[This text is machine generated and may contain errors.]
Hi- Enclosing articles
@i2245-3850 for any of your members
that wants them as promised.
Great being with you.
ALVIN H. REISS Shp
WRITER, LECTURER, CONSULTANT
408 WEST 577TH STREET
NEW YORK, NY 10019
408 Wi FEST 57th STRE
40 57 �?~th DHKE
: NEW YORK, N. Y. 10019
Reprinted from
AMERICAN MANAGEMENT ASSOCIATION PUBLICATION FOR MEMBERS
RE VIEVV
EYE ON NONPROFITS
The Hidden Economy:
The Nonprofit Sector
BY ALVIN H. REISS
EYE ON NONPROFITS Ee ee
The Hidden Economy:
The Nonprofit Sector
BY ALVIN H. REISS
he profit incentive may be a
(] motating force for most em-
ployees, but in a giant industry
with more than 7 million workers (6
percent of the nation�?Ts total work-
force) profitability is never, and has
never been, a concern. These employ-
ees work for organizations in a sector
of the economy that touches most
Americans in many ways every day,
but it still remains little known and
less understood by most people.
This is the nonprofit sectora net-
work of about a million organizations
that are concerned with the spiritual,
educational, social, medical, legal, cul-
tural and leisure time needs of our
citizens. Despite the scope of the field
and its impact on national concerns,
little attention has been focused on
how it operates and manages its ac-
tivities.
The good news is that most non-
profit industry organizations are pro-
fessionally managed and marketed.
They contributed an estimated $228.2
billion to the national economy in
1986, or a 6.4 percent share of the
national income, according to studies
undertaken by Washington, D.C.-
based Independent Sector, a national
coalition of nonprofit organizations.
While profit isn�?Tt the motivation for
growth and development within this
industry, money, or the lack of it,
continues to be a major concern. As
many nonprofit groups have learned,
staying alive and growing isn�?Tt an easy
taskespecially when their services
are frequently offered at a cost below
market value so that their most needy
Alvin H. Reiss, a long-time writer,
lecturer, and consultant in the arts
and other areas of the nonprofit field,
is the editor of Arts Management, d1-
rector of the Professional Arts Man-
agement Institute, and director of the
new Arts Management Certificate Pro-
gram at Marymount Manhattan Col-
lege in New York City. His most recent
book 1s Cash In! Funding and Promot-
ing the Arts (Theatre Communica-
tions Group, 1986).
users at the lowest end of the income
scale can utilize them.
As a result, nonprofits constantly
are concerned with finding ways to
stimulate income potential, to close
the gap between what they earn from
the services they provide and what it
costs to provide them. Fund raising is
an ongoing effort, involving not only
direct proposals to foundations, cor-
porations and government agencies,
but also appeals of all kinds to indi-
viduals, who contribute the lion�?Ts
share of all private giving, an esti-
mated 82 percent in 1987, according
to �?oGiving USA,�?� a report published
by the New York City-based Ameri-
can Association of Fund-Raising Coun-
sel Trust for Philanthropy. Fund rais-
ing also includes special events and
earned-income techniques that often
go beyond the prosaic. For example,
an opera company created a parody of
an expose tabloid to sell subscrip-
tions, and a hospital used celebrity
waiters to win �?o�?~tips�?��?T at a dinner for its
medical program.
SEARCHING FOR NEW FUNDING
The search for new funding is end-
lessproduced by increased cutbacks
by government agencies at every
level. And many grants frequently are
in the form of contracts for specific
services rather than money for on-
going operations. This has pushed non-
profits into new areas and new rela-
tionships. Some major nonprofit or-
ganizations, such as the Sierra Club
and the Muscular Dystrophy Associa-
tion, have joined with banks to offer
their own affinity credit cards to mem-
bers and supporters. A growing num-
ber have become involved with top
corporations in joint venture market-
ing projects, where the corporation
pegs the sale or use of its products
directly to a gift to the charity.
As part of the national drive to raise
funds for restoration of the Statue of
NED LEVINE
JULY 1989
oO
Printed in U.S.A. © 1989 by Periodicals Division, American Management Association. All rights reserved.
EYE ON NONPROFITS
Liberty in 1983, American Express,
which coined the term �?o�?~cause-related
marketing�?T some years earlier, do-
nated a penny to the Statue of Liberty
Foundation each time its charge card
was used and a dollar each time it
received a new application for its card.
The program not only raised $1.7
million for Miss Liberty, it also led to
increased American Express card use
business techniques, funding and staff
development.
Nonprofits have also learned how
to promote similar needs and con-
cerns by lobbying for them. This has
led to the growth of state associations
of nonprofits, banded together to focus
on mutual interests, provide support
services and lobby state legislatures.
Another result has been the publica-
ee OO ea Oe Re eee
While profit isn�?Tt the motivation for growth
within this industry, money, or the lack of it,
continues to be a major concern. Staying alive
and growing isn�?Tt easy, many nonprofits know.
by 28 percent, according to the com-
pany.
Nonprofit funding efforts are also
boosted by a key force within the
industry: the volunteer. Frequently
overlooked and too often unrecog-
nized, the volunteer contribution is so
staggering that without it, the indus-
try would probably collapse. In 1987
some 45 percent of all adult Ameri-
cans served as volunteers for charita-
ble causes, averaging 4.7 hours of
contributed time a week, according to
a 1988 Gallup survey on volunteerism
conducted for Independent Sector.
The value of these regular volunteer
activities was calculated at 14.9 billion
hours, the equivalent of 8.8 million
full-time employees. And, the value of
the donated time was estimated to be
an incredible $150 billion.
Considering the great diversity
among nonprofits, it may seem odd to
lump them together into one industry.
What, for instance, can a small-town
hospital have in common with a subur-
ban symphony orchestra? And what
concerns can an inner city church
share with a suburban family service
organization?
