and how to
make those publics feel the most connected [to the nonprofit] as possible.
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
59
Gowdy et al, 2009.

$%"
Chapter III: Research Method
Interviewed professionals about non-profit practices now, and about suggestions
and recommendations for arts nonprofits.

1 Brad Shaw, Corporate Communications and External Affairs, Home Depot
Personal communication – e-mail, Oct. 15, 2009
Brad Shaw oversees communications for the Home Depot Foundation, and sits on a
number of nonprofit boards.

2 Lisa Christiansen, Senior Account Executive, Social Impact Group, Allison &
Partners, Santa Monica
Personal communication – e-mail, Oct. 19, 2009
Lisa Christiansen works with corporate clients by matching the companies’ values and
interests with potential charity partners.

3 Kelly Rice, Partner, QuantumMethod Strategy, Communication and Design, Los
Angeles
Personal communication – e-mail, Oct. 21, 2009
Kelly Rice has experience with pro-bono non-profit clients, and works alongside
nonprofit expert Blythe Maling.

$&"
4 Deborah Knutsen, Public and Corporate Relations Director, USA Western
Territory, The Salvation Army
Personal communication – e-mail, Oct. 22, 2009

5 Andrea Van Hook, Director, Communications and Marketing, L.A. Health Care
Plan
Personal communication – e-mail, Oct. 23, 2009

6 Pam Shambra, President, Pretend City Children’s Museum, Irvine
Personal communication – e-mail, Oct. 26, 2009
Pam Shambra recently led Pretend City through its Grand Opening in August of 2009.

7 Lawrence Fried, Development Director, Evergreen City Ballet, Renton,
Washington
Personal communication – e-mail, Nov. 3, 2009

8 Patrick Feeley, Assistant Vice President for Institutional and Events Fundraising,
The Children’s Hospital of Philadelphia Foundation
Personal communication – phone, Nov. 5, 2009

9 Regina Birdsell, President and Chief Executive Officer, Center for Nonprofit
Management, Los Angeles

$'"
Personal communication – e-mail, Nov. 5, 2009 and in-person, Nov. 19, 2009

10 Vicky Lelash, Client Service Manager, PainePR, Orange County
Personal communication – phone, Nov. 13, 2009
Vicky Lelash founded the Quality Time With PR Minds annual non-profit consulting
event.

11 Jennifer Floto, Faculty, Annenberg School for Communication and Journalism,
University of Southern California
Personal communication – e-mail, Feb. 15, 2010.

$("
Chapter IV: Results
The following are major themes and supporting evidence extracted from the
qualitative research.

Theme 1: Nonprofits are like for-profit businesses in many ways.
The recession did not just affect banks, nor did it just affect small arts programs.
Americans all over the country are struggling with budgeting, restructuring and
reprioritizing. If an arts advocacy group, for example, has always utilized its resources
efficiently and concentrated on providing value to its constituents, it should continue to
behave in this business-oriented manner.
For instance, although Patrick Feeley’s Children’s Hospital of Philadelphia
Foundation is not an arts nonprofit, it sets a great example for any organization. “We are
adjusting downwards now, but ramping up again quickly. Since we had reserves, it is
easier to ride through the recession, just like in big business.”
60
The more long-term
focused an organization is able to be, the easier it will be to recover. According to some
interviewees, reducing capital expenses and focusing on a competitive marketplace is key
to achieving success. Deborah Knutsen of The Salvation Army said, “the bottom line for
nonprofits – and just about everyone else – in our current economic situation is that
there’s much more competition for fewer resources.”
61
In the case of artistic
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
60
Feeley, 2009.
61
Knutsen, 2009.

$)"
organizations, the resources include individual donors, corporate funding, government
money, foundation grants and audiences.
Non-profit groups do not share all of the characteristics of corporations, but to
make it out of the recession successfully, they may need to mimic for-profit businesses in
some aspects, while continuing to serve a community purpose. Although many nonprofits
have an overly optimistic view of the broader economy and the likelihood of the funding
spigot getting turned back on to prior levels, “this isn’t going to happen any time in the
next couple of years,” said Brad Shaw of Home Depot.
62
For that reason and others,
nonprofits should continue to focus on offering as much as they can with the resources
they do have.

Theme 2: Collaboration is necessary, within one’s own organization and within the
non-profit sector.
Interestingly, the theme of collaboration appeared in the literature review, as well
as the qualitative research. “The recession has forced collaboration and consolidation in
the nonprofit sector,” said Feeley.
63
This will help the nonprofits that currently exist, but
prevent new startups from succeeding.
Some interviewees felt it is not the appropriate time in the United States to start a
new organization when there are so many already-established ones in need due to the
recession. One way arts organizations can collaborate is through educating their various
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
62
Shaw, 2009.
63
Feeley, 2009.

$*"
communities in cost-effective, influential ways. Vicky Lelash of PainePR recommends
that arts education programs need to come together, collaborate, and find opportunities to
speak with one voice.
64
For example, numerous nonprofits joined together to fight the
obesity epidemic in America. The Endocrine Society, the Hormone Foundation, the
Center for Disease Control and Prevention and dozens of other NPOs and agencies have
coordinated efforts to develop research, guidelines and conventions for precluding
obesity in the U.S.
Arts education programs could form some type of council or symposium in which
executives and staff with specific experience come together and offer their expertise to
one another. It is important to attend workshops and events to help move the organization
forward in this economy, said Lelash.
65
By sharing insight and leveraging existing efforts
during this extremely challenging time, arts education organizations might be able to
succeed at higher rates than they would without collaboration. In addition, appearing as
one united front may also attract more funders, said Lelash.
66

Although these tactics may seem to fall under a development director’s job
description, the marketing, public relations and office management departments can step
up and provide leadership through these changes. One example of community
collaboration benefitting an arts organization is “MOCA Mobilization,” which is an
independent group formed to show solidarity and support for The Museum of
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
64
Lelash, 2009.
65
Lelash, 2009.
66
Lelash, 2009.

$+"
Contemporary Art in Los Angeles, as the organization was going through a financial
crisis in 2008.
67
This support group had 3,300 members who came together to fight for
MOCA’s independence of vision and bolster the morale of staff. The MOCA
Mobilization petition states:
We are a vigilant public who care for the integrity and autonomy of
MOCA. The Board of Trustees is the guardian of this great institution. It is
the Board’s responsibility to insure the Museum’s financial health and
preserve its programming and staff. We call upon the Trustees to maintain
MOCA’s independence and to keep its collection intact and accessible to a
wide and appreciative public.
68

This noteworthy collaboration would not have succeeded without direct and
purposive communication tactics, including the use of online platforms. In the end, 2009
marked a turnaround year for the museum, and the community continues to show
support, according to MOCA.org.
69

Within any nonprofit, the communication function needs to help keep the entire
organization stay focused on the long-term goals, said Lelash.
70
Five-year business plans
are definitely necessary for nonprofits, as well as any company, but referring to an
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
67
MOCA Mobilization. ThePetitionSite.com, Accessed Feb. 2010.
68
Press Releases/Statements. MOCAMobilization.org, Accessed Feb. 2010.
69
Winter, L. The Museum of Contemporary Art announces MOCA new 30
th
anniversary gala raises record-
breaking $4 million. MOCA.org, Nov. 16, 2009.
70
Lelash, 2009.

