Monday, April 30, 2007

The graying of the non-profit arts sector? On what planet?

A large and generally very smart foundation recently published a really silly report. The basic premise is that non-profit arts organizations are facing a crisis of failure to attract the younger generations of adults as artists, staff or supporters. Therefore, the foundation argues, the non-profit arts sector must adopt "a systemic approach to the challenge of generational succession in the areas of governance, membership, advocacy, [and] financial support."

Heh. Are they kidding? Well no they're not, alas; rather, they are offering conclusions that are wildly unsupported by the fairly trivial amount of actual data offered. Andrew Taylor with The Artful Manager, and especially some of the commenters to his post, nicely point out some glaring logic flaws in the above argument. Best comment: "In reality, younger people have perfectly fine values of their own -- as well as finely honed bullshit detectors -- and the real challenge is for the arts to genuinely mean something to younger people. To be worthy of them, I might even say."

I can't do any better than that on the logic so I'll throw in two cents on the facts: if there is a sector of the U.S. economy that is doing better now at attracting young people than the arts I haven't seen it. I've been working in the non-profit arts sector for several years now, just did some empirical research on it actually, and that trend is blindingly obvious. Theater, dance, music, visual arts, whatever.

Training talented kids for those fields is a booming business at all levels, the number of U.S. tax returns listing artist as a paid occupation doubled in one generation, the biggest current theatrical hit on the planet is minting money around the country based on its appeal to young women ("Wicked"), and so on. In my day job I deal with small to medium sized arts organizations, the number of which has been rising at a crazy rate, and it's long since become a surprise to meet an artistic director or music director as old as 35.

That report notes demographic predictions of the rising average age of the U.S. and claims that this is a danger sign for the arts unless the sector gets organized to meet "increasing competition" for the attention of "a shrinking pool of younger people." You know what, if the shrinking pool prediction turns out to be correct I'm going to predict that it will be other sectors scrambling to figure out how to become as attractive to young people as the arts provably are, rather than the reverse.

Saturday, April 21, 2007

Where are the donations going?

It's commonplace in dot-org land to hear professionals quote as unquestioned fact things about charitable giving in this country that are either completely wrong, or wildly outdated. This seems like one more example of the immaturity of this sector -- do lifers in other lines of enterprise walk around believing basic objective facts about their sectors which are dead wrong? Doesn't seem likely.

Anyway, inspired by one such comment I recently pulled out the authoritative annual reports by Giving USA on charitable donations in the United States. The subject in mind was where the current ongoing boom in charitable giving is going (that is, to which causes or types of organizations?). I wanted to look at the last 20 years or so which is the real boom period, and wanted to see the overall trends rather than the single-year blips which always end up being the dumb newspaper headlines. So I plotted the annual totals from the years 1985, 1990, 1995, 2000 and 2005 (2006 data is not yet published), as percentages of change.

The overall context is that after adjusting for inflation, charitable contributions in the U.S. for 2005 totaled about 2.5 times as many dollars as in 1985. So total amounts given to every type of non-profit have risen, a lot. Individuals remain by far the major source though slowly declining as a fraction (from being more than 80 percent of the total in 1985 to around 75 percent of it now); the shares contributed by corporations and by foundations are somewhat higher now than 20 years ago.

Giving USA breaks all contributions down into several useful categories by organizational mission. Easily the biggest loser of this particular market share has been religious non-profits: from 53 percent of all donations in 1985 they dropped to 34 percent in 2000, ticking back up to 36 percent in 2005. (Or put another way: the share of all contributions that goes to religious groups has fallen by about one-third over the past 20 years.)

Three other major types of non-profits saw their shares of all giving decline a bit between 1985 and 2005: health care (from 11 percent to 9 percent), human services (from 11 percent to just under 9 percent), and arts/culture (from 7 percent to 5 percent).

So who have been the biggest relative gainers? (Keeping in mind that all types of non-profit have been gaining in absolute terms because the total contributions have risen so much across the board.) Education-focused non-profits have seen their market share rise from 11 percent in 1985 to almost 15 percent in 2005, and giving to foundations rose from under 7 percent then to more than 8 percent now (and the 2006 figures will likely boost this one even more).

What Giving USA calls "public/society benefit" non-profits (meaning groups which collect donations and pass them on such as the United Way) went from 3 percent of all 1985 donations to more than 5 percent in 2005. Other gainers have been by categories which in 1985 weren't even big enough to be counted by Giving USA: environment/animals (3.4 percent of all 2005 giving) and international affairs (2.5 percent). And there are more new types of non-profit entering the picture steadily: the "other" category received 6 percent of all 2005 contributions.

