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June 1, 2005

For honor or cash...or something in between

At least one arts journalist in Madison, Wisconsin, is in a bunch over the name change of a local museum. After the Elvehjem Museum of Art -- part of the University of Wisconsin-Madison -- announced a $20 million gift for a new building and simultaneously changed its name to the Chazen Museum of Art to honor the donors, Jacob Stockinger had two reactions. The first was gratitude to the donors for supporting a great museum. But the second wasn't so warm and fuzzy:

But my second reaction is that a big mistake, a really clumsy miscalculation, has been made. Private money alone should not determine who gets a public building named or, worse, renamed, after them....Whatever happened to the days of honoring public service, not just private wealth? (I half seriously joke with friends that if you have enough money to buy a public building, you're not being taxed enough.)

(Conrad Elvehjem, for whom the museum building was originally named, was not a major donor, but a university faculty member and president who died during its development in the 1960s.) Stockinger's third reaction was to request public comment and publish excerpts the following week. The gist of the public comment was captured in this short response:

I agree that private philanthropy should not outrank public service. And that the names of public buildings should not be put up for sale to the highest bidder.

In his rebuttal to the barrage, museum director Russell Panczenko walks through the history of the museum and its name...suggesting that Professor Elvehjem was certainly respected, but was not the driving force behind the museum, or an avid supporter of the arts (even according to his own family). And that the building, if not the museum, would still carry his name. Further, he says:

Private gifts to public institutions play a very important role in our culture. It is unfortunate that some people equate voluntary contributions with business transactions. Personal generosity is motivated by many factors, but in my experience, commerce, which is defined as the exchange of one thing for another of equal value, is not one of them. Renaming the museum, on the one hand, acknowledges an extraordinary act of generosity, but it also recognizes and points to the fact that when the new building is finished, the museum will be a very different place than it is today.

There has always been a tension between the purpose of public universities and their need for private money. As the squeeze continues from public funding sources, expect to see the private side of the coin play a larger role. As one administrator in our university likes to say, we began as an institution funded by the state, then became an institution supported by the state, and now seem to be an institution merely located in the state.

So what's a public arts organization to do when a portion of its public longs for recognition of service over cash, but also seems unwilling to open the public purse?

Posted by ataylor at 7:49 AM | Comments (5)

June 2, 2005

Just a short link...

No time for much today, just a quick link to weblog neighbor Greg Sandow, and his fabulous examples of how to write a classical music press release...with personality, voice, perspective, intelligence, and without the usually empty hyperbole.

Posted by ataylor at 8:53 AM | Comments (1)

June 3, 2005

Do you REALLY want to talk?

C|NET has a once-over-lightly piece on the Van Cliburn Piano Competition's new blog and the trend it suggests for classical music marketing. Says C|NET:

...like other areas before it, from politics to open-source programming, the classical music world is finding a democratic spirit online that could help shape its future....with little support from big institutions, a bloggers'-age network of fans, musicians and writers is building support for concerts and recordings online. These advocates, ranging from interested amateurs to professional composers, are taking on the roles of evangelist, educator and reviewer once largely played by newspaper critics and radio stations.

Through webcasts, the weblog, and opportunities for the world to vote on a favorite competitor, Van Cliburn is working to open the competition into a conversation, and engaging a worldwide audience through the web.

Meanwhile, at MoMA, they're discovering that the world is also capable of starting its own conversation, thank you very much. The New York Times reports on an unofficial and irreverant series of audio guides for the MoMA exhibits, made available as podcasts (audio files that can be downloaded to an Apple iPod or other personal device).

With an iPod and Internet access, anyone can now download these audio tours, and then wander MoMA's new space with an alternative perspective on the works...often quite far from the official curator's view. The group involved is even accepting MoMA audio tours from the public, allowing anyone to post their audio descriptions through their web site.