COMMON PROBLEMS,
COMMON NEEDS
In recent years many nonprofits
have come to recognize that because
of their corporate status they have
more in common with each other than
they had imagined. And similarly, dis-
parate organizations within a single
area of the nonprofit field-modern
dance, ballet companies and ethnic
troupes in the dance field, for ex-
amplehave come together to share
information on various aspects of man-
agement. These include marketing,
tion of many national periodicals to
serve the field, bearing such titles as
The NonProfit Times, The Chronicle
of Philanthropy, Nonprofit World, The
Taft Nonprofit Executive and Fund
Raising Management.
Not surprisingly, the internal man-
agement concerns of nonprofit organi-
zations are not unlike those in the
profit sector. A spring 1989 series of
workshops offered by the Account-
ants for the Public Interest/Support
Center of New York, for example,
included budgeting, managing the of-
fice and files, payroll and government
reporting, employee benefit plans, ef-
fective telephone skills, strategic plan-
ning, and advanced supervisory skills.
Also included, however, were top-
ics geared distinctly to the needs of
organizations that depend upon fund
ke COME
�?oJ just know that the people from Accounting came up, said your desk
was fully depreciated, and took it away.�?�
chiuner veer sities tt
raising and volunteer involvement. A
three-hour �?~�?~Building and Strengthen-
ing Your Board�?��?T workshop focused on
board/staff relationships, the board�?Ts
composition and recruitment, board
committees, and the board�?Ts role in
fund raising.
While common operational and man-
agement concerns have been a co-
alescing force within the industry, non-
profits have been drawn together by
larger issues in recent years. Because
of their special status, and the fact
that many agencies are the recipients
of public funding, they have had to
bear the close scrutiny of government
agencies. For example, the Internal
Revenue Service is concerned that
they do not abuse their tax-exempt
privileges.
The lobbying activities of non-
profits, unrelated business income, the
use of material inducements (such as
premiums to attract donors), and the
proper way to inform donors of the tax
deductibility of contributions have
been scrutinized by various state and
federal government agencies.
MAINTAINING STANDARDS
The industry itself has done a good
deal of soul-searching to insure that
its standards are maintained and that
levels of confidence and trust remain
high. Leaders within it have debated
such major areas as cause-related mar-
ketingto determine if business sup-
port tied directly to product sales
might not smack too heavily of com-
mercialism.
The New York City-based National
Charities Information Bureau (NCIB)
fe
¥
&
fant
*,
WES - ae Sg
Cae
o
50 MANAGEMENT REVIEW
EYE ON NONPROFITS
assembled a panel of 36 nonprofit
industry leaders to help revise its
published standards for philan-
thropic organizations. Following a se-
ries of intensive panel meetings over
an 18-month period and a review by
the Bureau�?Ts board, NCIB adopted its
revised �?~Standards in Philanthropy�?��?T
in July 1988. The standards, which
serve as guidelines for contributors,
include recommendations to nonprofit
organizations in such key operational
areas aS governance, programs, pub-
lic information, use of funds and
accountability.
The nonprofit sector is here to stay.
Despite funding difficulties, execu-
tives at these organizations maintain
grace under pressure. One nonprofit
manager, an opera administrator,
calmly accepted his new position with
an organization saddled with a
$250,000 deficit. Glynn Ross, named
as the general director of the Arizona
Opera Company in 1983, immediately
announced a new sales blitz to capture
the attention and support of the com-
munity. Its theme? �?oThere Is Life
After Debt.�?� 0
JULY 1989 51
L
Just how far down
is the bottom line?
ALVIN H. REISS
408 WEST 57th STREEF
NE
YORK, N. Y. 10019
recent article in the newsletter of
At Miami City Ballet aimed at cor-
porate sponsors had an interesting
opening. �?oUnderwriting can be fun,�?� it
began �?oand at the same time let a corporate
or private donor support the ballet in a very
important and meaningful way.�?� The article
then went on to list 17 underwriting oppor-
tunities ranging from the purchase of com-
puter hardware for the company at $60,000
down to paying for a portable barre for the
company�?Ts rehearsal studio at $1,000.
It�?Ts doubtful that many corporations
faced with the prospect of sponsoring an
arts activity would agree that they were
doing so because it was fun. Nor perhaps
would many companies indicate that their
rationale for underwriting a dance-related
project was to support the ballet in an impor-
tant and meaningful way.
Would that it was so but it isn�?Tt. Business
support of the arts is pragmatic and corpo-
rations link their dollars to the kind of or-
ganizations and programs that relate to their
own marketing or audience needs. And as
the hard-pressed arts community in coun-
tries throughout the world recognizes that
the once munificent hand of government
can no longer satisfy all their financial
needs, the move toward business sponsor-
ship increases.
The benefits that a corporation wins from
its support of the arts have been cited fre-
quently. In speeches before business groups
this writer often mentions Paul H. Elicker
as an example of a businessman whose com-
pany benefitted from its support of cultural
programs. Over the years Elicker indicated
many times that the SCM Corporation,
which he served as president and board
chairman before retiring last year, spon-
sored museum exhibitions because of the
recognition it achieved by doing so, �?obe-
cause we wish to become better known,�?�
as he phrased it. Elicker also stated in
Alvin H. �?oSkip�?� Reiss, a noted arts
writer, lecturer and journalist, is the
editor of Arts Management and author
of the new book Cash In! Funding and
Promoting The Arts. He also directs
the Professional Arts Management In-
stitute and is administrative director of
the Arts Management Certificate pro-
gram at Marymount Manhattan Col-
lege in New York City.
speeches and articles that the $200,000 a
year his company spent on museum spon-
sorship was such an excellent investment
that to achieve the kind of recognition it
won from arts support, SCM would have
to spend $1 million a year for five years on
advertising.
