We should allow failing arts organizations to die.

A debate that began (for me) nine months ago, finally gets real at #aftacon.

The following is the text from a debate I participated in at the Americans for the Arts annual conference in Nashville.

Agree or disagree: we should let arts organizations that don’t adapt die.

Arts organizations are already dying. In Detroit, in New York City, in the UK. From operas to art galleries. This is no longer an urban versus rural debate. A nonprofit versus for profit debate. A “one discipline is dying” but “others are inexplicably thriving” debate.

This is a simple acknowledgement that the industry represented by the people and organizations in this room, is in decline. And I think that not only should we allow it, we should encourage it.

Tracked by their 990s, over the past 20 years, 40% of arts organizations have perished. But they are being replaced even faster. For every arts org that survived between 1990 — 2010, 2.6 more were born (NEA Research Art Works).

And I don’t have the stats to support this, but for every hour of “traditional” nonprofit arts that a consumer experiences this year, they’ll spend 20 or 30 times times that experiencing “nontraditional” arts and culture. Those experiences that reveal or question our humanity. That enable us to see the world and each other in a new light. Those experiences that delight our mind and our senses. That teach us about other cultures and expand our capacity for imagination. Because for me, those “nontraditional” experiences include going to a folk music concert, funding a poetry book on Kickstarter, appreciating the aesthetic design of an especially beautiful video game, the art of a pulling a great shot of espresso, and the craft of a great pair of raw denim jeans. All things that I’ve done these past 3 days in Nashville. And none of those experience required an arts organization to support them.

So I don’t buy the idea that if our arts organizations die, so will our ability to access art. We’ve seen for more than 2 millennia that art arises from a fundamental human need to both create, and consume, transformative experiences. That will continue for another 2 millennia regardless of our organizational structures or legal tax status.

So if we’re not saving arts organizations for the art (because it’s already more likely to get made in venues outside of these traditional structure), and we’re not saving arts organizations for the audiences (because they’re already consuming more, and in many cases, subjectively better, art thru these other sectors), we must be saving arts organizations for the artists? Only we already know that the vast majority of artists don’t earn their living exclusively, or even primarily, through the wages from an arts organization. Instead, artists are fluidly crossing between the commercial and nonprofit arts, between being a choreographer and a teacher, between working for someone else and finding their own new revenue streams.

We are left saving arts organizations for the administrators who run them.

Which isn’t altogether a bad reason. Creating and sustaining jobs is important to our economy. And it’s not out of the question to ask the government to subsidize the wages of a given sector. We do it for farmers and for teachers and for other public sectors, because they’re all providing a public good, just like the arts do. But if our goal in saving the arts organizations is because they’re providing financially & professionally rewarding careers for our administrators, then I think many of you would believe we are failing.

So it’s hopeless, right. Let’s just kill them all. What’s the point in gunning the motor if we have no more gas left? But what if we framed the question in a different way.

Otis James is a Nashville artisan craftsman in Marathon Village.

Instead of, “Do we allow failing organizations to die?” what if we were asking,
“How do we save ONLY those organizations who are succeeding?”

How do we protect those arts organizations who are brilliantly serving their community, and opening up space for their artists to thrive, and rewarding their administrators for hard work and substantive results? If we were focused on saving the best among us, we’d need to let go of some, maybe even many, of the rest. A productive crop can’t grow when it’s being choked off by weeds. The healthy can’t stay that way surrounded by a crowd of the sick. It’s hard to outrun the zombies if you have to carry the weak.

And that’s what we’re doing when we allow failing arts organizations to stay on life support, those who don’t have the motivation or capacity to find a radical cure. We’re choking off funding for the productive. We’re infecting the healthy with the attitudes and market perceptions of the sick. We’re limiting the capacity of the strong, by focusing our collective attention on the weak.

There’s no doubt this will be a difficult transition. Fortunately, we’ve seen other industries whether this storm—from journalism to record companies to horse and buggies. And it resulted in no lack of sources for high quality press, music, or transportation options.