We often talk about the marketing power of weblogs, web sites, and podcasts -- usually considering them as new ways to draw audiences to what we already do. But these technologies also have a wonderfully insidious way of transforming both sides of that conversation, diminishing the traditional control of message and meaning held by arts organizations -- provided by official program notes, marketing language, education, outreach, and so on.

Organizations that dive into these technologies should not be expecting business as usual. Instead, they should be ready for a real conversation that they can take part in but cannot control. It will be an uneasy feeling for many artistic, education, and marketing departments. But what fun!

Thanks to Mr. Blau for the MoMA link.

Posted by ataylor at 7:51 AM | Comments (2)

June 7, 2005

Rockonomics 101

It's kinda cool when the National Bureau of Economic Research (NBER) turns its gaze in our general direction. And it's especially cool when their work takes such a radical turn from economic policy, currency dynamics, stock markets, and international trade to talk about Rock and Roll.

Rockonomics: The Economics of Popular Music, co-written by Princeton industrial economist Alan Krueger, explores the dynamics and drivers behind live concerts in popular music, focusing along the way on pricing, concentration of revenue among performers, secondary ticket markets, copyright, and technological change.

Sure, the paper focuses exclusively on the commercial touring market. But even the basic economics of live performance are useful to any working cultural manager that ever puts on a show. This paper begins with those basics:

As an economic good, concerts are distinguished by five important characteristics:

1. although not as extreme as movies or records, from a production standpoint concerts have high fixed costs and low marginal costs;
2. concerts are an 'experience good,' whose quality is only known after it is consumed;
3. the value of a concert ticket is zero after the concert is performed;
4. concert seats vary in quality;
5. bands sell complementary products, such as merchandise and records.

Those five qualities make for some funky behavior in pricing, production, contract relationships, risk-sharing, and industry structure. If you can skip over the über-wonky stuff like the formula below (which has something to do with mixing a perfect martini, I think), it's well worth a read:

And if you find that you're totally hooked on the economics of arts, entertainment, and culture, don't stop there. Take a look at the following longer tomes:

• The Economics of Art and Culture
  by James Heilbrun and Charles M. Gray
• Economics and Culture
  by David Throsby
• Creative Industries: Contracts Between Art and Commerce
  by Richard Caves
• Entertainment Industry Economics: A Guide for Financial Analysis
  by Harold L. Vogel

Wonk away!

Posted by ataylor at 8:27 AM | Comments (1)

June 8, 2005

Ample parking, but no atmosphere...literally

The quest for quality exhibit space has finally stretched to the final frontier with this study of possible cultural uses of the international space station (or read the Guardian story on the effort). The European Space Agency has funded The Arts Catalyst in London to carry out the project, which ends this month (so get those ideas in soon).

Says their web site:

This new study sets out to investigate and focus the interest of the cultural world in the International Space Station, to generate a policy for involving cultural users in the International Space Station programme in the longer term and to develop a representative set of ready-to-implement demonstrator projects in arts, culture and media.

While the works exhibited in the space station may have a captive audience of astronauts, the venue seems best suited to artists who want maximum separation between their creative work and the viewing public. Or, I'm sure Congress would be happy to nominate some works they'd like off the planet.

Posted by ataylor at 12:13 AM | Comments (0)

June 9, 2005

The downside of the ''mushroom method''

A colleague of mine espouses what he calls the ''mushroom method'' of managing a board of directors: keep them in the dark, and every now and then shovel crap on them (he uses an alternate word for ''crap''). That method may have been a factor at the Milwaukee Public Museum, based on the news flowing from their announcement last month of severe financial troubles.

Now it seems that when that organization's endowment committee met at the beginning of the year, they were given the wrong year-end balance for the organization's endowment. They were told it stood at $6.4 million, when in fact it had already dropped to $2.5 million. The committee now claims they would have done something about the troubles sooner if they had known the truth.

However, the error seems more a product of ''mushy'' than ''mushroom'' management. The organization's endowment and operating money were invested together -- confusing the financial manager of the funds, it seems -- and worse, it appears that the organization was spending down its endowment without even knowing it.