%,"
overarching strategic vision will keep executives and staff focused on durable, mission-
based results.

Theme 3: Build new relationships within your community and retain with donors.
“[It is important to] have relationships with donors and funders that communicate
regularly how much you need their support,” said Regina Birdsell, President and CEO of
the Southern California Center for Nonprofit Management.
71
Arts nonprofits will want to
clearly articulate which programs incoming donations are supporting, and why those
programs are valuable. Building relationships does not necessarily mean adding hundreds
of friends to a Facebook group, or handing out X number of flyers. Relationships are
more advantageous when they result in donations, increased attendance or positive
“buzz.”
For example, a statewide advocacy group for keeping arts in public schools would
benefit from fostering meaningful, honest relationships with public officials, school board
influencers and other like-minded advocacy organizations, because those listed publics
will affect the accomplishment of the group’s objectives, goals and overall strategic
vision.
The Evergreen City Ballet (ECB) is a professional dance academy and performing
company in the Seattle area. ECB is an arts organization using public relations to “make
it clear that we are part of the community, even for people who have no interest in
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
71
Birdsell, 2009.

%#"
dance.”
72
Development Director Larry Fried, along with the board and executive staff,
wants the respect and support of community members from all angles. The importance of
these relationships was recently illustrated when ECB moved to a new location within the
same demographic market area for the second time in a matter of about six years. If the
ballet company did not have open communication with local government officials and
other agencies, the move could have included dodging more red tape to secure a location.
The neighborhoods involved also gladly welcomed the new artistic establishment to town
because community members were already aware of ECB’s high quality training
combined with the mission of offering dance to everyone. One outreach program that
helps this company achieve success is Dance ALIVE!, which introduces public school
students to the basics of dance and movement.
“Relationships are everything right now – connect,” said Lelash.
73
Often non-
profit organizations depend heavily on raising money through public venues, like exhibits
at street fairs, or booths outside of performance centers. “Standing at a table or booth is
intimidating, so think of new ways to reach out to your communities. Become more
inspired with channels of communication,” suggested Lelash.
74
Often, people are more
influenced by what their friends, coworkers or family members tell them about what is
going on in their own communities than what they hear or see through controlled
messaging.
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
72
Fried, 2009.
73
Lelash, 2009.
74
Lelash, 2009.

%$"
Lelash poses questions to ask oneself in strategic planning: Think about where
your target audiences are – What are they doing? How can you reach them? Arts
organizations need to be relevant to more than just the existing patrons, so they need to
become part of the community. They cannot be in “arts silos.”
75
Some artistic
organizations do have reputations for interacting only with specific types of people –
namely current and prospective major donors. At this point, to gain support within a
community, operas, ballets, art museums, and other arts-related entities need to show
their relevance to the everyday person. Lelash suggests events like meet-and-greets or
free performances. Every strategy should be unique to the community surrounding the
organization.
76
For example, the Evergreen City Ballet partners with local middle schools
every December to show its full-length Nutcracker production at a reduced cost to the
school district. This exemplifies to the community ECB’s commitment to providing
dance experiences to all, while also intriguing a new generation of ballet-goers.

Theme 4: Think conservatively regarding fundraising and organizational growth.
Similar to for-profit businesses, arts nonprofits will not want to declare victory
and begin piling on debt again too quickly. Although the U.S. economy has been on a
path to recovery for a number of months, nonprofit organizations that depend on funding
from other agencies and individuals should expect a later bounce-back than banks or
retail companies enjoy.
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
75
Lelash, 2009.
76
Lelash, 2009.

%%"
The most successful arts groups have a diverse income stream, according to Fried.
“This is essential, because you never can predict when one source will dry up.” This
theme ties in with the secondary research findings by mentioning that donors who are not
necessarily passionate about your organization’s cause or history are likely to drop off
during a recession. Even corporate funders have been pressured to limit social
responsibility and charity spending so as to support nonprofits that strictly reflect their
corporate values.
“Nonprofits need to do something that just isn’t typically in their DNA, which is
get much more aggressive on cost-cutting and more prudent and conservative in their
growth plans,” said Shaw.
77
This theme also relates to the findings from the secondary
research in that organizational restructuring may be necessary to retain stability. “I’ve
never seen a budget which can’t be cut, providing that the artistic product is not
compromised. When times are good, arts groups tend to increase programs and staff, then
are stuck with these new expenses when the economy changes,” said Fried.
78

For instance, in periods of prosperity, a children’s afterschool arts education
program should be investing time and resources in planning for the future, rather than
spending double the usual amount on an end-of-the-year party. This could mean offering
additional training for staff members, conducting opinion research of participants, putting
more money away for scholarship funds or any number of other tactics.
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
77
Shaw, 2009.
78
Fried, 2009.

%&"
Nonprofits are talented when it comes to working within a tight budget. Yes,
these groups must stay focused during an economic recession, but even more so during
years of growth and success.
“The nonprofit organizations that are succeeding right now probably had money
in the bank going into this recession,” observes Birdsell.
79
The fact that certain nonprofits
did have more flexible budgets to begin with may reflect those organizations’ strong
business plans and objectives. Or, possibly, all nonprofits are set up to weather a
recession better than for-profit companies. Fried commented, “nonprofits are very
resilient. We know how to save money.”
80
In any type of company, business plans are
regularly being reevaluated, but executives who think on a more long-term, visionary
level can predict trends and adjust to changes within the sector. Deborah Knutsen –
referring to her organization, The Salvation Army – said, “Our fiscal conservatism has
(so far) afforded us enough reserves to maintain operations in lean times.”
This may be simpler for some nonprofits than for others. As an example, arts
organizations often spend a large amount in marketing and production costs prior to a
season opening or a performance series, expecting to profit from those shows.
There are ways to cut costs, even if it seems daunting to reduce traditional
practices. “Planning is critical, and requires time and effort, but not necessarily money.
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
79
Birdsell, 2009.
80
Fried, 2009.

%'"
Don’t try to be all things to all people. Build a program that is going to communicate well
to the most important publics,” said Lelash.
81

Theme 5: Direct focus back to the mission.
In an era of increasing transparency in business practices, internal communication
and long-range goals, arts nonprofits are not exempt from judgment by all constituents.
Donors, participants, audience members, employees, community leaders, public officials,
corporate funders, grant makers and social networking influencers will all take notice of
whether or not your organization is behaving in congruence with its mission. This may
mean executives editing the mission statement based on current need or resources. This
may mean all staff members should meet to revisit the purpose of the organization and
their individual roles in accomplishing that purpose. This may mean restructuring based
on what positions are required to carry out the core mission most efficiently. No matter
what approach an organization takes, it must address its mission while operating in a poor
economy. For example, the board of the Beach Cities Symphony, one of the oldest
community orchestras in Los Angeles, in its 2007 five-year plan, had slated 2010 as the
year to increase membership levels; by early 2009, the board realized that cutting costs
for the four annual performances was more prudent than to risk losing long-time
members over a $5-$10 dues increase, said USC’s Jennifer Floto.
82

""""""""""""""""""""""""""""""""""""""""""""""""""""""""
81
Lelash, 2009.
82
Floto, 2010.