So the overall picture is that charitable giving while rising has also been spreading out, largely at the expense of religious groups.

Thursday, April 19, 2007

Volunteers are being drawn to youth and community

The Corporation for National and Community Service has released their annual survey of volunteerism in the U.S., showing a small drop in volunteer hours from 2005 to 2006. The broader context has been growth in volunteerism rates for a couple decades now; the data source is the Census Bureau's monthly surveying of about 60,000 households.

The report offers a variety of breakdowns on volunteerism which are interesting. For example when they compare 2006 to 1989 in terms of the different types of non-profits people are volunteering for, the big growth is for education/youth service groups (almost a doubled percentage of all volunteers now compared to then) and social or community service groups (a third more of all volunteers now than then). The recent losers of this particular sort of market share have been civic and professional groups, sports/hobby/arts groups, hospitals and health groups, and religious groups a little bit.

The report has a variety of rankings of the 50 states by volunteerism (hours, volunteers, rates of change, etc.) which shows generally that Midwesterners are volunteering at higher rates than any other part of the country. Utah is a huge outlier at the top end, I assume due to the Mormon theological emphasis on volunteering. But it would be interesting to see those breakdowns correlated with various demographics, e.g. are the states with older populations the ones with the highest volunteerism rates? And presumably various folks are busily crunching these new numbers to try to support or debunk the Charles Brooks theory about religious conservative folks volunteering more than any other group.

Monday, April 16, 2007

Counting on being "too big to be allowed to fail"

Two high-profile arts non-profits on the East Coast are right now engaged in a familiar sort of public brinkmanship, with a distinct odor in both cases of "save us from ourselves."

Having worked in big-city regional non-profit theater myself I was quite startled to learn that the Paper Mill Playhouse in New Jersey is on the verge of collapse. (I'm actually familiar with a couple of the principals involved, since both the departed CEO and the current managing director were hired away in recent years from major Chicago theater companies.) The Paper Mill has long been a poster child for robust successful suburban repertory theaters; twenty years ago they led the nation with a whopping 45,000 subscribers.

So the state they've fallen to is pretty startling: fewer than 20,000 subscribers now (which is a far more drastic falloff than the general national trend), and a budget for the current season which depended on increasing annual fundraising by almost $3 million in one gulp. They're now in so many words daring legislators to let the "official state theater of New Jersey" collapse, with perhaps predictable results.

There's nowhere near enough information in the media coverage to be clear on how this situation came to pass for Paper Mill, but a quick glance at their tax returns on Guidestar does support what Playbill wrote, that "the board at Paper Mill has either not had the ability to get outside contributions or has not seen the need due to the once-high subscribership." It's hard to see that as anything but seriously negligent in a society where per-capita individual contributions for the arts quintupled after inflation from 1964 to 2004.

Meanwhile in Miami, the mammoth Carnival Center for the Performing Arts which opened to huge fanfare only last October is apparently already in financial free-fall. The thing appears to have been a financial Potemkin village actually: a half-billion dollar multi-facility arts complex that opens with zero endowment? For which the pro formas assumed operational profitability from day one? Almost no onsite parking (in South Florida??), and the operating budget didn't include the cost of stagehands? Surely no one with any experience running an actual arts center (or a service-sector business of any kind) was in charge of the planning on this thing.

All the bailout scenarios being discussed are fairly gruesome but they include at least one that's fairly innovative: blackmail the city's major newspaper. Quoting from that article in the area's business newspaper: "The Miami Herald...has a contract to sell its land around the center for $190 million, but the unsold land's value would plummet if the center shut down. Because the land's value soared about $180 million as the center rose nearby with the Herald's strong editorial push, the paper could protect its holding by handing the center, say, 10% of the gain the center caused." The paper does seem to have been covering the center's problems reasonably bluntly, anyway. And what a fine mess it is.

Friday, April 13, 2007

The joy of giving

The great charitable-giving boom we're in nowadays has caught the attention of neurological researchers. Several studies have concluded that the act of giving (either in money or in volunteerism) makes people feel good at a really primal level.

Logical questions include both why and how that would be the case. Taking the broad evolutionary view, some researchers have argued that altruistic behavior is a positive for natural selection at a group level as distinct from Darwinian individualism. But homo sapiens is the only species which practices altruism outside its own genetic relatives -- is that a cultural adaptation or does it have a long-term natural-selection payoff? Creationists have taken to arguing that widespread human charity cannot be explained in Darwinian terms and hence represents a flaw in the science that they hate so much. Researchers more interested in the scientific method are actively exploring several hypotheses on the issue.