Herbert Schmertz, the public relations
genius who helped steer Mobil into support-
ing such cultural events as Masterpiece
Theatre, when he was the company�?Ts vice
president for public affairs, recognized just
how significant an identification with arts
excellence was for the oil company. Ac-
cording to Schmertz, �?oPatronage can be
made into a valid and legitimate tool for
marketing the company�?Ts products, ser-
vices, ideas, needs and inspirations.�?� On
another occasion he pinpointed a key mar-
keting concept when he indicated that
sophisticated purchasers based their buying
decisions less on how products differ from
each other than on how they viewed the
companies that produced them.
While the arts continue to represent a
good investment for the corporation wish-
ing to position itself in the public conscious-
ness, there has been a marked change in
arts support in recent years. Increasingly,
companies are turning away from direct do-
nations to the arts to cultural event sponsor-
ship, with the result that corporate cash has
moved from the company�?Ts giving arm to
its marketing arm. In fact, a growing
number of companies are now beginning to
look at arts sponsorship as they have long
looked at sports sponsorship, as a prime
area of marketing activity.
�?oAs the sponsorship of traditional sport-
ing events has grown more costly and
crowded,�?� began an article in the media
column of The New York Times on March
27, �?ocompanies [several were named] are
turning to out-of-the-ordinary events to help
polish their images and increase their
sales.�?� Ergo the arts.
Hitachi America Ltd., for example, an-
nounced a new sponsorship strategy this
spring indicating that it was no longer in-
terested in most sports events and was look-
ing for new opportunities in dance, music
and other arts. Special Events Report, in
its April 17 issue, cited Hitachi�?Ts manager
of corporate business development, Harry
McGrath, who said, �?oHitachi America,
which targets mid- and upper-level man-
oe
agers at Fortune 500 companies, will spon-
sor blue chip cultural events that provide
an image of sophistication and inter-
nationalism.�?�
Mary Ann Josh, whose Chicago-based
company, Events Alive, develops sponsor-
ship activities for major corporations, con-
firmed the move by many companies from
sports to arts sponsorship. �?oOnly a dozen
major companies can afford to sponsor big
sports events today,�?� she said. �?oMany com-
panies that aren�?Tt spending their money on
sports anymore are looking to the arts,
where they can find innovative and exciting
projects to sponsor at a much lower cost.�?�
Josh also indicated that currently, her
clients were considering the sponsorship of
at least four major cultural events.
The move toward business sponsorship
is not only an American development. In
countries throughout the world, where any
kind of business support of the arts is a
relatively new concept, corporate execu-
tives are looking to the American experi-
ence to find ways that they too can become
involved in the arts and benefit from the
relationship. Moreover, with the growing
internationalism of business and the
economic difficulties experienced by many
governments, which must cut back on ser-
vices to many areas including the arts, bus-
iness sponsorship is certain to grow as arts
groups look to new forms of support.
On a recent lecture tour of Australia and
a subsequent lecture residency in Vienna,
I was aware of the corporate interest in arts
sponsorship. In Australia, where business
support is virtually limited to sponsorship
arrangements, since tax laws make direct
donations difficult, I received many ques-
tions from interested and curious corporate
executives not only about the nature of arts
sponsorship and how it has worked in the
States but about the benefits available to
them from such relationships. In fact, in-
terest is so strong that a new national organi-
zation, Australian Business Support for the
Arts, has just been formed to spur corporate
arts sponsorships. Headed by a volunteer
committee of top business executives, the
new organization will operate as a division
of the Australian Elizabethan Theatre Trust,
with an initial budget of $160,000. In Vi-
enna, where government support of the arts
has been especially strong over the years,
(continued on page 80)
72 Fund Raising Management/August 1989
CLASSIFIED
ADVERTISING
Rates: $8.25 per line; payable in. ad-
vance; minimum 4 lines. Send copy di-
rectly to Fund Raising Management,
224 Seventh St., Garden City, New
York 11530.
For Box agjreplies, please indicate box
number and send c/o Fund Raising
Management.
POSITION WANTED:
EXECUTIVE DIRECTOR
Leading 27-yr. old international
public health and development organi-
zation, headquartered in SAN DIEGO,
seeking Executive Director to assume
full responsibility. Requires motivator
with high quality record of accomplish-
ment in management. Desired experi-
ence: int'l relations, business, over-
seas, public health or development,
fund raising, volunteerism. Must be a
good communicator, negotiator and
commited to humanitarium causes.
Rare opportunity. Write in confidence
to:
Search Committee, Board of Directors
PROJECT CONCERN INT'L.,
3550 Afton Rd.
San Diego, CA. 92123
EOE/m/f
Mai
continued from page 71
ask?�?� I looked at the check for $5,000 and
thanked him.
Maybe that whole performance was just
his idea of fun. After I reported the com-
plaint to the doctors, he may have had
another laugh when they followed-up.
A farmer near Moberly, Missouri, went
to his lawyer, Garry Tatlow, to discuss es-
tate plans. The client said, �?oI have no family
and want to leave my $300,000 estate to
help young people. I have already provided
four years of college for a talented neigh-
bor�?Ts daughter. I am thinking of leaving the
money to the Boy Scouts and the Girl
Scouts. What do you think?�?�
Tatlow replied, �?oYou have an excellent
plan. My only suggestion is to also take a
look at Woodhaven. See what they do for
children and youth.�?�
The farmer went to Columbia to investi-
gate Woodhaven Learning Center. He did
not look like a man with $300,000 to give
away. Someone was told, �?oShow this
farmer around the place.�?� He was given the
tour but no one talked to him or even got
his name. That may sound incredible, but
it happens in the very best organizations
when those meeting the public happen to
be distracted or not alert for a time.
Now you think I�?Tm going to say that a
little lapse in attention lost Woodhaven a
gift. No, the tour itself was enough to get
the center one-third of the estate. Pure luck.
