The nonprofit arts industry in the U.S. generates more than $53 billion a year in spending by arts organizations, nearly $81 billion in event-related spending by audiences, and some $24 billion in federal, state, and local tax revenues. Moreover, many would argue that its impact in terms of community revitalization and local quality-of-life issues is as, if not more, significant.
For arts funders, the size and scope of the arts in America represents both a challenge and an opportunity. The opportunity, says M. Christine DeVita, president of the recently rechristened Wallace Foundation, an independent private foundation established by DeWitt and Lila Acheson Wallace, the founders of the Reader's Digest Association, is in being able to fund something that touches peoples lives on a daily basis. And the challenge lies in figuring out how to have a positive impact on such a large and diverse sector with resources, both financial and human, that are limited.
In June, Philanthropy News Digest spoke to DeVita about these and other topics, including trends in arts participation, the impact of private foundation funding on those trends, the importance of strategic grantmaking, and the significance of the name change recently announced by the foundation.
DeVita joined the DeWitt Wallace and Lila Wallace-Reader's Digest Funds in November 1987 as executive director and was named president of the Funds in June 1989. In 2000, she and her staff reorganized the two funds administratively to function as a single organization, and in 2002, after selling the Funds' controlling interest in the Reader's Digest Association, completed the merger of the two into a single entity called the Wallace Foundation.
Born in New York, DeVita earned her B.A. magna cum laude from Queens College of the City University of New York, and her J.D. cum laude from Fordham University School of Law, where she was an editor of the Fordham Law Review. Prior to joining the Funds, she was deputy general counsel for rhe Reader's Digest Association. Ms. DeVita is a member of the board of the Foundation Center, the Reader's Digest Association, Inc., and the Queens College Foundation.
[Editor's note: At the time of this interview in June, the Funds had yet to officially announce the name change.]
Philanthropy News Digest: Chris, the Wallace Funds have articulated three broad, strategic directions for the next decade or so: developing effective educational leaders to improve student learning; providing high-quality informal learning opportunities for children, families, and communities; and promoting new standards of practice to increase participation in the arts. Is there a thread that unites those three objectives?
Christine DeVita: The objectives really derive from the values of our founders, DeWitt Wallace and Lila Acheson Wallace, who throughout their lives tried to create a society where people had access to opportunities for learning, enrichment, and personal fulfillment. Coming out of that value system, the foundation's mission is to support and share ideas and practices that fundamentally improve the performance of institutions that can help shape the destinies of people and communities. And the institutions people interact with on a daily basis that have great potential to shape people's lives are schools, cultural institutions, and community-based organizations. Those are the three public systems that touch people every day.
PND: Let's talk about the third objective, increasing participation in the arts. Is the audience for the arts in America growing or shrinking?
CD: One of the problems with the arts in general in America is that we don't have a lot of information or data about them. One of the benchmarks in the field is the Survey for Public Participation in the Arts, or SPPA, which is conducted every five years by the National Endowment for the Arts. Now, if you look at the participation numbers in the '82, '87, '92, and '97 surveys, you can see that the numbers have been pretty consistent. They actually increased in the '97 survey, although people aren't sure why. Some of the questions were changed in '97, and that may have something to do with it. In the most recent survey, which was conducted in 2002 and hasn't been published yet, the questions were changed back to their pre-'97 wording, so we'll be able to look at '92 and 2002 as an apples-to-apples comparison. But if you look at a chart of the numbers from 1982 to 1997, you can see that, with the exception of modest increases in '97, participation in the arts has remained pretty stable.
PND: Is there any evidence to suggest that participation in the arts has increased as a result of grantmaking by private foundations?
