Arts Governance 2 -- Trustees as ATM’s

By coincidence, the day I roughed this out, The New York Times wrote on the subject of boards as fund raisers. What a distance ‘twixt MOMA and SRJO!

Many arts orgs unabashedly use board seats as ATM machines. It is the socially prominent orgs that can get away with being heavy-handed about it, not only in New York but here in Seattle, too. I dare say the trustees of Seattle Symphony or Seattle Opera don’t have laid on them the $10 million expectation of MOMA or the Metropolitan Museum of Art – that’s right, $10 million! -- but the principal holds: you want to sit with the prominent in this community, either give or get. Check the roster of names the next time you attend SSO or the Opera or the Rep. I don’t want to sound too resentfully proletarian; at bottom, I’m really jealous of their ability to lasso big hitters in support of the arts they love.

In truth, all of us do it to one degree or another. Boards have a responsibility to generate the resources an arts org needs, and unearned income is needed. Typically, earned income from ticket sales and contract performances, from sales of CD’s and those souvenirs in the lobbies, account for only some 40% of total revenues needed to survive and serve the community. (This year, our earned income from performances will be over 51% of total revenues, a high proportion that may say we’re not generating enough elsewhere.) The other 60% or so comes from foundation grants, corporate sponsorships, and individual donations. Grantors are pinched in these days of shrinking investment and endowment accounts. So it comes down to individuals taking up the slack.

As a result, some arts orgs pad their boards way beyond what governance experts say is an efficient size – around 15 active members. Operative word: active. Seattle Opera has a board of 61; the Symphony, 43; Seattle Repertory Theatre, 69. Even smaller orgs pump their boards. Seattle Chamber Music Society, for example, has 36 trustees. These huge boards are there to give and get. Many arts orgs rely on their board’s personal gifts for over 50% of total individual giving.

That’s not SRJO’s way. Not that we’re better or worse – just different. We have a board of 17 (and are actively recruiting for a few more who care and want to work on jazz preservation, presentation, and education – interested?) who are expected to “generate” annually at least $1,000 of revenue – gifts, sponsorships, donations, whatever. Their own gifts account for under a third of our total individual contributions. But padding the board with ATM seats just runs against what egalitarian SRJO stands for – the preservation and presentation of what Jimmy Heath calls America’s “most democratic music”, large ensemble jazz. If some big hitter comes along and wants to join our board that’s an entirely different matter -- blessings upon you, chum.

Same for a corporate sponsor. Didn't you love the way half a mill was raised in one day in response to the threat of cancelling the Lake Union July 4th Fireworks? Maybe that's what we should try? Who’d notice if SRJO threatened to cancel our annual Ellington Sacred Music Concert? Well, by our standards a lot of folks would – SRJO and Earshot sold out Town Hall last holiday season.

Arts Governance -- theory and practice sometimes don't meet

This series on governance of arts orgs has been prepared for our SRJO blog, (which if you care about jazz, you should check out.)

In January, I engaged twenty-some candidates for Seattle U’s Master in Fine Arts Administration (http://www.seattleu.edu/artsci/mfa/) in a discussion of arts governance. Since all of these sharp students have spent two years or more working with arts orgs of one sort or another, they have a pretty good view of staff and executive director matters. But their exposure to trustees and boards typically has been more limited – so that is why I was invited to speak, as President of SRJO’s Board of Trustees.

We talked about theory of board governance – which looks logical and simple -- and then about reality’s disconnects. In theory, a non-profit art org’s board ought to do seven things.

• Define the mission and vision
• Provide resources, i.e., dollars and volunteers
• Select staff leadership, i.e., the Executive Director or CEO
• Approve policies, plans, goals and budget
• Act as fiduciaries, i.e.,

- assure resources are used responsibly and as constituents intend, and
- be accountable for delivery of services that justify the org’s tax-exempt status

• Evaluate and compensate key staff
• Support and encourage, maintaining positive relations with exec director and artistic director
  

This is governance: the act of governing. Serious business -- important. But all too often, we see it abdicated to a strong executive director or to the organization’s founder. Why? Where does theory get disconnected?

First of all, art org directors are volunteers. What motivates someone to be on a board? First, it is love of the art – whether dance or opera or jazz or children's theatre or whatever. And those lovers of the art may or may not be disciplined in financial oversight or priority setting or fund raising or performance appraisal or planning and strategy…. Sometimes it is the prestige of being on a socially significant board like the symphony or opera. In the case of smaller, less visible boards, directors often turn out to have had some relationship with the exec director or artistic director that led to being invited onto the board. So, between the love of the art, the prestige of position, and/or that relationship, objectivity can get waylaid. Hard decisions and diligence can be undermined.

Governance is work, and in these days of tight money, hard work: arts orgs are struggling to serve and survive. If governing and supporting isn’t fun, a volunteer director begins to ask ‘why am I wrestling with all this?’ One of my challenges then, as President, is to make it fulfilling and fun (and that is tough for old sobersides, here, who gets all uptight about projects, forecasts and due dates.)

Enough for now; I’ll post more later on how reality tests trustee theory.