So let’s pull the plug on perennially failing arts organizations. Failing because they aren’t meeting the needs of their community. Failing because they’re unable to meet the financial obligations of adequately compensating their artists and their staff. Failing because the art they’re producing or preserving is no longer relevant to their audience. Like a forest after a fire, regrowth is not just possible, it will surprise us with its innovation, its beauty, and its resourcefulness.

Who is we? Who decides?
Do we assemble death panels for the arts?
To extend the metaphor: should “we” allow organizations to just die a natural death, or should we play a more proactive role to create a healthy “end of life” transition for organizations whose time has come?

I have to admit I don’t have one solution, but I do see 3 interesting, and I think feasible, possibilities: putting this decision in the hands of: institutions, individuals, or the IRS. I’ll work my way up to controversy here. I don’t believe the arts organizations themselves can be trusted to do it on their own. Because they haven’t yet. People in power have an incentive to keep themselves in power, regardless of how it affects the rest of the sector, or those they control.

Institutions (whether corporate, foundation, or government) are a small enough group of constituents, with reasonably similar interests, that they could make the decision about who is failing, and then decide to discontinue their funding. We trust these institutions to make decisions about who to fund right now. This is asking them to make a different, more broad calculation about which factors to consider. Impact-driven giving is on the rise, and we need to get better at supporting experimentation and micro failures, while simultaneously eliminating support for structural failures to adapt. See the Urban Institute’s Outcome Indicators, or the Case Foundation’s work on Risk & Failure for more.

Individuals could make this decision, though they are so diverse in their makeup, and their intentions, that it’s almost certainly the case that we’d need an objective rating mechanism, as well as a pretty extensive advocacy campaign to encourage people to actually use it. Already there exists rating systems like Charity Navigator, and start ups like GiveWell and LikeMinded, and investigative venues like TinySpark that are trying to evaluate nonprofits on more than just their financial capacity, but instead the “on the ground” impact that they’re having.

I’m also really curious about what an “arts stock market” would look like. Economists believe that all knowledge about a given company, its current and future prospects, are incorporated into the price of its stock, so it’s a useful way to compare one company to another, as well as a signal to the industry about which companies are healthy or not. And everyone is free to buy penny stocks, that will likely never amount to anything valuable. But they go into that purchase (read: donation) with that perspective.

Finally, we could leave this decision up to the government. Already, the IRS will take away 501c3 status if you don’t file your 990 for 3 years. But it’s not impossible to imagine they’d start evaluating the content included in that 990. That they could require a minimum threshold of financial viability and/or “cost per outcome”, in order to continue receiving that tax status. Alternately, they could reward efficiency, like with the “Pay for Success” movement being explored by the Irvine Foundation and others. It will set a dangerous precedent for government intervention in the arts, people will no doubt manipulate the numbers, and learn to “pass the test” rather than learning how to truly adapt. But the government regulates plenty of other sectors—finance, and energy, and healthcare. Maybe we need more big brother.

Who are we to choose?

We choose already. We need funders to make better choices.

How would we evaluate failure?

We need clear goals & impact metrics, which will make everyone stronger.

Won’t they die on their own?

They haven’t (quickly enough) yet. Until they do, and then it’s a shock to the community and the ecosystem. Better to plan for death. Look at what’s happening in San Jose.

Who’s already doing this?

The Corporation for Public Broadcasting has a strategic merger fund to incentivize and support broadcasters who have overlapping markets. San Francisco Foundation has written a great report on partnerships and collaborations between nonprofit arts organizations.

How should funders respond to failing organizations—and what different strategies might be employed for the slow failure versus the abrupt crisis failure?

It’s true. Even great organizations, with strong intellectual property, great products, can get lazy, can overestimate their treasured place in the ecosystem, can let a hungry start up find better & cheaper ways of meeting a need in the market. Steve Jobs could have let Apple fail, instead of returning and remaking it into a great organization.

