Reader Response: Diminished Philosophy

I was very pleased to receive an email from none other than Adrian Ellis, the gentleman responsible for the quote I scrutinized line by line in my article Diminished Philosophy.  He ran across the article via a regular web search and felt compelled to write in order to further explain his views.

We had a wonderful email exchange about our disagreements regarding the current nature of nonprofit industry in general and the orchestra business in particular.  Much of that email conversation focused on whether or not nonprofits really benefit from some sort of protected status compared to their for profit cousins. 

I asked Adrian if he would mind putting his main point into writing for publication. He was kind enough to oblige my request and submitted the following:

“Nonprofit organizations are only half exposed to the market. They are in a market for customers/audience/attendees and for contributed income (half in the market place) but there is not a market in their shares (but also half out of it). It is this asymmetry that has an impact on their behavior and protects them on occasion from the results of their own inefficiencies; that makes adjustments ‘slow, awkward and politicized’; and that allows for unduly sustained inefficiencies. The reasons for protecting them from the full force of the capital market is that if exposed to it, and stripped of their 501(c)(3) status they would not exist. So it is a price worth paying but we need to acknowledge the price.”

I don’t entirely disagree with the fact that orchestras are typically slow, awkward, and politicized due to their own inefficiencies; much of which comes from the nature of being a nonprofit business compounded by myopic management practices.

It’s that last part I still take issue with.  I disagree with the assertion that if nonprofits were stripped of their 501(c)(3) status they would not exist.  That’s akin to saying that without wings a bird wouldn’t fly it’s an obvious but unrealistic situation.  Nature would have never allowed an entire species of animal to evolve that was incapable of surviving and propagating itself.

If orchestras turned down a different path 100 years ago and forsake a nonprofit status I don’t believe for an instant that they would have failed to survive and flourish.  Granted, it would be a much different beast than we know today (perhaps better, perhaps worse), but only because survival would have dictated it evolve along a different path.

To limit classical music’s growth by attempting to acknowledge there is some sort of metaphorical fixed price worth paying only attempts to control a natural evolutionary process; and that course of action will surely result in extinction.

That’s not to say orchestras and nonprofits have a license to waste money and act irresponsibly.  Quite the contrary, I believe that their nonprofit status requires them to behave in an exemplary fashion compared to their for profit cousins.  They aren’t merely attempting to provide a return on risk capital, they’re returning an intangible gift to everyone willing to invest in their endeavor: creating art.

And those returns are only limited by how well an organization manages itself and the quality of the product they produce. No more, no less, and no different than the for profit industry.

My thanks again to Adrian Ellis for maintaining a productive dialog and for his willingness to share his thoughts with my readers.  I still disagree with much of what he says regarding this particular issue, but at least I have a better understanding of why I disagree.

About Drew McManus

"I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

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