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Hi- Enclosing articles@i2245-3850 for any of your membersthat wants them as promised.Great being with you.ALVIN H. REISS ShpWRITER, LECTURER, CONSULTANT408 WEST 577TH STREETNEW YORK, NY 10019

408 Wi FEST 57th STRE40 57 �?~th DHKE: NEW YORK, N. Y. 10019Reprinted fromAMERICAN MANAGEMENT ASSOCIATION PUBLICATION FOR MEMBERSRE VIEVVEYE ON NONPROFITSThe Hidden Economy:The Nonprofit SectorBY ALVIN H. REISS

EYE ON NONPROFITS Ee eeThe Hidden Economy:The Nonprofit SectorBY ALVIN H. REISShe profit incentive may be a(] motating force for most em-ployees, but in a giant industrywith more than 7 million workers (6percent of the nation�?Ts total work-force) profitability is never, and hasnever been, a concern. These employ-ees work for organizations in a sectorof the economy that touches mostAmericans in many ways every day,but it still remains little known andless understood by most people.This is the nonprofit sectora net-work of about a million organizationsthat are concerned with the spiritual,educational, social, medical, legal, cul-tural and leisure time needs of ourcitizens. Despite the scope of the fieldand its impact on national concerns,little attention has been focused onhow 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 $228.2billion to the national economy in1986, or a 6.4 percent share of thenational income, according to studiesundertaken by Washington, D.C.-based Independent Sector, a nationalcoalition of nonprofit organizations.While profit isn�?Tt the motivation forgrowth and development within thisindustry, money, or the lack of it,continues to be a major concern. Asmany nonprofit groups have learned,staying alive and growing isn�?Tt an easytaskespecially when their servicesare frequently offered at a cost belowmarket value so that their most needyAlvin H. Reiss, a long-time writer,lecturer, and consultant in the artsand other areas of the nonprofit field,is the editor of Arts Management, d1-rector of the Professional Arts Man-agement Institute, and director of thenew Arts Management Certificate Pro-gram at Marymount Manhattan Col-lege in New York City. His most recentbook 1s Cash In! Funding and Promot-ing the Arts (Theatre Communica-tions Group, 1986).users at the lowest end of the incomescale can utilize them.As a result, nonprofits constantlyare concerned with finding ways tostimulate income potential, to closethe gap between what they earn fromthe services they provide and what itcosts to provide them. Fund raising isan ongoing effort, involving not onlydirect proposals to foundations, cor-porations and government agencies,but also appeals of all kinds to indi-viduals, who contribute the lion�?Tsshare of all private giving, an esti-mated 82 percent in 1987, accordingto �?oGiving USA,�?� a report publishedby the New York City-based Ameri-can Association of Fund-Raising Coun-sel Trust for Philanthropy. Fund rais-ing also includes special events andearned-income techniques that oftengo beyond the prosaic. For example,an opera company created a parody ofan expose tabloid to sell subscrip-tions, and a hospital used celebritywaiters to win �?o�?~tips�?��?T at a dinner for itsmedical program.SEARCHING FOR NEW FUNDINGThe search for new funding is end-lessproduced by increased cutbacksby government agencies at everylevel. And many grants frequently arein the form of contracts for specificservices 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 Cluband the Muscular Dystrophy Associa-tion, have joined with banks to offertheir own affinity credit cards to mem-bers and supporters. A growing num-ber have become involved with topcorporations in joint venture market-ing projects, where the corporationpegs the sale or use of its productsdirectly to a gift to the charity.As part of the national drive to raisefunds for restoration of the Statue ofNED LEVINEJULY 1989oOPrinted in U.S.A. © 1989 by Periodicals Division, American Management Association. All rights reserved.

EYE ON NONPROFITSLiberty in 1983, American Express,which coined the term �?o�?~cause-relatedmarketing�?T some years earlier, do-nated a penny to the Statue of LibertyFoundation each time its charge cardwas used and a dollar each time itreceived a new application for its card.The program not only raised $1.7million for Miss Liberty, it also led toincreased American Express card usebusiness techniques, funding and staffdevelopment.Nonprofits have also learned howto promote similar needs and con-cerns by lobbying for them. This hasled to the growth of state associationsof nonprofits, banded together to focuson mutual interests, provide supportservices and lobby state legislatures.Another result has been the publica-ee OO ea Oe Re eeeWhile profit isn�?Tt the motivation for growthwithin this industry, money, or the lack of it,continues to be a major concern. Staying aliveand growing isn�?Tt easy, many nonprofits know.by 28 percent, according to the com-pany.Nonprofit funding efforts are alsoboosted by a key force within theindustry: the volunteer. Frequentlyoverlooked and too often unrecog-nized, the volunteer contribution is sostaggering that without it, the indus-try would probably collapse. In 1987some 45 percent of all adult Ameri-cans served as volunteers for charita-ble causes, averaging 4.7 hours ofcontributed time a week, according toa 1988 Gallup survey on volunteerismconducted for Independent Sector.The value of these regular volunteeractivities was calculated at 14.9 billionhours, the equivalent of 8.8 millionfull-time employees. And, the value ofthe donated time was estimated to bean incredible $150 billion.Considering the great diversityamong nonprofits, it may seem odd tolump them together into one