Arts Can Prosper Through Strategic Collaborations
The Arts Industry Backdrop:
The 60' thru the 80's
The nonprofit performing arts industry in the United States is facing crises on a variety of fronts. After two boom decades, its unprecedented growth has ground to a halt.
From the mid-1960s to the mid-1980s, contributions from foundations and corporations grew from $15 million to nearly $700 million, the number of professional orchestras swelled from 58 to more than 1,000, and the number of professional resident theater companies increased from 12 to more than 400. By 1987, ticket revenues for nonprofit performing arts organizations exceeded ticket revenues for sporting events.
Many arts organizations displayed their newfound affluence in more elaborate productions, larger management staffs, and new performance facilities that contain more seats to fill than the old ones.
For the first time, midsize orchestras gave their musicians full-year contracts instead of fee-for-service agreements, thereby providing them with a welcome measure of financial security formerly enjoyed only by musicians with large symphony orchestras in major cities. These changes reflected optimism in continued growth in both audiences and contributions.
The Arts Industry from the 90's
Yet in the past few years, many important organizations have been forced to eliminate programs; others have closed altogether. The arts have been hard hit by shrinking audiences and rising debt.
Cuts in government funding have become severe, and many sources of funding—especially government agencies and private foundations—have been earmarking grants for specific programs so that less is available for general operating budgets. Corporate, foundation, and business support is often provided on the condition that arts organizations become leaner, more business oriented, and supportive of the donor’s marketing objectives.
At the same time, arts organizations face a constant upward spiral of operating costs. Whereas the business sector has realized considerable gains in productivity throughout most of this century as well as benefits from cost cutting and downsizing, a performance of Beethoven’s Fifth Symphony will always require about 36 minutes and an orchestra of 70 musicians.
The question is, How can arts organizations succeed in this environment and fulfill their own special artistic missions?
One solution lies in what we call strategic collaborations.
Strategic collaborations are durable commitments created for mutual gain.
In a strategic collaboration, joint authority and structure are created to carry out a common mission. The parties engage in comprehensive planning and operate well-defined communication channels. They pool resources jointly and share the resulting benefits. Each partner contributes its own resources and reputation—a risky but necessary component of a collaboration.
When well designed and executed, strategic collaborations can help expand the customer base, develop new sources of funding, and cut costs without compromising any organization’s mission or quality. They can also help arts organizations achieve goals that they cannot achieve on their own, such as funding the construction of a new performance space.
A strategic collaboration is a major opportunity for both nonprofit arts organizations and their partners, provided they understand clearly what it is, when it can be useful, and how and with whom it can be achieved.
Corporations are discovering that they can serve their own strategic goals in exchange for such aid. By supporting the arts, businesses demonstrate good citizenship, add polish to their corporate image, enhance their community’s quality of life, and promote goodwill among customers, clients, and employees. Moreover, a thriving cultural community helps businesses recruit and retain highly educated and talented people. The collective power of these benefits allows businesses to attribute many of the cash expenses of collaborative ventures to marketing rather than philanthropic budgets.
State of the Arts: Collaboration
First, the organization initiating the collaboration should decide on its primary long-term objectives: targeting new audiences, reducing overhead, garnering expertise in a key function, obtaining scale for a capital drive. Then it should identify what kinds of collaborations and which partners would help meet those needs