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Pick-up Trucks Singing Karaoke

Howard Sherman tweeted an article today by Jake Orr about theatre being intellectually inaccessible. I mention this only as a reference point for a comment on the article. I will probably circle back to write about this issue on another date.

What I wanted to address today is the conflict arts organizations often feel between appearing accessible to all potential audiences while simultaneous attempting to project an image that justifies high priced tickets and retains long time donors and subscribers.

One of the commenters on Orr’s post, Mark Shenton related his thoughts about London’s Royal Opera House possessing an ambiance that is intimidating even to veteran arts attendees.

…So often we all feel ‘excluded’ from the club, whether it be a theatre, or a sports event (I’m sure I’d feel the same as your partner if I was taken to a football match….) But the trouble is when the VENUE welcomes the exclusivity and sense of its own (self) importance.

I once had a conversation with the head of PR at the Royal Opera House, and said to him that, as a (relatively!) sophisticated theatregoer (well, it is my job and I do around 5-6 times a week!), I feel intimidated still by going to the ROH. His answer? “I can’t deal with your psychological problems!”

So, it was MY fault that the Opera House feels intimidating! A couple of years ago, I was at the ROH — for the Olivier Awards, as it happens — and seated next to the Reece Shearsmith. And he looked around and marvelled at how beautiful it was, and said to me, “I’ve never been here before!” Now Reece, too, is a sophisticated theatregoer — and a cultural figure in his own right — and for him to have never been here struck me as very revealing.

I reckon that the venue is a club, and a lot of us feel VERY disconnected from it.

This isn’t a new idea. There have been a number of studies and surveys that have emphasized the importance of physical environment to an attendance experience. Ten years ago, I wrote about an Urban Institute study that found not liking the venue along with not having an enjoyable social experience as the factors that would keep people from attending again.

But as I mentioned, there is also a need to create an environment that speaks to the quality of the performance product to long time donors and subscribers that value this type of experience.

Now before anyone starts sputtering about how this perpetuates an exclusionary ideal that alienates people, I would like to suggest that it is actually a matter of almost elementary consumer psychology.

To wit I give you the karaoke singing pick up truck.

Engines in trucks and high performance vehicles are so efficient now that their natural noise profile is much quieter than in the past. In response, car and truck manufacturers are using sound enhancing tail pipes or digital sound effects to replicate a throaty engine noise.

Fake engine noise has become one of the auto industry’s dirty little secrets, with automakers from BMW to Volkswagen turning to a sound-boosting bag of tricks. Without them, today’s more fuel-efficient engines would sound far quieter and, automakers worry, seemingly less powerful, potentially pushing buyers away.

Softer-sounding engines are actually a positive symbol of just how far engines and gas economy have progressed. But automakers say they resort to artifice because they understand a key car-buyer paradox: Drivers want all the force and fuel savings of a newer, better engine — but the classic sound of an old gas-guzzler.

I think it is easy to brand arts lovers as being snobby and elitist for wanting to maintain a traditional experience. If we are honest in the context of this article, the reality is that they are manifesting the same attitude toward the arts attendance experience as people who value the traditional images experience of driving F-150s and Mustangs. Neither is really that distant from the other in the continuum of basic human psychology.

For arts and cultural organizations, I think the last sentence in the quote above provides a key concept: People want advanced features, but the illusion of a traditional experience. I started this blog on the premise that technology was creating evolving expectations of their experience, but that there were still traditional elements that they still valued.

Learning what that ever-shifting balance is, is the challenge arts organizations face. What is important to remember is that not all elements of traditional experience need to be discarded in the name of expanding accessibility.

The article on sound enhancements for vehicles has sums up that conflicting issues arts organizations face pretty well.

“Karl Brauer, a senior analyst with Kelley Blue Book, says automakers should stop the lies and get real with drivers.

“If you’re going to do that stuff, do that stuff. Own it. Tell customers: If you want a V-8 rumble, you’ve gotta buy a V-8 that costs more, gets worse gas mileage and hurts the Earth,” Brauer said. “You’re fabricating the car’s sexiness. You’re fabricating performance elements of the car that don’t actually exist. That just feels deceptive to me.”

Since the arts often involve the creation of illusion, I am not sure they need to worry about coming clean with audiences about fabricating the sexiness of an experience. But both organizations and customers that value traditional experiences need to be aware there is a trade off in trying to maintain them exactly.

It is possible to provide a high quality experience. Technology enables some of this at increasingly lower costs every day. But there comes a time where one has to settle for an acceptable illusion or pay the higher price for the real thing.

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Info You Can Use: Figuring Out True Program Cost

After reading my post yesterday about how the federal government is requiring that non-profits receive at least 10% of grant/contract funding to cover indirect costs, you may be wondering how to accurately determine direct and indirect costs for your programs.

Getting an accurate picture of program costs is not only important for making sure you get proper allocations from government funded programs, but also for working toward a larger goal of providing boards of directors, funders and the general public with an accurate picture of the true costs of programs.

Providing an accurate picture is key in the campaign to diminish the use of overhead ratio as a measure of non-profit effectiveness.

In a piece on Social Velocity, Nell Edgington, emphasizes the need to present an accurate picture of costs and “break out of the nonprofit starvation cycle

She also notes that it can help decide what programs really needs to be cut.