It's certainly easy to point to the staff and executive leadership for fumbling the ball so horribly, and even to suggest that they didn't keep their board informed and engaged enough to govern well. But the ''mushroom method'' can also be a self-imposed or mutually reinforcing phenomenon when the board has a preference for sitting in the dark.

Posted by ataylor at 8:53 AM | Comments (0)

June 10, 2005

The crazy frog prince

KCRW's radio show, The Business, has a great segment on the world's most popular mobile phone ring tone, and its strange and backward route to the top (you can listen to the show on-line, the story is about 14 minutes in). Here's their short description of the story:

...a song made from a cell phone ring-tone and attributed to an animated frog on the Internet tops the pop charts in the UK. We take a listen to Crazy Frog and examine its weird journey to European pop culture ubiquity. Is a ring-tone-turned-pop song a sign of the coming apocalypse?

In a nutshell, here's the provenance (for more details, see this archive history):

• 1997 -- Swedish teenager Daniel Malmedahl records his vocal impression of his friend's moped engine. It sounds so odd and annoying, friends pass it around at parties and by computer.
• 2001 -- the sound starts circulating on the web, appearing here, among other places. Bouncing from friend to friend, newsgroup to web link.
• 2003 -- computer animator Erik Wernquist hears the sound on-line and creates a strange animation to go with it, featuring a frog-like character called 'The Annoying Thing.'' The sound and the animation become a high-traffic web element once again.
• 2004 -- German company Jamba! buys the rights to ''The Annoying Thing,'' and releases it as a mobile phone ring tone called ''Crazy Frog.'' The tone becomes the most popular of all the company's ring tones and a cultural phenomenon in Europe (where everyone has a mobile phone), leading to a whole host of related ''Crazy Frog'' products (screensavers, games, and such).
• 2005 -- a musical single featuring the sound (mixed with the 1980s song from Beverly Hills Cop called ''Axel F'') hits the top of the UK singles charts, because people can't get enough of that strange, demonic, motorcycle-riding frog, and long to dance to it. Meanwhile, some other Britons decide that they've heard enough.

It's not clear what message or insight we might draw from this strange journey, especially as it contrasts to the creative production of most other cultural works. Perhaps it underscores the grassroots/word-of-mouth power of the Internet. Perhaps it proves that we've all gone nuts.

One thing's for sure. The ''crazy frog'' is already in America and finding its way onto mobile phones...so prepare yourselves.

Posted by ataylor at 8:45 AM | Comments (2)

June 13, 2005

Who gets to decide what 'performance' means?

Several sources are talking about a new musician's contract at the Tokyo Metropolitan Symphony (the New York Times had a piece this Sunday, drawing from an earlier article in Andante, and discussed today at length by my weblog neighbor, Drew McManus). Says the Times:

The Tokyo Metropolitan Symphony, one of Japan's top-tier orchestras, has its own financial challenges, and in its recent negotiations it suggested a radical fix: performance-based contracts, under which musicians' raises and promotions -- or, perhaps, their departures -- would be based on ''objective'' evaluations by management.

Of course, the challenge in any performance-based job review and incentive system is deciding what ''good performance'' looks like, what evidence it leaves behind, and who gets to measure. The danger comes when any side assumes it understands all the complexity and nuance of the ecosystem (which nobody can), and implements measures and goals that are detached from or detrimental to the true vitality of the organization.

The measures in Tokyo are still being negotiated, but the Times gives a hint of the variables:

The criteria for judging the musicians are still being discussed, but in addition to straightforward musical performance, they're likely to include attendance, onstage manners, teamwork and helping to publicize the orchestra.

The best performance evaluation and support systems begin with a deep and mutually honest conversation -- where everyone involved in the activity can describe the qualities of an ideal process, and the pieces required to make the puzzle work. Here, that would include management, musicians, audience members, board members, donors, civic leaders, educators, and others. Unfortunately, there's no evidence that such conversations are taking place in Tokyo, so whoever has the most power will likely pick.

