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Current feature topic - "A Diet of Economy"
Just out from the budget and a long way from the wake of Christmas, talk of recession is still on the tip of most people’s tongue; this Year can be the season for the bold, brave, and the smart to make hay. There is no doubt of the seriousness of the global economic crisis, but in New Zealand and the arts and heritage world there is some opinion that this storm can be weathered if the crisis of confidence is managed. Over the previous decade the climate of support and growth for the arts, heritage, and sports sectors also witnessed the development of a more business like approach within these sectors. Now is the time for this development to pay off.
In the arts, culture, heritage, and sports sectors there is little interest in the origins of the current crisis; the main focus is on dealing with the immediate fallout, and a strategy for surviving it in the medium to long term. Mark Weldon CEO of NZX is quoted as acknowledging getting through the coming year is going to be hard We are small on the wave of the world, but we have the ability to choose whether we surf it or just get smashed by it.
The New Zealand Herald on Saturday January 31 2009 led with the headline Huge losses threaten grants. This shows the position of the ASB Charitable Trust, usually able to provide major support and at times bailing out organisations, now struggling to confirm its 2009/10 granting programme and delaying the March announcements to September 2009.
No one is unaffected by this extraordinary set of circumstances. Media reports on how organisations are managing difficult times, and the steps being taken by central and local government to address the issues, unsurprisingly connect the value of art, heritage, and sport to everyday life. There is ample demonstration of not only the intrinsic value of the sector but of the social, economic, employment, and community value; this is leading central Government in France increases cultural spending - The Art Newspaper Government in Germany increases cultural spending - The Art Newspaper and local government Cumberland Times-News - Arts at work to act to help influence how the sector can navigate the current crisis.
Creativity is the key to staying in business during rocky times. A study of the past century proves that in a down-turn entities can survive and whole new scenarios and opportunities grow out of a different set of circumstances. Arts can survive - there's no need to be gloomy - Telegraph (sic)
Tough times lead us to repackage, refine, and enlarge our thinking to make the most of every situation $25 orchestra seats at the New York City Ballet!!! (corrected version) . In doing so we must keep in perspective that despite the severity of the crisis, downturns are not new, they are cyclic, and there is little doubt there will be a recovery in due course for those who are bold and smart enough to manage the tough climate. The show must go on (Cincinnati Enquirer, Cincinnati.Com)
It can be argued the world has talked itself into a depression, but closer to home how will this affect the local situation for arts, heritage, and sports? There is a significant crunch in investment income which in turn affects most arts, heritage, and sport organisations reliant on grant funding.
The economic crisis adds an extra layer of anxiety for cultural and sports organisations as they watch subscription and season renewals, sponsorships, and grant disbursements diminish. National wealth has declined between 30 and 40 %, and this will have a dramatic impact on the sector. Demonstrating the sectors’ value is essential in the competition for the resources that remain.
So how must our sectors respond to the challenge of 2009 and beyond?
More than ever before there is a need for boards and management to operate as a team. Collegiality, and the ability to have open and frank discussions between every member of the organisation will play a part in managing solutions that will determine an organisation’s success and survival. Most sector governors and managers know what is needed. Mark Weldon’s call is for leaders to take responsibility for the reshaping and execution of the strategy needed to survive.
The mood of the board survey conducted by the New Zealand Herald in late 2008 compared the factors of most concern internationally, to the factors most concerning New Zealand organisations. Internationally the credit crunch topped the list; locally regulation gained top place, placing in context New Zealanders’ expectations for 2009 and beyond. As most of the organisations within this sector are fragmented, no single organisation’s demise threatens the economy or makes major waves. Yet the state of New Zealand’s cultural and sports sector ecology is in danger.
The sector needs to be confident, and understand the value and importance of the contribution the sector contributes to the New Zealand’s economy which is between 5 – 10%. Included in this is that cultural goods and services are the fourth largest category of household spending. Constraints on the sustainability and viability of the sector will have a significant effect across the whole economy.
