Funding Non-Profits Will Change

Perhaps it is my age, how I think and because I have spent decades in the start-up world but I fear for the future of large non-profit institutions in our country such as museums, libraries and parks.

Some of these verticals are publicly funded while others are only privately funded. Those public funds are slowly dwindling and will not be as robust as they have in the past. Budgets are constantly changing and the private philanthropic sector will eventually be run by a different generation who want to see change and engagement differently than the last generation.

This past week I spent some time at a large institution learning about the organization. I was curious about the budget, the size of the board, the money they need to raise privately every year to survive but most of all I wanted to know how they were thinking about the future.

This is not the first conversation I have had with leaders in large non-profit institutions in the culture world. They are all sitting on massive assets from content to real estate. Why are they not capturing every email that visits, why are they not capturing what each individual is looking at or reading when it comes to the library? That is important data. Why are they not figuring out how to share their assets with the world through books, content and on-line communities. Why aren’t they figuring out how to create multiple events that pull people in from all over to listen to speakers, create conversation, engage in something unique? Why aren’t they making sure that everyone who touches the organization feels connected to it? Why aren’t they thinking about what is necessary to keep growing with the future and being able to pay the bills with creative commerce that fits with the mission instead of the ways of the past? Why aren’t they creating restaurants inside of them? Why aren’t they creating more kids and family activities?

Ok, enough already. I continue to point to the MET who couldn’t raise enough capital to make a budget one year and they had to cut the staff in half. They had to rethink their operation. Certainly they can exist with less as most of these organizations are too big to fail but they could be oh so much more.

This is an issue that nobody is really talking about but my gut is that this is eventually going to be a bigger issue when the tides of expectations around philanthropic capital and public budgets shift dramatically. I have to ask where are all the boards on this? Why aren’t they pushing for more leadership and change?

Comments (Archived):

  1. pointsnfigures

    One of the things I guarantee they are not planning for is the movement of people out of state. When a person leaves a high tax state like Illinois, California, New York, NJ, Conn for a lower tax state, one of the tests the IRS uses for residency is charitable donations. Wealthy people that redomicile will be encouraged by their tax advisor to donate to charities in the domain where they want to be taxed, and eliminate donations in the domain where they used to reside. Most charity is local; hence not a lot of Chicagoans donate to the MET when they can donate to the Art Institute (or LA people to the Getty etc)

  2. LE

    At the core of this all is that the arts are entertainment and the entertainment landscape has changed greatly in the past 20 years. With the MET you could be talking about either the Opera or the Museum as both have had layoffs. People en masse don’t care about the opera. My brother in law (and my sister in law) are both opera singers. They are young, talented, and good looking (I really I wish I was that good looking). He has sung at the MET and also had nice things said about him in the NY Times. But my brother in law is now moving to Israel to become a cantor. Not enough people care about opera that he can earn a living from it. [1] With both of those institutions (in NYC at least) you are talking about world class expense. Making money from that (or improving the situation) is not low hanging fruit.[1] Something I was criticized for saying back when I entered the family about 10 years ago.

  3. Renee Zau

    I see so many parallels between the the corporate and nonprofit worlds when it comes to staying current and relevant. What worked in the past won’t necessarily carry them into the future… people and values change, how things catch our attention is changing, and our money follows. Relying on handouts is not a sustainable strategy, similar to companies and startups expecting the next investor to keep them afloat. I’m glad to see trends toward earned revenue and social enterprise in the nonprofit industry, which gives them more control over how funds are used as well (another topic altogether!)If institutions like the MET can remind us of the value they bring to our lives through activities and events–both online and offline–that reach wider audiences, they have the potential to increase both the breadth and depth of money flowing in. The MET is lucky to have assets which they can leverage to earn revenue… not all large nonprofits do.

    1. Gotham Gal

      I agree with your analogy. And yes…those assets!!

      1. pointsnfigures

        If you like art, you will find this interesting: http://www.nbcnews.com/id/4… My friend Robert found this speech that Eisenhower made at the MET after WW2, and prior to him running for President. Here is the speech (with battle scenes from WW2): https://www.youtube.com/wat… I think the sentiment in this is very important, and rings true today.

  4. LE

    Why are they not capturing every email that visits, why are they not capturing what each individual is looking at or reading when it comes to the library? That is important data. Why are they not figuring out how to share their assets with the world through books, content and on-line communities. Why aren’t they figuring out how to create multiple events that pull people in from all over to listen to speakers, create conversation, engage in something unique? Why aren’t they making sure that everyone who touches the organization feels connected to it?Why? Because they don’t have the talent nor business sense to do that type of thing. They are not ‘hustlers’. If they were they probably wouldn’t be doing that type of job.Take the following as a compliment. You sound like me ranting to my wife every time I run into a situation where I think people suck and are mediocre. You know what my saving grace always is? Realizing that if everyone thought like me I’d have a much harder time making a living. One last thing about people who suck and are mediocre. They care about who gets credit and whose idea something is and not in any end result. That is why it’s great to be running a business that is yours. It doesn’t matter to you whose idea makes you money as long as it works you are happy. But people beneath you? Typically from what I have found not the case. I suspect that in an institution like what you are talking about all that ‘not invented here’ is a large reason creative solutions are not implemented.

  5. jason wright

    This sounds like a recruitment issue. How do people come to find themselves sitting on the boards of these grand institutions? The answer to that question will greatly inform the debate about why there is failure.

    1. Gotham Gal

      $$

      1. jason wright

        So it’s corruption. Rotten to the core. Why even try to save such institutions? Let them fall and start over again.

        1. Gotham Gal

          It is not corruption at all. Boards are filled with people who are powerful with have deep pockets that give to the organizations. Many do nothing but just sit on the board without doing much more.

          1. jason wright

            Of course it is. It explains your original criticism, “Why are they not capturing every email that visits, why are they not capturing what each individual is looking at or reading when it comes to the library? That is important data.” It’s because they don’t need to. The members of the board have become their ‘customer’. It’s a corrupt perversion of ‘public’.

          2. Gotham Gal

            fair enough.

          3. jason wright

            “capture” – it’s not your word. It’s ‘their’ word. Capturing our data, as if we are being hunted, as lesser beings. They have a complete lack of respect. We are not people they wish to serve in a relationship of fairness. They want to own us and take from us. I’m optimistic about the future though because i don’t think this will last.