Am I asking you to see beyond the man-
ner of dress, the gruff voice, the frugal life-
style to the true, inner self of your prospect?
Yes, and that�?Ts what makes fund-raising
calls a fascinating challenge. @
Reiss
continued from page 72
my host, the Management Club, selected a
title for my seminar designed to draw a
large audience of interested business execu-
AZ Marketing
Access International, Inc.
American City Bureau
American Comm. and Engineerng
Blackbaud MicroSystems
Champion Printing Company
re Were 2. a cepa teay 2 84 3 ce ea em
Con Squires Nat�?T! Copy Clinic
Cravat Club, Inc.
Data Documents/Intelimail
Direct Mail Decision Makers
Donor Research Institute
Dynamic Programming, Inc.
Epsilon Data Management Inc
Essex Printing Company
Fund Raising Tool Box
Hoke Communications, Inc
Audiocassettes
Book Catalog
Complete Direct Mail List Handbook
How To Write Powerful Fund Raising Letters. 46
Insiders Guide To Demographic Know-How. . 56
RINIROR Cire MIs oe an 8s 6 o g's Fas Bo
InfoCision Mgmt. Corporation
Information Prospector
Inforum Marketing Co
JAMI Marketing Services, Inc. ...........
Kenadar Corporation
Ketchum Inc
Role SU as �?only Ge ae kes eee ew:
Macvantage
Mail-Well Envelope
Mater Bittwiee COI 8 ee ee eS
80 Fund Raising Management/August 1989
VERTISERS
Master Systems
Metafile Information Sys., Inc
Natsu otis os 28 A es a Es BC
Mokrynski & Associates, Inc.
NDL/Lifestyle Selector
NSFRE
Names In The News California
National Hole in One Assoc.
Nat! Committee on Planned Giv
New Boston Group
PG Calc, Inc.
PVA-EPVA, Inc.
Project Concern
Robert F. Sharpe & Company
Saturn Corporation
Signature Systems, Inc.
Starkland System/Donor Perfect
Swiss Colony, Inc.
System Support Services
Tele-Systems
The Brennan Companies
The Pacific Group
Travis & Software
U.S. Monitor Service
Unique Marketing, Inc.
Walter Karl, Inc.
Whitacre/Greer
Williams-Sonoma, Inc
Zoller Data Systems
This index is provided as a service. The publisher does not
assume any liability for errors or omissions.
tives. It worked. My topic? �?oArts Sponsor-
ship as a Marketing Instrument Practical
Applications.�?�
The shift toward sponsorship, while pre-
senting arts organizations with new funding
opportunities, also creates new relation-
ships and new problems. Who, for exam-
ple, has primary control over development
activities in a cultural group, the develop-
ment director or the marketing director?
Can corporate dollars lead the artistic prod-
uct or even shape it, rather than follow it?
According to Barbara Janowitz Ehrlich, the
director of management services for Theatre
Communications Group, �?oWhile sponsor-
ship and other marketing-oriented projects
are bringing needed new dollars into our
cultural institutions, some development
professionals are concerned that a commer-
cialized perception of their programs may
erode the case for strictly charitable con-
tributions that should motivate the bulk of
giving.�?�
The current circumstances of Britain�?Ts
Royal Ballet indicates what can happen
when the arts�?T quest for business sponsor-
ship gets a little out of hand. A May 17
New York Times story, �?oUncertain times at
the Royal Ballet,�?� focused on the artistic,
financial and management problems that
have plagued the company for the past dec-
ade. �?oThe Royal is also playing to less tra-
ditional ballet audiences these days because
of increased corporate sponsorship and ris-
ing seat prices,�?� stated the article, It then
suggested that with a loss of much govern-
ment support and ticket prices rising to $57
for orchestra seats, corporations were be-
coming the Royal�?Ts principal audience and
influencing its programs. �?oCorporate spon-
sors, using ballet to entertain clients, are
buying big blocks of seats,�?� the article said.
�?oIncreased dependence on such audiences
has influenced the repertory with the famil-
iar story ballets replacing more adventurous
works.�?�
While the danger signs are evident, cor-
porate sponsorship, when placed in iis
proper perspective and balanced with a
program of direct giving, can be an impor-
tant addition to the overall funding mix.
Happily, the days of direct corporate dona-
tions to the arts are far from over, as scores
of arts organizations and united arts funds
in cities throughout the country can attest.
In Seattle, where the Corporate Council for
the Arts (CCA) has solicited millions of
arts dollars from corporations over the past
20 years, the concept of direct funding has
been strongly affirmed. Aware of the influx
of marketing dollars into the arts, the CCA
undertook a study of its operations and in
1988 asked its 17 arts recipients and many
contributing corporations if it should go out
of business and allow cultural fund seekers
to solicit corporations on their own. The
idea was strongly rejected by both business
and the arts. As of this writing, according
to new CCA president, Peter Donnelly, a
former theater administrator, the united
fund was well on its way to reaching its
1989 goal of $1.5 million, an increase of
$200,000 over the previous year. @
Reprinted from
AN AMERICAN MANAGEMENT ASSOCIATION PUBLICATION FOR MEMBERS
ELS ERE SAD EST ER ARE ER PMCS eS OAR SONS
REVIEW
Business Jakes a Partner-
The Arts
AWA =.
Business Iakes a Partner-
The Arts
BY ALVIN REISS
ew York Tele-
phone placed a se-
ries of prominent
advertisements in
leading New York
City newspapers
this past Decem-
ber to proclaim an
unusual alliance.
As sole corporate
sponsor of �?~The
Nutcracker,�?� it announced that the
company had initiated a unique part-
nership with the New York City
Ballet. During this same time
period, other major corporations
CIGNA Cos., National Westmin-
ster Bank, Philip Morris Cos., and
Chrysler Corp. among themalso
were using the media to publicize
their support of arts groups and
cultural events.