Posted by ataylor at 9:14 AM | Comments (1)

June 14, 2005

Podcasting: Why you should care

I talked about ''podcasting'' way back in December, and suggested it was an interesting technology/trend to watch. The technology showed up again in an entry earlier this month, as a rogue group of art lovers were creating and distributing their own audio guides to MoMA exhibits. Now, there are lots of reasons to pay even more attention.

In a nutshell, ''podcasting'' combines a number of technologies that allow you to ''subscribe'' to audio files on-line to play back on your personal audio player (iPod and such) or your computer. As content creators post new audio files (which can be interviews, monologues, music files, whatever), your computer automatically grabs them and adds them to your music player. It's like listening to a portable radio, but where you decide what shows to hear, when to hear them, and how long you care to listen (some personal favorites include Tod Maffin's How to Do Stuff and KCRW's The Business).

So, why should you care now more than you did (or didn't) last December? Several reasons:

• Podcasts are growing exponentially, much as weblogs did when they first started. Feedburner, an on-line company that supports and tracks news and audio feeds, listed 505 podcast sources back in November, now they list more than 6000.
• Podcasts are becoming easier to produce and distribute, so that a reasonably technologically aware individual on an arts organization's staff could give it a go. You can have a basic set-up for about $300 (with an iPod, a voice recorder attachment like the iTalk, and an audio editing package like Garage Band).
• Radio stations around the world are starting to see the on-coming train, and distributing their radio content through podcasts as well as on-air (just check out KCRW in Santa Monica, or CBC Radio in Canada).
• Arts organizations and their patrons are starting to experiment with the technology, as well (check out the first steps of the Frist Center for Visual Arts, for example, or the Art Mobs site I've linked to before).

With all the pieces coming together, all that's needed is a friendly and easy way for curious audiences to take advantage of these audio feeds. And that's likely coming in July. Apple confirmed recently that the next version of iTunes (the free and popular audio jukebox program, already sitting on millions of computers) will support podcasting...making subscribing as easy as playing a song.

So what's the potential for arts organizations? Here's just a few ideas off the top of my head:

• A series of audio commentaries by a conductor, even including excerpts from upcoming performances;
• An audio guide for a museum that can't afford the fancy equipment or production contracts required of official audio guides;
• Audio excerpts from theater rehearsals or monologues to draw patrons into an upcoming performance;
• Commissioned short audio theater works;
• A central place to post lots of audio program notes of major touring works or artists;
• Audio archives of conference keynotes or panel discussions, replacing the cumbersome and expensive audio cassettes or CDs...extending the reach and lifespan of a professional gathering;
• ''Day of show'' commentary from the director or curator for patrons to listen to on their way to the event or exhibit;
• The list could go on and on.

I realize most arts organizations have plenty to do just to keep up with the traditional means of connecting to their audiences. But every now and then, a technology shows a promise and potential that's worth at least an hour of your time to learn more about it. It would be wise to find that time before July. Here's a place to start.

UPDATE OF 6/17/05: At least one source is now projecting the growth of podcasting: ''Some 60 million Americans will be listening to podcasts by 2010 and the demand for tools and services to create podcasts will reach US$400 million within the next year...''

Posted by ataylor at 9:06 AM | Comments (6)

June 15, 2005

Howdy neighbor

Just a quick note today to welcome the newest ArtsJournal blogger, jazz journalist and author Doug Ramsey. I used to work in the communications office of Berklee College of Music in Boston, academic home to many jazz greats. So I'm eager to read.

Welcome aboard Doug!

Posted by ataylor at 9:12 AM | Comments (0)

June 16, 2005

We won't say we told you so

Businessweek has an interesting update/overview on Clear Channel Communications, and the current effort of the media and entertainment mega-company to disassemble itself. The company has proposed spinning off its live entertainment division (which owns theaters, productions, agents, and such) into a separate corporation. Says the article:

From the beginning, Wall Street never much liked the live-entertainment business, for which Clear Channel paid a hefty $4.4 billion in 2000 in a deal for Robert Sillerman's SFX Entertainment Inc. Promoting concerts and owning venues was supposed to be a good fit with radio: Shows could be promoted with on-air ads, and radio stations could woo listeners at concerts. But the payoff never materialized. The entertainment business accounts for about 29% of Clear Channel's revenue but only 6% of cash flow, with margins in single digits, vs. upwards of 40% for radio.