When funders, and they are the most likely at this time to be the ones aware of the issue, begin to see chinks in the armor of a successful arts organization, that’s the time to step in. To do so, we need better data. On inputs & outputs. Are they trying to change & failing? Are they failing because there is no motivation to change? Has so much change happened around them that they can’t respond quickly enough? There are lots of interventions if any of these are the case.

From Lean Impact to Design Thinking, there are no end of ways to inspire change in organizations that have yet to be wide spread in the arts field, but that requires a clear sense of goals, and regular monitoring of impact.

It is likely that your mission statement is not clear enough.
That your strategic plan is not strategic.
That your annual reports are not actually evaluating your progress against goals.

So: ideally you step in at the early stages. But we need better trained/more experienced program officers, and better data on organizational outcomes—not just what they’re doing, but how it’s impacted their organization, and the community.

For those organizations that are on the brink of failure, we should consider hiring turnaround strategists to evaluate them. These people don’t exist in the arts (that I know of). But we need something similar to bankruptcy court. To declare impact bankruptcy instead of financial bankruptcy, and allow the courts of public perception to take stock of what we have to offer our community, and whether we are “at fault” for this failure, to determine whether it’s appropriate to try to save this organization or dismantle it for parts that are redistributed to other successful organizations. Whether this organization has the capacity and will to change their product, or their market, or their strategic approach.

These strategists would be responsible for identifying and implementing radical change. That might be a new Executive Director, a new Board Chair, or someone else in senior leadership, but a failure of the org is often the failure of the organization’s leader. That person should be held accountable.

Delgado Guitars is a luthier business passed down three generations, currently residing in Marathon Village.

How will allowing arts organizations to die affect the arts landscape/ecosystem?

I’ll start with your most likely fears.

We’ll lose the historically valuable.

We have never had easier/cheaper methods of preservation, without institutionalization. We lost the Library of Alexandria, but we relearned euclidean geometry.

We’ll lose the art made for communities of color.

We haven’t seen this in the music industry. Consumers have never more options for niche music around the global.

We’ll lose the most expensive art to produce.

Even with the decline of print media, we haven’t seen this in journalism at large. VICE TV is making some of the most interesting and valuable stories; Matter is doing the same with long form digital.

Producers will flee to the popular/contemporary.

Even with the decline of broadcast TV, we haven’t seen this in Netflix. House of Cards and Orange is the New Black were produced in response to the glut of reality TV.

Closure will negatively impact collaborators.

Yes, sudden disruptions are undoubtedly bad for the ecosystem, but slow absorption of collaborators is great. Find opportunities early and often to scale impact, while achieving economies of scale.

There’s a lot of potential upside coming out of a bent towards allowing failing arts organizations to die. The same pie with fewer slices means each is bigger for those successful organizations. We might even be able to expand the pie, if funders see a positive impact of death by design. The average quality will increase of those who survive, so the perception of value increases, thereby increasing consumers willingness to pay. The fewer options there are, willingness to pay continues to increase. Culling the weak from the herd leaves everyone else stronger.

All this said, there are no industries composed solely of adaptable and successful organizations. We’re always going to need to learn to deal with failure.

Are there arts organizations that should be deemed as too big to fail? How should these organizations be handled if they are sinking into irrelevance?

Banks that were Too Big to Fail were identified as such because they served such a structural component to the global financial system, that a failure of one, would lead to a failure of all, because they were essentially funding each other, as well as the government. That they would create a domino effect, and not just because they failed, but because they’d make people *afraid* of even more failure. It’s hard to imagine an arts org that is supporting so many other arts organizations that if it failed, so would they. Possibly a foundation, or a fiscal sponsor, maybe an anchor organization in a small community.

But look at Intiman’s closing in Seattle, or San Jose Rep, or Detroit Art Museum. Other arts organizations and artists are stepping in to fill the gaps. In a market economy, if artists have something willing to give, they’ll open up avenues to create art. If audiences want to consume art, they will find it, and support it.

