News

Arts and business news from around the country.

RSS

The Arts Mean Business

Posted by Mariama Holman
0 Comments
The Arts Mean Business

It’s a tough world out there for nonprofit arts organizations, and only those with savvy business skills employed within a social value-maximizing framework survive. However, for some reason, arts organizations are not perceived as institutions with any inherent business capability. Below are 4 reasons why arts organizations actually embody many of the same business skills you would find in any corporate boardroom, given, they handle a similar set of issues. The arts, actually mean business.

 

Profit does matter

First, even though many arts organizations are nonprofit, that does not mean that ending the year in the black, or covering the operational budget, is not important. Nonprofit accounting financial statements are comprised of both contributed and earned income. Development and marketing teams work tirelessly to hit organizational revenue goals, alongside the board of directors and executive leadership. Just like a business, arts organizations have to find ways to minimize the costs of services offered, or the equivalent to cost of goods sold – in fact, sometimes even more creatively. By design, admissions ticket prices rarely offset the full cost of the service offered, given the nonprofit seeks to provide its benefits to the greatest number of people it can afford. While profit is definitely not the primary motivator for existence, healthy arts organizations find creative, resourceful ways to prevent continued deficits at the end of the year, like any business.

 

Stellar executive leadership

You can’t judge a book by its cover – arts leaders can make the best of organizational leaders. There is a misconception that nonprofit leaders do not possess solid business knowledge.  Many arts organizations actually have presidents, general managers, COOs and CEOs with impressive business backgrounds, with previous careers working for top consulting firms, or leadership roles in local companies or Fortune 500 businesses. Furthermore, it must be noted that by design, some nonprofit roles themselves are heavily-finance and business oriented, such as the role of production directors, who not only manage budgets for labor costs but forecast the prices of resources used to source or design theatrical sets. At the end of the day, leaders must have an entrepreneurial mindset to thrive in an environment with especially scarce resources. This quality drives arts leaders to excellence in organizational leadership.

 

Fighting stiff competition

In following along with the understanding that nonprofits do value profit, understand that they face competition – they compete with themselves to offer a unique social value relative to similar institutions in their communities over time, to justify their existence. Rather than measuring success in terms of assets alone, nonprofits have a social output that must be tracked and accounted for in an often hyper-complex environment. Like any business, they have tremendous external threats to reckon with, such as legislative concerns, demographic trends, community net migration, and local economic forecasts. Answers to questions such as, “How many patrons did we serve?” and “How did we improve their lives?” relative to last period despite environmental changes are critical. Organizations rely on this information to secure and even grow funding from foundations, government sources and private donors in communities with scarce resources – thus demonstrating their significance to contributed income sources by offering a competitive social value proposition.

 

Efficient and responsible management

By design, arts organizations usually have a slimmer percentage of organizational budgets allocated to operational expenses than for-profit businesses, and as a result must be lean, mean, life-impacting machines. Arts organizations often utilize the same functional capabilities found in businesses, such as strategy, marketing, finance, operations, accounting, IT and human resources but with less staff and resources. Like businesses, nonprofits are held accountable to boards of directors, state, federal and local governments and private donors. Their taxes are audited and often shared with prospective funders. Like a business, there is little room for mismanagement if an organization is to survive over the long-run.

 

In summary, arts organizations contain a wide-variety of business skills, organizational management best practices and resource-efficiency hacks. When combined with their social value orientation, they become a force to reckon with in tackling community issues. 