It turns out that live productions and performances have high fixed costs, low marginal returns, and can be a pain to profitably produce as compared to other forms of entertainment. I'm sure there are many in the nonprofit presenting industry that could have told them that a long time ago.

Don't expect Clear Channel's live entertainment efforts to fade away, even if the split goes through. You'll likely just see a separate company with lower revenue expectations, but holding a wonking big share of the national performing arts and entertainment world.

Posted by ataylor at 5:49 AM | Comments (0)

June 17, 2005

Rethinking the production/delivery process

I realize it's odd for an arts and culture business weblog to talk about pizza delivery, but Super Fast Pizza in Fond du Lac, Wisconsin, deserves the nod. The company has radically rethought the pizza delivery process to connect with what customers want (fast, hot, tasty).

One if the biggest problems with that connection, they determined, was the required distance between a bricks-and-morter pizza kitchen/order center and the customer's home. Solution? Move the kitchen onto the delivery truck, and receive the orders from the road. Says this MSNBC story on the company:

The company uses Mercedes-Benz Sprinters, high-roofed vehicles used as ambulances in Europe that cost about $32,000. For another $65,000 they were outfitted with coolers, five small pizza ovens and touch-screen monitors connected to an Internet-based ordering system staffed by a call center in Nebraska.

The lesson here is that sometimes it's the production/delivery process, itself, that blocks effective connections with a customer base. And in the traditional performing arts, the production/delivery processes are particularly rigid (big box, quiet space, high technical requirements, raised stage, formal audience chamber, etc.).

While the storybook ballet experience couldn't be crammed into a Mercedes-Benz Sprinter, it's worth wondering what other radical rethink might be available.

Posted by ataylor at 5:59 AM | Comments (2)

June 20, 2005

The stuff you SAY you like vs. the stuff you DO like

I don't intend for my weblog to become a techno/trend rag, but I'll admit to a strange fascination for how new technologies change our behavior, or expose behaviors that have always been there. One particularly interesting question for me is how we cluster our cultural preferences (and how arts organizations do it for us).

The traditional performing arts center season, for example, is often broken down into 'tracks' or smaller subscription series, usually clustered by genre (Broadway series, chamber music series, dance series, world music series, etc.). Programmers figure that if you like The Producers, you'll like Thoroughly Modern Millie, and if you like Youssou N'Dour, you'll like the Lincoln Center Afro-Latin Jazz Orchestra.

These genre categories have always seemed a bit forced to me, and a little too convenient for the presenter/producer. These are clusters on the supplier's terms, not the audience's terms. What if I like some Broadway, but also a certain Latin performer, and the Bulgarian Women's Chorus, and an obscure folk performer of the 1970s, and an angular jazz pianist...tell me which subscription series is best for me (and don't just say 'pick five'...assume I'd like a little help).

On-line companies like Amazon have been taking another tack on this question for quite some time now. By tracking your actual purchases, and comparing your patterns to the millions of other patterns they've seen, they can recommend a cluster of books that might be up your alley (not based on some predetermined genre, but on the patterns of actual preferences).

These companies use a technique called collaborative filtering (see a definition here, or a previous weblog entry about the technology) to compare your purchase and preference patterns to other users, and to suggest items they also bought. I'm still looking for a performing arts organization that has tried this technology using its ticket purchase data, to see what seasons emerged from actual purchases. If you know of one, let me know.

The new wrinkle on collaborative filtering is that it's no longer just the domain of 'big brother' retailers, and is becoming a tool for personal discovery. Services like Audioscrobbler will watch what music you choose to play on your computer, and suggest other music you might enjoy. There's no sales engine lurking to sell you something. And, in theory, there are no hidden contracts or commissions leading the software to nudge you toward certain works.

