Wednesday, April 3, 2013

Competition between Nonprofit Arts

This weeks readings about identifying competition, reinvention, and staying ahead of the curb really hit home for me because of my love of the arts and their serious problems in these areas. Nonprofitpeople.com posted an article discussing the findings in a 2010 study conducted by the First National Arts Index. The study found that there has been an overall 4.2 percent decline in the arts sector from 2007 to 2008 with non-economic warning signs that have been present in the last decade such as decreased number of people majoring in the arts, philanthropy moving to other nonprofit sectors, audiences choosing other sources of entertainment, etc. Yet despite these declines, the number of nonprofit arts organizations are increasing (73,000 to 104,000 since 1998) while only 1 in 3 arts organizations have their budgets break even. Overall, the competition is going up and the resources are going down. Sounds like a bad investment.

The Foundation Center posted an article by David La Piana and Michaela Hayes titled "Are You an Effective Competitor" on their online journal (Philanthropy News Digest) discussing what it takes for a nonprofit to be sustainable in a highly unstable and competitive environment. The authors point out four resources necessary for a nonprofit, which include customers, funders, human resources, and public attention/media. It is important to remember that there are more nonprofits than their are resources and the competition is high. However, nonprofits are encouraged to partner rather than compete. La Piana and Hayes state that although partnerships are still important, there needs to be competition in order to weed out the less effective nonprofits and raise the bar for everyone.

Strategic planning for arts organization are too focused on internal affairs such a future programming and audience development/interaction. Arts organizations need to focus more on their market environment and discuss strategic positioning, identifying competition (direct and indirect such as for-profit entertainment), and how to come out on top and grow (not just survive). I believe that this can be done while maintaining artistic integrity and nurturing the local culture environment rather than creating a monopoly. The first step is to include these discussions in strategic planning and to stop thinking that competition is taboo in the nonprofit sector. Think of a garden, you need to pull some weeds in order to let the flowers grow.

References:
"U.S. Arts Industry Faces Big Slump, More Competition for Money." NonProfitPeople. N.p., n.d. Web. 03 Apr. 2013. <http://nonprofitpeople.monster.com/news/articles/360-us-arts-industry-faces-big-slump-more-competition-for-money>.

La Piana, David, and Michaela Hayes. "The Sustainable Nonprofit: Are You an Effective Conpetitor?" Philantropy News Digest (2005): n. pag. Mar. 2005. Web. 3 Apr. 2013. <http://foundationcenter.org/pnd/tsn/tsn.jhtml?id=102200001>.

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