%("
“It’s a time to go squarely back to your mission and start shouting it passionately
and strategically to those with wealth,” said Pam Shambra.
83
Yes, well-off individuals
and companies are proven sources of continued funding, however, nonprofits should be
“shouting” their missions to those with wealth in influence, power, voting capability,
community respect, newsworthiness or collaboration potential. As delineated in Theme 2,
partnering with new types of organizations can produce new types of results.
Focus on the service to the community over simply the entertainment value [of
your arts organization], suggested Lelash.
84
If an arts nonprofit happens to be serving
basic needs, this is the time to make that known. Maybe your nonprofit offers after-
school care to at-risk youth, or holds a canned food drive as an admission price to events.
“Any organization that can show [it is] serving a disadvantaged population is going to get
a lot more dollars in this economy, since we are experiencing a huge shift to people
choosing to support basic needs right now,” said Lisa Christiansen.
85
It is important not to
try to expand an organization’s mission to cover basic needs just to gain temporary
donors, volunteers and supporters. “Stick to the basics, just do more of them and do them
better,” recommends Fried.
86

If community relations have always been an integral part of your company, then
now is the time to draw attention to the unique benefits of those programs and services. If
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
83
Shambra, 2009.
84
Lelash, 2009.
85
Christiansen, 2009.
86
Fried, 2009.

%)"
a nonprofit does not reach its publics through providing community services,
communications executives must highlight how their organization fulfills a significant
need. “Have a clear vision of what the need is, and what makes your organization
important and effective in filling that need,” said Birdsell.
87
For arts organizations, this
can mean bringing creativity and imagination to a certain geographic area, or offering
training scholarships for dedicated and promising young musicians, among an infinite
number of possibilities. Artistic expression has served as a cornerstone of cultures from
ancient times until present, and the need should not become diminished due to an
economic downturn.
Consistency can make donors, participants, community members and employees
feel confident in a nonprofit’s plans for the future. Deborah Knutsen, in referring to The
Salvation Army, noted: “Since its inception, The Salvation Army’s mission – the basis
for the work we do – has remained the same.” Americans recognize symbols, values and
practices of The Salvation Army – especially during the holiday season – and they
respond to that level of consistency. The same coherent, reliable behavior can positively
affect arts organizations. If a person understands what a nonprofit stands for, he or she is
more likely to recall any marketing communications regarding that organization.
“Because of competition, nonprofits need to pay attention and express what
makes them unique,” said Andrea Van Hook.
88
Being able to concisely convey need and
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
87
Birdsell 2009.
88
Van Hook, 2009.

%*"
purpose can be a challenge for many nonprofits. “This is not about fancy marketing
materials – it’s about being able to express the mission in a clear and compelling way.”
89

An excellent demonstration of this straightforward, “back-to-mission” messaging
is the American Cancer Society’s “Celebrate More Birthdays” campaign. ACS’s mission
has always been to eradicate cancer and help Americans live longer, and this campaign
puts an upbeat perspective on the typically tragic subject of cancer. The organization did
not change what it stands for or what it does. It simply reiterated its purpose in a new
way.
Finally, arts groups must truly assess their priorities, because many of them no
longer have budgets to cover extra programs and services. “Most people don’t realize just
how small a margin arts organizations operate on, even when the economy is great,” said
Fried. “This is the nature of what we do. We can’t begin to charge the audience what is
really costs to put on a performance; if we did, no one could afford the tickets.”
90
For
Fried’s ballet company and other nonprofits, executives must ask themselves if cutting
programs and services in order to save money will actually damage customer loyalty and
reputation in the long run.
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
89
Van Hook, 2009.
90
Fried, 2009.

%+"
Chapter V: Case Studies
The following four case studies illustrate how arts organizations are operating in
the recession. These cases will provide examples of successful and unsuccessful
strategies and tactics in an array of circumstances.

Los Angeles County Museum of Art Transformation Campaign
The Los Angeles County Museum of Art, or LACMA, is the largest art museum
in the western United States, and is one of the most recognized landmarks in Southern
California. LACMA houses pieces from all eras and countries, attracting nearly one
million visitors annually.
91

Beginning in 2008, LACMA officials began the museum’s decade-long
renovation and expansion project called the Transformation. This enormous undertaking
is being designed by famous architect Renzo Piano, and features two main phases and an
increase to LACMA’s endowment.
Phase I of the Transformation featured major expansions of various areas of the
LACMA campus, including a central gathering place, a new parking garage, a concourse
connecting various galleries and piazzas of LACMA together, and a designated space for
displaying contemporary art. The Broad Contemporary Art Museum (BCAM) was
completed in February, 2008, and added 60,000 square feet of gallery space. BCAM is an
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
91
LACMA.org.

&,"
example of LACMA’s strategy of integrating more contemporary art into its
exhibitions.
92

Phase II is basically a continuation of the upgrading of LACMA as a destination.
In September, 2008, LACMA received a $55 million gift from Southern California-based
philanthropists Lynda and Stuart Resnick. Forty-five million dollars of this gift was
designated for LACMA’s Transformation.
93
Phase II was intended to feature a “complete
rehabilitation” of the 300,000 square-feet of LACMA West, an expansion of the Resnick
Exhibition Pavillion, and the installation of various artist-designed outdoor works.
94

However, in response to the economic downturn, the institution postponed the $50
million LACMA West renovation, wrote Mike Boehm in the Los Angeles Times.
95

With Piano designing the new structures for LACMA’s Transformation, the
Museum is fulfilling art enthusiasts’ expectations that a world-renowned architect is
creating the physical setting for new works to be viewed. Piano also is working on
Boston’s Isabella Stewart Gardner Museum’s $118 million expansion, slated to be
completed by early 2012.
96
Gardner executives state that this expansion – which will
nearly double the size of the museum – is occurring out of necessity. “It provides the
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
92
LACMA.org.
93
LACMA.org.
94
LACMA.org.
95
Boehm, 2009.
96
Edgers, Geoff. Sweeping change for Gardner. The Boston Globe, Jan. 21, 2010.

&#"
space the museum has really needed for 10 years so its programming can really
blossom,” said Jim Labeck, the Gardeners director of operations.
97

With the completion of Phase II slated for mid-2010, LACMA is facing a degree
of public scrutiny for continuing with its extravagant Transformation campaign in the
midst of the recession. On November 21, 2009, Mike Boehm wrote a Los Angeles Times
article entitled “Los Angeles County Museum of Art is hard hit by recession,” in which
the journalist reports LACMA’s investment portfolio’s drastic decline during the 2008-09
fiscal year. “In 2007-08, it [LACMA] raked in gifts and pledges totaling $129.7 million,
most of it for the museum’s expansion and renovation campaign, which was in high gear
amid strong markets.”
98
One sacrifice made to continue with this Transformation is the
delay of a $25 million Jeff Koons sculpture that was supposed to arrive at LACMA in
2011-2012.
99
Koons’s project, entitled “Train,” was pushed back to 2014-2015 because
LACMA lost almost one quarter of its endowment when the stock market crashed in
2008, reported Katya Kazakina of Bloomberg.
100
“We wouldn’t do it unless someone
funds it; someone has to write us a check,” said Barbara Pflaumer, LACMA’s associate
vice president for communications and marketing. “This is a very tough economy.
Everyone has revised timetables.”
101
One can infer that the Transformation will impact a
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
97
Edgers, 2010.
98
Boehm, 2009.
99
Kazakina, Katya. Koons’s $25 Million Dangling Train Delayed by Lacma Shortfall. Bloomberg.com,
Nov. 23, 2009.
100
Kazakina, 2009.
101
Kazakina, 2009.

