Note: We were asked not to share any of Rocco Landesman's commentary so I have not included the notes I took from that part of the conference - though to be honest you aren't missing anything. He seems to be kept on a rather tight leash these days, which from a political standpoint I can understand given everything that is happening in DC right now, Healthcare and Afghanistan "need" to be dominating the news cycle, not another NEA 4. But from a constitutional standpoint I find it rather problematic given the first amendment and all.
Here's a little outline so you can scroll past things you are maybe not so interested in
Pre-Conference: Strategic Financial Planning with NFF
Day 1: Unlearning 101 with Jack Uldrich & a breakout session (good skimming)
Day 1: Value, communicating value and some stats on non-profits in general with Independent Sector
Day 2: Board management with Board Source
PreConference: definitely look at the slides in the PDF handouts these notes are more like footnotes to those slides.TCG Pre-Conference 11/6/09
Strategic Financial Planning
Assessing and Addressing Risk
Non-Profit Finance Fund
twitter search: #fallforum
triangle = ecosystem of a non-profit
1 top = mission & program
2 bottom left = capacity - staff, space, and processes
3 bottom right = capital - resources and assets
the three pull each other and shift depending on what is happening
best is to anticipate changes and try to keep the triangle balanced
NFF - does financial consulting
lessons from history & experiences from the field
assessing risk - capital structure, exposure and tolerance
addressing risk - defining what's core, etc…
slides page 4
2008-09 recession is steeper and deeper than the other 4 that have happened in the last 30 years. According to the industrial production Index.
Recovery lag on deficits that happen during recessions can be as long as 3 years, and still does not necessarily return to pre-recession levels.
Funders anticipate that their giving levels in 2010 and 2011 will be taking the bigger hit, than 08 & 09.
slides page 6
often told to "do more with less"
funding cuts - but then anticipate increases in demand, how to serve an increase in demand, when we have less financial support to meet the costs of serving more.
slides page 7
Changes we've been making because of the last 18 months.
- look at how we lay out the season, order the programming so that build times and other things are organized to impact the budgets less (less overtime etc).
- set up three board committees - earned income, contributed income, expenses - looking at every aspect of the theater, but really predominantly reduce expenses, staff reduction, hiring freeze, did not make cuts to programming.
- look at what you charge for ticket prices - raising and lowering them
most organizations are looking at two possible scenarios
revenue staying flat
revenue being cut
a couple are looking at revenue growing
response depends on two factors:
assets and what you do
tolerance for risk
being able to access risk is about having data:
page 8 slide 2
need to have data and manage it
are you using the financial data to assess your position and make decisions?
net assets are the equity of our sector => surpluses on the income statement build net assets, deficits deplete them.
(note in nonprofit world some net assets are restricted, some are unrestricted…)
Board designated reserves: cash reserves or other....
Temporarily Restricted Assets: when they are released will they be used for CORE programs? or are the restricted assets for something you wouldn't normally do? a program you might be cutting etc?
ideal is to have at least 6 months of liquidity.
3 ways of calculating liquidity
months of cash
**months of liquid net assets
they will likely show different results, but the third is the one NNF likes to use because it takes into account restricted $ and assets that cannot easily be converted to cash.
- even if your contributed income has been increasing:
discount your ability to rely on fundraising going forward; don't rely on what you were able to achieve in the last two years either for individual or institutional giving.
- plan your ability to respond to risk
- focus on what you do well
What are the non-negotiables in your budget?
- what must you do?
- what should you do?
- what do you want to do?
if you have the option to postpone capital projects, do.
- recommend using cash flow projects with Board on a monthly basis def with finance committee, but also with entire board if institution is in difficult position.
- don't just give them numbers, give them narrative as well, verbal descriptions about what has happened/ what is going on - what came in what didn't come in and why.. etc…
**Program Economics Analysis
are there savings & efficiencies we could be creating?
what should our fundraising priorities be? what are the hardest programs to fund?
if you can identify subsidy for a deficit program and it is mission critical, then there is no reason not to run it; if there is no subsidy, then you need to reconsider it.
for grant proposals include "indirect" program costs, but for the program economics don't, measure only the direct costs to those particular projects. (AD is indirect, for example)
on the income side only include income that would go away if that program goes away.