industry.What, for instance, can a small-townhospital have in common with a subur-ban symphony orchestra? And whatconcerns can an inner city churchshare with a suburban family serviceorganization?COMMON PROBLEMS,COMMON NEEDSIn recent years many nonprofitshave come to recognize that becauseof their corporate status they havemore in common with each other thanthey had imagined. And similarly, dis-parate organizations within a singlearea of the nonprofit field-moderndance, ballet companies and ethnictroupes in the dance field, for ex-amplehave come together to shareinformation on various aspects of man-agement. These include marketing,tion of many national periodicals toserve the field, bearing such titles asThe NonProfit Times, The Chronicleof Philanthropy, Nonprofit World, TheTaft Nonprofit Executive and FundRaising Management.Not surprisingly, the internal man-agement concerns of nonprofit organi-zations are not unlike those in theprofit sector. A spring 1989 series ofworkshops offered by the Account-ants for the Public Interest/SupportCenter of New York, for example,included budgeting, managing the of-fice and files, payroll and governmentreporting, 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 oforganizations that depend upon fundke COME�?oJ just know that the people from Accounting came up, said your deskwas fully depreciated, and took it away.�?� chiuner veer sities ttraising and volunteer involvement. Athree-hour �?~�?~Building and Strengthen-ing Your Board�?��?T workshop focused onboard/staff relationships, the board�?Tscomposition and recruitment, boardcommittees, and the board�?Ts role infund raising.While common operational and man-agement concerns have been a co-alescing force within the industry, non-profits have been drawn together bylarger issues in recent years. Becauseof their special status, and the factthat many agencies are the recipientsof public funding, they have had tobear the close scrutiny of governmentagencies. For example, the InternalRevenue Service is concerned thatthey do not abuse their tax-exemptprivileges.The lobbying activities of non-profits, unrelated business income, theuse of material inducements (such aspremiums to attract donors), and theproper way to inform donors of the taxdeductibility of contributions havebeen scrutinized by various state andfederal government agencies.MAINTAINING STANDARDSThe industry itself has done a gooddeal of soul-searching to insure thatits standards are maintained and thatlevels of confidence and trust remainhigh. Leaders within it have debatedsuch major areas as cause-related mar-ketingto determine if business sup-port tied directly to product salesmight not smack too heavily of com-mercialism.The New York City-based NationalCharities Information Bureau (NCIB)fe¥&fant*,WES - ae SgCaeo50 MANAGEMENT REVIEW

EYE ON NONPROFITSassembled a panel of 36 nonprofitindustry leaders to help revise itspublished standards for philan-thropic organizations. Following a se-ries of intensive panel meetings overan 18-month period and a review bythe Bureau�?Ts board, NCIB adopted itsrevised �?~Standards in Philanthropy�?��?Tin July 1988. The standards, whichserve as guidelines for contributors,include recommendations to nonprofitorganizations in such key operationalareas aS governance, programs, pub-lic information, use of funds andaccountability.The nonprofit sector is here to stay.Despite funding difficulties, execu-tives at these organizations maintaingrace under pressure. One nonprofitmanager, an opera administrator,calmly accepted his new position withan organization saddled with a$250,000 deficit. Glynn Ross, namedas the general director of the ArizonaOpera Company in 1983, immediatelyannounced a new sales blitz to capturethe attention and support of the com-munity. Its theme? �?oThere Is LifeAfter Debt.�?� 0JULY 1989 51

LJust how far downis the bottom line?ALVIN H. REISS408 WEST 57th STREEFNEYORK, N. Y. 10019recent article in the newsletter ofAt Miami City Ballet aimed at cor-porate sponsors had an interestingopening. �?oUnderwriting can be fun,�?� itbegan �?oand at the same time let a corporateor private donor support the ballet in a veryimportant and meaningful way.�?� The articlethen went on to list 17 underwriting oppor-tunities ranging from the purchase of com-puter hardware for the company at $60,000down to paying for a portable barre for thecompany�?Ts rehearsal studio at $1,000.It�?Ts doubtful that many corporationsfaced with the prospect of sponsoring anarts activity would agree that they weredoing so because it was fun. Nor perhapswould many companies indicate that theirrationale for underwriting a dance-relatedproject was to support the ballet in an impor-tant and meaningful way.Would that it was so but it isn�?Tt. Businesssupport of the arts is pragmatic and corpo-rations link their dollars to the kind of or-ganizations and programs that relate to theirown marketing or audience needs. And asthe hard-pressed arts community in coun-tries throughout the world recognizes thatthe once munificent hand of governmentcan no longer satisfy all their financialneeds, the move toward business sponsor-ship increases.The benefits that a corporation wins fromits support of the arts have been cited fre-quently. In speeches before business groupsthis writer often mentions Paul H. Elickeras an example of a businessman whose com-pany benefitted from its support of culturalprograms. Over the years Elicker indicatedmany times that the SCM Corporation,which he served as president and boardchairman before retiring last year, spon-sored museum exhibitions because of therecognition it achieved by doing so, �?obe-cause we wish to become better known,�?�as he phrased it. Elicker also stated inAlvin H. �?oSkip�?