The Creative New Zealand report launched in March 2009 indicates the arts are increasingly an essential part of New Zealander’s daily lives. Sixty-five per cent of those surveyed agree that the arts are ‘part of their everyday life’, up 8% from 2005 and eighty six percent surveyed are actively involved in the arts in some form. Nearly all (99%) of 10 -14yr olds have been actively involved in the arts in the last 12 months.
Of particular interest is the research that indicates Māori and Pacific Island communities have a higher - than - average attendance and participation in arts events.
Also that young New Zealanders actively involved in the arts are taking up the opportunities presented by digital technology. The report highlights the vital role parents and teachers play in developing a life-long interest in the arts.
This provides confidence for the sectors on where to concentrate planning and the value of doing so.
Weathering the storm
Eliminate distractions, distractions suck focus and energy. The robust business practice you adopt to manage this environment determines how you come through. Balancing a cautious outlook and business risk without changing the underlying characteristics of your business is the tightrope most organisations are walking.
What does the present fiscal environment mean for the arts, culture, heritage, and sports sectors with fewer resources for outgoings?
Features that charactise sector organisations are:
- deeply embedded organisational values
- the enablement or restraint these values create
- the management of a stable of stakeholders around a common purpose
- balancing multiple revenue sources
- uneven and uncertain performance of the organisation.
Housekeeping for uncertain times:
- Revisit the values/ mission of your organisation, reinvigorate their meaning.
- Identify your mission critical programmes and concentrate your resources around these.
- Steer clear of speculative ventures.
- Use strict development criteria.
- Position yourself at the quality end of your business.
- Tell your stakeholders of these priorities and bring them on board.
- As much as possible spread your risk on income and expenditure.
- Advertise what you are doing and how you intend to operate during this period and engage your members, audience, and stakeholders.
Follow this up by investing in talent. Where possible, hold on to the people who have contributed to your organisation’s success. Tough times magnify the importance of people to an organisation and employers and boards need to make sure you keep people who are able to work within the current environment, people with resilience and optimism. Keep investing in your most critical roles, look for ways to retain and motivate your best people. This may not necessarily need a monetary solution. Keep a customer focus and recognise that staff drive this, and create an environment that supports your staff and keeps your top asset.
Keep your profile strong
Understand your brand and strategic objectives and what you need to keep these strong. By determining key functions and priorities you can then trim these to the budget you have.
- Always allow for marketing in your budget
- Avoid a ‘cut – price’ mentality. This could undermine your brand
- Use the downturn to audit your activity and product/s and retain the best
- Use what resources you have efficiently
Protect your brand by being consistent in every aspect of its delivery.
Use cost effective ways of marketing:
- Place offers on all emails and invoices
- A smart efficient web presence
- Blog your message as widely as possible
- Write up your successes and use happy customer referrals
- Use your existing customer base to market your success
- Promote offers, but do not cut prices.
Stay in touch; throughout the world sector organisations are all facing the same issues. Media, a variety of blogs, and newsletters feature daily the creative and innovative ways organisations are managing the credit crunch. Canvass this material for ideas, support, and, to reaffirm how well you are managing. Renew the commitment to being client focused and focus in the value you create.
A Diet of Economy
Responding to this crisis requires organisations to concentrate on reducing uncertainties while at the same time capitalising on opportunity. Tough times call for us to work harder, master a proactive stance by not serving ‘old wine in new bottles’ but embracing what culture and sports stand for and using creativity, innovation, and keeping our nerve. Robert Jones observes that busts always end and recessions should not be feared but viewed positively as desirable stocktaking pauses from which we can emerge better positioned for the next inevitable growth surge.
Rupert Christiansen in the UK Telegraph writes salvation doesn’t lie in programming nothing except Swan Lake or La Boheme. The cold climate provides room for fresh vision and new beauty. The crisis for culture and sport is less an economic one than a crisis of confidence. It is difficult but not giving up, along with the liveliness, history and character of New Zealand’s cultural and sporting heritage is what distinguishes this country. Tough times force a new and different approach, and in the future your organisation will be stronger for it.
