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The critical role of arts and culture boards, now and moving forward

This is the first article in a three-part thought leadership series that is focused on volunteers. Click here to access the second article in the series, which examines how to leverage fundraising volunteers during tumultuous times. Click here to read the third article, which focuses on cultural institutions can rethink auxiliary groups.

For the past five months every arts organization has dealt with countless challenges and constant uncertainty. With the world around us changing by the minute, how can members of arts boards best support the organizations they serve?

Go beyond good governance. A board’s main responsibility is governance in service of the mission. However, this charge involves more elements than simply hiring executives, approving budgets, and following bylaws. In times of change, the board must be strategic partners in both planning for the near-term and the future. That means having a deep understanding of the institution’s business model—both historically and how it has been impacted by the COVID-19 pandemic—so that members can ask tough questions (such as, what does your financial model look like coming out of the pandemic and can it be stronger than where we were when this crisis began?) and do more than rubber-stamp what is presented to them. This is a time for boards to hold themselves and the organizational leadership accountable for legacy issues like year-over-year deficits in order to build a strong plan for the future.

Focus on philanthropy. For the vast majority of arts institutions, the impact of the pandemic on earned revenue will continue to be felt acutely now and for years to come. That means everyone within the institution, including the board, should focus on fundraising. If they haven’t already done so, every board member should make a multiyear commitment to allow the organization to plan for short- and long-term cash flow. This should reflect all areas of financial commitments, including those that may no longer be occurring, such as ticket purchases and special events. Additionally, board members can make thank you calls to donors to help with stewardship efforts, regularly promote the organization to their networks, and work with development officers on discovery and introductions to new prospective donors.

Make a strategic investment in diversity. Ethnically diverse companies are 35% more likely to financially outperform the national industry median, according to a 2015 McKinsey & Co. article, “Why diversity matters.” Those findings suggest there is an authentic need to cultivate a diversity of voices to make the best decisions that ultimately lead to greater financial success. This goes beyond having equal representation and will allow the organization to better serve its mission by having a diversity of opinions and experiences on the board.

Initially these actions may seem separate but creating binary solutions doesn’t work for things that are interconnected. So, how does the board address these issues comprehensively in a way that serves the mission? Here are three places to start:

1. Have a deep understanding of the budget

Before delving into the budget, it should be said that this is not an endorsement for boards to micromanage every single line item. However, it is the finance committee’s responsibility to understand all surpluses and deficits in past budgets and how they relate to a newly proposed budget and to outline that analysis for the full board. Additionally, with many organizations having conversations about their business model and how it will change in the short- and long-term, now is the time to address structural deficit and plan for a more sustainable model. This is the most important long-term issue every board member should focus on right now. If the decision is made to approve a budget with a deficit, it should only be done after multiple tracks have been proposed to fill the budget gap and there’s a detailed plan to ensure that the deficit will be fixed soon. In other words, be sure that you are not creating a business model which will have the same deficit year-over-year.

2. Plan for, and invest in, diversifying your fundraising

For many cultural institutions, the financial model is structured to have a large percentage of philanthropy come from the board. This means that you can only cull from a very narrow part of the economy. Diversifying your funding sources allows for the diversification of the board. We can’t treat the need for a less homogenous board as a separate issue from the organization’s economic model. By developing philanthropic priorities that directly tie to the mission, it will allow the institution to make a greater investment in major gift fundraising, developing a planned giving program, and building endowment–all which can help reduce reliance on a small number of very large annual gifts from a narrow pool of donors. To do this successfully, board members must be generous and proactive with the development staff as they think through discovery and cultivation, and institutions must invest in the staff and resources needed to grow other areas of philanthropy.

3. Cultivate a board that will best serve the organization’s long-term strategic governance with a diversity of opinions and experiences

The board must assess all areas where diversity can be increased to build a deep bench of knowledge and skills that will provide expertise in a broad range of situations. This goes beyond recruitment to building a culture of equity and inclusion in all areas of the board’s functions. The governance committee should go beyond recruiting and work to ensure that each member of the board brings their best skills to support the mission and the business model of the organization. Only then will the board fulfill its role as governors and stewards of the organization.

GG+A has a history of working with arts and culture boards on engagement, growth, and best practices in fundraising and working with arts leaders to help maximize the impact of their board on fundraising. If we can be helpful in working through challenges or making plans for the future, please reach out to us for an initial conversation. We are here to help. Anne may be reached at akohn@grenzglier.com; Suzanne may be reached at shilser-wiles@grenzglier.com.GG+A has a history of working with arts and culture boards on engagement, growth, and best practices in fundraising and working with arts leaders to help maximize the impact of their board on fundraising. If we can be helpful in working through challenges or making plans for the future, please reach out to us for an initial conversation. We are here to help. Anne may be reached at akohn@grenzglier.com; Suzanne may be reached at shilser-wiles@grenzglier.com

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About the authors

Anne S. Kohn

Consulting Associate

Anne S. Kohn, Consulting Associate, brings to the firm more than 15 years of professional experience in the performing arts. Since joining GG+A, Anne has worked across all sectors of nonprofits with a particular focus and passion for arts and cultural clients such as the Lyric Opera of Chicago, California…

Suzanne Hilser-Wiles

President

Suzanne Hilser-Wiles, President, partners with GG+A clients around the globe to help them elevate their fundraising by offering more than 25 years of experience in advancement, program building, and campaign planning and implementation. Throughout her career, she has helped design, rebuild, and reimagine programs by applying her experience with a…