� Reiss, a noted artswriter, lecturer and journalist, is theeditor of Arts Management and authorof the new book Cash In! Funding andPromoting The Arts. He also directsthe Professional Arts Management In-stitute and is administrative director ofthe Arts Management Certificate pro-gram at Marymount Manhattan Col-lege in New York City.speeches and articles that the $200,000 ayear his company spent on museum spon-sorship was such an excellent investmentthat to achieve the kind of recognition itwon from arts support, SCM would haveto spend $1 million a year for five years onadvertising.Herbert Schmertz, the public relationsgenius who helped steer Mobil into support-ing such cultural events as MasterpieceTheatre, when he was the company�?Ts vicepresident for public affairs, recognized justhow significant an identification with artsexcellence was for the oil company. Ac-cording to Schmertz, �?oPatronage can bemade into a valid and legitimate tool formarketing the company�?Ts products, ser-vices, ideas, needs and inspirations.�?� Onanother occasion he pinpointed a key mar-keting concept when he indicated thatsophisticated purchasers based their buyingdecisions less on how products differ fromeach other than on how they viewed thecompanies that produced them.While the arts continue to represent agood investment for the corporation wish-ing to position itself in the public conscious-ness, there has been a marked change inarts 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 hasmoved from the company�?Ts giving arm toits marketing arm. In fact, a growingnumber of companies are now beginning tolook at arts sponsorship as they have longlooked at sports sponsorship, as a primearea of marketing activity.�?oAs the sponsorship of traditional sport-ing events has grown more costly andcrowded,�?� began an article in the mediacolumn of The New York Times on March27, �?ocompanies [several were named] areturning to out-of-the-ordinary events to helppolish their images and increase theirsales.�?� Ergo the arts.Hitachi America Ltd., for example, an-nounced a new sponsorship strategy thisspring indicating that it was no longer in-terested in most sports events and was look-ing for new opportunities in dance, musicand other arts. Special Events Report, inits April 17 issue, cited Hitachi�?Ts managerof corporate business development, HarryMcGrath, who said, �?oHitachi America,which targets mid- and upper-level man-oeagers at Fortune 500 companies, will spon-sor blue chip cultural events that providean image of sophistication and inter-nationalism.�?�Mary Ann Josh, whose Chicago-basedcompany, Events Alive, develops sponsor-ship activities for major corporations, con-firmed the move by many companies fromsports to arts sponsorship. �?oOnly a dozenmajor companies can afford to sponsor bigsports events today,�?� she said. �?oMany com-panies that aren�?Tt spending their money onsports anymore are looking to the arts,where they can find innovative and excitingprojects to sponsor at a much lower cost.�?�Josh also indicated that currently, herclients were considering the sponsorship ofat least four major cultural events.The move toward business sponsorshipis not only an American development. Incountries throughout the world, where anykind of business support of the arts is arelatively new concept, corporate execu-tives are looking to the American experi-ence to find ways that they too can becomeinvolved in the arts and benefit from therelationship. Moreover, with the growinginternationalism of business and theeconomic difficulties experienced by manygovernments, which must cut back on ser-vices to many areas including the arts, bus-iness sponsorship is certain to grow as artsgroups look to new forms of support.On a recent lecture tour of Australia anda subsequent lecture residency in Vienna,I was aware of the corporate interest in artssponsorship. In Australia, where businesssupport is virtually limited to sponsorshiparrangements, since tax laws make directdonations difficult, I received many ques-tions from interested and curious corporateexecutives not only about the nature of artssponsorship and how it has worked in theStates but about the benefits available tothem from such relationships. In fact, in-terest is so strong that a new national organi-zation, Australian Business Support for theArts, has just been formed to spur corporatearts sponsorships. Headed by a volunteercommittee of top business executives, thenew organization will operate as a divisionof the Australian Elizabethan Theatre Trust,with an initial budget of $160,000. In Vi-enna, where government support of the artshas been especially strong over the years,(continued on page 80)72 Fund Raising Management/August 1989

CLASSIFIEDADVERTISINGRates: $8.25 per line; payable in. ad-vance; minimum 4 lines. Send copy di-rectly to Fund Raising Management,224 Seventh St., Garden City, NewYork 11530.For Box agjreplies, please indicate boxnumber and send c/o Fund RaisingManagement.POSITION WANTED:EXECUTIVE DIRECTORLeading 27-yr. old internationalpublic health and development organi-zation, headquartered in SAN DIEGO,seeking Executive Director to assumefull responsibility. Requires motivatorwith 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 agood communicator, negotiator andcommited to humanitarium causes.Rare opportunity. Write in confidenceto:Search Committee, Board of DirectorsPROJECT CONCERN INT'L.,3550 Afton Rd.San Diego, CA. 92123EOE/m/fMaicontinued from page 71ask?�?