&$"
greater number of people in LACMA’s target market than the Train sculpture would.
“The Train is something on our to-do list,” Pflaumer added. “There’s no question we’d
like it to happen. It’s a question of whether we can make it happen.”
102

With LACMA’s decision to continue full-speed-ahead with the Transformation
project, the communications team must continue to reach out to former, current and
future museum patrons and convey the excitement and unique offerings of the upgraded
museum campus. One will need to reevaluate the situation later in 2010 to determine
whether or not LACMA made the best decision by continuing with Phase II of the
Transformation despite the major loss in endowment assets.

Los Angeles Unified School District: Fate of arts education undecided
Although the Los Angeles Unified School District is not a traditional non-profit
organization, it reflects changes taking place in arts education programs throughout the
country. “Faced with a nearly $470-million shortfall in the 2010-11 school year, the
LAUSD published in December [2009] a series of proposed budget cuts.” These include
elimination of half of the district’s arts specialists who teach such specific cultural subject
as music or dance in elementary schools.
103
This proposal would result in a savings of
$14.9 million for the 2010-11 year, and included the possible elimination of the
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
102
Kazakina, 2009.
103
Ng, David. LAUSD board meets to discuss fate of elementary school arts education. Los Angeles Times,
Jan. 19, 2010.

&%"
remaining arts specialists the following year, which would generate another $14.9 million
in savings, according to a Los Angeles Times article by David Ng.
104

Caught in the midst of a statewide budget crisis, LAUSD is forced to turn its back
on its revolutionary plan to restore arts education throughout the system that was
implemented eleven years ago, reported Ng.
105

To increase awareness of this issue, the school district is launching a series of
televised public service announcements featuring prominent actors and artists.
106
A local
advocacy group called Arts for L.A. is also involved in this case, stating they know “arts
education is going to have to take a hit. We just don’t want it to be disproportionate.”
107

One LAUSD board member suggested that corporations in the arts and
entertainment fields should take an active role to support arts education.
108
Of course, this
solution means that the school district itself is still eliminating in-school programs, and
placing the responsibility of extracurricular time management on other organizations,
parents and students themselves.
LAUSD officials should be sure to retain as many efficient and results-oriented
arts programs as they can while staying within statewide budgetary restraints. From a
communication perspective, LAUSD needs to cooperate with board members, county and
state officials, teachers’ unions and the local artistic community. In addition, the district
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
104
Ng, 2010.
105
Ng, 2010.
106
Ng, 2010.
107
Ng, 2010.
108
Ng, 2010.

&&"
should prepare to reinstate programs within its elementary schools, because funding will
eventually flow back to the schools in two or three years.

New York City Ballet focuses on expansion
The New York City Ballet exemplifies the American ideal in the art of classical
ballet. Despite its stature and recognition, the company is not exempt from a faltering
economy. However, this well-established organization has continued to renovate its
facilities, debut new choreography and hire a major executive during this recessionary
period.
In the summer of 2008, New York City Ballet and the New York City Opera
received a $100 million gift for the organizations’ joint capital campaign to renovate the
New York State Theater.
109
According to a NYCB press release, “the gift will help to
fund the unprecedented joint initiative by City Ballet and City Opera to modernize and
enhance the artistic and visitor experience and to establish an endowment for future
capital projects and theater maintenance.” In addition to this major cultural milestone,
Lincoln Center is undergoing various other renovations and upgrades.
110

In addition, with the 2010 spring season featuring seven choreographic world
premieres, four new scores and farewell performances for four of City Ballet’s most
famed principal dancers,
111
scaling back does not seem to be in the business plan. The
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
109
nycballet.org.
110
LincolnCenter.org.
111
Bloom, Julie. New York City Ballet News. The New York Times. Jan. 12, 2010.

&'"
2009-2010 season opened with a benefit gala event in November, which was the
inaugural production in the newly renovated David H. Koch Theater, according to
NYCB.org.
112

In a move that may or may not be related to the theater renovation, NYCB is
restructuring its executive leadership function. Katherine E. Brown, former chief
operating officer of a public radio station, started her new job as business chief of the
New York City Ballet in December 2009, writes Julie Bloom of The New York Times.
113

Hiring a new business chief is part of NYCB’s long-range plan to have finance,
administration and marketing managed professionally, full-time, “in order for [Artistic
Director Peter Martins] to focus all of his time on the artistic aspects,” reports Bloom.
114

John L. Vogelstein, chairman of the Board of Directors, said, “We are delighted to add
Kathy’s management expertise and entrepreneurial energy to Peter Martins’ unparalleled
artistic direction and drive. This powerful combination will allow New York City Ballet
to continue to deliver the most exciting dance experience in the world. Peter’s unrivaled
leadership will ensure the company’s artistic excellence, while Katherine’s abundant
talents will increase its operational and financial strength.”
115

New York City Ballet is also utilizing Twitter, Facebook and YouTube as
communication tools through this period. For a performing arts organization, these free
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
112
New York City Ballet’s Opening Night Benefit On Tuesday, November 25 To Mark First Performance
In Newly Named David H. Koch Theater. NYCB.org, Oct. 28, 2009.
113
Bloom, Julie. City Ballet Names Chief to Oversee Business. The New York Times. Nov. 17, 2009.
114
Bloom, Julie, 2009.
115
nycballet.org. Accessed Nov. 1 2009.

&("
social media platforms are an ideal way to increase search engine optimization and reach
new audiences.
American Ballet Theatre (ABT) is also showcasing new choreography in 2010 to
celebrate its 70
th
anniversary. The ABT Web site contains links to purchase tickets and
sign up for electronic newsletters, similar to NYCB. San Francisco Ballet is another
major player in the performing arts world, and its Web site is slightly more accessible,
organized and persuasive than the other two companies’ sites.
Ballet companies traditionally pursue wealthy donors and influential audiences. In
these changing economic times, some organizations may choose to branch out and
diversify their programming, while some other companies may take the New York City
Ballet approach and continue to offer black-tie events.

Museum of Contemporary Art, Los Angeles celebrates extravagant thirtieth
anniversary
Museum of Contemporary Art, Los Angeles, or MOCA, is devoted exclusively to
collecting, presenting and interpreting contemporary art. Its mission includes engaging
artists and audiences, and providing leadership in the sector. Visitors come to MOCA
from all over the world to view its steadily growing collection of over 5,000 pieces.
116

(According to the National Endowment for the Arts, 31 percent of California residents
visited an art museum in 2008.
117
)
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
116
Us. MOCA.org, Accessed Nov. 10, 2009.
117
Ng, 2009.

