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Non-Profit Arts Version Of “The Talk”

From what I have been reading, the new Fair Labor Standards Act regulations regarding overtime pay is going be pretty tough for non-profit arts organizations to handle. If you aren’t up on the news, the salary threshold part of the overtime exemption criteria will rise from $23,660 to $47,476. Anyone making less than that or who doesn’t meet the other criteria for exemption will need to be paid overtime.

Generally, most of the criteria hasn’t changed so the big issue for non-profits is the salary threshold. Last month, American Theatre did a pretty good job of covering how the new rules will impact theaters specifically. There have been articles about non-profits in general, but few that discussed how arts organizations were planning to address the change.

The reason I say this new requirement is going to be tough is because some of the comments of the interviewees made me cringe. One person mentioned the benefit of staffing their organization with young 20-somethings to take advantage of the fact they would still be living at home and under their parents healthcare. Another respondent estimated the cost of living in their anonymous mid-size Midwest city was $20,000/year which I suspect is misinformed. The lowest costs of living, even for small Midwest cities, I found hovered around $25,000.

While I cringed at some of the tactics people were generating to deal with the projected expense they were going to incur, I didn’t view them as particularly extraordinary. The alternative approaches being considered are absolutely typical of the problem solving process arts organizations engage in. This is the sort of unorthodox creativity you have to employ to pull things off in the non-profit arts.

The problem is that depending on stop-gap measures and pressure of organizational culture will no longer be viable in the face of this new salary threshold and expectations of a work-life balance that new employees are bringing to the workplace. The gulf will literally and figuratively be too wide to straddle.

This is going to be one of those situations that is going to result in a lot of negative news before it gets better. Doubtless there will be cases we will be amazed have lingered only to explode somewhat scandalously a decade down the road (or sooner since the salary threshold for non-exempt moves to $51,000 in 2020).

The situation is likely to force long delayed conversations between arts organizations, their funders, boards, audiences and employees about what is really required to operative effectively.

The only consolation is that this conversation will still be way easier than talking to your kids about sex.

I don’t think I am being especially prescient when I say now would be a good time to develop a cogent response to the statement “Arts need to be self-supporting or close,” and start distributing the talking points to everyone. It is guaranteed that sentiment will be expressed constantly.

At the same time, a serious discussion about business plans and legal structures employed by arts organizations may become unavoidable. We may see groups recreate and reinvent themselves. Especially if non-profits are permitted to retain their assets as they transition into a corporate entity with a different tax structure.

All this being said, the American Theatre piece discusses how organizations are already making efforts to implement constructive measures to prepare for these changes.

Maybe around this time next year when people have been operating under the new rules for 9-10 months, I will suggest to Drew McManus that ArtsHacker do a series on some practices and restructuring efforts that initially seem to be working. The salary changes are going to have too significant an impact on the arts industry not to share advice about what has been successful for the organization and beneficial to employees.

In the meantime, I will work on learning more about the implications of FLSA rules in order to provide tips about how to prepare for the changes.

For example, many organizations may not know that use of comp time to offset “binge-and-purge” schedules around production time is already illegal  and is about to become more so for a wider range of employees.

But this kind of comp-hours time-shifting isn’t kosher under FLSA provisions. If a non-overtime-exempt employee works 60 hours one week, say, they can’t offset that by clocking just 20 the next week; they’ll be earning their regular salary for the 20-hour week and time-and-a-half for the hours over 40 in the 60-hour week. This was always the case under the FLSA, but with the new $47, 746 threshold, it will apply to many more employees than before.

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Middle School Is Too Young To Start Suffering For Your Art

There is a lot of conversation about the importance of advocating for the funding and inclusion of arts in K-12 education but according to a recent study, some attention needs to be paid to the social aspects experienced by students interested in the arts.

According to a recent piece in Pacific Standard (h/t Createquity), students taking music and theatre classes are more likely to be bullied than other students. The study the article cites (subscription required) did not include visual arts students.

The study involving 26,420 middle and high school students found that bullying peaks in middle school.

…female music and theater students faced a 41 percent greater risk of being bullied, and male music and theater students faced a 69 percent greater risk of being bullied than their peers.”

Looking specifically at middle school — a period when bullying typically peaks — the researchers found theater and music students had a 39 percent chance of being bullied, compared to a 30 percent chance for their peers who did not participate in such activities.

