The Business of Non profits More than ever, financial and managerial skills are a necessity for nonprofit survival By Mark Stuertz
PHOTOGRAPH BY HOLT HAYNSWORTH
NGELA GIERAS WAS THE â€œGO toâ€? person whenever a philanthropic organization requested assistance from SunTrust Bank. She coordinated United Way campaigns. She did volunteer work for theater companies. She directed fundraising drives for various nonprofits. As a bank relationship manager working with corporations generating between $5 million to $100 million in revenues, Gieras nurtured a knack for enlisting aid to nonprofit organizations, especially those in the arts.
PHOTOGRAPH BY HOLT HAYNSWORTH
Angela Gieras put her degree to work by capitalizing on her business savvy and love forTK?? the arts. CAPTION
During her pursuit of an undergraduate degree in finance, Gieras discovered a passion for theater. Eventually she transformed from banker to nonprofit executive through the knowledge she gained by earning a joint graduate degree in business and the arts through a unique collaboration between SMU’s Cox School of Business and the Meadows School of the Arts. “What makes me tick is making a difference at an organization,” says Gieras, now vice president of major gifts and planned giving at KERA, the public radio and television station in Dallas, Texas. “Ultimately, I feel a lot better about what I’m doing every day because I’m contributing to society and making a difference in the world that I live in.” Yet the current recession has not been charitable to nonprofit professionals such as Gieras. They are finding they must make do with less, often much less. According to Giving USA, a foundation that conducts research on the philanthropic industry, charitable giving declined 5.7 percent last year—the steepest decline since it started estimating donations in 1956, according to The Chronicle of Philanthropy.
Indicators bode worse for 2009. According to Target Analytics, a division of nonprofit software developer Blackbaud, revenue to nonprofits declined a median 7.8 percent between January and March compared to the same period last year. The Target Analytics Index of National Fundraising Performance also reported overall per-donor revenue dipped 2.1 percent, registering the first decline since the survey launched in 2002. These
But steep resource and management challenges don’t mean the philanthropic sector is shedding opportunities. It may, in fact, be gaining them. According to a survey published earlier this year by the Bridgespan Group, a nonprofit consulting firm, 28 percent of charitable organizations with revenues of $1 million and above plan to fill senior-level slots in 2009. The study predicts upward of 24,000 senior-level nonprofit jobs will open as baby boomers retire and new positions are created in finance and fundraising. That’s good news for professionals and students who carry a passion for philanthropy and the arts with an interest in contemporary business practices and market strategy. Typically, potential philanthropic professionals go into arts administration, for example, driven almost exclusively by a deep interest in music, dance or fine art. “That puts the organization in a conundrum,” says Meghan Graham, who earned an undergraduate degree in music and is completing SMU’s MA/MBA program at Cox with an emphasis on marketing. “They have the arts passion, but they don’t know how to make the organization work financially.” Today, successful nonprofit leadership
“Ultimately, I feel a lot better about what I’m doing every day because I’m contributing to society and making a difference in the world that I live in.”
-Angela Gieras statistics point to a compelling need among philanthropic organizations for commercialsector survival skills. “The people who really need to understand entrepreneurship and management are people in nonprofits, especially in the arts,” says José Bowen, dean of the Meadows School of the Arts at SMU. “How do you motivate people? How do you create the right structure? How do you stay lean? These challenges are much more important to a nonprofit.”
demands a broad portfolio of business skills to develop thriving nonprofits and sustain them through tough times and that’s precisely why these organizations have the greatest need for fresh leaders with attuned business and financial savvy. Confronting this challenge won’t be easy. Some 60 percent of executives across all nonprofit sectors in the Bridgespan study predict that they will have difficulty finding qualified candidates to meet these new leadership demands; this despite a rich pool of job seekers affected by unemployment in the commercial sector. “They have to be smart. They have to be passionate. They have to be hard-working,” Gieras insists. “You have fewer resources at your disposal so creativity is important. The passion is what gets you by when the economy hits rough spots, like we have today.” Gieras says her experience in banking and finance coupled with her graduate studies give her a distinct advantage in fundraising efforts. “I am comfortable talking to a CFO or CEO or other accomplished business people about a variety of topics,” Gieras says. “I bring a lot of business savvy and tenacity to the table.” But finance and business management are not the only areas in which nonprofit organizations can benefit from the commercial sector. There is a critical need among nonprofits for the sophisticated market research data that businesses generate routinely. “There are a lot of unknowns because there is no data, Graham says. “What are current audience-buying patterns? How far in advance do they purchase tickets for performances? Symphonies could once run on subscriptions alone. Not any more.” Lauren Walstad, Smith Pharis and Bart Peters, MA/MBA class of 2010
Yet this benefits stream doesn’t only flow one way. Businesses can learn from the world of philanthropy, too. Nonprofit organizations are highly skilled at cultivating and retaining donors, and connecting with audiences—all on meager budgets. Such donor building and audience insights can help businesses connect with customers and develop enhanced levels of customer service. Nonprofit professionals are also far more likely to embrace new networking technologies. According to a recent University of Massachusetts market research study reported in The Chronicle of Philanthropy, 89 percent of nonprofit organizations are utilizing social-media tools such as Twitter and Facebook while 57 percent report using blogs—utilization numbers well ahead of the commercial sector. The lean nature of nonprofits and the high cost of advertising and direct mail make experimentation with new development tools a necessity for nonprofits, The Chronicle reported. Weaving philanthropy into the core of a business can yield significant dividends in the commercial sector as well. SMU graduate Chris Cook, CEO of mattress retailer Sleep Experts, developed the Rest Assured program as part of his firm’s corporate mission. Rest Assured removes and refurbishes old mattresses from a customer’s home and donates them to charitable organizations. “We get more back as a company,” he says. “From a culture standpoint, bringing a deeper purpose to what we do on a daily basis gets people excited. Customers want to do business with a company that gives back. People want to hear that story. They want to hear that passion.”