&)"
MOCA is celebrating its 30
th
anniversary in 2009-10 with its biggest exhibition
ever. Collection: MOCA’s First Thirty Years is a two-part exhibition demonstrating
MOCA’s commitment to contemporary art throughout the years. The exhibit features 500
works from MOCA’s own collection, highlighting geographical and ideological
commonalities amongst the pieces, as well as the variety that defines contemporary art.
118

The Collection will occupy 24,000 square feet at MOCA Grand Avenue and 26,000
square feet at The Geffen Contemporary at MOCA.
119

Collection opened on November 14, 2009, with an Anniversary Gala featuring
performances by artist Francesco Vezzoli, pop icon Lady Gaga and the world renowned
Bolshoi Ballet. With more than 1,000 art, fashion and Hollywood celebrities in
attendance, this gala event raised a record-breaking $4 million, according to
MOCA.org.
120
The proceeds of this event went toward the exhibit and MOCA’s
educational programs. “Never before have so many people come from around the world
to support an L.A. arts institution,” said MOCA Founding Chairman Eli Broad, who also
served as the gala co-chair. “No other museum has built such a great collection of art in
just 30 years, and with the goal of doubling attendance in the next several years, we
expect MOCA to serve an even greater public.”
121

""""""""""""""""""""""""""""""""""""""""""""""""""""""""
118
Collection: MOCA’s First Thirty Years. MOCA.org, Accessed Nov. 10, 2010.
119
Press release. MOCA unveils largest-ever installation of works from its world-renowned permanent
collection on occasion of museum’s 30
th
anniversary. MOCA.org, Nov. 2, 2009.
120
Winter, L. The Museum of Contemporary Art announces MOCA new 30
th
anniversary gala raises
record-breaking $4 million. MOCA.org, Nov. 16, 2009.
121
Winter, 2009.

&*"
For the entire opening week of the Collection, MOCA offered complimentary
admission, referred to as “MOCA <3 You.”
122
Later in November, the museum held a
30
th
birthday party for itself, featuring “insightful and participatory performance.” This
event was free for MOCA members, which offers another benefit of becoming a museum
patron this year, despite the recession.
MOCA is also reaching out to the new generation of art connoisseurs and building
relationships within the community with its First Sundays are For Families workshops.
These events occur regularly, and are hands-on educational experiences for families of all
backgrounds and age categories.
123

""""""""""""""""""""""""""""""""""""""""""""""""""""""""
122
MOCA press release, 2009.
123
First Sundays are For Families, MOCA.org, Accessed Jan. 30, 2010.

&+"
Chapter VI: Analysis
Themes from both the primary and secondary research overlap at certain points,
illustrating what practices and circumstances positively affect arts nonprofits and which
are potentially detrimental.
Based on the case studies of LACMA, New York City Ballet and MOCA, one can
infer that following through with preplanned events and expansions, even in poor
economic conditions, can yield positive results. These organizations have captured their
respective target audiences because of their appearance of operating confidently,
thoughtfully and strategically through tumultuous times. It seems that by continuing to
offer community programs and educational outreach, these high-end artistic institutions
have avoided criticism of their behavior. For example, when an art museum holds gala
events during a recession, the perception is much different than when big businesses host
luxurious executive retreats while simultaneously requesting funding from the
government.
Both the qualitative interviews and literature review suggest that understanding
the values and expectations of one’s audiences will produce success. Potential donors
now include younger generations with different values and expectations, as reported by
the James Irvine Foudnation.
124
Also, Baby Boomers are approaching retirement age,
which could change their spending patterns and available leisure time, and potentially
increase their arts patronage. Audience analysis should be conducted for organizations of
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
124
Gowdy et al, 2009.

',"
all sizes and purposes. How will a nonprofit know how to reach their target publics
without finding out who their target publics really are?
Often in the arts, conducting any sort of market research is viewed negatively, as
a sales tool that is focused purely on profit, rather than artistic freedom and expression.
No one is suggesting that an abstract modern dance group drastically change its identity
and begin producing family-friendly musicals. It is simply necessary to know what
motivates various groups of donors, enthusiasts, community members and other
constituents.
Another theme shared by both primary and secondary findings is that it is
beneficial to behave like a for-profit business in most aspects. Margeurite Kondracke
wrote in The NonProfit Times, “after this rough year, for-profit business leaders have
learned to survive by changing strategies for new long-term realities – and nonprofits can
take that page from their book.”
125
Maybe internal organization needs restructuring.
Maybe the paid advertising budget needs to be decreased. Maybe a social media function
needs to be added. Maybe a large-scale diversification effort needs to be delayed. If
nonprofits do not have the continued funding to maintain current practices, “business as
usual” needs to change and adapt to the new environment.
“Success will be pretty much determined by the same fundamentals – a clear
understanding of what’s working and what’s not, following facts and not opinions. It will
be measuring results and acting on them, creativity, experimentation, and investment in
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
125
Kondracke, Marguerite. Take new steps for a better nonprofit-business partnership. The NonProfit
Times, Dec. 1, 2009.

'#"
new ideas,” claimed Larry May in The NonProfit Times.
126
One example of acting based
on measureable results is a nonprofit monitoring which fundraising initiatives are
generating a good return on investment and which ones are not, and eliminating the
poorly performing strategies to operate more efficiently. Although according to some
statistics the recession technically ended in 2009, it is clear that nonprofits are still facing
major challenges. Non-profit organizations are always going to be a step or two behind
corporations, because they depend on funding from others to operate.
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
126
May, 2009.

'$"
Chapter VII: Recommendations
The following are the top nine best practices for arts nonprofits in a recession, based
on themes and evidence extracted from primary and secondary research between
September 2009 and January 2010.

1 Focus on mission, vision and core values.
A difficult economic period is when a company’s mission statement becomes more
central to its success than ever. If your non-profit organization can concisely define its
purpose, link to the identified need, and convey its overarching vision clearly and
substantially, important publics will take notice. For example, when applying for grants,
the development team must know which grants are applicable to their organization and
why. Now is not the time to overreach and try to claim your nonprofit as acting in the
best interests of every possible constituency. In other words, do not try to squeeze your
nonprofit into a category in which it does not fit. Like Vicky Lelash said: “Don’t try to be
everything to everyone.”
127

“One of the more exciting outcomes of this current crisis has been the new interest in
double-bottom-line investments. Mission-related and program-related investments can
provide an opportunity for both growth and service,” said Steve Gunderson.
128
Staying
focused on the purpose of one’s organization is essential when writing grant proposals. A
foundation or other grantmaker needs to understand the need your organization is filling,
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
127
Lelash, 2009.
128
Gunderson, 2009.

'%"
and why it is more effective than other competing nonprofits. The person writing the
proposal should concisely convey how the actions of the organization are working to
accomplish the mission. It’s also critical to provide proof that your organization does,
indeed, meet the needs of the constituents you claim. Simple, cost-effective attendance
polls or audience surveys can provide much-needed demographic data. In addition, an
arts group is more likely to receive a grant from a foundation that has goals and values
reflective of the potential grantee.
The mission and core principles of an organization should be central in strategizing
and planning annual events, benchmarks, etc. All nonprofits are different, including arts-
centric ones. A black-tie benefit gala is not a “one-size-fits-all” default fundraiser, nor is
an e-mail outreach campaign or a walk-a-thon. Not every arts education program serves
the same population, and not every symphony has a superstar conductor. These
differentiating factors make non-profit organizations unique, and they should be
exemplified in each group’s strategic approach.
Finally, nonprofits must keep mission in mind when evaluating the budget. For
example, raising ticket prices will not accomplish a goal of catering to the local
community at all levels. If a nonprofit’s mission does not include providing exhibitions or
productions to citizens regardless of socioeconomic standing, then maybe raising
admission rates would be an acceptable choice. Again, every group is different, and
should behave based on its own values.

