WolfBrown: On Our Minds

Ecological Thinking

February 6th, 2014

What’s on my mind this month is ecological thinking. Researchers in the cultural sector have explored the idea that culture is a highly complex and interdependent ecosystem in which “resources” are exchanged between “species,” much like a rainforest. Bill Sharpe’s 2010 book, Economies of Life: Patterns of Health and Wealth, continues to resonate in my mind and work. Money is one resource that flows between species in the ecosystem of culture, but other resources are also exchanged, such as meaning, legitimacy and fulfillment. Art is a currency in the economy of meaning. This metaphorical leap allows for a critical analysis of the ecosystem of culture using the principles and tools of systems dynamics. Kyle and I are working now with a great colleague, the brilliant consultant John Shibley, on a project to map the ecology of dance in the Bay Area, developing vocabulary for describing the dynamics of the ecosystem, who the species are, and how they exchange resources. This thought process is part of a strategic planning process for Dancers’ Group, a vibrant service organization supporting the ecology of dance in the Bay Area, as a means of reflecting critically on how the ecology of dance can be supported most effectively. The planning work is supported by The William and Flora Hewlett Foundation.

Where can resources be introduced into the ecosystem such that many species benefit, but without disrupting the natural state of equilibrium that characterizes a healthy ecosystem? Ecosystems are constantly changing and naturally self-sustaining. Species persist, but individuals do not. In a healthy ecosystem, there is birth, growth and competition for resources, cross-fertilization, mutation, and regular dying and regeneration. In general, it seems that the cultural sector is becoming more interdependent — new partnerships, alliances, and co-creative relationships seem to spring up every day as cultural organizations embed themselves more deeply in their communities. As time moves on, our ability to understand ourselves — our organizations, artists, audiences, and supporters — as part of a larger ecosystem will emerge as a defining challenge and key to unlocking the potential of the entirety of the ecosystem, not just the species with access to money.

 

Alan Brown is a leading arts researcher and management consultant worldwide. As a principal of WolfBrown, his work focuses on understanding consumer demand for cultural experiences and assisting cultural institutions, foundations, and agencies in gaining the insight and perspectives they need to fulfill their promise.

Defining the Creative Economy

February 6th, 2014

An interesting and provocative study on America’s Creative Economycrossed my desk recently. The report was produced by the Creative Economy Coalition, a working group of the National Creativity Network.

The researchers, including WolfBrown friend and consultant Christine Harris, studied 27 research projects relating to the creative economy in order to “profile and analyze how the creative economy is currently being defined, segmented and quantified throughout the United States.” At the risk of over-simplifying the methodology, they looked at, for each of the 27 projects, the North American Industry Classification System (NAICS) and the Standard Occupational Classification (SOC) coding systems that were used in each study as part of its definition of “the creative economy.” Needless to say, there was little overlap of included codes. Perhaps we ought not be surprised, considering the economic, demographic, political, cultural, and geographic differences in the research areas.

I confess I’ve been skeptical of Richard Florida’s claims about the role of creativity in revitalizing communities (and recently, he has acknowledged that he has perhaps overstated the impact). I’ve been bothered by the over-reliance on an economic argument that I believe ends up short-changing creativity’s other types of impact in realms like education and community cohesion, among others. That is not to say that the economic impact of arts, culture, and creativity isn’t real or that its impact shouldn’t be exploited. Rather, it suggests that we invite skepticism and worse when we overstate or overemphasize one component of our case. That said, this research is an excellent step toward a better understanding of exactly what is meant by “creative economy.”

Should we be bothered, for example, that of the 264 NAICS codes used in aggregate in the studies, only four were selected by all 27 reports (interior design services, graphic design services, theatre companies and dinner theatres, and musical groups and artists), and only 39 were used in 75% of the studies? Actually, I think not. So much of this quest for strong advocacy data to support arts and culture resembles the blind men describing the elephant based on what part they touched. We’ve been defining “creative economy” based on what we see in our service area. That’s fine, up to a point, if a bit limited. That’s the value of this research: we can have a national dialogue about exactly what we are measuring in our claims of the impact of the creative economy. That is a big benefit as we consider ways to integrate arts, culture, and creativity more deeply into the lives of our communities.

 

Marc Goldring is a Fulbright Award-winning artist and an Associate Principal at WolfBrown with a focus on community cultural planning. He has worked on plans for Chattanooga, Tennessee, and Richmond, Virginia, and is currently working in Dayton, Ohio. He is a photographer and part-time administrative director for a community-based arts organization in Boston.

 

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A recent Nonprofit Quarterly headline caught my eye. It was an article discussing a topic that I know is germane to many nonprofits each year as they move through their annual budgeting process — how much profit does a nonprofit need? This is a challenging question that involves factors such as capital investment and cash reserves (although the article doesn’t directly mention this second part), among other things.

While the article provides a simple formula that may be helpful to some organizations seeking an answer to this question, it raises an even greater challenge. How do you explain complex financial issues to your board (or to fellow board members, if you happen to be on the board because of your expertise in this area)? How do you ensure that decisions are made with an understanding of their financial implications? How do you explain why you need to budget a profit/surplus (or have a contingency, or whatever other tool you may use to ensure ongoing financial viability)?

The article assumes that everyone understands that nonprofit organizations must have a surplus (a profit), which in itself is frequently a topic of discussion, especially for small and mid-sized organizations who may have board members with slightly less experience (and less financial expertise). It then goes on to explain a methodology that is somewhat complex, using terms that not everyone readily understands or is comfortable with — “service delivery model,” “assets to spending ratio,” “profit rate.”

I have spent decades working with nonprofit organizations on finances. As I imagine myself trying to explain the methodology described in this article to any of the small and mid-sized nonprofit organizations (and even some large ones) that I have worked with over the years, the challenge becomes exceedingly clear — how do you describe complex financial issues in a way that everyone can understand? This is the fundamental challenge because, as we all know, board members bear the ultimate responsibility for ensuring that nonprofit organizations remain financially viable. And not all board members are comfortable with even simple finances, much less more sophisticated analyses. That is why you have a Finance Committee, but it is still essential that board members approve the annual budget with a clear understanding of its short- and long-term implications. Raising the level of financial literacy amongst board members is critical to the long-term financial and creative health of the field.

 

Jane Culbert provides WolfBrown with expertise in comparative research and financial analysis. She has developed community cultural budgets for Philadelphia, Charlotte, Silicon Valley, Cleveland, Birmingham, Fort Worth, and other cities. Jane has also conducted comparative community research for a number of WolfBrown cultural and organizational plans.

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