The following is a conversation I have had far too many times in the past three years:
Nervous board member (of an arts organization that has recently incurred a deficit): Is our organization sustainable? Can we take in enough revenue to sustain the budget size we have or should we be cutting the size of our organization since it is harder to attract earned and contributed income?
Me: I am afraid that there is no simple answer to your question.
Yes, your organization can sustain its budget, and even grow, if you develop a strong artistic and educational program, embrace your community, create aggressive and targeted programmatic and institutional marketing programs, build a strong, supportive board of directors, welcome new supporters openly, mount smart, focused fundraising campaigns and invest only in mission-driven projects.
No, your organization cannot sustain its budget, and will likely get smaller, if you continue to produce the same works year after year, stay aloof from your community, waste money on programmatic marketing and forget to pursue an institutional marketing effort, maintain a weak, unsupportive board, make it difficult for newcomers to join the institutional family, continue to solicit the same 20 donors without targeting new prospects and devoting scarce resources to building campaigns rather than art.
Nervous board member: But you are asking us to invest in programming and marketing when we have no money to risk. How do I know that we will earn enough to pay for it? Isn't it safer to spend less since we know we can raise the funds to cover a smaller program?
Me: I cannot promise you will earn enough to pay for the programming, but in my experience arts organizations that do the most interesting work earn and raise the most money. And those that make themselves visible and exciting have an easier time attracting new donors.
I also know that those organizations that reduce programming for financial reasons almost always experience further loss of ticket sales and contributed revenue. We are living in a very competitive world -- there are so many forms of entertainment available. If we are not interesting to our group of friends and supporters, they have many other places where they can give their money. Arts organizations that do not get more interesting and ambitious are going to fall farther and farther behind. In other words, you cannot save your way to health.
Nervous board member: What you say makes sense and I want to believe that you are correct but I am not sure our organization has the capabilities to implement what you are suggesting. How can I be sure?
Me: You cannot be sure. But if the board and staff work together as a team, develop an exciting plan, and work hard to implement it, I am confident you will see substantial progress. Focus on a strong product, aggressive marketing and consistent development of the board. And remember, it takes the entire organization to commit.
Nervous board member: Hmmmm.