Business Lessons for the Arts

Business is business and art is art, but to the benefit of both in an era of diminished economic support comes an imaginative program called “arts stabilization.”

Southern California arts organizations that hope to prosper should examine this innovative approach, which teaches organizations receiving grants how to develop productive management structures, improve their financial bases and live within their means.

Organizations supporting or creating arts face many challenges: changing audiences, tight revenues, growing costs and broad competition for both private and public funding. The arts stabilization program begins with a simple, self-evident truth: The best way to bolster an organization is to teach it to strengthen itself. To that end, a group of major national funding institutions--the Ford Foundation, the Pew Charitable Trusts, the Heinz Foundation and others--have designed a program for success.

Stabilization grants, which funnel about $100 million annually into a variety of arts programs, assist recipients not only in eliminating their accumulated deficit, if necessary, but by imposing strict financial discipline, a practice usually found only in very large cultural institutions.

Most important, perhaps, the program forces the grant recipients to establish long-term plans. Any exercise that begins by questioning a group’s raison d’etre usually ends up ensuring its prosperity in the long run.