Management can be creative, too;

              The Crisis in the Arts
MANAGEMENT CAN BE CREATIVE, TOO
By CHRISTIAN P. FREDERIKSEN/National Services Director for Cultural Institutions, and
DIANE LANSING/Director, Community Service Organizations Program
From the standpoint of a museum director or, say, the
general manager of a performing arts organization, 1974
was not a banner year in terms of finances—and 1975
does not look much better. Costs are skyrocketing when
the public can least afford higher prices. A major increase
in government funding seems remote as pressure mounts
for restraint in public spending. And convincing a major
donor to keep supporting the opera, when his invest­ment
portfolio has all but disintegrated, takes a near
miracle.
The arts "industry" is particularly vulnerable to both
recession and inflation. Expenditures for labor, the
principal expense of an arts organization, are rising
rapidly, as salaries for support personnel increase and as
artists themselves, no longer content with their
traditionally substandard incomes, are demanding higher
wages.
Various surveys have indicated that the majority of
Americans believe arts organizations are self-supporting.
This is not true—admission revenues never have and
probably never will cover the cost of operations. A large
part of any arts budget has to come from public and
private sources.
What are these sources of financial support? Historical­ly,
the major support has come from foundations and
individuals, and to a lesser extent from government and
corporations. In recent years, however, the influence of
government has been expanding. This changing pattern
of support creates new challenges and new problems for
arts organizations.
"Social responsibility" is a current buzz-word in the
arts. Simply stated, both donors and recipient
organizations have taken steps to make the arts available
to a wider segment of the community and to enlist a
broader base of funding. This has been prompted
particularly by government programs. Many state and
federal grants have been used to encourage arts groups
to tour in culturally and geographically isolated com­munities
and to perform before students or for the
elderly and handicapped. In addition, to encourage
increased public support of the arts, many government
grants now require organizations to raise matching funds
in order to receive funds.
These programs have been beneficial. They have
undoubtedly helped organizations to expand their
involvement in their communities, although they still
remain largely outside the mainstream of local govern­ment
planning, decision-making, and programming.
Likewise, the matching requirements have created the
necessity for a stronger base of local support money.
The programs have stabilized some organizations by
permitting them to maintain longer seasons—in some
cases to operate throughout the year; this avoids the
agonies of an annual birth and death cycle.
Recipients of government funds have, however, been
left on their own to develop support functions for these
programs. Examples are arrangements for bookings and
touring, new fund-raising approaches, and methods for
reaching new audiences. In addition, as the level of
support has grown, so has the complexity of application,
reporting, and evaluation procedures. Experience in
other nonprofit industries, such as health care and
education, suggests that continued government funding
will lead to even more administrative controls on the
grantees.
These are some of the economic facts of life. There is
certainly no lack of concern on the part of arts leaders;
the question remains only as to how the problems can be
resolved.
There are two areas where arts organizations can move
rapidly and practically to improve their situation. One is
the area of administration and management; the other is
the way in which arts organizations are structured.
Managing the Arts
Arts administrators usually have been chosen because of
their interest in a particular art form, seldom because
they have specific management ability or training. This
selection process has had predictable results. With costs
soaring and with intense competition for available
financial support, there is a growing realization among
arts groups that effective management techniques are
necessary for survival. Several outside forces are causing
arts management to be upgraded:
• A growing number of grants and major donations
are either for management assistance or are contingent
upon specific management results. Many Ford Founda­tion
grants, for example, are continued only if the
grantee reaches a specified goal in terms of fund raising,
deficit reduction, or some other milestone.
• Several enterprises, such as Volunteer Lawyers for
the Arts and local volunteer service bureaus, have been
set up to provide basic legal and management guidance,
generally to smaller groups.
• The recognition of the arts as an industry has led a
number of universities to offer specialized programs in
arts administration. These schools are graduating an ever-increasing
number of trained arts administrators.
• Corporate support of the arts is also acquiring new
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