When Money Problems Persist – Treat the Cause, Not the Symptom

Every arts and cultural organization has the number.  The number needed for their organization to be fiscally healthy. The numerical panacea that would make the institution financially “whole”.  Even if inconspicuous, the number is there – on the balance sheet, in the strategic plan, or in the bucket named “unidentified fundraising” that the organization carries around year after year.

Trim Some More Fat?

When money issues are ongoing, we logically conclude that money is the problem.  If we just had a little more.  Sold more tickets.  Had a bigger endowment.  Secured more corporate sponsors.  Had one “big gala event”.

Or, we cut back to “save” money.  Fewer performances.  Scaled-back productions.  Fewer touring exhibits.  Postponed building repairs. Feed the dolphins only on odd days. 

Most arts and cultural organizations have wrestled with the “cash issue” enough to psychologically understand that money is ultimately a symptom, not the cause itself.  So, why do so many organizations continue to address the symptom as the cause?  Maybe because addressing “money” still feels like the most accurate, measurable, controllable and explainable way to fix problems.

But if money were the ailment, then arts organizations would have found the cure a long time ago.  The need for / value of cultural organizations has increased in communities.  Patrons continue to be generous with their support and in most cases, attendance.  Organizational cost-cutting is so deep it is often worn as a badge of honor both locally and nationally.

Growing the endowment, selling more tickets, increasing admissions and making responsible budget choices are all good things in the right context – and they should all be pursued as part of a carefully-crafted organizational plan.  But too often it’s not actually part of a plan; it’s instead a “reaction” to a deteriorating organizational situation.  The momentum is wrong.  The situation keeps sliding.  The illness isn’t really addressed.

So how does an organization break the cycle?  Don’t treat the symptom (money), treat the cause (likely something structural).   Getting to the root cause isn’t as difficult as you might think.  Simply “ask the right questions”. 

1. Keep Asking “Why” until you get to the real cause.  Not in a writhing-on-the-floor, Nancy Kerrigan way, but in a genuinely curious way that gets to the root problem.  Then you know what issues truly need addressed that will lead to a “cure”. 
2. Revive at the Core. If your organization has drifted from its mission, taken on too much or tried to serve too many masters, it’s time to get back to basics.  Remember why your organization exists, who it serves, and why it’s important and unique.
3. Look Ahead.  Develop (or clean up) your strategic plan to address the future and your organization’s role in it.  For example, talk to the Mayor’s office to better align your mission with the community.
4. Get Back to Business Basics. If you have identified the problems, revived your organization and created a compelling future, now you can address the operational business practices to keep your organization on track and with momentum in your favor.
5. Don’t Be Afraid to Change.  Change is often difficult and painful (which again is why it’s easier to address the need for more money than it is to address change!).  But if taking all the other steps above points to making positive changes that will make a difference to increase the value of your organization, then make ‘em.

As part of RSC’s focus on contributed revenue growth, we pay special attention to overall organizational development.  We’ve seen some terrific examples of organizations that are bold in their approach to tackling the root issues and becoming stronger, more vibrant organizations in the process.  They become more value-driven and community-driven, which adds to their organizational health.  When those things happen, momentum changes for the better and the money can flow more easily.