Government Relations

Ever Think About How Many Staff You Need Per Attendee?

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Last week the National Center for Arts Research (NCAR) released some interesting data about the ratio between the number of full time employees at arts organizations and the audiences/visitors they serve.

An average of 3,547 people attend for each full-time employee. That is the relationship between an overall average of 38,741 attendees and 11 full-time staff members annually.

Finding that attendance at many organizations has either decreased or is flat, but number of staff has grown NCAR says,

This means that organizational capacity expanded at a slightly faster rate than growth in the number of people served. This does not mean that staffs became bloated. Instead, modest staff expansion can mean that an organization realizes it has maxed out its current staff’s capacity to provide high quality offerings and services, and the ability to attract more future audience members depends on making initial investments in people.

They break down the data by sector, organization size and market size.

Every Answer Raised More Questions

The part that really interested me and left me wanting to know more detail was in the Ecosystem Highlights section where they talk about “What Drives In-person Attendance?” (their emphasis)

• In-person attendance varies by sector and increases with organizational age, square footage, budget size, the number of programmatic offerings, the amount spent directly on programs (emphasizing the importance of findings related to the Investment in Program Index), targeting kids or Asian-Americans, and having higher levels of local funding.
• Attendance tends to be lower when organizations receive higher levels of support from state or federal agencies, when their lowest ticket prices is not terribly low (representing the importance of an accessible price point), if they produce proportionally more world premieres, or if they target young adults, African-Americans or Hispanics/Latino

Bearing in mind that correlation doesn’t equal causation, I really wanted to know more about the relationship of attendance increasing when programming targeted Asian-Americans or when there was higher levels of local funding.

Does the fact that attendance is lower when there is higher levels of support from state and federal agencies have any significance? Does that say something about the value of NEA funding? Are there restrictions on federal and state support that don’t exist with local funding that leads organizations to program and promote in ways that don’t connect with the local community?

This could be the case since NCAR found,

The number of world and national premieres increased contributions from trustees and other individual donors but decreased government contributions and program and earned revenue.

and

Government Grant Activity has a positive effect on fulltime employees, program expenses and total expenses but a negative effect on the number of offerings and direct marketing expenses.

So maybe federal funders aren’t really supporting the new work, broader programming and marketing that is needed to engage larger audiences.

I started to assume local funding meant high giving from individual donors until I read (my emphasis),

Physical attendance is lower in communities where the total population is larger, there is a higher percentage of children in the community, and the community’s overall level of philanthropy is high.

So I guess higher levels of local funding associated with higher attendance must be either local foundations or government?  Except, apparently federal funding is helpful except when it comes to securing money from foundations:

The receipt of an NEA or IMLS grants had a positive effect on nearly all outcomes except foundation funding, which was lower for federal grant recipients.

Some Surprises About Demographics Orgs Want

Why is attendance lower for young adults, African-Americans and Hispanics/Latinos? Is it something about those segments or are arts and cultural organizations as a general group doing things that don’t resonate well with those groups but do resonate with kids and Asian-Americans? (Keeping in mind we aren’t necessarily talking about the same organizations doing well with the latter groups but not the former.)

There seems to be an inverse relationship on these same factors when it comes to Full Time Employees.

• Organizations that target people under 25 years old or Hispanics/Latinos, and those awarded NEA or IMLS grants tend to have more full-time employees.
• The number of full-time employees tends to be lower for organizations that present higher levels of local and world premieres and for those who target Asian-Americans.

I wondered if organizations that targeted young adults and Hispanic/Latinos also got more federal grants. Since young adults and Hispanic/Latino audiences are often mentioned as groups arts organizations aspire to attract, this might mean these efforts are targeted to receive more federal funding. There is a suggestion this might be the case:

And Government Grant Activity has no effect on program or earned revenue and a negative effect on physical attendance and engagement; this negative effect may reflect government support for arts and culture organizations that are initiating outreach efforts targeting traditionally underserved populations.

Is there an implication of racism/classism in the suggestion that government grants have a negative effect on physical attendance because the grants support targeting underserved populations?