2 Collaborate in new ways.

'&"
The James Irvine Foundation recently awarded grants of $150,000 each to seven
nonprofits that are pursuing strategic alliances or mergers during this economic
downturn.
129
The idea-generation and additional capabilities resulting from collaboration
might even be more valuable for arts nonprofits than this financial incentive. Not only
should groups partner with likeminded arts institutions, but also they should seek out
unlikely, complimentary partners, such as pop culture icons or technology service
companies. This was shown with the Museum of Contemporary Art, Los Angeles’s
opening night gala for its new collection. Lady Gaga – an icon among young Americans -
performed, along with the more traditional Bolshoi Ballet. This contrast attracted a wider
array of patrons than the typical contemporary art exhibit would.
“I would remind our public sector leaders that innovation is not consigned only to
new organizations,” said Peter Goldberg in a NonProfit Times article.
130
Even if your
concert hall has never before partnered with an online ticket auction site, the benefit of
this alliance may be increased now, due to Americans’ adjusted spending habits.
Nonprofits can also collaborate in a somewhat abstract way by leveraging American
holidays or major cultural events to reach new audiences. As an example, most ballet
companies feature an annual Nutcracker production coinciding with the Christmas
season. Going to see the local Nutcracker performance has become an American family
tradition, so ballet companies can depend on attendance year after year. There are other
potential collaboration opportunities based on cultural and environmental circumstances.
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
129
OpportunityKnocks.org, Jan. 25, 2010.
130
Goldberg, Peter. Government must pay the actual cost of services. The NonProfit Times, Dec. 1, 2009.

''"
In order to utilize more volunteers, and therefore pay less full-time employees, a
nonprofit could offer summer “internships” where qualified candidates could help with
administrative, programming, development, or communication tasks.
Collaboration is an expected strategy in many situations, but for arts nonprofits in
the recession, the angle is unique. It will not suffice to simply exchange logo advertising
with a partner organization and hope to gain a larger audience. Collaboration will mean
identifying common goals, working within a global marketplace, seeking out new
supporters and addressing community needs and concerns. Especially in this era of the
intergenerational workplace, teaming up with nontraditional partners can produce
substantive, unique results.

3 Think about target audiences when making all decisions, not just communication-
related.
Although communication is essential to the success of an arts-based nonprofit, it
cannot carry a company to the top on its own. Key constituencies should be carefully
considered in all strategic decision-making processes, from where to host annual events
to what artists to feature next season. Nonprofits must know how to tap into these
audiences’ motivations, preferences and backgrounds. Organizations must define its
target publics: Where do they live? What jobs or careers do they have? What are their
family situations? What do they do with their leisure time? What media do they consume,
and how often? These are just a few questions that can lead to uncovering what these
audiences will respond to and care about. Nonprofits then must decide how to engage

'("
with key constituencies. In this ‘Web 2.0’ world, this will mean not only traditional
outreach, but also the use of digital platforms, like Web sites, social networking and e-
mailing. “Web-based communications and social networking have to be more fully
integrated with direct mail and other efforts. Keeping the Web and social media teams
segregated is a mistake,” writes Larry May.
131
For most organizations, new media
combined with traditional media offers new channels to reach the same audience. For
each and every strategic move, a nonprofit organization should know its overarching
goal, and its individual measurable objectives.
Arts nonprofits must not forget that there are more audiences than just funders.
Internal publics, like employees, board members and users can affect the success of an
organization to almost the same degree as a donor. Decisions should be made with all
stakeholders in mind, especially the long-lasting and passionate ones, like employees and
partners throughout the creative community. If an improv troupe that was enjoying
growth and success in 2007 now has 50 percent less funding in 2010, it is necessary to
honor and appreciate the participants themselves so that they are able to uphold their
ardor and motivation to continue on in their field.

4 Retain skilled leaders.
Skilled leadership is essential to the sector’s ability to successfully navigate the
emerging trends.
132
It makes sense that any organization can only function to the capacity
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
131
May, 2009.
132
Gowdy et al, 2009.

')"
of its personnel. Budget cuts are causing arts nonprofits to shake up their internal
structures, but those organizations that can manage to keep their passionate, efficient and
experienced leaders have a better chance at success than organizations that do not retain
those people. It may seem like the best option to bring in less-experienced staff members
at a lower pay rate for certain positions.
However, the added value of retaining the original employees who care deeply
about the mission outweighs any cost saved by replacing them. This is especially relevant
for the programming and marketing functions, according to Michael Kaiser, president of
the John F. Kennedy Center for the Performing Arts. “Cutting programming and
marketing ensures that future revenue will fall. This initiates a viscous cycle; less art and
marketing yielding less revenue leading to more cuts in programming and marketing, less
revenue, etc., etc.”
133

Kaiser’s theory applies to the development executives within an arts organization,
as well. “The talent of fundraisers is a factor in any nonprofit’s success,” he noted.
134

Retain top talent in development departments through recession in order to perform better
in expansion period. A passionate, motivated staff will usually yield better results.
135

Developing an organization’s workforce based on changing circumstances can be
beneficial. Navigating the convergence of evolving trends and permutations will require
“intense curiosity and willingness to learn, the ability to work as part of a diverse group
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
133
Kaiser, 2009.
134
Feeley, 2009.
135
Feeley, 2009.

'*"
and lead as part of a team, and openness to testing new ideas and challenging the status
quo.”
136

Examples of retaining skilled and valuable leaders are found in two previously
discussed organizations – the New York City Ballet and Los Angeles County Arts
Museum. New York City Ballet allowed Peter Martins to do his job, while hiring
Katherine Brown as executive director, and LACMA added two new board members in
January, 2010, both with successful business backgrounds.
137

It will take time to assess whether retaining leaders through the recession is
actually paying off in monetary terms, but according to qualitative research, this is a best
practice for arts nonprofits.

5 Devise new ways of acquiring funding.
Since the American public generally has a new, more cautious view of money today,
so should nonprofits. Individuals, corporations, family trusts and other sources that do
have the ability to donate are doing so in a more cautious, strategic manner. Funders need
to see solid business plans and proof of both internal stability and opportunities for
growth. An arts nonprofit needs to illustrate its significance and explain to a grantmaker
how the two organizations share certain values. According to the James Irvine
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
136
Gowdy, 2009.
137
LACMA Appoints Joshua S. Friedman and Steven F. Roth to Its Board. ArtDaily.org, Jan. 22, 2010.

'+"
Foundation Convergence report, in many cases, funders must be willing to depart from
traditional funding models in order to enable innovation inside and outside the sector.
138

However, it is important to remember that private donors do not comprise the
majority of nonprofit dollars – that is where the government steps in. Approximately $50
million of the stimulus money from The Recovery and Reinvestment Act of 2009 will
fund state agencies and arts groups through the National Endowment for the Arts (NEA).

139
Under the Interior Appropriations Bill passed in late 2009, the NEA and the National
Endowment for the Humanities received $167.5 million for the 2010 fiscal year, which is
both organizations’ highest level of funding since 1993.
140

Digital fundraising is also opening new doors for NPOs to secure funding through
things like online auctions, donation matching programs and anonymous online giving.
For example, the American Cancer Society’s renowned Relay for Life event has moved
its teams to the Web, where they are reaching out to friends, family and coworkers to
donate on their behalf. By implementing this digital strategy, Relay for Life is more
efficient for participants, and more accessible for potential donors.
So whether it means applying for newly created federal grants, or reaching out to a
larger base of individual donors, arts nonprofits now need to consider new, creative
options. Oftentimes board members possess the ideal combination: a passion for the
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
138
Gowdy, 2009.
139
Farhi, Paul and Trescott, Jacqueline. Recession Slams U.S. Arts Organizations. Philanthropy News
Digest, May 6, 2009.
140
Zongker, Brett. Arts agencies to get highest funding in 16 years. Associated Press, Oct. 30, 2009.