Some will find this self-installed voyeur disturbing. Others will be eager to discover music that matches their 'pattern' that they would never find on their own. Either way, it's another technology to watch. And it's another reason to question your assumptions when you're clustering next year's season brochure (like, how about the 'Country Music/Grand Opera/Taiko Drumming' series?).

Posted by ataylor at 9:09 AM | Comments (2)

June 22, 2005

Espoused mission vs. mission-in-use

Writing my post earlier this week reminded me of another useful business theory that I hadn't yet discussed in this weblog. The ''theory of action'' proposed by Chris Argyris and Donald Schön way back in 1974 explores the difference between what people say they value and what their actions suggest they value. The two can be quite far apart.

From this overview of Argyris' work:

When someone is asked how he would behave under certain circumstances, the answer he usually gives is his espoused theory of action for that situation. This is the theory of action to which he gives allegiance, and which, upon request, he communicates to others. However, the theory that actually governs his actions is this theory-in-use. (Argyris and Schön 1974: 6-7)

For many of his observed subjects, Argyris found, the theory-in-use was quite similar: a desire to 'win' or to not be embarrased, to avoid conflict, to think and behave defensively. These same subjects would often claim their belief in open and honest conversation, in taking responsibility, and in productive action.

Argyris felt that productive work and management came only when the espoused theory and the theory-in-use were aligned...when what people said and what people did made sense together.

This theory is particularly useful for organizations driven by mission (like nonprofit arts and culture), especially if we change the word ''theory'' to the word ''mission.'' Every nonprofit has a stated or espoused mission. These are the statements (official or otherwise) they say out loud to donors, to each other, to constituents, that define what they believe. Every nonprofit also has a trail of evidence -- the actions and choices they have made over time -- that either matches their stated mission or that doesn't.

It can be an extremely useful exercise for managers and board members to call this question forward from time to time: is our ''espoused mission'' consistent with our ''mission-in-use''? Or another way to ask the same question: ''if a reasonable stranger looked at our actions, what would they infer our mission to be?''

I've known many nonprofits that have asked that question and have been disturbed and transformed by the answer.

Posted by ataylor at 7:08 AM | Comments (2)

June 23, 2005

Relearning conversation skills

I've been noticing a common thread in many of the conversations I've been having and hearing among arts professionals. There's the tension between what a 'curator' presents and what the public wants; between 'teaching' an audience that doesn't yet value our craft and 'learning' what they value; between being more engaged with a community but standing separate to be recognized and noticed as unique.

It seems to me that all of these tensions are part of the same evolution in arts and cultural management -- from monologue to dialogue, from lecture to conversation.

I've touched on this issue before, but it keeps bubbling up. We've grown used to the ''lecture,'' the assumption that we know what is good and valuable, that we have the wisdom society so desperately needs, and that our job is to talk until they understand. And we quietly have a fear that if we truly listened and engaged, honestly and openly, we might stray from that wisdom or water it down.

So, what does this dialogue look like? A quick Google expedition discovered at least one useful description of dialogue and its essential elements, excerpted here:

Suspension:
Suspension of thoughts, impulses, judgments, etc., lies at the very heart of Dialogue.... Suspension involves attention, listening and looking and is essential to exploration. Speaking is necessary, of course, for without it there would be little in the Dialogue to explore. But the actual process of exploration takes place during listening -- not only to others but to oneself. Suspension involves exposing your reactions, impulses, feelings and opinions in such a way that they can be seen and felt within your own psyche and also be reflected back by others in the group. It does not mean repressing or suppressing or, even, postponing them. It means, simply, giving them your serious attention so that their structures can be noticed while they are actually taking place.

To suspend thought, impulse, judgment, etc., requires serious attention to the overall process we have been considering -- both on one's own and within a group. This involves what may at first appear to be an arduous kind of work. But if this work is sustained, one's ability to give such attention constantly develops so that less and less effort is required.