As John F. Kennedy said, I am certain that after the dust of centuries has passed over our cities, we too, will be remembered not for our victories or defeats in battle or in politics, but for our contribution to the human spirit. As governments are seeking measures to bail out business it is timely to ensure our sector in New Zealand (worth around 6.9% of this country’s workforce and contributing approximately 8.3% of Gross National Income) should be included in any recovery package and in doing so we save our soul as well as our economy.
So how does the OECD report delivered April 16 relate to our sectors? This tough prescription poses a series of dilemmas for government, business, and organisational leaders. Of primary concern to the arts, heritage, sporting sectors is the forecast cumulative shrinking of the economy. This highlights for all the need for credible medium term planning and budgeting, that programme our organisations for success. Fixing the Future The Young Foundation.
As highlighted previously in this article our sectors are vital to the economy and form one of the fastest growing sectors, so it is important that we do not view ourselves as ‘victims’ of the recession but rather the view it is the time not to position arts and heritage ahead of other issues, but for the sector to demonstrate the integral role arts can play in the solutions.
Leading with a truly inspirational idea is SOUNZ (the Centre for New Zealand Music).
SOUNZ is refusing to remain passive in the face of an operational funding shortfall, and is leading the charge with an innovative solution. Thursday 14 May is the launch of their solution to the funding difficulties faced by all. At noon on 14 May, bidding will open for five works by the previous winners of the SOUNZ Contemporary Award: Eve de Castro-Robinson, Chris Gendall, Ross Harris, John Psathas and Gillian Whitehead.
The successful bidders will have the opportunity to work with the composer they have chosen and discuss the content of the piece, name the work and suggest the instrument or voice for which the work will be composed. They will receive a performance and recording of the piece by a leading New Zealand performer, exclusive rights to performances for a year, and a presentation copy of the score signed by the composer.
SOUNZtender is an initiative of the board to meet a shortfall in our operational funding, particularly in 2009. Not only will the money raised ensure our future, but also the continued vitality of New Zealand music."
As a charitable trust, SOUNZ relies on funding from a wide range of sources. Creative New Zealand, APRA and PPNZ Ltd provide recurrent funding, but many activities and projects rely on one-off funding and donations.
SOUNZ holds the largest accessible collection in the world of music by New Zealand composers – currently 9,500 works by 290 composers – and offers services and projects to provide and promote this.
In April 2009 the Ministry hosted Justine Munro the CEO of the Centre for Social Innovation. Staff and Agency CEOs enjoyed the opportunity to hear Justine speak. Justine outlined how a solution to the present recession is to do things differently and alongside economic innovation, is a need for social innovation. This is a theme we will pick up in a future feature, meanwhile Justine is available to follow-up the talk with individuals organisations.
New Zealand and the world needs the dynamic balance the contribution of art, sports, and cultural organisations can provide, and it is up to us all to the ensure we can.
Resources and references
New Zealand Publications
New Zealanders and the Arts / Creative New Zealand, March 2009
Employment in the Cultural Sector / Ministry for Culture and Heritage, February 2009
How Important is Culture? New Zealanders’ Views in 2008 / Ministry for Culture and Heritage, February 2009
Case Study - Smart ideas for interesting times / Changing Its Tune - Philanthropy.com
Toolkit Sample
Donations Toolkit
Arts Funding Response and Readiness Kit
Links of interest
A Generous Difference — Vivian Hutchinson
Sets and the City: The economic downturn / The Big Idea : an online community of New Zealand's creative industries
LabforCulture
Arts sponsorship .htm
Museum of Contemporary Art: Bigger, bolder and poorer / Los Angeles Times
Hard times for the arts / Baltimoresun.com
Ballet dancing on the edge, other B.C. arts groups dig in
The Stage / News / Exclusive: Arts must prepare for 2010 funding cuts, warns Burnham
Time for a cull in the art world / Times Online
Jonathan Jones: Should Britain have a new capital of culture every two years? / The Guardian
Museums make deep cuts in face of global financial crisis / The Art Newspaper
Does the credit crunch have a silver lining for literature? / The Independent
Market takes bite out of Field Museum / CHICAGO SUN-TIME
Skeletal Budget Cut: No "Lucy" Fossil Show for Chicago’s Field Museum - CultureGrrl
Caution or conviction? / The Artful Manager
Cumberland Times-News - Arts at work
Future support for literary infrastructure / Australia Council for the Arts
Arts Leaders Urge Role for Culture in Economic Recovery and Stimulus Through the N.E.A / NYTimes.com
Karen Ross
Archive Feature Topics
Articles, information and opinions to share
How will you ride the global recession?
