Is Sustainability Sustainable?

By the principal consultants of WolfBrown with Joanna Woronkowicz

Historically, sustaining an arts organization meant generating enough earned and contributed revenue to fund current operations. With so much continued change and turmoil in the arts industry, WolfBrown set out to reconsider what sustainability means in 2011.

Why are some arts groups able to persevere – and even thrive – when they are chronically “under-capitalized” and perpetually on the brink of extinction? On the other hand, why are well-established, large institutions with sizable endowments filing for bankruptcy? What, besides strong finances, does sustainability require? Is it possible that financial security actually deters sustainability?

Reflecting back on several decades of work with funders and arts organizations, we propose a more nuanced and multi-dimensional view of sustainability – one that encompasses and transcends the current dialogue on capitalization, adaptive capacity and other elements of good management. In our view, sustainability requires a balancing act with three interdependent but sometimes competing priorities:

• Community Relevance
• Artistic Vibrancy
• Capitalization

Together, these elements give organizations the ability to excel in a permanent state of flux, uncertainty and creative tension.

Is Sustainability an Illusion?

On December 16th, 2002, the San Jose Symphony – having played to audiences for over 120 years – declared bankruptcy. Its assets were sold and an institution that had once been the pride of a growing city suddenly ceased to exist. Many were shocked; how could an arts organization with such a long history and sizeable endowment fail? Throughout the late 1990s, the orchestra’s ticket sales had increased by fifty percent and government support remained stable. In the first fiscal year of the new millennium, however, ticket sales declined twelve percent. More significantly, private support for the orchestra decreased by half over a span of four years. While revenues decreased, expenses increased. At the opening of its 2002 season, the orchestra found itself in dire straits. Reluctantly, a weary board of directors, unable to reorganize and remain solvent, declared Chapter 7 bankruptcy.

Contrast this story to that of another nonprofit arts organization, the Center for Puppetry Arts in Atlanta, which opened 30 years ago when Kermit the Frog and his creator, the late Jim Henson, cut the ceremonial ribbon. Now a $3.5 million organization, the Center’s live performances, exhibits and distance learning programs generate roughly half a million visits annually. Demand for the Center’s programs has remained stable and expenses have been carefully controlled, producing consistent operating results. In response to a major donation to the Center from Jim Henson’s family of puppets and other objects from their personal collection, a capital campaign is underway to renovate and expand the Center’s facilities, including a commitment to raise additional endowment to cover increased operating expenses. While other organizations in Atlanta have struggled to raise sufficient capital for new facilities, the Center for Puppetry Arts sees great community demand for its expansion, which will enable it to double the number of unique visitors and increase operating revenues by seventy-five percent.

Seemingly sustainable in a financial sense, the San Jose Symphony was not able to rebound after a few difficult years. With its structural deficit exposed, the orchestra’s value proposition to San Jose’s diverse community was not sufficient to generate the level of support required to reorganize, nor was it able to rescale its operations to align with demand. In contrast, the Center for Puppetry Arts – consistently operating on shoestring budgets – continues to grow in relevance to its community and to be recognized for its managerial and artistic excellence by national as well as local funders.

Towards a New Understanding of Sustainability

Side-by-side, these two short case studies illustrate why a new model of sustainability is required. Accumulation of capital alone is not sufficient to achieve sustainability and may in fact lead to a false sense of security. Nor is artistic excellence sufficient. Rather, three elements must work together to achieve a level of stability or “equilibrium” known as sustainability:

• Community Relevance
• Artistic Vibrancy
• Capitalization

The First Element

---

Community Relevance

Community relevance should be the first and foremost element of sustainability. It draws on a generosity of spirit and an authentic desire to serve one’s community, allowing for a range of partnerships both inside and outside of the arts. Achieving relevance in the eyes of the community enables an arts organization to demonstrate its public value regularly. This goes far beyond conventional notions of education and outreach work or convenient strategies such as reduced-price tickets. In order to be relevant, an arts organization must first develop a diagnostic capacity to understand what its community needs and then refract that knowledge through its artistic vision and core capacities. This is not to ask the community what it wants, but to inform programming decisions with a sense of community need.

An indicator of community relevance is an organization’s ability to achieve “collateral impact” through partnerships. In doing so, it demonstrates the essential role it plays in community development and civic dialogue. When times get tough, an arts group with high community relevance is seen as a community asset rather than an isolated, self-interested nonprofit with a financial problem.

Take for example, Big Thought, the Dallas-based nonprofit devoted to creative learning for children and youth. Since its founding in 1987, Big Thought’s investments in financial, human and cultural capital have slowly paid off, garnering the attention of community leaders. Now, through its partnerships with numerous cultural programs and community service providers such as the Dallas County Juvenile Department, the Dallas Public Library, the city’s Department of Cultural Affairs and the Dallas Independent School District, Big Thought has reached an impressive scale of impact. While its programs and partners are not immune to shifting economic and political conditions, Big Thought is deeply embedded in the community. It provides an instructive example of the power of community relevance as a source of strength during challenging times.

Often, there is a natural tension between the needs of the community, which can be endless, and an organization’s artistic vision and capacity. Balancing these two value systems is a constant give and take. Community relevance takes the form of:

• A philosophy of community engagement that transcends departments and programs;
• A diagnostic capacity through which information about the community is gathered and considered;
• A board-level accountability process that balances community outcomes with artistic aspirations;
• Programming collaborations and partnerships that extend impact and position the organization as a player in the larger community dialogue;
• Marketing partnerships that build awareness and extend the reach of programs to a range of audiences; and
• Programs that take place in venues and settings that engage the community.

Arts organizations that embed themselves in a larger dialogue about the challenges, hopes and aspirations of their community will be seen as indispensable. Those who do not will grow increasingly irrelevant and unsustainable.

Read the full article here