� I looked at the check for $5,000 andthanked him.Maybe that whole performance was justhis idea of fun. After I reported the com-plaint to the doctors, he may have hadanother laugh when they followed-up.A farmer near Moberly, Missouri, wentto his lawyer, Garry Tatlow, to discuss es-tate plans. The client said, �?oI have no familyand want to leave my $300,000 estate tohelp young people. I have already providedfour years of college for a talented neigh-bor�?Ts daughter. I am thinking of leaving themoney to the Boy Scouts and the GirlScouts. What do you think?�?�Tatlow replied, �?oYou have an excellentplan. My only suggestion is to also take alook at Woodhaven. See what they do forchildren and youth.�?�The farmer went to Columbia to investi-gate Woodhaven Learning Center. He didnot look like a man with $300,000 to giveaway. Someone was told, �?oShow thisfarmer around the place.�?� He was given thetour but no one talked to him or even gothis name. That may sound incredible, butit happens in the very best organizationswhen those meeting the public happen tobe distracted or not alert for a time.Now you think I�?Tm going to say that alittle lapse in attention lost Woodhaven agift. No, the tour itself was enough to getthe 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-raisingcalls a fascinating challenge. @Reisscontinued from page 72my host, the Management Club, selected atitle for my seminar designed to draw alarge audience of interested business execu-AZ MarketingAccess International, Inc.American City BureauAmerican Comm. and EngineerngBlackbaud MicroSystemsChampion Printing Companyre Were 2. a cepa teay 2 84 3 ce ea emCon Squires Nat�?T! Copy ClinicCravat Club, Inc.Data Documents/IntelimailDirect Mail Decision MakersDonor Research InstituteDynamic Programming, Inc.Epsilon Data Management IncEssex Printing CompanyFund Raising Tool BoxHoke Communications, IncAudiocassettesBook CatalogComplete Direct Mail List HandbookHow To Write Powerful Fund Raising Letters. 46Insiders Guide To Demographic Know-How. . 56RINIROR Cire MIs oe an 8s 6 o g's Fas BoInfoCision Mgmt. CorporationInformation ProspectorInforum Marketing CoJAMI Marketing Services, Inc. ...........Kenadar CorporationKetchum IncRole SU as �?only Ge ae kes eee ew:MacvantageMail-Well EnvelopeMater Bittwiee COI 8 ee ee eS80 Fund Raising Management/August 1989VERTISERSMaster SystemsMetafile Information Sys., IncNatsu otis os 28 A es a Es BCMokrynski & Associates, Inc.NDL/Lifestyle SelectorNSFRENames In The News CaliforniaNational Hole in One Assoc.Nat! Committee on Planned GivNew Boston GroupPG Calc, Inc.PVA-EPVA, Inc.Project ConcernRobert F. Sharpe & CompanySaturn CorporationSignature Systems, Inc.Starkland System/Donor PerfectSwiss Colony, Inc.System Support ServicesTele-SystemsThe Brennan CompaniesThe Pacific GroupTravis & SoftwareU.S. Monitor ServiceUnique Marketing, Inc.Walter Karl, Inc.Whitacre/GreerWilliams-Sonoma, IncZoller Data SystemsThis index is provided as a service. The publisher does notassume any liability for errors or omissions.tives. It worked. My topic? �?oArts Sponsor-ship as a Marketing Instrument PracticalApplications.�?�The shift toward sponsorship, while pre-senting arts organizations with new fundingopportunities, also creates new relation-ships and new problems. Who, for exam-ple, has primary control over developmentactivities 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, thedirector of management services for TheatreCommunications Group, �?oWhile sponsor-ship and other marketing-oriented projectsare bringing needed new dollars into ourcultural institutions, some developmentprofessionals are concerned that a commer-cialized perception of their programs mayerode the case for strictly charitable con-tributions that should motivate the bulk ofgiving.�?�The current circumstances of Britain�?TsRoyal Ballet indicates what can happenwhen the arts�?T quest for business sponsor-ship gets a little out of hand. A May 17New York Times story, �?oUncertain times atthe Royal Ballet,�?� focused on the artistic,financial and management problems thathave plagued the company for the past dec-ade. �?oThe Royal is also playing to less tra-ditional ballet audiences these days becauseof increased corporate sponsorship and ris-ing seat prices,�?� stated the article, It thensuggested that with a loss of much govern-ment support and ticket prices rising to $57for orchestra seats, corporations were be-coming the Royal�?Ts principal audience andinfluencing its programs. �?oCorporate spon-sors, using ballet to entertain clients, arebuying big blocks of seats,�?� the article said.�?oIncreased dependence on such audienceshas influenced the repertory with the famil-iar story ballets replacing more adventurousworks.�?�While the danger signs are evident, cor-porate sponsorship, when placed in iisproper perspective and balanced with aprogram 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 scoresof arts organizations and united arts fundsin cities throughout the country can attest.In Seattle, where the Corporate Council forthe Arts (CCA) has solicited millions ofarts dollars from corporations over the past20 years, the concept of direct funding hasbeen strongly affirmed. Aware of the influxof marketing dollars into the arts, the CCAundertook a study of its operations and in1988 asked its 17 arts recipients and manycontributing corporations if it should go outof business and allow cultural fund seekersto solicit corporations on their own. Theidea was strongly rejected by both businessand the arts. As of this writing, accordingto new CCA president, Peter Donnelly, aformer theater administrator, the unitedfund was well on its way to reaching its1989 goal of $1.5 million, an increase of$200,000 over the previous year. @

Reprinted fromAN AMERICAN MANAGEMENT ASSOCIATION PUBLICATION FOR MEMBERSELS ERE SAD EST ER ARE ER PMCS eS OAR SONSREVIEWBusiness Jakes a Partner-The ArtsAWA =.