The Competitive Edge: Smu’s ma/mba degree
José Bowen thinks something is dramatically askew in arts administration education. “I think it’s very odd that we train people to run symphonies, operas and after-school programs by letting them skip finance,” says Bowen, dean of SMU’s Meadows School of the Arts. “I would argue that finance is more important than administration in the nonprofit world because you have to make the money go further.” It’s from this necessity that SMU’s joint business and arts graduate degree program—offered through the Meadows School of the Arts and the Cox School of Business—was born. Focusing on the development of resourceful administrators, SMU’s MA/ MBA program not only provides students with a comprehensive understanding of the arts, it furnishes a thorough knowledge of contemporary business practices so that graduates can better control scarce nonprofit resources while developing new revenue streams and resources in a competitive environment. Bottom line: It’s one of the only arts administration graduate programs in the U.S. with a full-blown MBA component. Thus, demand for SMU-trained nonprofit administrators runs high. Program graduates have assumed leadership roles with the Chicago Symphony, the American Film Institute, the American Heart Association, the Boston Pops, the New York City Opera, San Francisco’s Museum of Modern Art and Walt Disney Theatrical Productions. “Our graduates are a ‘who’s who’ of art leadership across the country,” Bowen says. “Our MA/MBA graduates go on to lead some of the nation’s most respected nonprofit organizations,” says Albert W. Niemi, Jr., dean of the Cox School of Business. “They come fully equipped with the business tools necessary to keep the bottom line in check, combined with a rich understanding of the arts and the unique issues facing the industry.”
Setting the Stage for Success Faculty and alumni generosity help launch the AT&T Performing Arts Center
hen the AT&T Performing Arts Center (the Center) opens its doors this fall, it will do so in large measure because of the extraordinary time, resources and guidance of many in the community, including SMU and the Cox School of Business. The Center is a multi-venue center for performance art of all kinds—music, theater, opera and dance, and it is part of the larger, 25-year vision intent on creating a world-class Dallas Arts District. The multimedia, hightech and high-touch facilities are woven into the surrounding urban park and existing arts district icons such as the Nasher Sculpture Center and the Dallas Symphony Orchestra, the final touch in transforming into an unparalleled cultural destination. The Center’s physical facilities are a work of art that nearly rivals the
performance art that will take place within its hallowed halls. The Margot and Bill Winspear Opera House seats 2,200 and is designed in a modern horseshoe configuration. The Dee and Charles Wyly Theatre, seating 600, will serve as a gateway to the Dallas Arts District from the downtown business corridor. The completely renovated and redesigned Annette Strauss Artist Square will be the
center’s outdoor entertainment venue, and the Elaine D. and Charles A. Sammons Park ties the whole venue together with gorgeous outdoor landscaping that creates an urban oasis. Much of it was made possible because of the participation from SMU, the Meadows School of the Arts and the Cox School of Business and alumni. “Because of both its proximity to the Center and the caliber of the university, SMU plays an integral role in the center. We have already benefited from the leadership and counsel of many SMU alumni, faculty and administrators,” says Mark Nerenhausen, president and CEO of the Center. “Once the center is open, these two institutions will become even more intertwined, to the benefit of both of our organizations, through educational programs that we develop together, internships at the center and more.” Fall 2009
photos courtesy AT&T performing arts center
By Trey Garrison
The nine-year campaign to build the Center kicked off with a fund-raising goal of $354 million, 95 percent of which was to be generated in the form of gifts and grants from Dallas families, companies and foundations. In the time since, more than 130 gifts of more than $1 million were given by Dallas families and organizations, many of whom are linked to SMU.
The Center’s physical facilities are a work of art that nearly rivals the performance art that will take place within its hallowed halls. The Center’s board members who headed up the effort include SMU President R. Gerald Turner as well as many SMU alumni. The President’s Advisory Council includes Albert W. Niemi, Jr., dean of the Cox School of Business, José Bowen, dean of the Meadows School of the Arts, and Linda www.cox.smu.edu
Kao, assistant dean of Global Programs. “In addition to all the support we’ve received from Cox, SMU and the Meadows School, we’ve also received an enormous amount of help from the intern programs at Cox and Meadows, with students providing vital services in the ongoing campaign,” says Maria
May, director of public relations for the Center and a graduate of SMU’s MA/ MBA program, which combines art and business education and is one of the few such programs in the United States. For Bowen, the partnership between the university and the Center is a hand-inopera-glove match. “The bottom line is there’s a reciprocal relationship here. If I’m going to help the Meadows School achieve more national prominence, people have to see Dallas is a great art city, and vice versa,” Bowen says. “I can create the best name brand for Meadows but if people outside think of Dallas and think, ‘I’d never go there because they have no art scene,’ then it won’t work. No renowned artist will leave New York if they don’t believe Dallas has a vibrant arts scene. And the AT&T Performing Arts Center allows us to say, ‘Yes, we do have it.’ ”