(,"
organization’s mission and strong networks within donor communities that can yield vital
backing. Board members are traditionally a go-to source for donations, but nonprofit
executives should seek out other pathways, too. To acquire funding in new ways, one
should employ the other “best practices” – collaborate and utilize technological advances.

6 Do not become shortsighted. Plan for the future.
Yes, budgets are tight, layoffs are necessary and every day is more challenging
than the next. However, organizations in the public sector should not give up on fulfilling
their missions. Not only do individuals depend on arts nonprofits for things like
entertainment, employment, education and family events, the culture of the United States
is somewhat defined by the arts. Sustaining cultural traditions and practices is important
for any nation, especially during a trying economic period. Non-profit arts organizations
owe it to themselves and all of their stakeholders to continue offering their services. “We
cannot minimize the challenges of present day. But, we must prepare for future growth,”
recommends Gunderson.
141

While it is important to be pragmatic, nonprofits should think optimistically, and have
faith in audiences, patrons and donors. An organization may have experienced a decrease
in income for FY2009, but by upholding its most valuable programs and retaining skilled
leaders, this nonprofit will be better prepared for success in 2010 and 2011.
One way to prepare for the future is to assess relevant national trends – where is the
stock market headed? What pop culture fads are emerging? Who are the up-and-coming
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
141
Gunderson, 2009.

(#"
artists relevant to your organization? Nonprofit executives should be constantly ‘checking
the pulse’ of the nation and determining how overarching trends might affect their
organization.
Nonprofits must recognize their challenges and uncover the opportunities they bring,
while managing the accompanying uncertainty and risk.
142
Some refer to this concept as
becoming a ‘futurist.’ Nonprofit executives who take this approach must continuously
reevaluate and reinvent roles, structures, systems and norms that define their
organizations today. “Becoming a futurist requires both individual and institutional
curiosity, and a willingness to take risks,” according to a James Irvine Foundation
report.
143

7 Utilize volunteers within the scope of the organization’s infrastructure and
capacity.
When one is thinking of charities or non-profit organizations, the aspect of
volunteering tends to come to mind. Volunteers, filling a variety of roles, have
traditionally strengthened many charitable organizations, from handing out free meals to
rebuilding houses.
In the arts realm, volunteers are just as important – working at performance
venues, organizing street fairs and posting flyers at the local coffee shops. However, it is
important to treat volunteers as partners rather than dispensable free labor, especially
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
142
Gowdy, 2009.
143
Gowdy, 2009.

($"
now, with so many skilled people unemployed and looking for fulfilling activities.
Similar to in the Great Depression, Americans turn to arts and entertainment to escape
from the reality of life in financial distress. Hollywood has definitely experienced the
rewards of this need for distraction. The box office saw a 17.5 percent increase in ticket
sales and a 16 percent jump in attendance between 2008 and 2009.
144
Arts nonprofits can
take part in this escapism, too, by offering discounts and more family programming.
Nonprofits should match volunteers’ skills with their organizational needs. For
example, maybe a company is struggling with budgeting for the next fiscal year,
volunteer recruiters notice one or two people on the list with financial backgrounds, and
an ideal match is made. Not every organization may be this fortunate, but it is worthwhile
to assess the backgrounds, interests and job histories of all volunteers, in order to utilize
them in the most effective way.
Nonprofits should not necessarily expect volunteerism rates to decrease in relation
to employment rates increasing. President Obama and the First Lady have both made it a
point to encourage volunteerism and civic engagement amongst Americans. The Disney
Resorts have also dedicated 2010 to volunteering, by offering one day free at a Disney
park with a certain number of volunteer hours completed. Though there is an obvious
trend toward corporate social responsibility, strategic planned giving and individual
contribution, if nonprofits are able to secure commitment from these new volunteers, they
could realize a long-term benefit.
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
144
Barnes, B. and Cieply, M. In Downturn, Americans Flock to the Movies. The New York Times, Feb. 28,
2009.

(%"
There are many opportunities to employ volunteers within every type of
organization, and it is up to each nonprofit to properly attain and utilize those
corporations, families and individuals to their highest capacity.

8 Use communication to lead the way through change.
One opportunity during this time is the media’s focus on American life in a time
of deep recession. There is potential here for a public relations professional to reach out
to appropriate outlets and tell the story of XYZ nonprofit to the general public. The
communication function can arise from a formal department, a board volunteer, a pro
bono contract, or any other situation. If a small arts education group, for example, does
not currently retain a public relations executive, the marketing or development function
can take on this responsibility.
Internally, employees will need honesty and compassion from the communication
function, especially if an organization is concerned with lay-offs or other restructuring
challenges. Often the executive directors or CEOs of nonprofits have overwhelming and
time-consuming administrative responsibilities, as well as strategic thinking to deal with
during downsizing, “rightsizing,” or hiring processes. A reassuring and organized internal
communications manager can explain to all parties what is taking place, which will
ideally help people understand their individual role in the change.
Change within an organization is inevitably challenging, especially in a classical
arts setting, like a museum or an opera company. To lead the change, nonprofit
executives must repeatedly analyze their organization and identify inputs, internal

(&"
transformational processes and outputs, as well as any cultural, procedural, personnel-
related or structural problems. It can often be challenging for a CEO or director to
objectively view his or her own organization in this way, so external consultants can be
hired to assess the company. This is a good idea, for it can lead to understanding
motivations, cause-and-effect relationships, and dissatisfaction within organizations. One
caution: employees typically adapt more pleasantly and efficiently to their own manager
leading the change rather than an external change consultant.

9 Determine how technological advances can work in your favor.
With Twitter, YouTube, Facebook, Raiser’sEdge, Cision, and dozens of other social
media platforms, nonprofits are now in a world of more than just e-mail and Web sites.
These Web 2.0 technologies are available for almost no cost, and have been widely
adopted all over the world.
It is vital for any company, including a nonprofit, to engage in digital conversation in
a strategic manner that accomplishes the organization’s vision and objectives. The James
Irvine Foundation Convergence report stated, “it’s tempting to jump on the technology
bandwagon and forge ahead. But the sheer number of new technologies entering the
marketplace from one month to the next presents a major strategic challenge to nonprofit
leaders.”
145
Of course, the same ineffective messaging delivered through different
channels will not necessarily yield different results.
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
145
Gowdy, 2009.