CD: Speaking only for ourselves, I think we can say with some assurance that the work of the institutions we have funded directly has resulted not only in additional participation, but also in changes in the ways in which they do business and in the strategies they use to engage individuals and their communities. I also think we're beginning to see some evidence of these changes being adopted by other institutions as well. All of our work is designed to directly create benefits for the organizations with whom we work. But if that's all we do, we don't think we've achieved our full potential.
|"...How do you have a positive impact on a sector when you're only working directly with thirty or fifty or a hundred institutions? What combination of tools do you use...?"|
What we also aim to do is create, indirectly, benefits for people who will never get money from us. And in an industry like the not-for-profit arts industry, which is a $53 billion-a year industry, the question becomes, How do you have a positive impact on a sector of that size when you're only working directly with thirty or fifty or a hundred institutions a year? What combination of tools do you use? Some of it is direct grants. But a lot of it is capturing what works and what doesn't work and sharing that information with others — as we have done with A New Framework for Building Participation in the Arts, which was published by RAND with our support and has been widely read. And a lot of it is tapping leaders in the institutions with which we work and encouraging them to speak to others about what they've learned. So I think the answer is yes, we can see that our efforts have made a difference. Have they filtered into the SPPA numbers? I don't think so.
I would also add that we've funded the Urban Institute to publish another report, Reggae to Rachmaninoff, based on our work with community foundations, which says, among other things, that if you think about arts participation more broadly and include activities presented in non-traditional venues, the number of people who participate in the arts jumps by about 20 percent, at least in some communities. Take Kansas City. If you look at the arts in narrowly defined terms, you'd have to conclude that participation in the arts there is fairly low. But when you broaden the definition to include things like jazz performances and other kinds of festivals, it goes up. So, as is the case with most things, the answer you get often depends on the question you ask.
PND: Do large arts organizations have an advantage over smaller organizations in the kind of tough funding environment we find ourselves in at the moment?
CD: From my perspective — and it's only my perspective — an organization's ability to attract funding from public or private resources depends first and foremost on how much of a benefit they provide to the public. To the extent that larger organizations have the ability to demonstrate public benefit over a period of time to a broader cross-section of people, then yes, I think by definition they have an advantage over smaller institutions, which might be newer and not have had sufficient time to demonstrate their value to the public.
By the same token, you can have large institutions — and we can all think of examples — that because of their failure to proactively engage people in their programming are driven to the brink of bankruptcy. In many of those cases, I think it's fair to say that their public and private support dropped in direct correlation to the value they were perceived as providing. Again, I think it all comes down to the public benefit you provide and how well people recognize and value that.
PND: Do you have any specific advice for smaller arts organizations that are worried about their ability to survive this funding climate?
CD: Not that I'm in a position to give anyone advice, but the advice I give everybody, including ourselves, is to remember that facts don't lie. Oftentimes organizations — not just arts organizations, but all organizations — are created out of a person's passion, and that's a wonderful thing. At some point, however, you have to be hard-nosed about the facts, and, as much as I hate to say it in this context, you have to fall back on some basic business principles. Where do we get our money? Why should someone give us money? What benefit do we provide to the public? Is there a market for it? How can we connect with new markets? Are we duplicating the efforts of other organizations? Are there economies of scale we could achieve in particular areas if we joined forces with X, Y, or Z? Can we change our business practices to become more efficient?
Let me give you a quick example. Arena Stage in Washington, D.C., a regional theater company, took a dynamic pricing model — the same kind of model the airlines use — applied it to various subscription plans, and ended up creating a significant surplus, which they then used to subsidize tickets for other segments of their audience. It's an example of being cold-eyed about the facts and open to finding new and better ways to do your work. Another example: The Pittsburgh Ballet Theatre expanded its audience base through a work called Indigo in Motion that combined the traditions of classical ballet with the city's jazz roots. You can read more about it on the Arts4AllPeople Web site we support.
PND: Are you concerned that the arts, and especially the performing arts, may be pricing themselves out of the reach of the average American?