Related
Comments
blog comments powered by Disqus

More News

Private Sector Takes a Stand
Nov 15, 2018 0 Comments
Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99;...
Go to full post
2018 BCA 10 Honorees in Forbes Magazine
Nov 02, 2018 0 Comments
This year's BCA 10: Best Businesses Partnering with the Arts in America honorees were in the September 30 issues of Forbes Magazine.   Read more about this year's honorees: Churchill Downs Fifth Third Bank Fosun International...
Go to full post
What's so important about creativity?
Oct 30, 2018 0 Comments
We might work in the arts field, but our day-to-day work looks like any other business. We stare at Excel charts, spend hours on conference calls, write reports, and try to find the bottom of our never-ending email inboxes. Like...
Go to full post
Business Contributions to the Arts Survey 2018
Oct 10, 2018 0 Comments
Business Contributions to the Arts: 2018 Edition is the second edition published by The Conference Board and Americans for the Arts of the annual study. Conducted in the summer of 2018, the survey garnered 132 responses from...
Go to full post
David Rockefeller pARTnership Award: Square + Cheyenne River Youth Project
Oct 01, 2018 0 Comments
Square and Cheyenne River Youth Project will receive the David Rockefeller pARTnership Award at the BCA 10 Gala on October 2, 2018 in New York City. Click here to learn more about the BCA 10.   "Our hope with the project, “Lakota...
Go to full post
BCA Leadership Award: Chandrika Tandon
Sep 27, 2018 0 Comments
Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99;...
Go to full post
BCA 10 Spotlight: UMB Financial Corporation (Kansas City, MO)
Sep 24, 2018 0 Comments
Americans for the Arts is excited to honor UMB at the BCA 10 Gala on October 2, 2018 in New York City. Click here to learn more about the BCA10.   “It is an honor to be recognized among this group of distinguished and innovative...
Go to full post
BCA 10 Spotlight: West Bend Mutual Insurance Company (West Bend, WI)
Sep 20, 2018 0 Comments
Americans for the Arts is excited to honor West Bend Mutual Insurance at the BCA 10 Gala on October 2, 2018 in New York City. Click here to learn more about the BCA10.   “The arts can have a profound impact on people of all...
Go to full post
BCA 10 Spotlight: Fifth Third Bank (Cincinnati, OH)
Sep 17, 2018 0 Comments
Americans for the Arts is excited to honor Fifth Third Bank at the BCA 10 Gala on October 2, 2018 in New York City. Click here to learn more about the BCA 10.   “Fifth Third Bank is committed to building thriving and vibrant...
Go to full post
BCA 10 Spotlight: Phillips 66 (Houston, TX)
Sep 13, 2018 0 Comments
“As a company committed to improving lives, Phillips 66 is proud to support the arts. Our communities are enriched by the arts, precisely because art touches and changes lives in ways that are positive and profound. It’s one...
Go to full post
Quaver Music Supports Arts Education
Sep 11, 2018 0 Comments
September 9-15 is National Arts in Education Week!   Passed by Congress in 2010, House Resolution 275 designates the week beginning with the second Sunday in September as National Arts in Education Week. During this week, the...
Go to full post
BCA 10 Spotlight: The Standard (Portland, OR)
Sep 10, 2018 0 Comments
Americans for the Arts is excited to honor The Standard at the BCA 10 Gala on October 2, 2018 in New York City. Click here to learn more about the BCA10.   “Fostering an appreciation for the arts helps build a foundation for...
Go to full post
BCA Spotlight: VF Corporation (Greesnboro, NC)
Sep 06, 2018 0 Comments
Americans for the Arts is excited to honor VF Corporation at the BCA 10 Gala on October 2, 2018 in New York City. Click here to learn more about the BCA10.   “VF has a proud history of supporting the arts in the communities...
Go to full post
BCA 10 Spotlight: Fosun International Shanghai CN (New York Office)
Sep 03, 2018 0 Comments
Americans for the Arts is excited to honor Fosun at the BCA 10 Gala on October 2, 2018 in New York City. Click here to learn more about the BCA10.   “Fosun has been a champion of the arts for many years, both domestically in...
Go to full post

Already a partner?

Already a partner?

Learn easy ways to take your partnership to a new level.

Use our ads locally

Use our ads locally

View The pARTnership Movement ad campaign and find ways to use the ads.

pARTnership videos

pARTnership videos

Watch and share our videos from The pARTnership Movement.

Partnership ideas

Partnership ideas

Inspire employees with tickets to the ballet or a concert.

Are you an arts group?

Are you an arts group?

Get listed in our searchable directory.

Recruit talent

Recruit talent

Employees want to live and work in a vibrant community.