- education programs take huge amounts of space and human time… how do you account for those in program profitability, when they might look balanced on cash…
Special Event - fundraisers vs. friendraisers
what are they, are they both, are they one or the other?
leave out inkind, though it is good to understand inkind costs
what are the impacts programatically on staff time and space time - add rows that speak to intangible costs.
weeks in space
% of time devoted to each program
marketing - make it a column itself
put it as a column or as a row depending on how you want to look at it…
add a column with proposed additions/subtractions if one expects major changes in future…
avoid over diversification in fundraising.
orgs that have two core revenue streams are more successful than ones that have more streams.
for example, it is important to do an analysis as you are applying for grants to know whether it will really be worth it in the end. ditto in all fundraising activities.
sharing costs, sharing office, offering second stage to smaller groups as "residents", offering scene shop to other theaters, joint marketing efforts, etc.
Day 1 of the Conference
Jack Uldrich - Unlearning 101 - no slides for this one
Stay open to the 800 pound guerilla walking through the middle of the basketball game, even if you are tasked with counting the number of passes happening in the basketball game.
- think about who you could be partnering with - get outside the normal partners, reach out to other corps, tech groups etc
- reconsider your assumptions about - audiences, partners, competitors, business models, traditions, and employees
- visualize the future: social media, augmented reality, virtual reality, nanomaterials, robotics
- challenge your assumptions, question the things you think you know
- what would you "never" do and then think about the implications of doing what you would "never" do
- interrogate traditions
- see things in fundamentally different ways - flip all the problems on their head, instead of asking "how can we make this faster", ask "how do we make the slowness valuable".
- who are your non-customers, how can you get them to come to a show
- constantly ask new questions
- challenge your intuition
- sometimes there isn't a right answer, things are ambiguous or there are in fact two right answers…
- small changes can lead to radically different outcomes
- don't miss the obvious that is right in front of you
- beer & diapers - sometimes two disparate things might seem counter intuitive at the face of it, but are perfect partners
- speak with non-customers, corporate partners, training programs, stage craft, problem solvers, and community leaders
- Dan Pink - book: "a whole new mind"
- be wary of experts
Breakout session 1
5 questions from Uldirch
1. How can you appeal to non-customers?
2. Where might the experts be wrong?
3. What trends (technological, demographic, social, political) might you be missing?
4. What basic assumptions may no longer be relevant or should at least be challenged?
5. Turn a big problem on its head.
answers from the group
- attract people who are affiliated with other groups to a event at which there might be a point of commonality
- develop material for the stage that has its own constituency
- provide non-customers with a forum for them to do what they want to do (rent to non theater people)
- identify who our customers are, develop the constituencies that they have beyond the theater
- unsettling audience expectations, and letting them know they are in for something different/new
- listen to the reasons why our audiences are coming into our building, it may have little to do with the actual art, and more to do with their loyalty to the venue or with a commitment to something else - ask them what value do you actually hold to audiences? (1. they wanted to be moved emotionally, transformative experience, 2. because of social obligations/opportunities)
- turn your audience members into participants
- create a happy hour before the show, open the lobby w/ a bar at 630, friends can come whether they are seeing the show or not, and then they can see the show at 8 or they can take off.
- rethink programming schedule - not just 8PM…. when we produce whatever we produce
- what are the reasons people don't come: what are the obstacles - what are the things we hold sacred, what are things they hold sacred - can you change things you hold sacred when they are obstacles to them? Can you be flexible on things?
- what does it mean to "interact"? create social time before and after, theater is supposed to be a social event - just sitting in the dark together is not social, and not interactive.
- create a "sky box" where people can watch the show either from a TV or from behind glass and can be together, talk throughout do whatever they want to in that area.
- fuck the play. we think it is really important to talk about the play, the audience isn't there half the time to see the play
- create events around the shows, that are social and have nothing to do with theater.