Not surprisingly, the bullying was more likely to involve physical aggression for boys, and relational aggression for girls — hurtful behavior such as spreading rumors or exclusion from desirable social activities. Female music and theater students had nearly a one-in-three chance of experiencing this sort of victimization, compared to a one-in-four chance for female athletes.

The researchers suggest that perhaps arts educators should receive additional training making them aware of these potential factors in their students’ lives to help prepare the teachers to be better mentors and resources for the students. In addition, they encourage zero tolerance for bullying of any sort and opening arts related rooms as safe spaces where students can gather for some respite.

In something of a “physician heal thy self” approach, the authors of the research paper propose use of arts to combat bullying in general.

Teachers can use discussions of the social-emotional import of art to reduce bullying by drawing parallels from what may seem to students as distant abstractions of composer’s or playwright’s artistic intent into the students’ own lived experiences. Drawing connections from art to daily lives in a framework intended to support students social-emotional competencies can actually reduce bullying and victimization, which seems like a worthwhile investment of time given the results of the present study.

[…]

…a drama-based bullying unit was developed by teachers in a middle school and used in social studies classes to supplement a larger, schoolwide anti-bullying initiative. In the program Burton (2010) described, students assumed the roles of bully, victim, and bystander in theatrical improvisations. The improvisations among girls especially brought the covert nature of relational aggression into the open and allowed victims of bullies a chance at “role reversal, choosing to portray bullies carrying out bullying they had actually experienced” (p. 264). The improvisations were then used to develop devised theatre pieces that were presented to younger students as part of a successful bullying reduction and prevention program.

I don’t know about you, but when I read about improv among girls bringing the “the covert nature of relational aggression into the open and allowed victims of bullies a chance at “role reversal…” I immediately thought of this scene from the movie Mean Girls.

I had worked for an organization that ran a residential arts summer camp and it was always clear that the kids reveled in an environment that didn’t pressure them to conform as they did in school the rest of the year. It didn’t necessarily strike me at the time that they were subject to more bullying than their peers. This was over a decade ago, before social media really took off, so the bullying may not have been as magnified. The data runs from 2005-2011, but the researchers don’t indicate if it has gotten worse across that time period.

Regardless, this is a factor in arts education to which to pay attention. Declaring success in preserving funding for the arts in your school district is worthless if kids are being intimidated for participating in the classes and activities.

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All Your Trend Are Belong To Us

Over the years I have frequently cautioned against becoming invested in the current hot thing that everyone is doing because the fad could pass quickly and you will have spent a lot of time and resources on something that is no longer viable.

One important thing I have never really been able to define is how to determine the difference between a long term trend and a passing fad.

Fortunately, Colleen Dilenschneider provides some intelligent guidance on the subject on her Know Your Own Bone blog. (my emphasis in green, rest is her’s)

So how can your organization figure out if something is a fad or a trend? A helpful trick may be to consider that trends inevitably affect some form of the organization’s engagement strategy, but fads usually influence tactics. This isn’t a fool-proof trick, but it can help your organization think strategically about the differences between both fads and trends.

For instance, social media use is a trend and that affects your engagement strategy, but selfies affect how you can carry out that strategy. Screaming “YOLO” and going gluten-free are things that folks may be doing these days – and, in order to remain relevant, your organization may benefit by embracing them for now. But these fads affect your organization’s tactics (and messages and programs), not its strategy. Data-informed management affects your strategy. Embracing transparency affects your strategy. The trend toward personalized interactions and programs thanks to our increasingly individually-tailored world is a trend and also deeply affects our strategies.

So by this definition, fads don’t really become trends in the same way ponies don’t grow up to be horses. (In fact, wanting a pony for your birthday is just a fad for most of us.)   But to confuse things, what social media tells you are trending topics are really just fads. (Whereas “all your base are belong to us” riffs are memes)

My advice in the past has generally been to wait, watch and evaluate whether something is going to endure and whether it is suited to your organizational goals and identity.  Dilenschneider takes a slightly different approach essentially saying it is okay to jump on the latest bandwagon, just don’t mistake it for an interstate shuttle.

Dilenschneider makes a valid point that it can be just as detrimental to be averse to adopting innovation as it is to waste time and energy chasing the latest fad.

If you have the time and resources, jumping into something knowing that it will be a short term project you will eventually discard can be useful in identifying new potential audiences and partners, and gauging your capacity to execute different sorts of activities. Essentially, something akin to rapid prototyping in software.