Leadership:
A Dialogue is essentially a conversation between equals. Any controlling authority, no matter how carefully or sensitively applied, will tend to hinder and inhibit the free play of thought and the often delicate and subtle feelings that would otherwise be shared. Dialogue is vulnerable to being manipulated, but its spirit is not consistent with this. Hierarchy has no place in Dialogue....

Guidance, when it is felt to be necessary, should take the form of ''leading from behind'' and preserve the intention of making itself redundant as quickly as possible.

Do those sound like the qualities and tendencies of your organization's programming, outreach, education, market research, fundraising, and audience interaction? If so, post a comment to tell us all.

Posted by ataylor at 9:00 AM | Comments (4)

June 24, 2005

Unnecessarily separate

ArtsJournal has another wonderful conversation running with its short-term weblog featuring violinist Midori. The artist is exchanging ideas and insights with ArtsJournal editor Doug McLennan as she tours Asia.

Her entry today explores some of her frustration and disbelief with the boundaries built between professional classical artists and their audiences. Says she:

One of the (many) issues we face in the classical music business is that of the created distance between performers and audiences. Many of us feel that this is unnecessary and is distancing potential music lovers. While others feel the need for that distance believing that the arts (and music) deserve respect and should prevent themselves from becoming ''ordinary'' and therefore ''mundane.'' I do agree that there are ways of respecting tradition and supporting the preservation of ''high art forms,'' but I do not think that this means music should not be popular.

Midori is on a mission to dissolve these boundaries. And her personal notes from so far away are already doing the job.

Posted by ataylor at 12:30 AM | Comments (1)

June 27, 2005

Fun with Sarbanes-Oxley

I know that corporate governance and financial reporting reform is the ideal way to start the week...so fun, so light, so intriguing. But sarcasm aside, there are good reasons to be at least marginally aware of the seismic shifts in what the federal government requires of public (and soon nonprofit) corporations.

First, a bit of recent history: Way, way back in July 2002, Congress passed the Sarbanes-Oxley Act into law, which applied to publicly traded corporations. According to this on-line forum on the legislation (or, if you are desperately bored, you can download the actual law here):

The Sarbanes-Oxley Act...introduced highly significant legislative changes to financial practice and corporate governance regulation. It introduced stringent new rules with the stated objective: "to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws".

On the heels of Enron and other corporate scandals, Congress was eager to set new standards of public disclosure, and -- according to President Bush -- "deter and punish corporate and accounting fraud and corruption, ensure justice for wrongdoers, and protect the interests of workers and shareholders."

As the law's requirements have oozed through publicly traded corporations -- keeping many a CPA happily busy -- Congress has shifted its focus to nonprofits, wondering if similar legislation might be necessary for that fishy world of charity and philanthropy. The fun began in June of last year, with hearings in both the House Ways and Means Committee and the Senate Finance Committee (which also held a hearing this past April).

From these discussions, stricter financial and corporate reporting standards have been suggested for nonprofits, and a few senators have suggested caution in wandering down that road. Just this month, Independent Sector released a report to Congress and the rest of us with their recommendations for reform.

As is required of such public conversations, a few poster children of nonprofit decadence and questionable accounting have been floated in the media. One recent example is Iowa Senator Charles E. Grassley's dressing-down of the Getty and its lavish executive compensation package:

"Charities shouldn't be funding their executives' gold-plated lifestyles....I'm concerned that the Getty board has been spending more time watching old episodes of 'Lifestyles of the Rich and Famous' than doing its job of protecting Getty's assets for charitable purposes," he said.

Even if you don't have $5 billion in assets, like the Getty Trust, it's best to keep one eye on these discussions. The upshot will likely be more paperwork, more auditing, more hoops for donors to jump through (leading some to decide not to jump at all), and more headaches for small and midsized nonprofits.

The balance between accounting for your actions and actually taking action is about to be shifted.