Surfing the tsunami - where opportunities lie
Crown entity annual reports - the role of the board
Holiday catch-up
2009 article about the 2008 NEA public participation in the arts report.
LA Times comment about the same report.
Artsdigitalera.com. A blog for arts content for the digital era is a pilot scheme being delivered by the Australian Council for the Arts allowing the sharing of information and resources.
Buckle Up is a summary of the message that the Minister of Finance Hon Bill English has been delivering over the past few months.
A fresh look at diversity issues for boards.
With the present Government's focus on philanthropy this article poses the question Should Board Members be required to Give?.
Articles, information, and opinions to share
16 October 2009
With the forecast for the weekend likely to keep us indoors, gathered below is a selection of sector related articles and viewpoints to keep you occupied.
A large number of companies now recognise the value of artistic processes in relation to day to day management and leadership. Nancy Adler explores The Arts and Leadership: Now that we can do anything, what will we do?
2. Survey result from the US on on the Museum sector managing payroll, hiring, and layoffs.
3. Hoping to boost attendance and broaden its base of supporters, the Metropolitan Museum of Art launched a new initiative this week that allows patrons, for the first time ever, to prod and scratch at the classic paintings in its revered collection.
4. The first big report on the private sector's vision for the arts in Britain is to be published this year by Colin Tweedy, the chief executive of Arts & Business. The New Zealand Herald backgrounds the the report.
and more from Arts and Business
5. Cultural Capital: Maintaining Investing in Culture Through the Good Times and Bad.
6. Dream Discover Celebrate - Cultural Olympiad
Vancouver 2010
London 2012
7. From Over the Net and Off the Table - The curator's
Sector Reading
14 September 2009
A wide range of reference and opinion pieces are available on the wider ACH sector and the environment organisations operate in. Some reading to help you shape you thinking.
With revenue from grants under pressure, funders are making difficult calls on the giving.
Stressing Results / Boston Foundation revamp.
With the economy at the top of the agenda for the last year, can the arts provide a ‘bigger picture’. The Arts and a new Moral Economy.
The Value for Money exercise underway at present call for an innovative approach, but where does innovation come from?The arts and culture have become central to an increasingly compelling vision of the good life and good society, see John Holden resource.
The Nonprofit Starvation Cycle – investing in infrastructure.
Cultural Value and the Crisis of Legitimacy - Why Culture Needs a Democratic Mandate.
Ideas for those who choose to explore, adapt, and look for opportunity – A Time for Change. Gross Added Value-what it means for your organisation Add up your Value. How does art transform us, or how are we different because of it? The Architecture of Value
How will you ride the global recession tsunami?
A presentation by Marianne Doczi to the CEs group held 18 October 2008
Surfing the tsunami - where opportunity lies
The world of opportunity that exists beside the daily headlines that fuel and inform the world economic crises is often overlooked. The climate where commentators proffer tales of gloom and forecast tough times ahead, also offers a window for sectors such as culture and sports to step up.
In the world of business great institutions are disappearing overnight, thousands of jobs are being lost, and there is financial volatility seldom seen before. Arts, heritage, sporting venues and organisations are feeling the pinch; the difference is, this is business as usual for the cultural and sports sectors.
The constant ingredient in our sector organisations is innovation, creativity, financial frugality, skilful management, and energetic committed staff. In these uncertain times the adaptation businesses must make to survive is the survival mechanism our sectors demonstrate daily. Providence asks arts administrators' advice Those charged with sector leadership manage the tightrope walk between funding, audiences, sponsorship, programming, day to day management, and the scale that measures the balance between falling income and rising costs. It is this business attitude that our sectors, which consistently punch above their weight, have that will assist with survival where commercial ventures may fail.