Yet, with all the attention fo-
cused on mergers, acquisitions, and
leveraged buyouts, this type of
emerging partnership has gone
virtually unnoticed by the business
press. Twenty years ago, these
types of partnerships were not in
full swing. But today many compa-
nies are finding that these alliances
can help them better market their
products, enhance public percep-
tion, and target key audiences. And
while corporate philanthropy does
Alvin H. Reiss, a writer, lecturer,
and consultant on the arts, is the
editor of Arts Management, direc-
tor of the Professional Arts Man-
agement Institute, and director of
the new Arts Management Certifi-
cate program at Marymount Man-
hattan College in New York City.
His most recent book is Cash In!
Funding and Promoting the Arts
(Theatre Communications Group,
1986).
Ballet Oklahoma convinced Holland America to become its official
cruise line. At the same time, the cruise line agreed to sponsor two of
the dance company�?Ts performances.
still exist, there are few companies
that aren�?Tt looking to relate such
giving to bottom-line objectives.
To the surprise of many in the
business world, much of the impe-
tus for these new relationships is
coming from an increasingly so-
phisticated arts community. These
organizations understand business
needs and know how to meet them
without sacrificing their own integ-
rity or changing their products.
Some of the results have been un-
usual as well as impressive. Ballet
Oklahoma, for example, headquar-
tered in landlocked Oklahoma City,
was able to convince Holland Amer-
ica Line to become its official cruise
line. With the help of a travel agent
board member, the dance company
pinpointed the cruise marketing po-
tential among its audience and won
accord for Holland America�?Ts des-
ignation as Ballet Oklahoma�?Ts offi-
cial sea carrier.
The outcome was Holland Amer-
ica�?Ts sponsorship of the dance com-
pany�?Ts opening performances in
both the 1987 and 1988 seasons;
cash donations from a participating
local travel agency of $100 for
every warm-water Holland Amer-
ica cruise booked by a Ballet Okla-
homa patron in the fall of 1987; a
barrage of publicity, including a vide-
otape showing ballet company prin-
cipals touring the ms Nieuw Am-
sterdam; and a �?oBallet Cruise,�?�
featuring performances by com-
pany dancers aboard the same ship.
The response to the onboard per-
formance was so positiveit re-
ceived Holland America�?Ts highest
entertainment rating for the ship
JUNE 1989 41
Printed in U.S.A. © 1989 by Periodicals Division, American Management Association. All rights reserved.
BUSINESS AND THE ARTS _
that yearthat company dancers
were invited back to perform on a
Noordam cruise this past February.
COURTING SPONSORS
GeVa, a Rochester, New York
theater, knew exactly where to
turn when it was looking for spon-
sors to underwrite performances
of its courtroom drama, �?oInherit
the Wind.�?T What better place, rea-
soned the theater�?Ts marketing
staff, than the court itself, specifi-
cally the jury box, where 10 non-
speaking �?o�?~actors�?T�?T would perform
nightly. Invitations went out to law
firms and other businesses, request-
ing them to sponsor one perform-
ance. In return they would get rec-
ognition in all theater materials and
the opportunity to select 10 part-
ners or staff members to sit in the
jury box at the sponsored perform-
ance. Thirteen sponsorships, at
$1,000 each, were sold; and audi-
ences flocked to the theater, with
many perhaps drawn by the rare
prospect of seeing lawyers remain
silent in the courtroom.
Similarly, The Wharton Center
for Performing Arts at Michigan
State University invited local busi-
nesses that, it reasoned, benefited
from its performances to several
on-stage cocktail receptions this
past year. The invitations were
worded with a pragmatic come-on:
�?oYou will be presented with ideas
for increasing your business on the
nights of Wharton Center events.
There is plenty of room for your
establishment to share in the
wealth.�?�
The receptions, held in January
and September 1988, each drew
more than 90 guests and continue
to reap benefits for the arts center.
Restaurateurs have purchased bulk
tickets for their patrons, promoted
Center productions in their ads,
and developed a range of perform-
ance tie-ins.
When an arts organization
makes itself vital to its community,
as the Alabama Shakespeare Festi-
val in Montgomery has, business
is often eager to form an alliance.
Not only has the Festival been
pictured on the cover of South Cen-
tral Bell�?Ts phone directory, but
Montgomery�?Ts Coca-Cola Bottling
Company has featured 12 million
coupons on bottles and displays in
hundreds of area stores promoting
discounted Festival ticket offers.
As relationships between busi-
nesses and arts groups continue
to develop, corporations are find-
ing new ways to utilize one of the
strongest arts resources: the high-
quality audiences cultural pro-
grams attract. Thus, when Chase
Manhattan Bank, a longtime arts
supporter, decided to underwrite a
special 50th anniversary exhibition
at the Guggenheim Museum in
More and more companies are bringing artists and other performers
into their corporate headquarters. Above, employees of Louisville,
Kentucky-based Philip Morris enjoy an informal performance by an
actress sponsored by The General Electric Foundation.
New York, it tied its support to the
use of Chase bank cards. At the
bottom of ads promoting the ex-
hibit was a bold headline reading,
�?oThe cultural advantages of bank-
ing at Chase.�?� Additional copy in-
formed readers that upon presen-
tation of any Chase bank cards,
they would be admitted free to the
exhibition.
While corporations know their
needs, arts groups are getting to
know them too and have learned
how to target their requests for
support to those needs. For exam-
ple, Milwaukee�?Ts Skylight Opera
Company knows that many poten-
tial corporate supporters like to tie
sponsorships to employee relations
programs. So it developed a port-
able performance project, offer-
ing sponsors in-house miniperfor-
mances featuring several singers
and a pianist. To entice Marquette
Electronics to commit to under-
write the opera company�?Ts 1987
production of �?~�?~Working,�?� it went a
step further. It brought an ex-
cerpted version of the full musical
productionwith the entire cast
to the electronics firm�?Ts plant.