Business Iakes a Partner-The ArtsBY ALVIN REISSew York Tele-phone placed a se-ries of prominentadvertisements inleading New YorkCity newspapersthis past Decem-ber to proclaim anunusual alliance.As sole corporatesponsor of �?~TheNutcracker,�?� it announced that thecompany had initiated a unique part-nership with the New York CityBallet. During this same timeperiod, other major corporationsCIGNA Cos., National Westmin-ster Bank, Philip Morris Cos., andChrysler Corp. among themalsowere using the media to publicizetheir support of arts groups andcultural events.Yet, with all the attention fo-cused on mergers, acquisitions, andleveraged buyouts, this type ofemerging partnership has gonevirtually unnoticed by the businesspress. Twenty years ago, thesetypes of partnerships were not infull swing. But today many compa-nies are finding that these alliancescan help them better market theirproducts, enhance public percep-tion, and target key audiences. Andwhile corporate philanthropy doesAlvin H. Reiss, a writer, lecturer,and consultant on the arts, is theeditor of Arts Management, direc-tor of the Professional Arts Man-agement Institute, and director ofthe 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 officialcruise line. At the same time, the cruise line agreed to sponsor two ofthe dance company�?Ts performances.still exist, there are few companiesthat aren�?Tt looking to relate suchgiving to bottom-line objectives.To the surprise of many in thebusiness world, much of the impe-tus for these new relationships iscoming from an increasingly so-phisticated arts community. Theseorganizations understand businessneeds and know how to meet themwithout sacrificing their own integ-rity or changing their products.Some of the results have been un-usual as well as impressive. BalletOklahoma, for example, headquar-tered in landlocked Oklahoma City,was able to convince Holland Amer-ica Line to become its official cruiseline. With the help of a travel agentboard member, the dance companypinpointed the cruise marketing po-tential among its audience and wonaccord 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 inboth the 1987 and 1988 seasons;cash donations from a participatinglocal travel agency of $100 forevery warm-water Holland Amer-ica cruise booked by a Ballet Okla-homa patron in the fall of 1987; abarrage 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 highestentertainment rating for the shipJUNE 1989 41Printed in U.S.A. © 1989 by Periodicals Division, American Management Association. All rights reserved.

BUSINESS AND THE ARTS _that yearthat company dancerswere invited back to perform on aNoordam cruise this past February.COURTING SPONSORSGeVa, a Rochester, New Yorktheater, knew exactly where toturn when it was looking for spon-sors to underwrite performancesof its courtroom drama, �?oInheritthe Wind.�?T What better place, rea-soned the theater�?Ts marketingstaff, than the court itself, specifi-cally the jury box, where 10 non-speaking �?o�?~actors�?T�?T would performnightly. Invitations went out to lawfirms and other businesses, request-ing them to sponsor one perform-ance. In return they would get rec-ognition in all theater materials andthe opportunity to select 10 part-ners or staff members to sit in thejury box at the sponsored perform-ance. Thirteen sponsorships, at$1,000 each, were sold; and audi-ences flocked to the theater, withmany perhaps drawn by the rareprospect of seeing lawyers remainsilent in the courtroom.Similarly, The Wharton Centerfor Performing Arts at MichiganState University invited local busi-nesses that, it reasoned, benefitedfrom its performances to severalon-stage cocktail receptions thispast year. The invitations wereworded with a pragmatic come-on:�?oYou will be presented with ideasfor increasing your business on thenights of Wharton Center events.There is plenty of room for yourestablishment to share in thewealth.�?�The receptions, held in Januaryand September 1988, each drewmore than 90 guests and continueto reap benefits for the arts center.Restaurateurs have purchased bulktickets for their patrons, promotedCenter productions in their ads,and developed a range of perform-ance tie-ins.When an arts organizationmakes itself vital to its community,as the Alabama Shakespeare Festi-val in Montgomery has, businessis often eager to form an alliance.Not only has the Festival beenpictured on the cover of South Cen-tral Bell�?Ts phone directory, butMontgomery�?Ts Coca-Cola BottlingCompany has featured 12 millioncoupons on bottles and displays inhundreds of area stores promotingdiscounted Festival ticket offers.As relationships between busi-nesses and arts groups continueto develop, corporations are find-ing new ways to utilize one of thestrongest arts resources: the high-quality audiences cultural pro-grams attract. Thus, when ChaseManhattan Bank, a longtime artssupporter, decided to underwrite aspecial 50th anniversary exhibitionat the Guggenheim Museum inMore and more companies are bringing artists and other performersinto their corporate headquarters. Above, employees of Louisville,Kentucky-based Philip Morris enjoy an informal performance by anactress sponsored by The General Electric Foundation.New York, it tied its support to theuse of Chase bank cards. At thebottom 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 theexhibition.While corporations know theirneeds, arts groups are getting toknow them too and have learnedhow to target their requests forsupport to those needs. For exam-ple, Milwaukee�?Ts Skylight OperaCompany knows that many poten-tial corporate supporters like to tiesponsorships to employee relationsprograms. So it developed a port-able performance project, offer-ing sponsors in-house miniperfor-mances featuring several singersand a pianist. To entice MarquetteElectronics to commit to under-write the opera company�?Ts 1987production of �?~�?~Working,�?� it went astep further. It brought an ex-cerpted version of the full musicalproductionwith the entire castto the electronics firm�?Ts plant.BENEFITS PACKAGES:A CREATIVE DRAWMany arts groups that regularlysolicit corporate sponsors offertheir supporters an overall benefitspackage, which can be expandedif the sponsorship is significantenough. New York City�?Ts Museumof American Folk Art, for example,extends to corporate sponsors suchoverall benefits as prominent dis-play of the sponsor�?Ts name in allexhibition-related materials; full-page catalog acknowledgment; cre-dit line in all exhibition corre-spondence, including press re-leases; a private reception for topexecutives and their guests; freeadmission for all employees; a pri-vate viewing for executives andtheir families; and corporate mem-bership in the museum.Some corporate benefits areeven more visible. Theatergoerswho congregate in the Gallery Barbetween acts of a South Coast Rep-ertory performance in Costa Mesa,California, are surrounded by re-minders of business support. Theoval bar, a popular spot during in-42 MANAGEMENT REVIEW

