ACT 160 UPDATE, Vermont Performing Arts Organizations, PLEASE READ!!

Act 160, the omnibus tax bill signed into law last spring (May, 2010) contains language that will require those of you that sell $50,000 or more in tickets to performances this year to charge a 6% sales tax on tickets to your events starting this April 1st.

We have just learned that ANY organization that uses a third-party ticketing outlet will probably have to charge the sales tax, EVEN IF YOU SOLD LESS THAN $50,000-WORTH OF TICKETS IN 2010!! The reason for this is that the Tax Department is interpreting the statute to read that the ticket seller is responsible for collecting the tax, therefore it is the ticket-seller's threshold, not the presenting entity's threshold, that matters.

Therefore, REGARDLESS of whether you believe this law will apply to you starting in April, WILL ALL OF YOU PLEASE fill out our incredibly brief questionnaire on the subject, by clicking HERE?

If you filled out a similar survey we sent out last spring, please fill it out again--you probably have more accurate numbers to report anyway...

Thank you!

Five Ways to Cope

In my last post (scroll down), I shared five trends that are driving the planning and operating agendas of arts organizations. Since the trends were, frankly, quite depressing, I closed by saying I'd share some strategies for how to cope with--or even take advantage of--these trying times...

Focus on Excellence
Last July the Kennedy Center's Michael Kaiser shared his thoughts about how organizations could cope with a financial crisis, and the one piece of advice that stood out for me was his admonition to NOT sacrifice artistic quality to save a few dollars. What I particularly noted was that he wasn't just saying "hire the best performers;" instead, he said "showcase new and exciting work." The lesson is, I think, people have seen Macbeth and heard Beethoven's Eroica; but they probably haven't seen Tony Kushner's "Angels in America" or the latest work by Philip Glass. In his experience, during tough economic times, patrons will pay to see something they haven't seen before (that has an excellent reputation) and not pay to see "the sure thing" that they probably have seen many times before. Keep your programs fresh...

Bring your Show to Where the People Are
Why should Philadelphia have all the fun? Two of the most moving examples of "taking it to the people" are the Opera Company of Philadelphia-led "Random Act of Culture" that involved dozens of local choruses, the "Halleluia" Chorus from Handel's Messiah, the Wanamaker Organ, and Macy's department store in downtown Philly; and their equally inspiring rendition of the "Brindisi" chorus from Verdi's La Traviata in the nearby Reading Market. These are extreme examples of what performers have known for ages: sometimes the best way to get people interested in your programs is to reach out to them first--in supermarkets and farmer's markets, in train stations, ski lodges and waterfront parks. Flash mobs may be the extreme version of what is a pretty good strategy for opening up your doors to younger audiences. Don't forget, though, the event has to be high quality to succeed...

Explore "Transient" events
Closely related to flash mobs is a growing segment of arts activities that can only be described as "transient" events. These are cultural events that occur in nontraditional spaces like parking lots, empty storefronts, public parks, and train stations, but instead of an opera company performing opera, or a dance company doing a dance, these are more often a collaboration of artists who are presenting original work that is designed specifically for the site. Whatever the collaboration needs, they figure out the cheapest most expedient way to do it. Collaborators are paid by passing a hat for a suggested donation and marketing/promotion is done entirely on Facebook or Twitter. With virtually no overhead, all of the tangible expenses handled as in-kind donations, and no formal "organization" to pay for, costs are unbelievably low and audiences are left feeling like they have been part of a planned, original "happening." While it technically a fairly "low risk" endeavor, an established arts organization might find this to be a "low reward" activity. This kind of performance, however, is proving to be a very popular pastime for the highly connected under-30 somethings on the west coast. At least that's what I've heard...

Is this the wave of the future?

Do Less with Less
Yes, this one is obvious. So why do we have such a difficult time doing less than we did last year or the year before? Because we are mission-driven, we are passionate, we believe in the all-consuming power of the arts to make our lives, schools, and communities better, and because our funders continually expect us to do more than we ever did before.

So here is a thought: disguise how you are doing less with less. Instead of doing six subscription events in a season, do five (high quality, remember), and, instead of a sixth, convene a gathering of local or regional artists for a day-long discussion of how to address the challenges facing the community. Invite the media--make an event out of it. Charge $10 to attend, and feed them all a box lunch. Your networking/planning discussions may show you new opportunities that you never would have thought of...

Or do five events of your own, and then invite your area schools to come in and present a showcase of their most talented students in a reduced-priced program whose purpose is to, say, raise funds for scholarships for their attendance at an arts school, or to make the local library more physically accessible or some other important community charitable purpose. Once you start thinking of your season as "five-plus-one," instead of "same-old-six," ideas and opportunities will start to flow.

Increase your Marketing/Promotion Budget
Most people have the biggest problem with this one. Again, because as 501(c)3s, most arts organizations are hard-wired to spend that last dollar on program, we insist on cutting marketing and promotion first. As Michael Kaiser pointed out last July, it's better to do one less event, but do everything else well--which includes marketing and promotion. As a percentage of our overall budget, I believe that we should begin to get our boards of directors and our funders comfortable with a marketing/promotion budget of at least 10%. Right now, if memory serves, our field usually spends about 3% on average. This is not enough. If people don't know the good work you are presenting, how are you going to expect them to buy a ticket? Organizations that gain audience share during times of austerity, usually keep those gains when the times get better.

