arts & business council
MetLife Foundation National Arts Forums Series
Past Forum SynopsisArts & Business Council of Chicago
City of Chicago Department of Cultural Affairs
Chicago, Illinois
The Art of Innovation: Creating Cash for Cultural Organizations
02/18/2004
Moderator: Tom Kuczmarski, Senior Partner and President, Kuczmarski & Associates
Panelists:
- Chris Persons, Executive Director, Inspiration Café
- Tom Yorton, President, Second City Communications
- Gillian Darlow, Managing Director, Redmoon Theater
- Mary Ellen McGarry, Executive Director, Peoples Music School
Keynote speaker Tom Kuczmarski began this forum by giving several pertinent examples of local nonprofit organizations that leveraged significant increases in their unrestricted income through innovative programs. These ideas included overnight stays for Brownies at the Shedd Aquarium, birthday parties at the Children’s Museum, and corporate memberships for employees and their families, to name a few. Mr. Kuczmarski encouraged the audience to remember that success is not contingent on a large time-intensive fundraiser "...anytime you think about income-generating events, they don’t have to be big massive programs, they can be one-night events."
The heart of Mr. Kuczmarski’s address centered on a seven-step evaluation process that helps organizations determine if they should consider developing a new fundraising program. A condensed version of this process Should You Innovate? The 7-Step Process follows.
Step 1: Set the Strategic Goals and Vision for Your Organization
You need to have a vision of who you want to become and that vision needs to be future oriented in order to think about and focus on new products, services, programs, or offerings that you’ll ultimately want to get to. Try to figure out if you are really using a new program to retain current members or to attract new segments. Ask yourself the question, "Am I trying to find a totally new set of people that I can provide a service to, or am I trying to enhance the image of my organization?" Figure out what that set of objectives is.
Step 2: Examine Your Assets and Your Unique Strengths
The best way to really find out what your unique strengths are is to talk to people outside of your organization, because they can give you perspectives that you cannot necessarily get internally. Have them identify the key strengths and assets of your organization. Do it with some board members and most importantly, do it with some members or patrons who enjoy your services. See what the three comparisons are—how your staff defines your unique strengths versus board members versus members/patrons, and you will gain some really good insights on what your key strengths are.
Step 3: Listen and Talk to Current and Future Members
Go out and talk to customers, patrons, and members face to face. Do not stay within your office to accomplish this. Listen to what their needs, issues, and problems are as they relate to the organization’s unique strengths and assets, which have already been identified.
Do this internally within an organization. Leverage staff, board members, and donor friends. This step is where most organizations start the process and they tend to neglect the first three steps. This must be done within the context of your mission. Bring five to six people together for a creative brainstorming idea session. Make sure there is no judgment or evaluation going on as ideas are generated.
Step 5: Create Concepts to Test and Solicit Feedback
Once you have a whole bunch of ideas generated, then you need to create a few concepts that you can go test and talk to potential new segments, new buyers, and new members to get their reactions to it and fine tune it and change it. Create a mock-up ad or a mail piece or a concept statement of what this idea could become. Make sure to identify key benefits. The key benefits are critical to get feedback from other constituents, members, nonmembers, and new segments. Talk to as many people as necessary to identify all the pros and cons of each concept.
Step 6: Determine Costs and Expected Returns
Here you get to figure out what this thing is going to cost, what the development cost will be, what the ongoing cost will be, and how much income you think you will bring in from it. So, you have to do a little business homework and be able to come up with what you think the return will be if you pursue this opportunity. Break down the costs to develop, launch into the marketplace, and maintain this new program. Estimate what you think your income and revenue will be from this new offering. Use other similar programs as a guide for this planning. Revise the income plan after the first three months, then at six months, then after 12 months. Determine how much profit you can hope to earn from this new offering over time.
Step 7: Develop Staffing Plan, Roll-Out Plan, and Communication Plan
Identify the people and resources that will be needed. Create the communications plan. How will you communicate this plan to the marketplace (direct call/direct mail/PR/brochure?). Develop a plan that says how you are going to get from the launch to the end of the first year.
With self-confidence plus creativity plus a disciplined process, you can develop profitable new programs, services, and products.
The Innovation Panel
Following the keynote address, Mr. Kuczmarski introduced the panel of four leaders whose organizations have successfully introduced innovative services and products into their organizations.
Gillian Darlow’s company, Redmoon Theater, performs spectacle theater that incorporates puppetry, masks, unusual mechanical objects, and live music. The company has increased the general operating funds over the past eight years by providing entertainment to parties and/or creating theatrical environments. This not only brings in important revenue, but also serves as informal practice for the troupe. Research indicated that people desire "customized experiences" and Redmoon created a menu of available options, as well as a fully customized event offering. It is also fun for the artistic staff.