termissions, is lined by a circle ofburnt-orange directors�?T chairs,each outlined in white letters withthe prominent name of a theatersupporter. These include Ameri-can Express Co. and the BostonCompany.CHALLENGES TO OVERCOMEWooing and winning a corporatesponsor isn�?Tt always simple. TheBrooklyn Academy of Music (BAM)was having difficulty finding sup-port for this past summer�?Ts seriesof performances by avant-gardedan-Relations Journal.The print campaign highlightedexamples of previous corporatesponsorships. For example, one adfeaturing a pianist in performancewas headlined �?oWe Gave Xerox anOriginal�?��?T and taglined �?~�?~We MakeCorporate Performance an Art.�?�The print effort was backed up bya direct mail campaign to corpora-tions, advertising agencies, and pub-lic relations representatives. Thearts group also took its case di-rectly to the public by exhibiting attrade shows and participating inWhen an arts organization makes itself vitalto its community, business is often eagerto form an alliance.cer Pina Bausch and her company.Since the Bausch company is basedin the Ruhr Valley in Wuppertal,Germany, the enterprising arts cen-ter turned to Lufthansa for sup-port. In the midst of complexnegotiationsBAM was seeking$75,000 to cover the cost of trans-porting both giant sets and the com-pany to Brooklynthere was achange in the airline�?Ts key person-nel. As a result, concern about thepromotional benefits Lufthansawould receive in return for its sup-port was heightened. BAM had tocome up with a somewhat alteredpackage, including greater expo-sure at the opening night party anda larger allotment of performancetickets.One arts group that has made ascience of creating corporate spon-sorship opportunitiesis Affiliate Art-ists Inc. (AAD), a 22-year-old NewYork City-based organization thatdevelops new career opportunitiesfor performing artists. Beginningin 1985, AAIwhose sponsorshave 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 budgetfor a nonprofit arts group, AAIplaced ads designed to attract cor-porate backers in such business pub-lications as Fortune and Publicconferences for meeting and con-vention planners.The campaign began to pay offwith hundreds of new leads andan increase in appointments to dis-cuss sponsorships from about one aweek to an average of six a week.Within a year, six major new corpo-rate sponsorships developed, all di-rectly traceable to the promotionaleffort; and by the end of 1988,some 12 more were added.Turning its attention to special-events marketing, Affiliate Artistsdelivered its case for support at agrowing number of conferencesand through a specially developedslide show that has since been pre-sented at Public Relations Societyof America meetings throughoutthe country. A presentation andreception AAI gave at an Interna-tional Events Marketing Confer-ence led to more than 100 newcorporate contacts. Feature storieson AAI�?Ts sponsorship program alsoappeared in The Wall Street Jour-nal, Advertising Age, Medical Meet-ings, and Automotive News.But despite having caught theattention of a vast number of po-tential sponsors, Affiliate Artistsisn�?Tt resting its case. Instead, it hasexpanded its program to includesuch corporate sponsorship activi-ties as artist residencies, meetingand convention entertainment, andspecial events. �?~�?o�?~We�?Tre unique inJUNE 1989 43

that we found a way to create cul-tural programmingoften calledspecial events and event market-ingthat advances the careers ofgifted artists, brings audiences tothe arts, and helps corporate spon-sors meet their marketing and pub-lic relations objectives,�?T�?T said Rich-ard C. Clark, founder and presidentof Affiliate Artists. �?oOver 125,000custom-designed events havehelped enhance corporate images,introduce new products, repositionconsumer brands, and even opennew factory sites,�?��?T he said.NATIONAL/STATE GROUPSLEND A HANDOver the years national or-ganizations with one foot in thebusiness camp and the other in thearts camp have helped arts groupswin business support. In recentyears both the Business Commit-tee for the Arts and the Arts &Business Council have expandedtheir scope to promote businesssupport of the arts and spur execu-tives to directly participate in cul-tural organizations�?T activities.The Business Committee for theArts (BCA) grew out of a 1966proposal by David Rockefeller andpresently comprises a national of-fice in New York City and 13 affili-ates around the country. Throughconferences, publications, and in-formation services, BCA has beena strong force in espousing generalRichard Clark, Affiliate Artists:�?oCultural programming advancesthe careers of gifted artists, bringsaudiences to the arts, and helpscorporate sponsors meet market-ing objectives.�?