CD: We haven't funded any comprehensive studies of pricing. I do know that when you look at surveys like the SPPA survey and the Urban Institute survey, which also looks at participation, price does not top the list of barriers to participation. In fact, in the SPPA survey the number-one barrier cited was difficulty in finding the time to go out, followed by not enough performances and/or exhibitions, followed by price. So, yes, price is a barrier to participation, but it's not number one.
What that says to me is that the arts, including the performing arts, are competing for a share of people's leisure time. We have to continually remind ourselves of that fact. We're part of a world in which people constantly make choices — about whether they should go to a concert, or go on a picnic with the kids, or take a walk, or just take a nap. If you couple that fact with the behavioral model of participation, which holds that barriers to participation in the arts can be perceptual, experiential, or practical, the trick then becomes to align your strategies to overcome those barriers, whatever they might be. A strategy that raises or lowers ticket prices across the board may not be the most effective strategy if the main barrier to higher attendance is inconvenient curtain times.
PND: One of the foundation's longstanding initiatives in the field is called LEAP, which is short for Leadership and Excellence in Arts Participation. One of the goals of the initiative is to encourage arts organizations and institutions to adopt customer-focused practices. What does that mean, and why is it important?
|"...The era — if it ever existed — of "build it and they will come" doesn't exist anymore...."|
CD: It's very related to the things we've just been talking about. The era — if it ever existed — of "build it and they will come" doesn't exist anymore, and I think all institutions, and cultural institutions in particular, need to be thinking about how they meet the needs of the audiences they want to attract. What is your value proposition? What is that you, and you alone, provide that will make people want to pay good money to walk through the doors of your theater or concert hall or museum? And how do they find out about that value proposition?
A lot of customer-friendly strategies that our LEAP grantees are developing are related to those issues. The dynamic pricing model I mentioned a minute ago is one example. Others are different. It might be understanding where your customers are and figuring out a different way to involve them. Maybe you market to them in a different way, offering "group" tickets instead of individual tickets. It's thinking about how you answer the phone. It's thinking about who's in the lobby to welcome people. It's thinking about whether you want to add before- or after-performance conversations that help people understand what they're about to see, or have just seen. It's all of those things and more. The possibilities are endless.
PND: Capacity building is a term that's become popular in the nonprofit world over the last few years. Do the Funds make grants to build the capacity of individual arts organizations?
CD: Actually, that question assumes a distinction that, for us, doesn't exist. Because we work with organizations for whom building participation is a strategic imperative — that is, it's central to what the organization is and does — almost everything we fund could be considered capacity-building. So we might include in a grant to a particular organization money for the development of more sophisticated financial systems, as we did with Arena Stage, or to improve the organization's research and marketing capabilities, or to upgrade its information technology systems so it can accept ticket reservations online. Things that in other fields might fall under the rubric of internal organizational development, we see as directly affecting the ability of the organization to serve its customers. So, depending on what the organization needs and assuming that increasing participation is core to the organization's purpose, we don't make a distinction between programmatic and back-office needs.
PND: How do you measure the impact of the grants you make?
CD: Great question. Lots of ways. We've had, for many years now, what I think is a very rigorous monitoring process. We're quite clear with our grantees from the beginning. We co-create a plan with them. We don't have a cookie-cutter approach where we say here's the Wallace template and just do these ten things. What an institution wants to do, who it wants to serve, how it wants to get there is really crafted by the organization and then negotiated with our staff.
So we begin our relationship with a grantee with an agreed-upon set of clearly articulated goals, strategies, and indicators. Then we monitor plan versus performance, using those indicators, throughout the year. We generally have annual report requirements, and those reports really are read — usually by at least three different people on staff. We also have conversations with the grantee before and after the reports are submitted, as well as regular check-in conversations during the course of the year. If a grantee comes to us and says, "This isn't working, we want to try that," we'll course-correct.
In addition, we look at performance across grantees and try to figure out where individual grantees fall on a continuum. Then we try to figure out whether there are lessons we can draw by looking across organizations. Are there certain strategies people are using that seem to be getting better results than others? We use that information in our own internal decision-making, and we share it with our grantees. We think of success as not only the good done by a particular organization for the audiences it serves directly, but about the effective practices that are developed with our support and which, when captured and shared, can be useful to other organizations.