On the second part (how exactly are we wired to enjoy being charitable?), some researchers have concluded that it stimulates the same part of our gray matter which drives our gut-level interest in things like food, drugs and sex. (The joy of giving, indeed...say sweetheart is that a charitable remainder trust in your pocket or are you just glad to see me?) This reminds me of a development director I once worked with who grumbled when another staffer referred to a particular individual-donor solicitation idea as "sexy"; turns out he was just accurately "following the donors"!

Monday, April 09, 2007

Donor cultivation conversation, part II

Albert Ruesga, proprietor of the excellent White Courtesy Telephone, posted a thoughtful response to Saturday's little rant here about donor-cultivation practices. (Today someone else has also left a comment which is specious, and anyway I don't debate with folks who aren't willing to put their names behind their ideas.) The subject seems worth some continuing examination as opposed to simply dueling comments.

Albert makes several good points, including that we should distinguish between opt-in and opt-out followup practices by organizations. Read his comment in full for more. I think though that our differing perspectives are more at a macro level.

It's probably worth noting that as a non-profit careerist I am reasonably well-versed in modern standards and practices of donor cultivation. At the Nature Conservancy in the late 1990s I had a stretch getting trained in it (attended some AFP conferences and trainings) and for a year I supervised a team of annual-fund staffers and major-gift officers. Then as executive director of a growing performing-arts organization I personally instituted the basics of professional donor management, under the expert guidance of a board vice-chair who had been an experienced successful director of development at a larger organization. I am certainly not as knowledgeable in that subject as Albert or his colleagues, but the point is simply that I do have hands-on familiarity with the theory and practice.

The sense I have today, which I did not have in 2002 or 1997, is that some core assumptions in the non-profit development field (reflected in that NonProfit Times essay) are rooted in a dated understanding of what donors know, want and expect of us. I'm quite sure that Albert is right that a majority of AFP members would agree with the article, and that is exactly my concern. It feels increasingly as if a rapid shift in donor tastes and donor behavior is underway right now and that donor-cultivation best practices are not keeping up.

For example: clearly anyone like me who regularly makes contributions to a variety of non-profits is interested in staying up to date on what those groups are doing. A decade or two ago the only practical way for that to happen was to receive periodic missives from those organizations, and any reasonable adult would accept continuing solicitation or cultivation as the overhead cost of thusly staying informed about the group's work. Today though, the cost in time and effort to seek that knowledge on our own is orders of magnitude lower, and we happily do that because we get to do it on our time and schedule. Put another way: two whole generations of American adults have grown up expecting a sort of control of their own time and information flow which is fundamentally different than was true for my peers or my parents.

Several other examples come to mind. Now of course I know that AFP conferences today are full of discussion of how to adapt donor-contact and -cultivation best practices to the online world; so are any number of well-written blogs, and so forth. The concern I have, or the button which that NonProfit Times columnist pushed I guess, is that discussing how to adapt the existing paradigm seems to really miss the forest for the trees as far as what charitably-minded Americans of today expect and will tolerate, and how they will respond.

Saturday, April 07, 2007

Are we going to drive donors crazy online, too?

NonProfit Times recently ran an article on how non-profits deal with online small donors. A columnist donated $15 each online to 62 different groups and then kept track of how they responded. The conclusion offered as obvious -- and echoed in this leading philanthropy blog -- is that non-profits should respond to online donations just as intensively as they are now expected to respond to check-writing donors.

aarrrg...I don't think I'm the only charitable donor for whom that idea inspires clenched teeth and a desire to reach into the monitor to smack somebody upside the head.

Literally everyone I know who regularly donates to non-profits absolutely loathes the sort of fawning, repetitive cultivation contact that development pros institute. Follow-up phone calls are simply intolerable (I remain outraged that non-profits were exempted from the "Do Not Call" legislation and list); in my household we follow an ironclad rule now that any non-profit to which we have donated never again receives anything if they ever call us. Friends and family members who know that I'm a lifer in the sector are constantly asking me why making a donation has to result in so much blankety-blank mail and phone calls and invitations to the next fundraiser and so forth. The news that bulk-postage rates for non-profits are about to go up gets a big cheer from here, in the hope that it might make direct mail just a little bit less attractive.

At every place I've worked, when these concerns are voiced the staff and board members think that what annoys people is the visible costs: how many trees were consumed to print that newsletter, etc. Hence they always think that online culivation activity is all to the good in terms of donor goodwill.

That's increasingly wrong in my experience. What makes more and more charitably-minded people nuts is that non-profits spend so much time and energy pestering people who have already donated! That is the thing my friends and family members always lament to me. That is what makes them roll their eyes or swear never to "make that mistake (of donating) again!"

