As I travel the nation and the world speaking to arts leaders, there is one phenomenon I observe virtually everywhere: arts organizations (and most not for profit organizations for that matter) consistently grow to the point where they are slightly uncomfortable financially. Arts organizations live on the edge, trying to do a bit more programming than they can really afford.
I am not talking only about troubled organizations; I am talking about ALL organizations.
Because arts organization are run by artists who are dreamers by nature and who aspire to create something new and important and often times, larger in scope than the work they did in the past. When we achieve a certain level of budget, we start thinking about the next, bigger idea. And when we are educating so many children, we dream of educating more. We believe in the importance of our work and, therefore, we need to and want to do more. This is a good thing, of course.
But it has implications.
It means we are never really stable. Stability implies a steady state and dreaming of more and better means we are constantly changing and growing. I have heard so many arts leaders, board members and staff talking about 'getting the organization to the next level.' That is the antithesis of 'stability.'
In fact, the tools we employ to create stability rarely, if ever, accomplish that goal. Endowments, for example, are widely credited with creating stable financial results for the organizations lucky enough to have them. Yet organizations that build an endowment infrequently achieve true stability. Those who conceive and manage endowment campaigns hope the endowment that results will reduce the level of annual fundraising required in future years. Instead, the income from an endowment simply forms a base on which more dreaming can occur. The pressure on fundraising to bring the organization to the next budget level is just as intense as before the endowment campaign.
While the dreams of artists fuel the success of arts organizations, they also can create tension. Since arts organizations tend to aspire to a bit more than they can afford, the loss of a major donor or an economic downturn can cause substantial fiscal instability. Operating on the edge is acceptable until the edge disappears.
This heightens the tension between artistic leaders and executive leaders. The artists keep having bigger and bigger dreams (their job) and the executives feel the need to protect the organization from overextending (their job).
In the end, artists must continue to think big and executives must encourage this. But they also have to keep a watchful eye to make sure that the level of discomfort is not too large for the organization to handle. Executives need to evaluate the economy and be able to modulate the size of the budget when problems are looming. And they have to recognize that their chief goal is to continue to support the dreams of their artistic leaders, which means creating an ever-increasing revenue stream.