New Rules: Death to the SOBs

Years ago, when I was working for a performing arts center that had a contract to present touring Broadway productions, one of the VPs of the producer was fond of crowing “Death to the SOBs!” whenever he heard about the struggles or demise of a not-for-profit arts organization.  By SOBs, of course, he meant the traditional arbiters of fine arts: Symphonies, Operas and Ballets.  His contention was that the not-for-profit was a failed business model and commercial entertainment – like Broadway musicals – would rule the 21st century.


There are some problems with this basic assumption, of course.  The Broadway industry has not been immune to struggles, and we are seeing changes daily in other commercial products like film and recorded music, as they scramble to keep up with consumer preferences.  Still, we continue to hear about major arts organizations that have served communities for generations closing up shop.  The most recent casualty: the 49-year-old San Diego Opera, according to this article the eleventh major opera company to close or file for bankruptcy since 2008.

We could do postmortems on these organizations until the cows come home, as many of them had developed dangerously unsustainable business practices in recent years in desperate attempts to keep afloat.  It’s easy to criticize a company like San Diego, whose recent budget for just one production was $2.4 million, or the New York City Opera, who ate through their endowment (not-for-profit no-no #1) on their way to extinction.  It’s also easy to sound a death knell for opera – an art form not embraced by the new audiences who are needed to keep the seats filled into the future.  I’ve heard the “we need younger audiences but all the kids want to do is to listen to their iPhones” arguments, and the arguments that a decline in arts education in the schools has led to a decline in the number of people who like the fine arts.  All of these are contributing factors, I believe, but not the underlying cause.  The underlying cause has to do with a poison pill in the basic structure of 501(c)(3) organizations combined with the current corporate climate.

The poison pill is the separation of governance and management – intended by government to be a feature of checks and balances to avoid the commandeering of the mission by a single person.  But what this has evolved into is a system where major decisions are made by the governing body which sometimes has little connection with the day-to-day reality of the organization and/or little knowledge of the special rules governing not-for-profits.  In an organization with a multi-million dollar budget, that often means peopling the board with trustees who are capable of giving or getting very large sums of money — people used to influence and not particularly patient with mission.  Organizations often need to navigate the rocky shoals between wealthy patrons who give to charities the way they give to politicians – as a means of affecting policy – and the charitable mission of the organization.  Case in point: WNET’s struggles with David Koch, who pulled a 7-figure donation and eventually resigned from the board after disagreements over the airing of two documentaries which portrayed him and his brother in an unfavorable light.  Certainly it is understandable that a board member wouldn’t want to be excoriated by a media organization to which he had just donated millions…but the bottom line is that WNET and PBS are bound by their charitable mission to maintain journalistic integrity.  A single board member is not allowed to dictate programming.  Period.

Now I like opera.  I like it enough to have gotten a master’s degree in opera performance.  I am a passionate and vehement arts advocate.  But I cannot justify a budget so bloated that it costs $2.4 million for a single production and still has to charge $200 per ticket in a relatively small city like San Diego (at least, it’s not Los Angeles or New York with high cultural tourism traffic).  To me, the numbers just don’t add up.  Yes, costs are rising.  Yes, we need to pay musicians, technicians and all involved in the production what they are worth.  But if a community can’t support an organization the way it wants to be supported, and the organization is unable or unwilling to innovate, it’s time to let go and allow something else, something more flexible and less dependent on  the 1%, to take its place.

Now that I’ve opened that hornet’s nest, what do you think?


About Ellen Rosewall

I am Professor and Chair of Arts Management and author of Arts Management: Uniting Arts and Audiences in the 21st Century (Oxford University Press, 2013). I believe that arts and culture are undergoing a profound change in the 21st century, and I love talking with people about how we continue to bring arts to our communities and individuals give the brave new world of social media, technology and economic changes. Join the conversation!
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