��?Tarts support and targeting specificareas of arts activity where greaterbusiness involvement is needed.Arts education is one area of in-volvement it singled out this pastyear.The New York City-based Arts& Business Council has developeda pioneering Business Volunteersfor the Arts (BVA) program, whichtook unusual action on one festivalday. They replaced items in theirstore windows with art works pro-vided by the Upper Catskills Com-munity Council of the Arts.BRIGHT FUTURE AHEADThe future of the business-artspartnership seems bright, even inthe face of growing economic pres-The involvement of upwardly mobile execu-tives in the activities of local arts groups hasstimulated continuing corporate supportof those groups.is spreading throughout the coun-try. At last count there were some30 BVA programs up and running,with a total of 62 set to be opera-tional by the end of 1989. Thisproject trains young business ex-ecutives in the operations of artsorganizations and then assignsthem as volunteers to arts groupsin need of their specific skills.The personal involvement of up-wardly mobile executives in the ac-tivities of local arts groups hashelped stimulate new and continu-ing corporate �?~support of thosegroups. :State programs, many focusedon smaller communities, also haveserved 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 andthe Humanities and the Alliance ofNew York State Arts Councils in1985 to foster partnerships be-tween corporations and local artsgroups 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 entiresupplement on the Lower Adiron-dack Regional Arts Council�?Ts festi-val; while in Oneonta, thanks to theDowntown Retail Merchants Asso-ciation, merchants not only con-tributed money and goods but alsosures. Businesses have come torecognize the importance of a goodcultural climate for their employ-ees, customers, communities, andthemselves. 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 displayedby the Palace Theatre in Cleve-land�?Ts Playhouse Square Center sev-eral years ago in finding a sponsorfor �?~Pump Boysand Dinettes�?T: Any-one driving into a Sohio servicestation during the show�?Ts run re-ceived a coupon worth $1.00 offthe cost of a ticket to the show.Theatergoers also received a cou-pon courtesy of Sohio inviting themto �?o�?~See the �?~Pump Boys�?T at Sohio�?��?Tand save $1.00 at the pump.When Philadelphia�?Ts WalnutStreet Theatre Company was plan-ning its 1988 production of �?~�?~Guysand Dolls,�?T the theater�?Ts promo-tion manager came up with a cleverway of linking one of the musical�?Tshit numbers with furrier JacquesFerber, one of the theater�?Ts busi-ness supporters. In the lobby of thetheater 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 thestage. As business has discovered,a lot of it takes place behind thescenes. After all, one can bean entrepreneur in the arts as wellas in business. 044 MANAGEMENT REVIEW

ALVIN H. REISS408 WEST 57th STREETNEW YORK, N. Y. 10019

AUSTRALIAN BUSINESS SUPPORT FOR THE ARTSAO nsrorrPREMIER EDITION_ SPRING �?T89InterviewAlvin Reiss:Building a bridge betweene artsAlvin �?oSkipp* Reiss is a founder member and ex vice-president of the Ants and BusinessCouncil of New York. This year he completed a whistle stop tour of Australia underthe auspices of the Myer Foundation. Whilst in Australia Mr Reiss conducted seminarsfor ans administrators and business people on business involvement in the arts. MarkSassella of Wang Australia, who has been seconded to ABSA ona part time basis, metwith Reiss towards the end of his tour to obtain his impressions of business and the artsbusiness andin Australia.Skip, Government funding of the arts iscurrently not increasing in Australia.Have you found Australian arts managersconfident of increasing their privatesector funding to compensate this?Well, I've only met a portion of the artsmanagement leadership in Australia, but |sense in speaking to a number of people thatthe possibilities are tremendous for increasingthat support.Our research shows that business peopleare concerned that arts organisationsoften do not recognise corporate needs.this simply a matter of betterpresentation by arts managers?I] think training will become an importantelement in the growing relationship,especially for those smaller groups who havenot really been involved as much in seekingand winning corporate sponsorship. Thekind of training that will have to take placeshould emphasise case studies where artsmanagers have the opportunity to probe arange of corporate situations. They shouldbe attune to regularly reading businesspublications, and becoming directly involvedwith business organisations like Chambers ofCommerce.Australian corporations are taking amuch more commercial approach to artssponsorship these days. Do you believethe arts industry must face up to this?This has been a growing reality in recent yearsand is certainly evident in the US.Corporations have needs that have to be metin a range of ways - through their image. theirmarketing, through the sale of their products- they are looking for returns on theirsponsorship. Arts groups should. however,be very careful that they in no waycommercialise their own activities merely forreasons of sponsorship. In fact, as long agoas 1972 when | was writing a book onbusiness in the arts | emphasised the wholequid pro quo relationship.Can you give a couple of examples of howarts organisations have provided realcommercial benefits to their corporatesponsors?One of the biggest would be the BusinessWeek example. Business Week is one of ourmajor corporate publications inthe US. Theyproduced an entire section in their DecemberSth issue devoted to New York'sMetropolitan Museum of Art. It was moreof a publication within a publicationcontaining photographs, artwork and storiesabout the museum, its collection and itsneeds.Also included in that publication were 31pages of advertising by 27 companies whowere very interested in the arts audience asamarket for their products. It was acommercial ploy by Business Week to selladvertising space using the arts group as theway to sell that space. Both business and artsOrganisations involved in the publicationwere extremely pleased with the results andthe whole insert was in excellent taste.Secondly, while Business Week was able towin $1.5m in advertising through thatsection, they also gave the MetropolitanMuseum of Art 10 per cent of that amount -$150,000-asadonation. I believe this to bea good example of a working quid pro quorelationship. es;One of the quotes that | frequently cite isfrom Paul Elliker of the SEM Corporation. Inhis annual report several years ago he statedthat the $250,000 a year his company spendson the