But don’t stop there. Turn this new knowledge about the financial impact of each of your programs into a strategic tool. Once you figure out what each individual program fully costs, you can compare the financial and social impact (how well it contributes to your mission) of each program to each other, like this in order to understand how well your entire program portfolio contributes to the money and mission of your nonprofit. Through this analysis you can determine what programs you should expand, which you should continue, and which you may need to cut.

She provides links to a rather detailed guide to determining the true costs of programs published by Bridgespan.

It isn’t an easy process. The estimated timeline in the guide is at least a month. Smaller organizations with fewer programs will take less time.

The guide discusses each stage of the process in detail, suggesting what staff roles need to be involved. It also provides some clear definitions and examples for what needs to be considered.

For instance, indirect costs:

Indirect costs can include general administration and management expenses (e.g. management staff salaries and benefits), infrastructure costs (e.g. rent and utilities, transportation, equipment depreciation, technical licenses), and other costs that are incurred for the benefit of all the programs within the organization (e.g. marketing costs, advocacy expenses).

It addresses questions about determining whether some salaries like those of the executive director and human resource personnel should be allocated across different programs or not.

(Just a note – The guide is about six years old and some of the internal links to templates and examples no longer work, but don’t be discouraged, most of them may be found in the appendix.)

Since there seems to be a slowly developing trend toward removing the stigma of overhead costs (that may evolve into a demand for a high level of transparency), nonprofits may want to start to invest in practices that will allow them to evaluate the true costs of their activities.

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Info You Can Use: Know Your Funding Rights

An event of note to be aware of is that last month the federal Office of Management and Budget said “that when governments hire nonprofits to provide services, those nonprofits legitimately need to incur and be paid for their “indirect costs”—which is government-speak for overhead and administrative expenses.”

According to Chronicle of Philanthropy, non-profits should receive at least 10%, if not more, “of the direct costs of their grant or contract to pay indirect costs.”

Given that non-profits are frequently anxious about revealing their true overhead costs for fear of having it count against them with donors and foundations, this mandate is seen as a victory because it starts to institutionalize the practice of covering those costs.

However, according to the Chronicle of Philanthropy story, the enforcement of these rules may depend on the self-advocacy of non-profits.

While the new rules are now the law of the land, the indirect-cost regulations must be interpreted and applied consistently by tens of thousands of individuals in fragmented departments, agencies, and offices at “pass through” entities (usually state and local governments and large nonprofits) that use federal funds to hire nonprofits to provide services in their communities.

The regulations are already in effect, but the multiple levels and layers of government have not learned about or communicated the existence of the new rules, let alone provided consistent training programs, to employees scattered across these pass-through entities.

Making matters worse, there has been no transition time for the thousands of jurisdictions to purge and modernize their outdated statutes and regulations to enable them to comply with the new federal requirements.

Unless we all take concerted action, it’s quite possible that we will slide back to what had been the status quo: inconsistencies in our nation’s archaic, patchwork government-nonprofit grants and contract “system” that have left nonprofits at the mercy of often contradictory policies and practices of disconnected federal, state, and local government departments, agencies, offices, and employees. Arbitrary, unjustifiable caps on indirect costs could remain routine.

The author of the piece, Tim Delaney, chief executive of the National Council of Nonprofits, encourages foundations to lend a hand with this advocacy. He points out that often grant makers end up filling the indirect cost gap that government entities may refuse to cover. Correct practices could mean a savings for grant makers who would no longer need to provide this assistance.

As an arts organization, you may be thinking that you don’t have any government contracts so this doesn’t apply to you. However, notice that these rules apply to pass through agencies which, depending on the program, may include arts councils and other organizations receiving funding from places like the National Endowment for the Arts.

The Council of Non-Profits has put together a guide to help people know their rights and advocate for them. It presents different scenarios where you may be told these new rules don’t apply and how to respond to them.

Two points brought up in the guide that lead me to think these rules apply to state and regional arts councils: One- it doesn’t matter whether it is called a contract or grant or any other term, the rules are based on the substance of the transaction.

Two – Sub-recipient non-profits who are required to acknowledge part of the funding is received from the federal government are covered under these rules.

If you have been required to acknowledge part of the funding is received from the NEA, these new rules are applicable to that program unless specifically excluded by by legislation.

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If You Got The Data, She Wants To Study It

Reader Heather Grob responded to my recent post asking about more information regarding propensity score matching to learn more about arts audiences.

Heather, an associate professor in the St. Martin’s University School of Business writes,

Hi Joe,

Yes, I have used propensity score matching in a different venue than the arts. It was in a study looking at workers’ compensation pension outcomes. When you have a subject where there are selection biases (for example, that the more educated are more likely to participate in the arts) then propensity scoring can help to control for the outcome to more precisely estimate the effect on outcomes.

I think you explained it pretty well to a lay audience. I imagine it would be useful to use when you have a lot of data on attendees and non-attendees (or season ticket holders and not is more likely).

If anyone has data they want to “play” with, let me know. I’m interested in doing more studies on socioeconomic phenomena in the arts. –Heather

I wasn’t sure anyone would respond to the post with more information much less be interested in getting their hands on data to study. If someone is interested in learning a bit more about their audience and potentially their community, if the data is available, you may want to follow up with Heather.

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