Collaborate Collaborate Collaborate
Before you exhaust your organization's resources trying to cope with a tight budget and increased competition; before you burn out your administrative and artistic staff by freezing salaries, asking for more hours, or placing them on furlough; before you allow your facility to slowly deteriorate to the point of embarrassment for lack of attention to regular maintenance, please please please collaborate! Think of your competition not as competition, but your most sympathetic partner. The chances are, if you are struggling, so are they, and they will welcome any overture from you.

Interestingly, I've had conversations with organizations who have a misplaced idea of who their competition is. One individual wanted to start a dance company because, as she put it, "there are no dance companies doing what I want to do in my part of the state." What she wanted to do was reach out to high-school aged boys and girls--particularly girls--and engage them in dance. To her, the competition was other dance efforts. To me, her competition was the local recreation department's after-school sports programs. I haven't heard back from her yet...

On another occasion, I had a conversation with a member of a local theater company whose board refused to allow him to share a production with another, similarly-sized theater company less than 50 miles away. "They're our biggest competition" this person was told. Maybe. It turns out that NO ONE on the board of this theater company had ever even attended a production at the other theater, nor did they know a single audience-member who had either! So with no audience overlap, how could they POSSIBLY be competitors? If ever a collaboration was designed to function well, this was it! So far, no dice...

* * * * *

Times of austerity are times to not just think, but actually ACT outside of the box. Why? You have a ready-made excuse for failure. "We had no choice...we had to try something!" Don't be misled, however. None of the ideas I have suggested are easy. All will certainly take you so outside your comfort zone, but isn't that better than, say, forced retirement...?

Stay strong and do good work.

Keep the Change (Coming)

Crocuses are stabbing through the winter detritus in our yard. Mud is on the roads. Maple steam is escaping from small rustic buildings dottling the landscape. The Legislature plans to finish by the end of April (wow!).

Change is in the air.

Although I continue to come across artists and administrators who are angry or scared about their current economic condition, by far the majority of them have taken the current crisis as a starting point for exploring how to accomplish their work differently, more efficiently, and/or with greater impact. For example, I have had conversations with cultural representatives from three Vermont communities who are in various stages of consolidating a significant segment of their local cultural efforts to achieve administrative, marketing, and promotional synergies and savings.

This is the kind of change we need.

At our advocacy day on March 17th (huge thanks to all of you who came!) we heard from a variety of people about new ways to capture and use data, or better ways to position Vermont artistic products and services to broaden and deepen Vermont's audience as well as its brand identity.

Again, more change to consider.

Perhaps the most important thing artists and arts administrators could change, however, is how they approach marketing and promotion. In a very quick and totally unscientific, recent sampling of a few Vermont arts organizations I discovered two things: 1) many arts administrators don't really know what percentage of their annual operating budget they allocate to marketing and promotion. They could all form an estimate by calculating the number of events times the rough expenditures on advertising per event, but no one would commit to a firm figure without equivocating; and 2) most administrators having completed the calculation, guesstimated that they spent less than 3% of their total operating expenditures on marketing and promotion.

Here's a new way to look at marketing and promotion. Take an average of your total operating income for the last three years. Multiply that by 10%. There. That's your new budget line-item for marketing and promotion for your organization next year. That's what you are going to spend on a well-considered plan to fill your seats, to engage your audiences in new ways, to invite your legislators to come and speak at your opening night events, to showcase your organization as the center of community life that you know it to be.

"But that's too much! We've never spent more than 2% (it turns out, having now done the math). We need to spend that extra XX thousand dollars on artist fees/travel/dressing the hall/insurance/mindless debates about marketing/etc...."

Really?

What if you presented one or two fewer performances and took the money you would have spent up front on artist fees and really developed a marketing and promotional campaign that was designed to fill every seat in the house so full that you had to add an extra show? Wouldn't your board be happy? Wouldn't the artists be happy?

Our state department of Tourism and Marketing (VDTM) has a long history of marketing and promoting the Vermont Brand almost exclusively out of state. They also have a long history of partnering with private-sector partners and splitting the costs of out-of-state promotional campaigns to lure visitors here from Montreal, Boston, Albany (Capital District), New York, and Philadelphia.

We believe this is a huge opportunity to improve our own financial conditions as well as that of Vermont, which is dependent on tourism for 15% of its revenue.

Let's take aim at a realistic goal: let's get our boards to commit to spending 5% on marketing/promotion within the next two years, and 10% within five years. While you are doing that, we (the Arts Council) will:

• Develop out-of-state marketing campaigns with VDTM that showcase the multiple reasons to visit Vermont for its art (Vermont is a pretty wide open source for great copy!)
• Develop in-state marketing campaigns with our arts organizations, local chambers of commerce and others to reach not only the large number of Vermonters who only know what's going on in their own communities, but the large number of out-of-state visitors who stay with family and friends.
• Encourage arts organizations all over the state to join forces with each other and with us and mimic the very successful brand-oriented campaigns that the likes of the Ski Areas Association and Cabot Cheese have done with VDTM.
  

In addition to many of the other ideas we have put forward at Advocacy Day about information-gathering, accountability, and application-streamlining, putting a new focus on marketing and promotion may be turn out to be the most significant change for the Arts Council in a generation.

Like I said, change is in the air, and these are all big.

Breathe deeply.