('"
Moreover, technological platforms can be used to reach broader audiences and/or new
audiences. Christie’s and other major art auction houses have moved operations online,
according to The Economist. Christie’s has found that more than a quarter of its online
bidders are new to the auction house,
146
which reaffirms that new technologies can
capture new audiences.
The most recent emergent technology is social networking, which is almost
completely free, and has the ability to reach audiences not limited by geography, and
build loyalty. Nonprofits now use Twitter, a microblogging social networking service
featuring 140-character-or-less updates. Twitter can be used to link followers to the
organization’s Web site, to an external site or article, to “twitpics,” or to other users’
tweets.
Another eminently popular social media tool is Facebook, Mark Zukerberg’s global
social networking site. Facebook offers companies the option of a “fan page,” a company
profile page, or individual personal profiles. With over 400 million active Facebook
users, this tool seems irresistible for an organization with a tight PR/marketing budget.
However, nonprofits must employ Facebook strategically, and decide the purpose of their
social networking presence: is this tactic going to lead to increased brand awareness, or is
it driving Web traffic to a fundraising site? Is your organization targeting existing
patrons, or seeking out new fans? An art museum could use its Facebook profile to
announce upcoming productions, and link to a site to purchase tickets in advance. Or a
""""""""""""""""""""""""""""""""""""""""""""""""""""""""
146
Rocco, F. and Thornton, S. The art market has suffered from the recession, but globalization should help
it recover. The Economist, Nov. 28-Dec. 4, 2009.

(("
company might offer special discounts or “insider specials” for those who indicate they
heard of the event through such social networks.
In conjunction to Twitter and Facebook, YouTube can offer nonprofits a cost-
effective marketing platform to reach a widespread audience. YouTube allows for more
connection between arts organizations and their audiences, since it is a video-based site.
For example, many dance troupes have adopted YouTube as a forum to show off their
“impromptu” performances at locations like international train stations, airports,
Disneyland and Times Square. Just like with the other technological options, nonprofit
executives must decide why they are using YouTube and whom they are trying to reach.
A very common Internet technology used by all successful organizations is the
company webiste, where people form initial judgments about an organization and its
legitimacy. The layout, content, navigation, images and theme of a site can give potential
donors, participants and other publics first impressions about the nonprofit organization
before those audiences even experience any face-to-face or voice-to-voice contact with
the NPO. Company Web sites appear in search engine results, and can be linked from
other platforms, like Twitter, Facebook, YouTube, e-newsletters, and other companies’
sites. For arts nonprofits in particular, Web sites are useful for ticket sales, program
registration and volunteer sign-ups. By offering reserved tickets at a slightly lower price
through an Internet portal, like Ticketmaster, a nonprofit is securing attendance from
those busier patrons who are concerned about saving a few dollars whenever they can.
Company blogs are another component of many corporate Web sites. Artistic
organizations have a unique ability to benefit from blogs, because many of these

()"
nonprofits are based around a charismatic, eccentric and/or famous executive or artistic
director.
A blog can be posted under a “news,” or “blog” tab on the Web site, can be updated
weekly or biweekly, and can feature commentary on the industry, pop culture, or any
angle that is relevant to the NPO’s mission and interests. Some blogs offer the transparent
option of accepting comments from any users bypassing any approval process, while
others post only approved comments. Even others are entirely closed to user comments.
The style of writing and commenting is dependent on the purpose of this communication
channel. Are you blogging to increase search engine optimization? Are you blogging to
engage Web-savvy patrons and potential donors? Are you blogging to solidify and
convey your artistic vision?
It is necessary to keep in mind that these digital channels are not “one-size-fits-all,”
and every tactic requires a specific purpose and measureable objective.
Finally, e-mail communication has been utilized by nonprofits for years, and offers
versatility in electronic discussion with key audiences. E-mail can, of course, be used for
the traditional e-newsletter, listing upcoming events, introducing new employees and
recognizing major funders. E-mail can also be utilized for fundraising purposes by
linking to online auction sites or parts of the company Web site that are accepting online
donations. Online fundraising is becoming increasingly necessary for arts nonprofits,
with many donors working predominantly through digital platforms. E-mail can also be
used to send invitations, RSVPs, directions and updates for special events.

(*"
New technological platforms offer the greatest opportunity and most intricate
challenge for nonprofits during this recession. Again, not every tool should be used for
every organization, but nonprofits should definitely be considering the options. The
James Irvine Foundation Convergence report found that, “having a cogent, thoughtful
and flexible technology strategy may be one of the most important requirements of
success for the nonprofit of the future.”
147

""""""""""""""""""""""""""""""""""""""""""""""""""""""""
147
Gowdy, 2009.

(+"
Chapter VIII: Conclusion
Non-profit arts organizations have come to symbolize the hearts and souls of
many communities across the United States, and each program serves its own important
purpose to various audiences.
In order for an arts nonprofit to succeed in an economic recession, there are nine
distinguishable best practices to consider: Remain focused on mission, vision and core
values in dealing with development, finance and communication; Collaborate with
unlikely, complementary partners to yield unique results; Think about target audiences
when strategizing from beginning to end; Do as much as possible to retain skilled leaders
and maximize their value; Leverage the recession to devise new ways of acquiring
funding; Do not be afraid to plan for the future, even if short-term challenges are
daunting; Utilize the increasing number of talented and diverse volunteers within
organizational capacity; Lead change with strong communication in order to get all
stakeholders on board; and embrace technological advances that can help move your
organization forward.
Although only time will tell whether this combination of practices is indeed a
blueprint for success, qualitative primary and secondary research has directed many
nonprofit professionals to subscribe to this list. Further research should be conducted to
follow-up on the effectiveness of the nine suggested practices in use at a representative
number of arts nonprofits. This should include monitoring internally for any
restructuring, changes in employee and participants’ attitudes, shifts in the flow of
funding and efficiency of resource utilization.

),"
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)'"
Appendix

Best Practices for Arts Nonprofits in a Recession

1 Focus on mission, vision and core values.

2 Collaborate in new ways.

3 Think about target audiences when making all decisions.

4 Retain skilled leaders.

5 Devise new ways of acquiring funding.

6 Do not become shortsighted. Plan for the future.

7 Utilize volunteers within the scope of the organization’s infrastructure and
capacity.

8 Use communication to lead the way through change.

9 Embrace technological advances.

Abstract (if available)

Abstract The purpose of this document is to identify key factors leading to success of arts and cultural non-profit organizations in America during the recession. Secondary research includes a literature review and case study analysis. Eleven interviews were conducted as primary qualitative research. The main themes from the primary research are as follows:•Nonprofits are like for-profit businesses in many ways.•Collaboration is necessary.•Organizations need to build new relationships within their communities and retain existing donor relationships.•Think conservatively regarding fundraising and organizational growth.•Direct your organization’s focus back to its mission.Nine best practices are recommended for arts nonprofits during this recession.

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Asset Metadata

Creator Speer, Janai (author)

Core Title Non-profit arts organizations succeeding in the recession

School Annenberg School for Communication

Degree Master of Arts

Degree Program Strategic Public Relations

Publication Date 05/06/2010

Defense Date 05/06/2010

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag Arts,Communication,non-profit,OAI-PMH Harvest,recession

Place Name California (states), Los Angeles (counties)

Language English

Contributor Electronically uploaded by the author (provenance)

Advisor Floto, Jennifer D. (committee chair), Birdsell, Regina (committee member), Cray, Edward (committee member)

Creator Email janai51@comcast.net,jspeer@usc.edu

Permanent Link (DOI) https://doi.org/10.25549/usctheses-m3029

Unique identifier UC1501909

Identifier etd-Speer-3307 (filename),usctheses-m40 (legacy collection record id),usctheses-c127-336294 (legacy record id),usctheses-m3029 (legacy record id)

Legacy Identifier etd-Speer-3307.pdf

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Rights Speer, Janai

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

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Repository Location Los Angeles, California

Repository Email cisadmin@lib.usc.edu