Creating, Managing & Presenting the Arts
This article will explore how creative arts organizations can effectively manage their businesses, especially in the nonprofit sector. There will be an examination of how marketing, management, labor relations and funding factors influence the operation of these organizations. In addition, the issue of risk management for the creative arts will be discussed as well as the complexities in arts funding which have placed increasing demands upon arts managers. To help tackle such risks and complexities and ensure a viable future for the arts, many institutions have created graduate arts management programs.
Keywords Arts Fundraisers; Arts Management; Economic Impact Analysis; Fine Arts; Nonprofit; Performing Arts; Risk Management; Unions
Management: Creating, Managing
Art is a tricky commodity to promote. Although art plays a significant role in educating society on cultural issues, it is not a product that generates large amounts of revenue. "The production of art [became] an international multi-billion dollar industry during the twentieth century" (Kjorkegren, 1993, p. 1). Nonetheless, according to Kjorkegren (1993), most organizations do not make money from the arts, most art initiatives fail, and few yield a profit.
Given the dynamics, many view the art industry as unpredictable. It is difficult to determine which products will be successful because it is not easy to predict the market response. Demographics are other factors that should be considered in marketing campaigns for art. Times are changing and arts managers must make sure that they create programs that appeal to a diverse population. Research has shown that families and senior citizens dominate the population, and new ethnic groups (i.e. Latinos, Asians, and Indians) have emerged (Holtzman, 2000). These variables, along with the fact that Americans are better educated than before, create a need for a different type of event programming. "The market response to art products is also influenced by the act of consumption, since art-producing organizations sell potential meanings rather than finished products" (Kjorkegren, 1993, p. 3). The success of art is determined by how well it is accepted by the target markets. If the product develops into a popular brand, the chances of its success increase as it establishes itself in the minds of potential consumers.
Funding is another concern for arts managers. Over the years, there has been a decline in contributions to the arts. Many organizations have seen a decline in National Endowment for the Arts (NEA) grants as well as a reduction in corporate funding of the arts. Since funding is not coming from the traditional sources, "art organizations will need to increase earned income from audiences and visitors" (Holtzman, 2000, p. 32). New strategies will need to be developed in order to address the changes that are occurring in the arts industry.
In order to meet the challenge of managing the unpredictability of the market, Bourdieu (1977) suggests two different business strategies — cultural and commercial. A cultural business strategy is a long term approach, and is driven on the artist's terms. Organizations that prescribe to this type of strategy tend to spend more time and money on developing artists and hoping that their efforts will help the artists to become successful. On the other hand, if an organization elects to pursue a commercial strategy, the art product is driven based on the market's terms. This strategy promotes controlling the supply, limiting the amount of the product that is given to the market, and obtaining a rapid return on investment by implementing a strong marketing initiative. Organizations have to decide which approach has the best fit with their mission and vision.
There has been much change in the way organizations conduct their business. "As the non-profit community progresses from founder-dominated to professionally managed institutions, there has been increased emphasis placed on utilizing strategic planning" (Holtzman, 2000, p. 32). Many have concluded that they will need to make changes to their operational practices in order to survive. The first area that an organization should tackle is the management team and structure. Every organization needs a visionary who embraces the need to change at different phases in the life of a company. The leader is the person who has to persuade employees, the board, and other stakeholders of the need to change. It's important that all of these groups support the change initiative and work together to improve the organization. One way to ensure success is to develop a viable strategic plan. Holtzman (2000) made some recommendations on how to get off to a good start, and these steps include:
Before a retreat, perform a situational analysis which defines the issues.
- This step should include developing an understanding of the needs, desires, and innovations of the constituents as well as an understanding of the competition. Many non-profit organizations tend to overlook analyzing the competition, but it is important to know what the competition is doing and what your organization is good at doing (i.e. niche or unique selling points).
Mission definition and objective and strategy development.
- Select the best people in the organization to be a part of the initial exploration team. These individuals should be open to change management.
Build your team.
- Once the exploration team has been established, there should be a campaign to include others to participate in the process. Each organization wants to make sure that they avoid group think. The team should not become an "inbred" group, and there has to be members that will not always go along with the popular point of view. Diversity in the skills and opinions of the team members is essential.
Determine the obstacles to change within the organization.
- It is important to determine where the team expects resistance to come from. There may be people and processes in the current structure that will not support a change initiative. The team must develop strategies to deal with these obstacles.
Determine an action plan that contains deadlines and responsibilities.
- Although the planning process is important, the team wants to make sure it can show progress. There has to be a beginning and end. In order to get from one point to the other, the team will need to establish an agreement that is supported by all members. The agreement should list the roles, responsibilities and deadline dates for all of the tasks required to implement the plan.
Gain the support of the board and other stakeholders
- Everyone has to be on the same page and support the initiative. It is important to get buy-in from all stakeholders. Otherwise, the project may fail before it starts.
Monthly review of action plan progress.
- In order to build momentum, it is important to provide feedback at different intervals of the project. Members will need to know if they should continue as planned or tweak different parts of the plan.
Role of Unions
It has been established that most art products do not produce a profit. One reason is that many nonprofit organizations have a hard time balancing their art and business (Richardson, 2006). This creates a problem for those that are employed in these organizations. Most employees who work in the performing arts industry tend to belong to a union. Unions are responsible for representing these employees and looking out for their best interests. Unions make sure their constituents receive a decent salary on the designated pay dates. As with any organization, payroll is usually the largest item in the budget. If the budget falls short, there may not be sufficient funds to make payroll.
Given the nature of the business, "unions have penetrated more deeply into the management of artistic enterprises than is typically the case for unions in manufacturing and other profit-making sectors, and they are responsible for determining the availability, quality and charter of artistic performances" (Kleingartner & Lloyd, 1972, p. 128). In summary, unions have a lot of power in the art world. Not only do they have a strong voice in setting wages, but they also have some control over the quality of performances since they are responsible for getting the right performers for the available work. Therefore, it is important for struggling artistic organizations to develop a partnership with unions so that they have the available personnel to complete the necessary work for a project. It is also important for the organizations to keep the unions abreast of financial issues.
Studies indicate that up to 70 percent of Americans believed that most charitable organizations misspent and mismanaged their funds (Pallotta, 2012). Many people do not believe that non-profits are held...
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