Knowing that organizations that target Asian-Americans have smaller staffs and that organizations that target Asian-Americans have higher attendance, does that mean Asian-Americans are easier to attract? Or are these statistics just a result of there being only a few small organizations specifically targeting Asian-Americans and they are doing a good job with that demographic segment?

Among the interesting pattern NCAR noted in regard to organizations focused on serving minority populations:

Organizations that target African-Americans attract higher levels of contributed funds but tend to have a smaller footprint, with fewer offerings and lower marketing and development expenses and lower program revenue, attendance, and engagement.

Organizations that target Hispanics/Latinos have higher contributed revenue, program salaries, development expenses, and total offerings but lower marketing expenses, and program and earned revenue.

Other Notes Of Interest

Some other interesting observations that don’t necessarily fit with the aforementioned topics:

Youth Orgs Have It Great Until The Kids Grow Up

And organizations targeting children have lower marketing expenses that yield higher attendance, engagement and program and earned revenue, and higher development expenses that yield lower unrestricted and total contributions. This puzzling finding seems to suggest that parent-contributors have a short-term focus on immediate benefits for their children without necessarily supporting the long-term financial health of the organization.

A Vibrant Arts Community Is Great, Except For Attendance

Total Arts Dollars in the community is positively related with nearly every performance outcome, with physical attendance being a prominent exception; this negative relationship likely reflects the presence of many small arts organizations in a thriving arts and culture community competing for audiences.

The Number of Arts Providers in the community positively impacts program and total expenses and contributions from every source except foundations; there is no effect on program and earned revenue and the impact on attendance and engagement is negative, again suggesting competition for audiences.

A Wealthy Community Is Great, Except For Attendance

Higher socio-economic level is negatively associated with physical attendance and engagement – likely reflecting increased access to other leisure opportunities like travel – and positively associated with program, development, and total expenses and program and earned revenue, reflecting the ability of arts organizations to invest more in the art and charge higher prices.

Just to repeat the old saw about correlation not equaling causation, while these findings are interesting individually one should be careful drawing assumptions and relationships between them.  Even some of the things listed together as having positive outcomes may not necessarily lead to a positive outcome when all present together. (i.e. You won’t necessarily increase attendance by expanding your physical plant, offerings, budget, spending and programming to Asian-American kids in a place with high local funding.)

On The Hook With Arts and Culture

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Back in 2008, I wrote how the voters of Minnesota passed an amendment to support both the arts and outdoor wildlife as a result of a political alliance between the arts community and outdoor sport enthusiasts.  The amendment increased the sales tax by 3/8 of 1%.

According to the website created to report how the money was being used, this is how much of the collected revenue has been allocated between fiscal year 2010 and 2017.

Minnesota has been known for its outdoor activities and support of the arts so it isn’t necessarily surprising that the citizens supported this tax increase. The alliance between the groups was not a forgone conclusion though. As I quote from an article from that time by Jay Weiner:

“As it was, the pioneers of the amendment idea — the sportsmen with bullets and hooks — were wary enough of the arts being included … until they saw the political power of the statewide arts and cultural organizations.”

I went on to write:

Every state should be lucky enough to have an arts community with enough political clout to help get a constitutional amendment passed. Of course, that influence didn’t magically appear, the state arts community would have been working on cultivating it over the course of years and probably decades.

[…]

The other thing he [Weiner] mentions is that berating the arts and parks people perpetuates an environment which keeps sports fans from forming coalitions.

If this program appeals to you and you want to replicate it in your state, another article written at the time outlines the pros and cons of the amendment. I am sure that nine years later, those who advocated for the amendment and those who have dealt with the appropriation and administration of the money can give valuable feedback about best practices and mistakes to avoid.

Frank Discussion About Outreach, New Audiences Efforts In The Community

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A couple of good articles on the influence non-profits in the community came out this week. CityLab noted that in some communities, non-profits were exhibiting greater influence and leadership than politicians that represented those districts.

