I’m one of the people that Michael Kaiser, the President of the Kennedy Center for the Performing Arts in DC, is complaining about. Eight months ago, in an article entitled “The New Model, Part 1” on Huffington Post, Kaiser got, well, all huffy:
If I hear one more pundit or read one more blog suggesting that ‘old models’ of arts organizations are dying and that ‘new models’ are needed I am going to scream. Expert after expert are calling for ‘new models’ without explaining what these new models are or what specifically they are meant to address, except for a vague unhappiness with how things are working (or not working) now.
He followed this with a bunch of rhetorical questions (“Do they mean that arts organizations are all going to die and that there will be no more arts institutions in the future?”) that showed that he had no grasp of just what the heck a business model is, or any awareness of how the overall economy has changed not just for the arts but for the business world as a whole.
But I don’t want to argue with Kaiser — well, I do, but not here. Rather, I want to make the first step in examining the concept of the business model, which is an important tool that is needed by the independent artist who is trying to free themselves from the lumbering institutions serving as gatekeepers to creative activity.
Below is a 3-minute video that lays out the process pretty clearly, and it isn’t hard to understand. It’s not MBA mumbo jumbo — rather it is a series of very clear questions that, if answered with creative reflection and a willingness to suspend one’s knowledge of “the way things are done” and think through possibilities from first principles, could lead to you to an approach to your creativity that is dynamic and sustainable. Here’s the video, entitled “What Is a Business Model?” by Gavin Wedell:
When you finish, go to this link (mentioned at the end of the video), where you will find a worksheet that asks the same basic questions using other words. It is called “The Business Model Canvas.”
The problem with the current business model — the one that Michael Kaiser apparently thinks is so strong that it cannot be questioned — is scattered throughout the form, but one major one is in the lower right-hand corner box labeled “Revenue Streams.” For arts institutions like the Kennedy Center, one huge revenue stream is “unearned income” — grants from foundations, government programs, donations from rich people. According to the Grantmakers in the Arts report “An Overview of Revenue Streams for NonProfit Arts Organizations,”
Nonprofit arts and cultural organizations in the U.S. obtain their revenues from three major sources: earned income, philanthropic contributions from private donors, and direct government subsidies. Earned income — composed of program service revenues (ticket sales, admissions, subscriptions, program ads, and gift shop sales) along with investment income and dues and assessments — account for approximately one-half of all revenue. Contributions from private donors (individuals, foundations, and corporations) account for about two-fifths. Government sources provide the remaining roughly one-tenth of revenue.
To my mind, an independent artist needs to dump this business model like a hot potato. You can’t be independent if you are constantly having
to beg for charity in order to survive. It makes you dependent on pleasing rich people, in essence having to ask their permission to practice your art — the very thing we are trying to avoid.
So don’t give yourself that out. Work on your business model as if the option of grants and contributions doesn’t exist.