Here’s another interesting chapter in the For-Profit / Non-Profit contest discussion courtesy of Diane Ragsdale. I really don’t see the need to “keep some sort of constraint” on the money making impulses of non-profits: non-profit status requires a level of charitable intent. Can we not leave it up to the IRS? Not trying to be flip here. By gut-level definition, non-profits are going to struggle for revenue in any marketplace, and are always going to be reaching for more. Also, the tendency of any organization is to want to grow- the recent article in the LA Times (see previous post) re The Getty undertaking fundraising efforts to augment its nine billion dollar endowment surely drives that home pretty effectively. Are we really going to try and artificially constrain that basic human impulse?
I sometimes feel that there is a generationally based, reflexive distrust of “Broadway”, or “the marketplace”. The feeling is that they represent something that is, inherently, wrong. Not to be trusted. Corrupting in some irreversible way. They are, in this view, comparable to Big Business, or Greed, or Capitalism. Can they be corrupting? Of course. Must they be? Let’s allow the individual organizations to decide how they are going to do that reaching for revenue. Then their supporters, their constituency, can decide if they support that.
The pain that Polly Carl shares in her response, and shares with many others, over salary iniquities, and the constant funding of buildings and administrations before artists also hits home. High relative salaries for artistic and / or administrative leaders are usually defended as market-based; these people are charged, directly or indirectly, with bringing in the dollars that keep the structure going – you have to pay up to get the best people, and bring in the most dollars possible. So you have the closed circle that perpetuates the organization for the arts, and only rarely, and seemingly as an afterthought, trickles a few lonely shekels down to the creators of art…
As long as performing arts institutions remain shackled to this vicious, closed circle, that is, the constant need to re-raise your entire budget every single year, while simultaneously harboring the natural ambition to grow (and thus make your task even more difficult next year), this won’t change. Waiting for government to pick up the slack is waiting for Godot – it will never happen. Completely aside from the miserable current condition of government budgets, both Federal and State, it is politically impossible. Neither the money nor the political will are there. There may be a few (rare) exceptions with regard to political will at the state level, but in Washington both obstacles are insurmountable.
The answer, I believe, is to follow the lead of the most successful non-profits in the country, the private universities, and focus on endowments. This will, eventually, create a revenue stream independent of the annual budget-raising merry-go-round. It creates a pile of dollars – that belongs to the institution – that artists can legitimately point to in their long-term quest for reasonable compensation. It’s money that the leadership isn’t required to raise every year, and so undercuts need to constantly pay top-dollar to asset collectors. And it helps to insulate the institution from the ups and downs of the economy (and if we can’t appreciate that in today’s economy, we never will). Further, it’s one of the few tools that our government offers non-profit status right from the get go, and we don’t use it.
Is it a silver bullet? No. Will it be quick? No. Is there something better we haven’t tried?