Based on his observations, he argues in the journal American Sociological Review, the role of nonprofits in disadvantaged city neighborhood has been changing. They’re no longer just extensions of the state or representatives of a few interest groups. They’re “legitimate representatives of poor urban neighborhoods,” and in many cases, “supersede” elected officials.

[…]

What’s happening now is that these organizations are directly negotiating for resources from public and private sector entities that hold the proverbial purse strings. Community organizations are now authoritative voices at the table, and often regarded by both private companies and bureaucrats as more invested and deeply knowledgable representatives of the neighborhoods. In Boston, “district-based elected officials, by contrast, attended ribbon cuttings and groundbreakings but were largely absent from substantive discussions of redevelopment planning,” Levine writes.

When I read this earlier this week, I thought it was interesting but didn’t think most arts organizations were deeply involved enough in their communities to wield this type of influence.

As luck would have it, I didn’t have to think too long about how I might express this in a blog post because Ronia Holmes does it so well in a post that came out today on TRG Arts’ blog.

Her post, “Your organization sucks at “community” and let me tell you why” is a must read if your arts organization conducts outreach activities or talks about attracting new audiences. I plan to distribute it to my board and partners in other arts organizations.

She makes some very frank statements which may be uncomfortable to read, but they are reasonable and empathize with the position in which arts organizations find themselves.

Almost too much to quote but I will try to keep it brief:

Disinvested communities are not devoid of arts and culture. In America particularly, communities who historically have been excluded from the table have responded by building their own tables, using whatever resources could be scraped together. Marginalized communities have established organizations that don’t treat them or their cultural output as deviations from the norm to be celebrated for diversity, but as fundamental components of society. The organizations they created, and continue to create, are replete with artists, leaders, decision-makers, and workers who look like and are part of the community they serve, who share similar lived experiences, and have a deep understanding of what programming will truly resonate.

Referring to arts organizations which are not native to these disinvested communities:

Rather than grapple with these deeply ingrained failings, most organizations have opted to substitute narrative for action. They have amended their written missions and values in order to recast themselves as inclusive organizations meant for all. They turn to the community and say, “Now we’ve got a space here for you!”

And they fail to hear this critical question: “Why should we abandon our own table for a small chair at yours?”

The following about seeking new audiences really grabbed my attention:

There is a pervasive idea that a “new” audience must be a “diverse” one, and community-building is co-opted as a tactic for patron acquisition. The hard truth is that the disinvested communities targeted by so many outreach programs simply do not have the resources to—or, frankly, the interest in—sustaining these organizations. The model of operation on which most organizations operate need constant and high influxes of cash, and the lion’s share of affluence still rests with white patrons.

The reality is that most arts organizations don’t need a “diverse” audience—they need an audience with discretionary income. Yet the almost maniacal focus on community-building keeps organizations trapped in cycles of trying to sell to—not engage with, but sell to—audiences that don’t have that resource. In the meantime, organizations are unable to concentrate fully on patron retention and loyalty, and identifying and building audiences that are able and willing to fill the funding gaps.

[…]

Every year, organizations jump through hoops to secure restricted grants that necessitate yet another outreach program or diversity week or community partnership, hoping that if they impress the funders enough they will be given money that can be used for what the organization actually has a mission to do.

If real, authentic, genuine community building isn’t central to your mission, if it isn’t your raison d’être, then you shouldn’t be doing it. Because chances are that not only are you doing it badly, you’re doing it at the expense of your real mission. The mission of most arts organizations—the real mission—is simple: to present an art form. And that’s ok. We need organizations that prioritize preservation, development, and presentation of an art form, and I for one don’t think any organization should be penalized for it.

As much as I quoted here, there is a lot I left out. Even though I probably flirted with tl;dnr eight paragraphs ago, I hope this sample is enough to make you want to read more of what she said.

While it is not the final word on the subject, I think we probably recognize the truth in what she says about outreach efforts. The futility of grant chasing has been acknowledged for quite awhile. These are ideas that need continued discussion.

While we would like to be in a position where our organizations are viewed as leaders in the community like those in the CityLab article, most arts organizations really lack the resources and mission to fulfill that role.

Non-Profit Arts Version Of “The Talk”

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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.