Is US Domestic Economic Policy To Blame For Lower Corporate Sponsorships?

There’s a fascinating article by Phillip Longman in the 11/28/2015 edition of The Atlantic that examines the impact of increasingly relaxed US economic policies on per capita income. At more than 6,000 words, this is not a quick read but that doesn’t make it any less engaging and the part that intersects with the orchestra field is when the author begins examining the impact of cities after losing corporate headquarters in the wake of a merger.
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[Relaxed antitrust enforcement] has led to the effective colonization of many once-great American cities, as the financial institutions and industrial companies that once were headquartered there have come under the control of distant corporations. Empirical studies have shown that when a city loses a major corporate headquarters in a merger, the replacement of locally based managers by “absentee” managers usually leads to lower levels of local corporate giving, civic engagement, employment, and investment, often setting in motion further regional decline. A Harvard Business School study that analyzed the community involvement of 180 companies in Boston, Cleveland, and Miami found that “[l]ocally headquartered companies do most for the community on every measure,” including having “the most active involvement by their leaders in prominent local civic and cultural organizations.”

Anyone in this field with history that dates back to the 80s has firsthand experience with the sorts of outcomes Longman described. That era, when corporate raiding and mergers began dominating the US economy in the wake of policy changes and deregulation, saw a number of orchestras struggle under the pressures of lost corporate sponsorship revenue and board participation.

For those of you who entered the field after that point, you’ve endured the steadily erosion of corporate giving but Longman’s article goes a long way toward explaining why and how it happened.

Although the article doesn’t provide any solution per se, it serves as an excellent example of the type of resource I recommend new and emerging managers absorb to better understand the field’s history.

At the very least, the article should get you thinking about where things are headed and how the field will need to prepare.

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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