- building long-term relationships with these new audiences, philosophical pursuit rather than a marketing pursuit
- long-term audience projections aren't just about youth audiences, but are also about what are the people in your audiences right now going to want and be thinking about 10 - 15 years from now
- pace at which we do things, do things slowly do it retail - not wholesale - if you have an idea don't give up if it isn't perfect the first time, do it right, do it slowly, do it block-by-block and make it stick
- don't ignore the seniors / the boomer generation
- is professionalism and quality really important to the audience? or is there something else more valuable?
- create events around first rehearsal, around first reading, around first design conversations - give those firsts and audience
- teach audiences that "theater can be entertaining"
- where do we have the dialog about how the artform is changing?
- change the website to be 50% broadcast/sales and 50% audience reactions to shows (particularly in the theater, where everyone thinks they are an expert and can criticize and want to criticize it)
- make the space accessible, help them get comfortable with the facility/institution - even before they get to know the art… where do you park? where do you eat? where are the bathrooms? etc etc…
- demographics studies, take samples of the audience, don't assume you know who your audience is
- how do we afford to make the changes, to be taking up the new social media trends, or new trends in general?
- is the business model rational/do-able going into the future?
- variable, dynamic & demand pricing
- don't forget the boomers - esp if you have been around for many years - you were the theater of their youth, how can you keep them/recapture them without making it a "retrospective", but a recapture of the experience that brought them in the first place.
- biggest problems = staff burn out, understaffing - how do you create an exilherated staff? are there over-staffed areas?
- act less like a business; encourage research, experimentation and play
- get people who are on the fringe on your Board - build diversity there, radical exclusion - "the periphary is the new center"
Failure - leads to success - Are you creating a culture where it is safe to have failures?
Play into the Active Life Style
There was a panel discussion - I have to admit I was completely out to lunch for it. Spent my time reading tweets and looking at email.
Breakout Session 2
Bill Wright: Independent Sector
- (also see the couple of slides that went with this)
as governments seek out new revenue sources, they are turning to the 501c3s to see if there are ways of getting money out of them.
- taxing ticket sales?
- denying tax-exempt status for reasons incl: because you are not giving your services away for free
- asking whether or not you are serving the "poor" or the wealthy elite
- arts groups are not "real" charities, nonprofits should "help the needy" or fill gaps in government services
How do we communicate the value of the non-profit sector?
- find an adaptable message framework
- goal: ensure that key decision makers support the nonprofit community in its work to improve peoples lives and benefit communities across the country and around the world
target audience: a narrow one of policy makers, media and other influentials
approach: research based message frame work that could be adapted for diverse causes and be applicable in diverse situations to help intensify support for the nonprofit community
see Value Traits for non profits handout.
most important traits to "audience" are: commitment, caring, accountability, effectiveness, efficiency, selflessness, and results-orientation - these are the traits you want to play up in communications with stakeholders.
Q? some of these are measurable, some are harder to measure - how do you deal with that?
no answer for that.
I'd say look at David Throsby's book. Economics & Culture.
but the real question I think is: HOW CAN WE AFFORD TO DO ALL THE DATA COLLECTION WE NEED TO DO?????? especially when there are so few operating grants.
I asked a similar question of Uldrich too on Twitter and he recommended I speak to Geoff Jue who knows something about something happening at IBM around this... I am going to be tracking him down.
keys to effective communications
illustrate the key values: unselfish, efficient, effective, results oriented, accountable
tone: elevated, high-minded language fails with all audiences, mix facts with emotional statements be specific and speak in plain english - talk realistically about what you do
importance of all three sector: do not denigrate government or business in your messaging - gov & business are trying to help people too.
offer collaboration and solutions, not just complaints
move from inputs to outcomes: stories can demonstrate results, talk about the people who come into contact with you and how they benefit from what you do,
"People who attend the performing arts vote more, volunteer more, and exercise more" - Dana Gioya (sp?)
TCG Conference Day 2
good slides for this one.. in the handout packet I linked to up above.
What is the tone of the Board Room?
- More relaxed and positive because we made cuts and have more modest ambitions for this year.
- Boards need to be major fundraisers for the organization, increasing the organization's profile, acting as ambassadors,
Board's primary responsibilities
- Board should be evaluating leadership each year at the least.