For example, you may never have considered the possibility of mounting performances or a festival in dance clubs. Yet over the course of playing with a lot of fads, you connected with demographics different from your core audience and had done some minor promotions with local bars. All this gave you the inspiration and confidence to do shows in bars.

Just remember though, this is an ideal outcome. It is very easy to become involved with a fad that becomes a long term detriment to your organization. Remember when Groupon was hot? Everyone was excited by it, but it became a nightmare for a lot of companies who lost money through discounting and never gained return business or loyalty. I know someone who still uses it regularly to find things to do, but never returns to a company unless there is another discount offer.

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Info You Can Use: Success May Result In Reduced Donations (Big MAY)

I was surprised by a recent piece on Non-Profit Quarterly reporting the results of a recent study finding that the more successful an arts organization was in attracting an audience, the more donations will decline.  The theory the researchers had was that success made an arts organization look less needy.

I was skeptical of this based on what I have observed, so I did a little digging to find the full article which appeared behind a paywall in Public Performance and Management Review. The details of their finding are a little more nuanced.

Even though the researchers make the statement in their conclusion that,

“The evidence suggests that better performance outcomes in terms of increased awareness and attendance have a negative rather than a positive influence on charitable giving.”

The discussion of their findings seems to suggest this is only true in regard to foundations.

For a 10% geometric mean increase in an organization’s attendance, the amount of all contributions received in the following year decreases by 0.72%

If we separate private giving into its three components (individual, corporate, and foundation giving), this negative relationship is statistically significant for foundation grants only. The amount of all charitable giving decreases by 0.08%

They don’t really make any statements about how individuals and corporations handle their giving in response to increased attendance and awareness.

Other Items of Interest:

Some other interesting things they found was that:

“It is worth noting that the amount of donations appears to be unresponsive to both government funding and program revenue.”

Basically, donation amounts don’t seems to be impacted by the amount of government funding or program revenue an organization receives in a year.

•Giving away free tickets may slightly help donations

“The result for increased free access lends some support to the first hypothesis: a 10% increase in the number of free tickets provided by arts and cultural nonprofits results in a 0.34% increase in contributions. This positive relationship is, however, only marginally significant.”

•Younger organizations tend to receive greater support than older organizations.

Donors, however, appear to prefer relatively young organizations, at least in the case of arts and cultural nonprofits. When we divide private giving into its three components, organization age has a negative relationship with institutional giving but is not a significant factor for individual donors.

Big Surprise

Despite what we read about donors really scrutinizing administrative overhead, for arts and cultural non-profit organizations at least, high overhead is not penalized.

…donors to arts and cultural nonprofits do not care about fundraising efficiency, which is measured by the average cost to raise one dollar. As the cost to raise a dollar increases, donations increase rather than decrease. On average, a 10% decrease in fundraising efficiency (i.e., an increase in the fundraising cost to raise a dollar of donation) leads to a 0.72% increase in the total amount of contributions. In other words, an organization would solicit slightly more donations, as compared to other organizations of similar type and size that spend less per dollar raised.

[…]

This finding is counterintuitive and provides no support for the prevailing assumption that donors view high costs of raising funds negatively. The results show that donors to arts and cultural nonprofits, especially foundation funders, reward rather than punish nonprofits that spend more to raise a dollar of donation.

The idea that the appearance of success is what helps you raise money is what provided the impetus for my deeper investigation. I think we all have a feeling that a few big organizations seem to attract big donations. Because the researchers are only looking at data collected via the Cultural Data Project, the social cachet of being seen to donate to a popular organization isn’t factored into the results. The authors do acknowledge that popularity and visibility do seem to be factors.

They suggest that big organizations are attracting larger donations because they are pouring more money into their fundraising budgets and aren’t being penalized for incurring the overhead expense.

I was interested by their observation that organizational size didn’t seem to impact corporate giving. I would assume visibility in the community, and therefore the ability to make a business more visible, is a factor in corporate giving more than organizational size.

Caveats

The researchers admit that since very little research has been done on these specific questions before, more study is required to gain an accurate picture. They say the statistical significance of the relationship between increased success and reduction in donations is marginal.

They also note that they use attendance as their measure of success which may be a poor criteria since it has no bearing on the effectiveness or quality of the experience for an audience member.

Likewise they note that using website visits as a measure of awareness might not be valid for many organizations whose communities may depend on print media, mailings and word of mouth to raise their awareness.

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