We tend to assume in the arts that fewer = bad, that big = bad. or that just a few large organizations would be unable to serve the entire country. But that’s not the case in other nonprofit sectors. Planned Parenthood is the largest provider of reproductive health care services. The National Park Service manages over a million square miles (more than a quarter) of land in the US. The Red Cross spends more than $3.3 Billion each year. They have all reached economies of scale, to be able to invest in R&D, to take risks and fail, to collect valuable data across time and populations, to serve people in every community in the US with a diverse area of necessary services. All of them have local affiliates who do work “on the ground,” supported by the back office positions back at headquarters.

These organizations are too big to fail.

We don’t have anything close to that in the arts. Maybe Zoos? They have what you might call nontransferable resources. It’s hard to move the elephants to a new location.

So what to do with large arts organizations who seem to be failing? support their death. Incentivize them to close down. Not dissimilar from the online shoe company Zappos. They offer new hires a $5k check to walk out the door at the end of their orientation & training period. Offer arts organizations who realize they’re failing a way out.

Barista Parlor is an East Nashville hangout for local artists and craftspeople.

Closing Statements.

I learned recently that hospice care in this country largely rose out of the AIDS crisis. When young (formerly) healthy people were suddenly facing the ends of their life, we didn’t know how to cure them, and we needed a system to help them die more gracefully. This required an entire field of professionals to work together to figure out how to address the issue, even as we were also trying to find a cure. The hospice movement was built by home health care workers, and pharmaceutical companies, and medical device manufacturers, and insurance companies, and doctors and patients.

To make this same change movement happen in the arts, we will need a field of professionals. There is no silver bullet. We have to decide as a field, that

A) failure is happening, and it is destructive to the field

B) our efforts to turn around failing arts organizations thus far, in more cases than not, failed. At least, failed at turning them into successful organizations. We’ve merely kept them on life support.

C) so we should focus our efforts only on saving the best, instead of trying to pull up the failures to mediocrity or stability.

It will take the collective action of funders and consumers and artists and administrators to do make this switch in our approach to the health of the field. And it’s likely that we will need some kind of formal intervention, if we wait for the change to “happen naturally,” we put the entire field at risk.

This isn’t to say we should give up on a cure,
just because we also have to plan for end of life.

There are arts organizations who are succeeding brilliantly at serving their communities, their artists, their administrators, and the art form itself. We need to learn from them. But we need to hold accountable the artists, and administrators who consistently contribute to the failure of their organizations. We should not only allow those failing organizations to die, we should encourage and support their graceful exit.

Fort Houston is a Nashville co-working space for screenprinters, wood workers, motorcycle craftsmen, skateboard shop, and darkroom.

Follow up question: Which of your debate opponent’s points/arguments did you find most compelling?

I’m still not sure how we define failure. An arts organization that is failing its community, may not be failing its artists. An arts organization who is failing financially, may be a vital component of its community.

I’m not particularly interested in giving more power to institutional funders to make the decision about who’s failing. I’d love it to be a decision made by the community, right now there’s just no good way for them to collectively and incontrovertibly act.

Identifying the fulcrum point between productive risk taking, and structural failure, is difficult, if not impossible. Every organization goes through transitional spots. Failure is good, we learn from failure. Until we become so mired in it, that we can’t rise above it.

In no way do I want to instill a culture of risk/failure aversion in our industry. We need arts organizations to take bigger risks, so they can earn bigger rewards. Too often, we dip our toes into the water when instead we need to be leaping off of the burning bridge.

These issues are important to our field, and I’m so glad to have the opportunity for this debate, but it’s a problem that will never be solved through talking along. We need to start taking action. The bigger questions, the more important decisions, are around how to identify and support failing organizations, not whether we should. But for more resources, see this Pinterest board, and follow the conversation on Twitter.