- What is the job description of the exec position - the exec has opportunity to express how they felt they met those items, and the board members have the opportunity to express whether they felt the exec met those conditions, they collect the responses put it together and then discuss it all.
- important to determine at the beginning of the year what are the expectations for that person in the coming year.
- full board should be engaged in the process and part of the annual cycle
Be a Mission Guardian
1. recommit to the organization's mission
2. ensure all important and difficult decisions flow from the mission
- put mission statement on all Board agendas so it is always present when making decisions.
- organizations that keep their mission narrow and focused are better able to show their value in their community - do not expand the mission or activities
- have audience member, funder, artist attend a board meeting and talk about why the organization is important to them, reminds the board why they joined
- what do you do to celebrate successes?
Work more closely with your Managing and Artistic Directors
- enahance the constructive partnership with the chief execs
- recognize that the effectiveness of the board and chief exec are interdependent
- create a climate of openness and transparency
- work with the chief exec to keep staff appraised of developments
- Chair and Chief Exec should speak once per week
- have "executive session" at each board meeting: a practice of the board where the board meets in closed session, not part of the minutes with only the chief execs (can also have a second one without them)
- are the board meetings dialogs or are they just staff broadcasting to board
- ask execs what is keeping you awake at night?
Q: what three things can you and your fellow board members do now to support the chief execs during these challenging times?
- go with producing artistic director to one-on-one meetings with each board member
- board members should read the written reports
- do a "consent agenda" that board members need to read and sign off on before the meeting
- always start the meeting with the AD's report
- once per week a Board newsletter (use constant contact to do that, and use the tracking information to see who is reading the newsletter and the materials and what articles they are reading.)
- ask the Board what type of information do you WANT to be receiving?
- try to have Board meetings on the stages
Get a realistic picture of your organization
- assess cash availability if your revenue is tied to makrt fluctuations
- make sure that your cahs, investments or reserves are parked some place safe and are getting the best possible return
- check to see if you have a diversified funding stream, and if not, develop a plan to reasonable diversity
- send monthly financial statements to board members
- be clear about what is bringing in revenue
- talk to your financial advisors regularly
- It is not so much about numbers of board members, as it is about having committed and engaged board members
- does a strategic plan already exist?
- position organization as useful in times of crisis
- frame questions to have broad more fruitful discussion
- ask: How do we best serve our mission despite changes in the economy?
- consider: How do you want to come out of this crisis?
- What will be the new NORM when you come out of this crisis?
- do both near term prioritization vs. long-term/comprehensive planning
- if you are in a dire crisis now, this is not the best time to do strategic planning - instead do a one-year tactical plan to get yourselves out of the crisis.
- do less with less, chose core priorities and move forward on those
- look at compensation of execs and other staff members
guidelines encouraging a 10% gap between highest and lowest paid
Create a contingency plan
- a contingency plan is a plan devised for a specific situation when things could go wrong- consider what would your organization do if you had to cut your budget by ten to twenty percent
specify your trip wires
- use a dash-board for board meetings - graphs and charts that are one-page that articulate this is how close we are, how far off we are, signal light identifying good things, vs. crisis things
- including best case scenario and worst case scenario
Step up your fundraising
- make a donation
- minimum give is perhaps less a priority than being one of the Board members largest 3 gifts each year and 100 percent board participation.
- being proactive in this climate may yield surprising results
- call on key funders to discuss your situation and reaffirm their commitment to your org's mission
- go beyond your usual suspects by considering nontraditional funding sources
- don't forget former donors
- consider increasing your own donation to the organization
- have artists call donors to thank them for their donation
- don't forget getting former board members engaged
- being on the Board is not just a status thing, it is a commitment to the organization to help, to fundraise, to volunteer, to engage and support the staff
- serve as the voice of the mission
- speak on behalf of the organization when appropriate
- be sure to speak with one voice and with common messages
- the Board members can sometimes make stronger more effective pitches for the organization than the staff can.
- what are the stakeholder's needs for tomorrow
- shifts in funding streams
- what does the board look like down the road