Posted by ataylor at 8:51 AM | Comments (1)

June 28, 2005

Of science and art (again)

Princeton University explored the intersection of discovery and beauty this semester with its ''Art of Science Competition.'' According to the project's web site:

This spring we asked the Princeton University community to submit imagery produced in the course of research or incorporating tools and concepts from science. The response was overwhelming: more than 200 entries from nearly 100 individuals in 15 departments. We selected 55 of these works to appear in the 2005 Art of Science Exhibition.

The winning entries and the on-line gallery are quite stunning, and nudge the boundary between art and imagery (the only difference being intent, really). I've said it before, I know, but art and science are closer siblings than we generally admit...both are ''ways of knowing'' the world.

ENTRY UPDATE: For those following the podcasting conversation of previous posts, Apple has just released version 4.9 of its iTunes software, with support for podcasting. Let the fun begin.

Posted by ataylor at 9:37 AM | Comments (0)

June 29, 2005

A crushing debt

The Philadelphia Inquirer covers the current financial woes of the Kimmel Center for the Performing Arts (login required, try BugMeNot to get one). The multi-venue cultural complex in Philadelphia opened in December 2001 to much fanfare (and much financial squabbling).

On top of lower ticket sales, sluggish fundraising, and under-budget operating fees (such as the per-ticket surcharge), the Kimmel is also saddled with another financial burden that's less common among cultural facilities -- a big chunk of debt. Says the article:

Part of the financial drain is long-term debt. The Kimmel took out a $30 million loan to help bridge the gap between the time pledges to its construction campaign were made and the time they were fulfilled. But only $3 million of the loan has been repaid, and each year the debt costs the Kimmel about $2 million in principal and interest payments....

In response, the center is cutting 11 percent of its staff, the president is taking a 10 percent salary cut, the gift shop is closing, public access to the facility has been limited, and plans for summer performances have been cancelled.

Long-term debt is a tricky business, especially for a business that doesn't cover its costs through revenue. But, given the scope and scale of the new breed of cultural facilities, such debt can be the only bridge to get these critters built (are you paying attention Dallas?).

The significant individual donations required are lured through multiyear pledges (glory and honor now, pay later), even though invoices on the brick, mortar, granite, steel, and glass (and the assembly thereof) are due immediately. And the capital fundraising hurdle is so daunting, new facilities sometimes choose to forgo an additional operating endowment, despite the massive operating costs that await them when the ribbon is cut.

Of course, the challenge comes in cutting back expenses, building revenue, shouldering the principal and interest payments, and still fulfilling a mission that's compelling to the various funding streams that support you (individuals, foundations, governments, etc.).

Here's hoping the Kimmel (and other newer facilities in similar straits) can find that balance.

Posted by ataylor at 8:47 AM | Comments (0)

June 30, 2005

Is ''audience'' an antiquated word?

Wired magazine this month focuses on the emerging ''cut and paste'' culture of sampling, homegrown branding, remixes, and other media mash-ups. Particularly interesting is a short essay by cyberpunk novelist William Gibson where he explores the creative power of combining and reconceiving other people's work. It's a practice he traces to William S. Burroughs, Picasso, Duchamp, Godard, and even his own writing.

Equally interesting is Gibson's take on the participatory audience, or the new opportunities for everyone to take an active role in creating:

Today's audience isn't listening at all -- it's participating. Indeed, audience is as antique a term as record, the one archaically passive, the other archaically physical. The record, not the remix, is the anomaly today. The remix is the very nature of the digital.

Today, an endless, recombinant, and fundamentally social process generates countless hours of creative product (another antique term?). To say that this poses a threat to the record industry is simply comic. The record industry, though it may not know it yet, has gone the way of the record. Instead, the recombinant (the bootleg, the remix, the mash-up) has become the characteristic pivot at the turn of our two centuries.

As we struggle to sustain and build an audience for the arts, it might be worth wondering if there is such a thing as an audience anymore...at least as we like to define it.

Posted by ataylor at 12:22 AM | Comments (1)

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