So when NonProfit Times columnist tut-tuts about the fact that 34 of 62 organizations responded to an online donation with nothing but simple acknowledgement of receipt, my reaction is to ask if I can have the list of 34 so I can move them to the top of my family's charitable-giving list. And I am quite certain that my reaction is far more common now than the reverse, and is growing. What people who invest in non-profits with their wallets want is for the organizations to do what they do -- not for them to behave like timeshare-condo salespeople on the excuse that it's for a good cause.

Wednesday, April 04, 2007

Is public radio fading into irrelevance?

It feels broadly as if public radio in the U.S. is undergoing some degree of paradigm shift. Whether it's ultimately for better or worse is hard to gauge, but I'm now wondering how much it really matters.

Chicago is ground zero for this issue because Chicago Public Radio recently pulled the plug on the music half of its longtime split personality. They reached that step in two stages in a fairly bumbling way, but ultimately arrived at a mission-driven decision.

As a longtime jazz fan and musician who'd listened to WBEZ's jazz and blues regularly for decades, my initial reaction to that decision was instinctively unhappy. But...when I voiced that gripe to a foundation colleague, she responded by pointing out that a large fraction of the station's music programming ranged from inept to overtly annoying. I had to admit the truth of that (my son still calls the most-annoying of the station's jazz DJs "Mumbly Man", and I am actually convinced that public-radio DJs in general deserve a piece of the blame for how many Americans today see jazz as dull and pedantic).

My colleague then praised WBEZ's new all-current-affairs-talk format thusly: "I sometimes have insomnia, and at 3 a.m. listening to music just wakes me up further. But if I tune in WBEZ now, they have me nodding back off in no time." Well that may not be what they want to put in the annual fund-drive letter. It's actually more positive than anything I would have said, though.

It may be that others besides me are finding NPR and its local imitators to be less than compelling, too. I notice that some folks are now developing a direct competitor for NPR's "Morning Edition". National Public Radio itself has noticed that its current listenership is overwhelmingly gray-haired and hence is launching "NPR-Zack: A New Space for Younger Listeners". (Cringe-inducing quote: "We thought Zack is exactly the kind of name NPR staffers would give their male children.")

Anyway in the era of podcasting and iPods, how much does any of this really matter anymore? I can't help wondering if public radio is just another piece of the old-fashioned one-to-many media that only still stands because not everybody has yet gotten used to the new and better ways to access things like discussion about current events, and for that matter jazz and blues. Are current-affairs discussions as routinely witless as NPR's still listened to at all for any reason other than simple habit? Certainly no one will ever miss those cloying, obnoxious pledge drives either.

Sunday, April 01, 2007

Baby steps towards a stronger sector

I'm most of the way through Joel Fleischman's book on foundations, and it's clear that he and Trent Stamp are preachers in the same crusade. Their emphasis is different in some ways and they certainly don't agree on tactics, but in broad strokes they have the same message: that the nongovernmental "civic sector" is a marvelous invention of which America has every right to be proud, and that if the sector doesn't do some serious growing up it will deservedly end up in history's dustbin. (As you can probably tell, I'm with them on all points.)

Independent Sector, which Fleischman cites as an example of promising new seriousness in the non-profit sector about things like transparency and mature governance practices, has been mostly snorted at by Stamp. He's seen the group's work on a set of new "Principles for Effective Practice" as being mostly window-dressing: too weak, and unlikely to ever change the behavior of the really bad non-profits.

I haven't agreed with him on that -- I think the voluntary principles being developed are an important step and would, if widely publicized and adopted by some sector heavyweights, have meaningful influence. Certainly they would be ignored by really weak and flatly-fraudulent non-profits, but that minority is not my primary concern. Well-meaning but poorly-run groups will be increasingly punished by the marketplace of better-informed contributors; meanwhile state attorneys general and the feds are waking up to the need for more serious pursuit of actual fraud and shady fundraising practices.

I'm more concerned with the great mass of well-intended non-profits that are organized and led no better than was true on average 20 or 40 years ago, which is simply not good enough. If "they mean well" is the only standard that this sector can ever meet then the (false, in my view) idea that "a just society would not need charity" might as well be true. In that case, why have this sector at all?

Stamp has just grudgingly come around to endorsing Independent Sector's proposal, for the fairly silly reason that he doesn't like being on the same list with others who have opposed it. Well, whatever -- what matters at this stage is not so much the specifics of this specific proposal, but the overall awakening which it hopefully represents and can help shape.