Finally, we're just starting to adopt organization-wide indicators to evaluate our own performance as a foundation. This will be our first year using a sort of scorecard to benchmark our effectiveness, and how our grantees are doing will be an important component of that evaluation. As I say, it's something new for us, but we're excited about what we may learn.
PND: A few years ago, your board made a decision to combine what had been two separate foundations, the DeWitt Wallace-Reader's Digest Fund and the Lila Wallace-Reader's Digest Fund, into a single entity so as to better focus your resources on more "strategic" investments. In the context of your current activities, what is a strategic investment?
|"...We've come to understand that while money is an important tool, it may in fact be the least important tool at our disposal...."|
CD: We've been making a transition from being a small family foundation that saw its main goal as doing good and money as its main tool to accomplish that goal, to being a national foundation whose main goal is to try to create fundamental improvement in some of the big systems that affect people's everyday lives. In the process, we've come to understand that while money is an important tool, it may in fact be the least important tool at our disposal. The most important tools we have are things like funding new solutions, capturing results, commissioning research to fill in knowledge gaps, and sharing what we learn with practitioners and policy makers to try to influence changes in those systems.
As you mentioned, we had two founders. They created two foundations — actually they created four. Then they merged the four into two, and the arts and education became the fundamental building blocks as those two foundations grew. But we began to notice several things as we came to the end of the '90s. One was that while the strategies we were using in both the arts and education were fairly common, we were missing potential synergies between the two. We also realized that we were doing far too many things to really be able to fundamentally change anything. Between DeWitt and Lila, we had more than a hundred different programs.
So in 1999 we took a step back and tried to really think about what we cared about and what we wanted to change. Did we want to continue to treat symptoms — as one of our board members said — by creating good programs that do good for people but are relatively limited in scope, or that wither and die after the money runs out? Or did we want to try to really figure out what it would take to help fundamentally improve some of these big systems? Could we think about focusing our efforts and our resources in smart ways that, if successful, would re-register systems in ways that created expanded opportunities for people?
As a result of that process, we went from more than a hundred programs to three programs, and within each of those programs we tried to identify the levers we would try to use to help improve that system. Our next step was to make sure we began to work those levers with all the resources at our disposal — which meant money, yes, but quite frankly, in the big public systems we're trying to affect any money we throw into the pot is just a teaspoonful in a sea. It's important, but not that important. More important is program expertise — staff people who really know what's going on in the field; or research and evaluation expertise, so that what we learn is directly related to what's happening on the ground; or communications expertise, in the sense of how we identify the audiences we need to engage in these discussions. How do we find ways to communicate with them that are useful to them? How do we begin to think about not only disseminating what we know, or think we know, or are learning, but also help people to use that knowledge?
So it's been a dramatic shift in many ways. And along the way we've eliminated what were rather traditional program evaluation and communication departments that functioned separately and replaced them with interdisciplinary teams that include those functions and are involved from the very beginning with strategy formation. We're only two or three years into it, but we're already beginning to get some traction and to see the benefits of the new approach. We're a long way from declaring victory, but we think we'll get there.
PND: What does your desire to be more strategic in your grantmaking have to do with the changes you're about to announce?
CD: When we realigned the activities of the DeWitt and Lila funds in 1999, it really was a cultural shift. It signaled a new focus, a new way of doing business, and a reorganization of staff resources to accomplish new objectives. But legally, we still had two foundations.
|"...Although we'll have a new name, our aspirations will remain the same, and our desire for accountability and having an impact will remain the same...."|
What we will announce in early July is a merger of the DeWitt and Lila funds into a single entity that will be re-named the Wallace Foundation. And that will give us an opportunity to re-articulate for ourselves and for others the role we think national foundations can play in the 21st century — a role that involves more than just handing out money. It involves identifying thoughtful, practical solutions to seemingly intractable problems and sharing that knowledge with key stakeholders. So although we'll have a new name, our aspirations will remain the same, and our desire for accountability and having an impact will remain the same.
