A Worthwhile Concessionary Agreement Part 1

Amid the dizzying array of contract reopeners, work stoppages, and other fraught-filled collective bargaining negotiations since last fall, the ensuing agreements are more alike than not in that they contain some degree of compensation/benefit concessions. For the most part, these agreements have nothing special worth looking at but there are a few exceptions. One of those exceptions is from the Utah Symphony & Opera, which announced their concessionary agreement at the beginning of October. What makes this settlement worth examining is how it is designed to marginalize a syndrome rarely discussed in public forums: board atrophy…

What Is Board Atrophy?

piggy bankFor the most part it is exactly what it sounds like, a deterioration of board stewardship. This can apply to a variety of governance efforts but in this case, it pertains to fundraising. Due to the basic nature of revenue generation within most orchestras, a sizeable portion of annual revenue comes from annually developed sources. Although the percentages vary from one orchestra to the next, the average professional orchestra board is responsible for raising anywhere from 15 to 40 percent from direct fundraising efforts.

Needless to say, the economic downturn has made this task more difficult than usual and the tendency for most boards in this situation is to adopt a “wait and see” approach. Inherently, there’s nothing wrong with this strategy and in most difficult economic climates, waiting for the economy to stabilize before engaging aggressive fundraising efforts is a useful strategy.

The problem with that approach in this economic cycle is the sheer length of time it will take for the economy to stabilize to historically comfortable levels is long enough that a board risks having fundraising connections grow stale and having lower levels of fundraising expectations taking hold throughout the membership. So without even realizing it is happening, boards can fall victim to shifting from a culture of maximizing potential to one where the fundraising community is allowed to define itself. And since artistic potential is inextricably intertwined with fundraising potential, the institutional byproduct is clear.

Part 2 will take a closer look at the today’s concessionary environment as well as specific details from the Utah agreement and how those provisions appear to appropriately address the inherent concern of board atrophy in the context described above whereas other groups are falling short.

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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