arts is the cheapest investment he canmake because to project its image throughnormal public relations and advertising wouldcost SEM $1m a year for 5 years to see thekinds of returns received through theirsponsorship of the arts.ABSA has been established here toencourage corporations to becomeinvolved in the arts. This process seemsto have worked well in the US and in theUK. Do you have any comments basedon your experience in setting up a similarorganisation in the US?First, is that you get really committed peopleas leaders of any new organisation. Fromwhat I've seen of the leadership of ABSA |think you have the kind of business peoplewho really sincerely believe in what they willbe proclaiming.Secondly, you have to have the time andthe means to project that message. You haveto be able to identify all of the kinds ofmarkets you are relating to and those marketsinclude not only the business people thatappreciate you but also the arts communityand individuals concerned with those artsOrganisations. A very important aspect ofthis is that the arts community has to feel thatwhat is being done for them is really in theirinterest. Therefore, some aspect of the totalprogram should involve arts people on anadvisory basis to look into the kinds ofprograms ABSA is developing.Toavoid any pitfalls, the progress should begradual rather than immediate. You can'timmediately create an organisation andexpect everyone to run to support it. Youhave to build up your case as there will be alot of stations along the way where you havethe opportunity to present new kinds of�?~a

thuda eeeInterviewarguments, meet new kinds of audiences.The other thing is that you can�?Tt promisetoo much initially, because everyone expectsthis organisation to be the grand solution toall the arts funding needs. I don�?Ttthink it willever be the solution to all the problems. It isonly one of the ways that can help.Have you had a chance to observe anydifferences in the style of corporatesupport of the arts in Australia incomparison to that in the US?We have discovered that corporations inAmerica are so eager to promote theirinvolvement with the arts and to establish abusiness/arts relationship that a corporationwill spend as much money on promoting itsinvolvement with that arts group as it will onthe project itself.Very often it will lend its marketing and PRexpertise to the promotion of that project.Forexample, some years ago when AmericanAirlines sponsored the Clybume Festival theyalso established their own public relationsdesk down in Fort Worth, Texas, where theFestival was held, to handle all mediaarrangements because they were so deeplyinvolved with it.Can you give me any idea how muchcorporate support is provided annually byUS corporations?There hasn�?Tt been a recent survey, but wellover $500 million. | will say one thing thesize of corporate grants in the States hasgrown tremendously.Once we considered a large grant at$50,000 or so. Today we would consider alarge grant as being $500,000 or up range.In the work of ABSA do you see a leadingrole from certain industry sectors in thebusiness advocacy process?| think the advertising industry is one of thecritical industries involved with the arts. Firstof all there is a natural affinity betweenadvertising and the arts because so much ofthe arts is already in advertising. Mostimportantly, advertising offers an inroad intothe needs of the corporation the advertisingdepartment of a corporation is generally themost knowledgeable of that corporation'smarketing needs.The media is also terribly important. Oneof the areas we must reach within the mediais the financial press. There needs to begreater reporting on the business of the artsand the economic needs of the arts. I'd loveto see a lot more attention given to this.Two other elements of the businesscommunity who can benefit from a strongbusiness/arts relationship are banking andlarge retail stores. They are both peoplebusinesses that have to attract people intotheir premises and through support of the artsthey can establish the kind of image that canbring in the arts audience to them.Bloomingdales has helped to establish itsidentity through its relationship with the arts.Can private sector support for the artswork for innovative or experimental artsorganisations?This is an interesting question becauseincreasingly in recent years some of theexperimental and avant garde groups haveattracted the attention of business because ofthese qualities. Avant garde arts programsWith the GovernTHE MICHELANGELO OF THE FUTURECOULD BE RIGHT IN YOUR BACKYARD.attract younger audiences and are beginningto attract a large share of corporate funding.Ford Foundation gave $350,000 to an ArenaStage program that was strictly for newworks. The American ChoreographerAwards focus on young and/or experimentalchoreographers and is now sponsored byGeneral Electric. We are seeing a lot ofsmaller, dynamic arts groups beginning toreach out for corporate support ascorporations desire to reach the youth marketto which these arts groups relate.Based on the conclusions of a study done inCanada, smaller arts groups can attractattention from small and medium sizedbusinesses if their boards of directors and thepeople within circles of supporters assist inopening the doors. The majority of ~successful sponsorships of smaller groups bysmaller businesses have come from boardmembers.Some of the large arts groups which arereceiving the benefits of corporatesponsorship should find a way to encourageand help the smaller groups. The smallergroups are generally not as adept in marketingthemselves to corporations as the largergroups. | suggest that when large arts groupsreceive funding from corporations for a majorproject, a small portion of that funding be setaside to help smaller and emerging groups.Editor's note: More from Alvin Reiss in the nextissue. Copies of Mark Sassella�?Ts completeinterview with Alvin Reiss may be obtained byphoning Lesley Allen at ABSA on (02) 698 1688.Ppa dhacathflistae@ deAustrahliat «nui by pore «Wp baweas abiipyarif�?oa* betPts thecbeassALVIN . REDO408�?T WEST 57th STREETNEW YORK, N. Y, 1007°�?T. ASBA REPORT