BENEFITS PACKAGES:
A CREATIVE DRAW
Many arts groups that regularly
solicit corporate sponsors offer
their supporters an overall benefits
package, which can be expanded
if the sponsorship is significant
enough. New York City�?Ts Museum
of American Folk Art, for example,
extends to corporate sponsors such
overall benefits as prominent dis-
play of the sponsor�?Ts name in all
exhibition-related materials; full-
page catalog acknowledgment; cre-
dit line in all exhibition corre-
spondence, including press re-
leases; a private reception for top
executives and their guests; free
admission for all employees; a pri-
vate viewing for executives and
their families; and corporate mem-
bership in the museum.
Some corporate benefits are
even more visible. Theatergoers
who congregate in the Gallery Bar
between acts of a South Coast Rep-
ertory performance in Costa Mesa,
California, are surrounded by re-
minders of business support. The
oval bar, a popular spot during in-
42 MANAGEMENT REVIEW
termissions, is lined by a circle of
burnt-orange directors�?T chairs,
each outlined in white letters with
the prominent name of a theater
supporter. These include Ameri-
can Express Co. and the Boston
Company.
CHALLENGES TO OVERCOME
Wooing and winning a corporate
sponsor isn�?Tt always simple. The
Brooklyn Academy of Music (BAM)
was having difficulty finding sup-
port for this past summer�?Ts series
of performances by avant-gardedan-
Relations Journal.
The print campaign highlighted
examples of previous corporate
sponsorships. For example, one ad
featuring a pianist in performance
was headlined �?oWe Gave Xerox an
Original�?��?T and taglined �?~�?~We Make
Corporate Performance an Art.�?�
The print effort was backed up by
a direct mail campaign to corpora-
tions, advertising agencies, and pub-
lic relations representatives. The
arts group also took its case di-
rectly to the public by exhibiting at
trade shows and participating in
When an arts organization makes itself vital
to its community, business is often eager
to form an alliance.
cer Pina Bausch and her company.
Since the Bausch company is based
in the Ruhr Valley in Wuppertal,
Germany, the enterprising arts cen-
ter turned to Lufthansa for sup-
port. In the midst of complex
negotiationsBAM was seeking
$75,000 to cover the cost of trans-
porting both giant sets and the com-
pany to Brooklynthere was a
change in the airline�?Ts key person-
nel. As a result, concern about the
promotional benefits Lufthansa
would receive in return for its sup-
port was heightened. BAM had to
come up with a somewhat altered
package, including greater expo-
sure at the opening night party and
a larger allotment of performance
tickets.
One arts group that has made a
science of creating corporate spon-
sorship opportunitiesis Affiliate Art-
ists Inc. (AAD), a 22-year-old New
York City-based organization that
develops new career opportunities
for performing artists. Beginning
in 1985, AAIwhose sponsors
have included General Electric Co.,
Nissan Motor Co., and Montgom-
ery Ward & Co.decided to accel-
erate its already aggressive cam-
paign for corporate support. Dig-
ging up $50,000, a giant budget
for a nonprofit arts group, AAI
placed ads designed to attract cor-
porate backers in such business pub-
lications as Fortune and Public
conferences for meeting and con-
vention planners.
The campaign began to pay off
with hundreds of new leads and
an increase in appointments to dis-
cuss sponsorships from about one a
week to an average of six a week.
Within a year, six major new corpo-
rate sponsorships developed, all di-
rectly traceable to the promotional
effort; and by the end of 1988,
some 12 more were added.
Turning its attention to special-
events marketing, Affiliate Artists
delivered its case for support at a
growing number of conferences
and through a specially developed
slide show that has since been pre-
sented at Public Relations Society
of America meetings throughout
the country. A presentation and
reception AAI gave at an Interna-
tional Events Marketing Confer-
ence led to more than 100 new
corporate contacts. Feature stories
on AAI�?Ts sponsorship program also
appeared in The Wall Street Jour-
nal, Advertising Age, Medical Meet-
ings, and Automotive News.
But despite having caught the
attention of a vast number of po-
tential sponsors, Affiliate Artists
isn�?Tt resting its case. Instead, it has
expanded its program to include
such corporate sponsorship activi-
ties as artist residencies, meeting
and convention entertainment, and
special events. �?~�?o�?~We�?Tre unique in
JUNE 1989 43
that we found a way to create cul-
tural programmingoften called
special events and event market-
ingthat advances the careers of
gifted artists, brings audiences to
the arts, and helps corporate spon-
sors meet their marketing and pub-
lic relations objectives,�?T�?T said Rich-
ard C. Clark, founder and president
of Affiliate Artists. �?oOver 125,000
custom-designed events have
helped enhance corporate images,
introduce new products, reposition
consumer brands, and even open
new factory sites,�?��?T he said.
NATIONAL/STATE GROUPS
LEND A HAND
Over the years national or-
ganizations with one foot in the
business camp and the other in the
arts camp have helped arts groups
win business support. In recent
years both the Business Commit-
tee for the Arts and the Arts &
Business Council have expanded
their scope to promote business
support of the arts and spur execu-
tives to directly participate in cul-
tural organizations�?T activities.
The Business Committee for the
Arts (BCA) grew out of a 1966
proposal by David Rockefeller and
presently comprises a national of-
fice in New York City and 13 affili-
ates around the country. Through
conferences, publications, and in-
formation services, BCA has been
a strong force in espousing general
Richard Clark, Affiliate Artists:
�?oCultural programming advances
the careers of gifted artists, brings
audiences to the arts, and helps
corporate sponsors meet market-
ing objectives.�?��?T
arts support and targeting specific
areas of arts activity where greater
business involvement is needed.
Arts education is one area of in-
volvement it singled out this past
year.
