$2M effort aims to help arts groups collaborate, cut costs

Local and national foundations have for years nudged nonprofits to look for ways they can operate together to cut costs.

Now two of them — the Troy-based Kresge Foundation and New York-based Ford Foundation — are putting $2 million behind an effort to help more than 30 local arts and cultural groups explore areas they can collaborate in their operations and to implement four to six of those ideas by 2012.

The Cultural Alliance of Southeastern Michigan and the Michigan Nonprofit Association are leading the three-year effort.

“Two of the strengths this region can draw upon as we reinvent ourselves are our arts and cultural sector and our long tradition of creativity,” said Alice Carle, program director at Kresge, in an e-mail.

“However, the area's arts and cultural sector is also struggling to adapt to the new economic reality.”

The Strategic Alliances Project ”will help to provide the tools and support necessary to allow organizations to explore and implement cost savings and to potentially consolidate infrastructure,” she said.

The project, which began last fall, will end in 2012 with four to six areas where two or more arts and cultural groups are collaborating operationally.

“We know that the economic situation of our state is not a temporary downturn (but) ... a restructuring of our economy,” said Maud Lyon, executive director of the Cultural Alliance.

The association “is trying to help our members navigate so that at the end of it, they'll be here doing even better work and financially sound,” she said.

“If we can help our members operate more efficiently on that backhouse side, they can contribute more of the money they have towards their mission.”

When the Cultural Alliance introduced its members to the program last fall, it urged them to isolate everything in their budget that directly correlates to their mission, Lyon said.

Everything else — backroom operations, insurance, human resources, accounting, running facilities “is what this project is designed to help (them) handle,” she said.

The Cultural Alliance has hired three managers to facilitate discussions among the 20 concept groups, research and consultation from legal, financial and technical experts to help explore the concepts and help those 20 groups come up with a business plan for how they'd work together and what resources they'd need to do so, by the end of June.

At that point a subcommittee of an expert panel, convened by MNA to offer guidance and feedback to the concept groups throughout the process, will pick the top four to six concepts. Those groups will receive funding to implement their collaborative ideas.

MNA, which is serving as fiduciary for the $2 million in funding, brings expertise in forging nonprofit partnerships, as well as technical experts to help explore the concepts, Lyon said.

“This is looked at as a pilot that could be replicated not only in other regions with arts groups but (also) with other subsectors of nonprofits such as human service and community development organizations,” said Kelley Kuhn, director, management support and capacity building services for MNA.

While the main focus of the project is helping arts and cultural groups work together, there are concept groups that could invite other nonprofit participants as well, she said.

“Working through a pilot for lessons learned is critical because issues that arts and culture will see are similar to other segments,” Kuhn said. “This will lead to an entirely different way of doing business.”

Over 30 arts and cultural groups are part of the discussions, Lyon said, with some participating in more than one concept group.

The groups are looking at how they can work together in areas such as financial and operations management, centralized administration of certain functions such as human resources, print production, program ad sales and volunteer recruitment and coordination, sharing facilities, industrywide marketing efforts such as establishing a cultural calendar Web site that sells tickets to events, and at how some could work together to build audiences.

“This is to look at the question of long-term sustainability for the arts in Michigan,” said Carla Milarch, executive director Performance Network Theatre, one of several participants in a professional theater group exploring ways they can work together.

Following declines in funding from the domestic automakers and other corporations over the past couple of years, the state in October cut funding to arts groups to just under $2.3 million from $7.9 million in 2009 for the Michigan Council for Arts and Cultural Affairs grants program.

Performance Network Theatre last year trimmed its budget by $200,000 to $750,000 by cutting salaries 5 percent to 20 percent, one of its 11 staff positions, health care benefits and one of its seven shows, Milarch said.

“The real issue is being able to find sustainable business models where if we get a cut to our budget ... we're not reeling,” she said.

“Oftentimes, the barriers for these kinds of long-term collaborations are people don't have the time and the money to invest if there's no guaranteed outcome.”

By providing management and technical assistance with funding to explore the collaborations and later to fund them, the Strategic Alliance Project is a “fantastic model—one I hope other groups may find a way to follow,” Milarch said.

“The idea is this is not about making organizations merge or lose their identity,” Lyon said.

“It's about helping them to operate efficiently in very specific operational functions, and as quickly as possible.”