There’s a need to envision a multi-faceted organizational topography of arts and culture not-for-profits in our communities. As I’ve written in the past about there being too many 501c3, not-for-profits, and I’ve offered up alternative organizational possibilities, now it’s time to think about how a landscape of different organizational designs might ideally work.
To quickly recap: our communities are weighted down with too many 501c3’s. The 501c3 might be ideal for a number of arts and culture enterprises, but not for all. When there are too many in a community, philanthropic resources are unduly tapped. Administrative costs are significant, and in smaller organizations can represent too high a percentage of overall costs. And, 501c3’s can work almost primarily in isolation, robbing communities of fertile cooperative and interactive ventures (that come about when organizations must conduct commerce with each other).
Some arts leaders offer that a type of Darwinism will eventually weed out or winnow down the number of 501c3’s. I reject this free-market concept, in that organizational survival does not necessarily rest on artistic quality, but on other, non-artistic abilities, such as development and marketing. Besides, by now there’s enough empirical evidence to conclude that the free-market is not having any effect in reducing the number of 501c3’s, except to create widespread stress and intensified problems.
An array of organizational types, beyond what currently exists, will best serve the artistic and cultural needs of a community. And rather than here present an academic overview of the current organizational types, I prefer to jump to what is needed, then reflect back on how new organizational models will impact the overall health of a community’s arts and culture sector.
Two organizational models, one old, one new, come to mind.
The first needed is an effective, trustworthy umbrella organization (Fractured Atlas comes to mind) that provides cover not-for-profit status for small and seasonal arts enterprises — at a reasonable cost. Needed in tandem is a willingness on the part of organizational funders (foundations, government, corporations) to give to these smaller organizations through the umbrella.
The second organization needed is a service organization that offers an array of services at affordable costs. The costs would need to be subsumed by philanthropy. The services would range from marketing to development, from senior management to technology expertise (not the Geek Squad, but how to deploy technology to best serve goals and mission).
Both these described organizations would need to maintain artistic neutrality, but at the same time sustain high operational standards.
Once these organizations would be established, or even in their construction, organizational funders would need to indicate to small, small-to-mid-size and seasonal organizations that they (the funders) were not going to fund any ongoing administrative costs that could be better addressed through one or both of these service organizations. The same could also hold for mid-sized and even some larger entities within the sector, in that one could imagine certain functions being served in more cost-efficient and cooperative manner.
There are additional ideas beyond the creation of these 2 organizational entities that will better facilitate the effectiveness of the arts and culture sector. More on these in future blog entries.
I enjoyed reading this post. I like the Fractured Atlas model, and also see the fee-for-service model working well as a partial solution to funding. Both models have ways they can be fortified.
Have you heard of the L3C status? (Read more about it here: http://en.wikipedia.org/wiki/L3C). I’m interested in starting to think about how this low-profit/public good model could be applied to arts organizations. Is this any more than a glorified fee-for-service model, though? I’ll look forward to getting your thoughts.
I am familiar with the L3C — and I’ll have to check, but I believe I have a couple of former blog entries about it. The key to forming one in the arts will be finding projects/programs that can yield positive financial results — while also clearly addressing a public good. I can imagine a building project — a theater or museum in a “challenged” city neighborhood, where the business plan shows financial results above the line. In such a situation a foundation would consider giving a PRI to the L3C, and private investors with concern about this neighborhood would be compelled to invest.