Mary Ellen McGarry has begun instituting monthly fundraisers at the Peoples Music School. The school provides free high-quality classical music training for 400 students per semester. By involving parents and students, they have increased their bottom line with such products as hot food sales—international cuisine (representing the multicultural school population) and Krispy Kreme, scarves and hats, and Diva Month—Diva Day, Baby Diva Day. It enables students to run programs and impresses funders with the efforts and involvement of the students in selling their ideas and art to raise money for the school.
Chris Persons’ organization, the Inspiration Café, has developed a partnership with Intelligentsia (a local roaster) to develop a premium coffee brand and enter the office coffee service (OCS) business. The Inspiration Corp. is leveraging its existing relationships with corporations that might purchase their products and with a start-up grant from The Boeing Company. Inspiration Corp. is poised to implement a potentially lucrative source of unrestricted income. Inspiration Café is a restaurant where homeless people come together and are treated with dignity and respect. The community becomes a healing agent for the problems/hurdles people face in their daily lives.
Tom Yorton has helped reposition Second City Communications from being purely entertainment-oriented and doing corporate comedy to becoming a communications consultancy that is grounded in improvisation. Second City Communications sells customized live entertainment in corporate settings, business communication training programs that are grounded in improvisation, and multimedia and video-based products to the corporate world. Second City has six training centers in North America, which now enroll 12,000 people. The key to their success is translating what they do to make sense for the corporate person.
Panel Discussion
Kuczmarski: How do you garner support from other people within or tied to your organization once you’ve got a new idea?
McGarry: It starts with my enthusiasm. As the steward of the ship, I have to be passionate about it. If I really believe in it, then I have to share it with you. Then, I will go out and talk to parents or a particular board member whom I believe will get excited about the idea. Once you get 10 other people excited about an idea, then I believe it is really going to work.
Darlow: We have created a team internally that works on new project ideas and we have a team leader to captain our current project. We need to market and sell this new product, and we are creating a subcommittee that will comprise board members as well as other people who will be involved in working together to determine how to launch this product, how to identify potential clients, and what types of partnerships make sense for the organization.
Kuczmarski: So, part of it is ensuring that you are convincing and creating a passion that can spread and be infectious to others. But it is also ensuring that you are linking the idea to other people and connecting with them at the same time.
Persons: We have a strategic plan that we revisit every year and then we market our ideas out to the community to our funders, on an individual basis, through our e-newsletter and through our webpage. In addition, we do a lot of communications and speaking engagements.
Yorton: For us, the bigger issue is green-lighting too many ideas too quickly. We need to have a better selection process.
Kuczmarski: When you think about success, how do you measure it? How do you determine whether a new offering that you are going to launch will be successful ? What’s the metric, measurement, or thought process you use?
Persons: The standard phrase is the double-bottom line because we are a human service organization. One of our bottom lines is that people exit homelessness with dignity and respect and we have a measurement system and logic models that we use to measure that. On the social enterprise side, it is just profit. It is how much money are we going to make, what our return on investment will be, and being able to re-invest that money toward the first bottom line.
Yorton: For us, we are a for-profit business, so if the financials are going up then things are good. One thing that I am most proud of is that we are putting Second City people to work. By keeping them in the fold, ideas sprout, whether the ideas relate to the theater or the training center. This knowledge base continues to grow within the organization.
Darlow: For us, it is also the double bottom line. The double bottom line represents financial and serving a greater social purpose, achieving our mission. Sometimes, serving your social purpose can compromise your ability to reap the most profits. That is why you are managing these two areas at the same time. We are trying to bring in money to support our other work, so that we can continue to offer cheap tickets to the public. We also want to maintain the artistic quality of the work and we do not want that to suffer at all. To accomplish this, we fully staff each special event. We have a director at every special event, two production people, and a stage manager. Our costs are just too high, so we can only do events that enable us to make money on these private parties. What is so important to us is that the quality of the work at these private parties is consistent with the quality of the work of our performances.
McGarry: For us, our mission requires us to provide a high-quality classical music experience and it has to remain free. The only way we maintain this quality is when people buy into the program and they maintain class attendance and their community spirit. When attendance is fully maxed out and I have to turn away 200 to 300 people each semester, because no one wants to leave the school that is recognized as a success.
Kuczmarski: If you had one suggestion that you can give all of us to improve or enhance innovation and be able to generate successful new programs and offerings, what might that suggestion be?
Yorton: Say yes first and ask questions later. Say yes we can do that and find a way to do that.
McGarry: Look to yourselves first, before you go out of the box. Look at what’s in the box first.
Darlow: Do something that is consistent with what you are already doing. Use the connections that you already have.
Persons: Stay true to your mission. Have a good corporate sponsor to give you the upfront money.
Breakout Sessions
Directly following the panel discussion, the attendees broke into small groups and spent time thinking as a consumer. In this role, each group brainstormed a list of innovative products and services.