The New York City-based Arts
& Business Council has developed
a pioneering Business Volunteers
for the Arts (BVA) program, which
took unusual action on one festival
day. They replaced items in their
store windows with art works pro-
vided by the Upper Catskills Com-
munity Council of the Arts.
BRIGHT FUTURE AHEAD
The future of the business-arts
partnership seems bright, even in
the face of growing economic pres-
The involvement of upwardly mobile execu-
tives in the activities of local arts groups has
stimulated continuing corporate support
of those groups.
is spreading throughout the coun-
try. At last count there were some
30 BVA programs up and running,
with a total of 62 set to be opera-
tional by the end of 1989. This
project trains young business ex-
ecutives in the operations of arts
organizations and then assigns
them as volunteers to arts groups
in need of their specific skills.
The personal involvement of up-
wardly mobile executives in the ac-
tivities of local arts groups has
helped stimulate new and continu-
ing corporate �?~support of those
groups. :
State programs, many focused
on smaller communities, also have
served to reinforce the arts-
business relationship. Vermont,
through its state arts agency, re-
cently launched a business-arts part-
nership program to boost joint pro-
jects at the grass roots level.
In New York State, a model pro-
gram set up by the national Presi-
dent�?Ts Committee on the Arts and
the Humanities and the Alliance of
New York State Arts Councils in
1985 to foster partnerships be-
tween corporations and local arts
groups has brought some impres-
sive resultsincluding help in pro-
moting and funding local arts festi-
vals. For example, in Glens Falls,
the Post Star published an entire
supplement on the Lower Adiron-
dack Regional Arts Council�?Ts festi-
val; while in Oneonta, thanks to the
Downtown Retail Merchants Asso-
ciation, merchants not only con-
tributed money and goods but also
sures. Businesses have come to
recognize the importance of a good
cultural climate for their employ-
ees, customers, communities, and
themselves. Moreover, if the crea-
tivity shown by arts groups in fur-
thering the partnership is any indi-
cation, continued growth is ahead.
Consider the ingenuity displayed
by the Palace Theatre in Cleve-
land�?Ts Playhouse Square Center sev-
eral years ago in finding a sponsor
for �?~Pump Boysand Dinettes�?T: Any-
one driving into a Sohio service
station during the show�?Ts run re-
ceived a coupon worth $1.00 off
the cost of a ticket to the show.
Theatergoers also received a cou-
pon courtesy of Sohio inviting them
to �?o�?~See the �?~Pump Boys�?T at Sohio�?��?T
and save $1.00 at the pump.
When Philadelphia�?Ts Walnut
Street Theatre Company was plan-
ning its 1988 production of �?~�?~Guys
and Dolls,�?T the theater�?Ts promo-
tion manager came up with a clever
way of linking one of the musical�?Ts
hit numbers with furrier Jacques
Ferber, one of the theater�?Ts busi-
ness supporters. In the lobby of the
theater a large sign reading �?~�?~La-
dies Take Back Your Mink�?T�?T ex-
plained that ticketholders would re-
ceive free cleaning and beautifica-
tion of their mink coats.
But all arts creativity isn�?Tt on the
stage. As business has discovered,
a lot of it takes place behind the
scenes. After all, one can be
an entrepreneur in the arts as well
as in business. 0
44 MANAGEMENT REVIEW
ALVIN H. REISS
408 WEST 57th STREET
NEW YORK, N. Y. 10019
AUSTRALIAN BUSINESS SUPPORT FOR THE ARTS
AO nsrorr
PREMIER EDITION
_ SPRING �?T89
Interview
Alvin Reiss:
Building a bridge between
e arts
Alvin �?oSkipp* Reiss is a founder member and ex vice-president of the Ants and Business
Council of New York. This year he completed a whistle stop tour of Australia under
the auspices of the Myer Foundation. Whilst in Australia Mr Reiss conducted seminars
for ans administrators and business people on business involvement in the arts. Mark
Sassella of Wang Australia, who has been seconded to ABSA ona part time basis, met
with Reiss towards the end of his tour to obtain his impressions of business and the arts
business and
in Australia.
Skip, Government funding of the arts is
currently not increasing in Australia.
Have you found Australian arts managers
confident of increasing their private
sector funding to compensate this?
Well, I've only met a portion of the arts
management leadership in Australia, but |
sense in speaking to a number of people that
the possibilities are tremendous for increasing
that support.
Our research shows that business people
are concerned that arts organisations
often do not recognise corporate needs.
this simply a matter of better
presentation by arts managers?
I] think training will become an important
element in the growing relationship,
especially for those smaller groups who have
not really been involved as much in seeking
and winning corporate sponsorship. The
kind of training that will have to take place
should emphasise case studies where arts
managers have the opportunity to probe a
range of corporate situations. They should
be attune to regularly reading business
publications, and becoming directly involved
with business organisations like Chambers of
Commerce.
Australian corporations are taking a
much more commercial approach to arts
sponsorship these days. Do you believe
the arts industry must face up to this?
This has been a growing reality in recent years
and is certainly evident in the US.
Corporations have needs that have to be met
in a range of ways - through their image. their
marketing, through the sale of their products
- they are looking for returns on their
sponsorship. Arts groups should. however,
be very careful that they in no way
commercialise their own activities merely for
reasons of sponsorship. In fact, as long ago
as 1972 when | was writing a book on
business in the arts | emphasised the whole
quid pro quo relationship.
Can you give a couple of examples of how
arts organisations have provided real
commercial benefits to their corporate
sponsors?
One of the biggest would be the Business
Week example. Business Week is one of our
major corporate publications inthe US. They
produced an entire section in their December
Sth issue devoted to New York's
Metropolitan Museum of Art. It was more
of a publication within a publication
containing photographs, artwork and stories
about the museum, its collection and its
needs.