Sector organisations can provide examples for business change, highlighting how creativity and communications contribute to organisational development and change. These examples can also demonstrate to other businesses our sectors’ model of business management it being, in part, the innovative use of lean economic resourcing for output delivery.
Financial crisis or sector opportunity?
Reaping the benefits of ‘feelgood’
When you cannot change what is happening to your financial health the need for personal health and wellbeing is heightened. Our sectors are to some extent ‘recession-resistant’ as people seek ‘well-being’ by spending more time a museum, attending or taking part in sports, or escaping to the theatre, ballet, or orchestra. The public get a ‘feelgood’ factorfrom using smaller luxuries as a respite from the world of global credit crunch and negative equity, rather than spending on major items like an overseas trip or a new car. In difficult times history proves that theatre, cosmetics (the lipstick test) and music sales boom, as arts and creativity flourish.
Amid the credit crunch the arts benefit from the feelgood factor / Times Online
In the Telegraph a banker is quoted as saying We are being called spivs, liars and thieves. We simply have to show ourselves as good citizens. Traditional sponsors of arts and sport may be seeking to build up a feelgood reputation by looking at ways to continue their involvement and support.
Art's big dreams are worth the cost / Los Angeles Times
Arts & Business Colin Tweedy on arts and the current economic downturn.
Financial crisis -- or arts opportunity? / Los Angeles Times
Surviving the downturn
While the sector may need to modify its aspirations and scale back from more ambitious ventures it is a mistake to focus exclusively on cost cutting as a strategy to survive the downturn. The need is to evaluate options for efficiencies. In a sector that is service and knowledge based, turn this to best advantage by allowing excellence in delivery to shine through. Organisations can explore how to be:
- better organised
- more focused
- highly professional
and
- heighten employee engagement
- involve sponsors, boards, staff and audiences/participants in solutions
- be clear about their purpose.
Surviving the Downturn - Pam Henderson
Financial disaster needn't spell the end for British theatre / www.guardian.co.uk
A spokesperson for Arts and Business, a UK organisation that develops and encourages collaboration between arts and commerce, believes there is a clear value in sponsoring arts and investing in culture , regardless of external factors such as economic downturn while emphasising the need for the arts to act fast to provide the private sector with greater returns for their investment.
Credit crunch to hit sponsorship - News , ArtsProfessional magazine
It's the economy again! sponsorship.pdf
Factors to consider are to diversify by using non-sector based activities to increase your income e.g.:
- hire out services, skills, and venues
- bulk buy
- joint marketing with other sector and non-sector based groups, where you are already trying to reach similar audiences
- review non-traditional programming for venues and productions.
Beckett, bacon or Bar Mitzvahs - Paul Bogen
Space Shoppers - Richard Lee
The Southwest Airlines Case
How can the arts or sports learn from an airline? Not the most obvious role model but step back and look from the outside at your organisation for insight on how common issues and situations from successful non-sector sources can be applied in today’s ultra-tight market.
From Love Field (Southwest Airlines)
Top search engine marketing articles and blog posts (2003-2007)
The Southwest Airlines Way: The ... - Google Book Search
So is there good news? Is a slump for business good for Culture and Sports?
Richard Eyre says Cometh the hour, cometh the genius. In Billy Bragg’s view People are going to have to start articulating these things, because what’s happening is going to affect everybody. Evidence does suggest we are at our most creative when times are hard.
John Harris reports that the slump could be a boon for culture / The Guardian
Every gloomy prediction can have a sliver of light: refer to the ABBA Economic Index, a little-known financial measure This Magazine: Are we poor yet? that follows on from other ‘market’ indicators such as the Skirt Length, Reality, Starbucks, and Lipstick Indexes. Seemingly we have sought solace in ABBA during previous economic hard times (the mid 1970s and early 1990s) and now here we go again with Mamma Mia. Or AC/DC.
Sunday Star Times - Soundtrack to a Recession
Timesonline - Here we go again
http://www.theage.com.au/news/entertainment/music/global-financial-crisis-dirty-deed-of-acdc/2008/10/28/1224955983738.html
While preparing this topic, daily updates appeared online with the publishing, review, and commentary on this subject being as lively, far reaching, and evolving as quickly as the environment creating the change.