PND: What do you think the landscape for the arts in the U.S. will look like in a decade?
CD: Given today's rapid pace of change, trying to predict what anything will look like that far out may be an exercise in fantasy. But with that disclaimer in mind, I will say that it appears as if the lines between the for-profit and not-for-profit sectors, in both the arts and education — but particularly in the arts — are blurring. What a nonprofit regional theatre does as opposed to what a dinner theatre does, whether one plays at Madison Square Garden or Carnegie Hall, whether one is organized as a not-for-profit literary press or Random House — those distinctions, which used to mean a lot, are blurring, and I don't think we yet know yet what that means for the arts. Moreover, I think we'll see continued blurring of those distinctions.
In such an environment, the way arts organizations articulate the value they provide to people and actually provide that value becomes much more important, regardless of whether an organization is for-profit or not-for-profit. I also think the way in which arts and cultural organizations deliver value to people will change, both through technology and because of a greater willingness on the part of arts organizations to go where their audiences are. So I think we'll begin to see — I hope we'll begin to see — the arts infused in many more venues, some of which are now considered quite non-traditional.
PND: Do you think public-sector funding for the arts will continue to decrease?
CD: That assumes public-sector funding for the arts has decreased, and, with the exception of the past year of state-budget shortfalls, I'm not sure the data actually bears that out. But in the long run, the public will demand public support for what it values — so it's important we not only build support for the arts, but that arts institutions find powerful ways to connect with the public.
Now, as I mentioned earlier, the benefits of arts participation have not been all that clearly articulated, and there's not a lot of data on the field in general. The usual argument for the arts is either a vague sort of eat-your-broccoli-it's-good-for-you argument, or one based on economic benefits. In fact, RAND is doing for us what might be the first comprehensive look at the benefits of the arts, both in terms of inherent personal benefits — it makes me a better person, it increases my creativity — as well as more tangible educational, economic, and civic benefits. And one of the things we're hoping the study does is begin to provide a story about the benefits the arts provide as a way to help arts organizations begin to talk about the value they provide.
PND: A final question: If you could point to one aspect of the current arts landscape that makes you hopeful, what would it be?
CD: Some of the information coming out of our initiatives and being talked about in publications like Reggae to Rachmaninoff, which as I said earlier suggests that we need to expand our definition of the arts to include non-traditional forms and venues, is quite hopeful. People are interested in the arts, and in much larger and varied ways than we've given them credit for in the past.
I also think that, starting with Excellence and Equity, the 1992 policy statement by the American Association of Museums on the public aspect of museums, and continuing with Arts and the Public Purpose, the 1997 study by the American Assembly, there has been a consistent and growing recognition of the importance of the arts and arts and cultural organizations in people's lives. This notion that arts and people belong together is one that is not only consistent with our work, but also one that is becoming more widely accepted. And that makes me hopeful.
Finally, I'd just add that even though we've used a lot of terms usually associated with business in our discussion, it's worth recalling that it was the father of management theory, Peter Drucker, who reminds us why this work is important. As Drucker said, "The arts alone give direct access to experience."
He was underscoring the fact that the arts give us pathways to other ways of seeing, hearing, and feeling — ways of understanding the world outside of our own that, in turn, can enlarge our own capacities. In that way, art has the ability to not only enrich life, but to help each of us become more fully human. And that, ultimately, is why we are pleased to play a role in helping arts and cultural institutions find ways to connect art and people.
PND: Well, Chris, thanks very much for your time this morning.
CD: My pleasure.
Mitch Nauffts, PND's editorial director, interviewed Christine DeVita in June. For more information on the Newsmakers series, contact Mitch at email@example.com.