Also included in that publication were 31
pages of advertising by 27 companies who
were very interested in the arts audience asa
market for their products. It was a
commercial ploy by Business Week to sell
advertising space using the arts group as the
way to sell that space. Both business and arts
Organisations involved in the publication
were extremely pleased with the results and
the whole insert was in excellent taste.
Secondly, while Business Week was able to
win $1.5m in advertising through that
section, they also gave the Metropolitan
Museum of Art 10 per cent of that amount -
$150,000-asadonation. I believe this to be
a good example of a working quid pro quo
relationship. es;
One of the quotes that | frequently cite is
from Paul Elliker of the SEM Corporation. In
his annual report several years ago he stated
that the $250,000 a year his company spends
on the arts is the cheapest investment he can
make because to project its image through
normal public relations and advertising would
cost SEM $1m a year for 5 years to see the
kinds of returns received through their
sponsorship of the arts.
ABSA has been established here to
encourage corporations to become
involved in the arts. This process seems
to have worked well in the US and in the
UK. Do you have any comments based
on your experience in setting up a similar
organisation in the US?
First, is that you get really committed people
as leaders of any new organisation. From
what I've seen of the leadership of ABSA |
think you have the kind of business people
who really sincerely believe in what they will
be proclaiming.
Secondly, you have to have the time and
the means to project that message. You have
to be able to identify all of the kinds of
markets you are relating to and those markets
include not only the business people that
appreciate you but also the arts community
and individuals concerned with those arts
Organisations. A very important aspect of
this is that the arts community has to feel that
what is being done for them is really in their
interest. Therefore, some aspect of the total
program should involve arts people on an
advisory basis to look into the kinds of
programs ABSA is developing.
Toavoid any pitfalls, the progress should be
gradual rather than immediate. You can't
immediately create an organisation and
expect everyone to run to support it. You
have to build up your case as there will be a
lot of stations along the way where you have
the opportunity to present new kinds of
�?~a
thud
a eee
Interview
arguments, meet new kinds of audiences.
The other thing is that you can�?Tt promise
too much initially, because everyone expects
this organisation to be the grand solution to
all the arts funding needs. I don�?Ttthink it will
ever be the solution to all the problems. It is
only one of the ways that can help.
Have you had a chance to observe any
differences in the style of corporate
support of the arts in Australia in
comparison to that in the US?
We have discovered that corporations in
America are so eager to promote their
involvement with the arts and to establish a
business/arts relationship that a corporation
will spend as much money on promoting its
involvement with that arts group as it will on
the project itself.
Very often it will lend its marketing and PR
expertise to the promotion of that project.
Forexample, some years ago when American
Airlines sponsored the Clybume Festival they
also established their own public relations
desk down in Fort Worth, Texas, where the
Festival was held, to handle all media
arrangements because they were so deeply
involved with it.
Can you give me any idea how much
corporate support is provided annually by
US corporations?
There hasn�?Tt been a recent survey, but well
over $500 million. | will say one thing the
size of corporate grants in the States has
grown tremendously.
Once we considered a large grant at
$50,000 or so. Today we would consider a
large grant as being $500,000 or up range.
In the work of ABSA do you see a leading
role from certain industry sectors in the
business advocacy process?
| think the advertising industry is one of the
critical industries involved with the arts. First
of all there is a natural affinity between
advertising and the arts because so much of
the arts is already in advertising. Most
importantly, advertising offers an inroad into
the needs of the corporation the advertising
department of a corporation is generally the
most knowledgeable of that corporation's
marketing needs.
The media is also terribly important. One
of the areas we must reach within the media
is the financial press. There needs to be
greater reporting on the business of the arts
and the economic needs of the arts. I'd love
to see a lot more attention given to this.
Two other elements of the business
community who can benefit from a strong
business/arts relationship are banking and
large retail stores. They are both people
businesses that have to attract people into
their premises and through support of the arts
they can establish the kind of image that can
bring in the arts audience to them.
Bloomingdales has helped to establish its
identity through its relationship with the arts.
Can private sector support for the arts
work for innovative or experimental arts
organisations?
This is an interesting question because
increasingly in recent years some of the
experimental and avant garde groups have
attracted the attention of business because of
these qualities. Avant garde arts programs
With the Govern
THE MICHELANGELO OF THE FUTURE
COULD BE RIGHT IN YOUR BACKYARD.
attract younger audiences and are beginning
to attract a large share of corporate funding.
Ford Foundation gave $350,000 to an Arena
Stage program that was strictly for new
works. The American Choreographer
Awards focus on young and/or experimental
choreographers and is now sponsored by
General Electric. We are seeing a lot of
smaller, dynamic arts groups beginning to
reach out for corporate support as
corporations desire to reach the youth market
to which these arts groups relate.
Based on the conclusions of a study done in
Canada, smaller arts groups can attract
attention from small and medium sized
businesses if their boards of directors and the
people within circles of supporters assist in
opening the doors. The majority of ~
successful sponsorships of smaller groups by
smaller businesses have come from board
members.
Some of the large arts groups which are
receiving the benefits of corporate
sponsorship should find a way to encourage
and help the smaller groups. The smaller
groups are generally not as adept in marketing
themselves to corporations as the larger
groups. | suggest that when large arts groups
receive funding from corporations for a major
project, a small portion of that funding be set
aside to help smaller and emerging groups.
Editor's note: More from Alvin Reiss in the next
issue. Copies of Mark Sassella�?Ts complete
interview with Alvin Reiss may be obtained by
phoning Lesley Allen at ABSA on (02) 698 1688.
Ppa dhacath
flistae@ de
Austrahliat «
nui by pore «
Wp baweas abiip
yar
if
�?oa
* bet
Pts thecbeass
ALVIN . REDO
408�?T WEST 57th STREET
NEW YORK, N. Y, 1007°
�?T
. ASBA REPORT