Radio New Zealand National : Programmes A-Z : Saturday Morning with Kim Hill : 20081025 for Mark Amery comment.
Bracing for Bad Times, Operas and Orchestras Batten Down the Hatches / NYTimes.com
Local arts world wobbles as patrons feel squeeze / The Boston Globe
The Stage - Irish arts hit by funding drop of almost 10%
This period of global uncertainty will provide creative people and organisations with the opportunity to produce material and experiences that give practical solutions for survival, and provide escape from, but also capture the spirit of, the times.
We welcome contributions, feedback, additional links, and comment on this topic. Please send your thoughts and links to karen.ross@mch.govt.nz.
Links and Resources
Arts Professional – Website and monthly Journal
ArtsProfessional: The UK's Leading Arts Management Magazine
Art and Business – Organisation and Website
Arts & Business - Home
A daily digest of arts, culture and ideas
ArtsJournal: Daily Arts NewsDaily Arts News
A weekly e publication for Americans for the Arts
Cultural Policy Listserv
This site features arts news and updates from an international viewpoint.
International Federation of Arts Councils and Culture Agencies
The courage of funders: risk and innovation in the age of artistic excellence
Alan Davey, Chief Executive, Arts Council England
RSA, 3 November 2008
Risks and Innovation in the age of artistic excellence
Criticism of UK taxpayer-funded arts, heritage, voluntary and sports organisations.
Mark Brown, Owen Gibson, The Guardian, 6 November 2008
Document can be found here
Crown Entity Annual Reports - the role of the board - 10 September 2008
The season of spring always has some regular features and for our boards it is the time of annual reports. This year, for the second year in succession, Crown entity annual reports are in a format as a consequence of the Crown Entities Act. These requirements underline the responsibility of the board for annual reports.
The reports are now required to be signed by 2 board members ‘on behalf of the board’ and are then sent to the Minister who presents them to parliament. While management will usually be responsible for preparing the detail and the draft of the report, the board will want to ensure that it is satisfied with the nature of the report and that it properly reflects both the statutory requirements and the board’s viewpoint. As former MCH Chief executive Martin Matthews commented in his capacity as Chief of Judges for the NZICA Annual Report Awards, good reports reflect the “authentic voice of the board while providing crucial information about how the board operates”.
Boards should ensure, in particular:
That the report has an appropriate outcome focus and there is a focus on critical aspects of performance and that these are consistent with the intentions, measures and standards set out in the prevailing statement of intent;
That there is a coherent account of what has been achieved in the year and that any variations between planned outcomes and actual achievements are identified and explained;
That the board is satisfied that the information, particularly in the sub reports (such as the Statement of Service Performance and the report on Compliance with Good Employer Policies), complies with the entity’s obligations and that any new reporting items required for this 2007/08 report are in an appropriate format;
That the final published format of the report is appropriate having regard to recent comments conveyed through the central agencies that the primary audiences for annual reports under the Act are Ministers and Parliament and they do not necessarily require long and/or expensive ‘glossy’ publications.
The Ministry has published a governance memorandum on this topic which is available here.
File download
The Arts and a new Moral Economy.pdf (270.19 KB)
The arts and a new moral economy
CriticismOfUKTaxpayerFundedArtsHeritageSportsAgencies.doc (25 KB)
Criticism of UK taxpayer funded organisations
Beckett Bacon or Bar Mitzvahs - Paul Bogen.pdf (356.56 KB)
Beckett, bacon or bar mitzvahs
From Lovefield Southwest Airlines.pdf (567.66 KB)
From Love Field Southwest Airlines
Sunday Star Times - Soundtrack to a Recession.pdf (2.79 MB)
Soundtrack to a recession
crown-entity-annual-reports-memo-the-boards-role2.rtf (59 KB)
Crown entity annual reports memo
Cultural Value and the Crisis of Legitimacy - John Holden.pdf (358.67 KB)
Cultural value and the crisis of legitimacy
Providence asks arts administrators' advice.pdf (63.62 KB)
Providence asks arts administrators' advice
